Yes, we
scheduled a final posting on central banking reform for today. We got bogged down in other things, however,
and had to set it aside until later.
Fortunately, someone asked us a question, so we just revised the answer
for today’s posting.
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| "And we're gonna go even higher than this!" |
The University
of California, Berkeley, seems to be caught in its own contradiction. Last year University of California President Janet Napolitano announced that the
minimum wage for university employees would be raised to $15.00 an hour. Then, “[a] week after California Gov. Jerry Brown signed the state’s
$15 minimum wage boost into law, UC Berkeley Chancellor Nicholas Dirks sent a
memo to employees announcing that 500 jobs were getting cut.” At the same time, supporters of the raise in
the minimum wage insist that there is no connection, that the job cuts are due
to other factors.
There seems to be a
contradiction in there, somewhere. There
seems to be a definite cause-and-effect going on here. So how do supporters of raising the minimum
wage explain this away?
First, you have
to adhere to the labor theory of value, the underlying premise of which is that
labor is the sole factor of production.
Yes, in some classical economics and most modern economics the factors
of production are given as land, labor, and capital.
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| Is human labor really the only thing that is productive? |
The problem is
that the U.S. Bureau of Labor Statistics always — always — gives “productivity figures” as “output per labor
hour.” Conclusion? Labor, despite what academic economists say
out of one side of their mouths, out of the other they insist that labor is the
sole factor of production.
Because
human labor does not create land, land is a “cost free” factor of production,
at least according to David Ricardo.
Land is not a factor at all according to the agrarian socialist Henry
George. As for technology, it merely
enhances labor, or is a form of “congealed” or “accumulated” labor, and thus
not independent of labor.
What
you end up with is people convinced that labor is the sole source of all
production. Logically, raising wages is
simply giving workers what is already theirs.
It is being unjustly withheld from them by capitalists stealing surplus
value by not distributing all the results of production (income) to workers.
The landlord is entitled to nothing. The theory is that, not having created the
land, he or she cannot legitimately own it, and is due none of the income that
comes from the use of land. “Rent” is
stolen from workers and consumers. The
capitalist is entitled only to retain what is equal to the cost of the capital,
as that is equal to the labor congealed in it.
Thus,
if prices go up as a result of raising wage levels, the loss of jobs is due not
to the rise in wages and thus costs — that belongs to the workers in any
event. Instead, job loss is due to the
greed of landlords and capitalists in stealing surplus value.
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| Does land really produce nothing? |
This
analysis falls apart of its own contradictions once it is admitted that land
and technology are productive. That
being the case, the owner of the land or technology is due a share of the
profits of production based on the relative contribution to that profitability
the land or technology makes — the owner of land or technology is as much
entitled to a return on what he or she owns as is the owner of labor, given
that land and technology are productive in the same way as labor.
There
are other problems with the analysis. If
(for example) labor is the only thing that is productive, and only the owner of
labor can own what labor produces . . . what labor produced the laborer? No one created him- or herself, so logically
no one can own him- or herself, or that which his or her labor creates.
Does
the Creator then own each and every human being?
We
don’t need to go any further with this.
You can see that the argument, which starts out with bad assumptions (i.e., only labor is productive, and you
can’t own anything you did not produce with your own labor) turns ludicrous
very quickly.
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| MINE-MINE-MINE-MINE-MINE!!!!! |
For
example, asserting that God owns everything, but lets human beings have the use
and control of things. If we understand
property, that means God both owns everything, and does not own anything:
ownership and control are the same in all codes of law. This violates the first principle of reason, i.e., that nothing can both “be” and
“not be” at the same time under the same conditions.
Of
course, once we admit that more than labor is productive, and that there are
other ways to produce and thereby generate income, we get out of the
contradiction. If people can own land
and technology as well as their own labor, then if labor doesn’t produce
enough, don’t raise wages, get land or technology.
The
good part is that while you can’t legitimately buy more labor and keep all that
it produces (the Thirteenth Amendment abolished chattel slavery in the U.S.),
you can buy land and technology and keep all that it produces.
Further,
capital — including both land and technology under the heading of capital as
both are “non-human” factors of production — can pay for itself out of its own
future profits. You can’t add labor to
yourself or add a few more bodies in the slave cabins nowadays, but you can
purchase all the capital you need to produce enough for a decent life and it
will pay for itself.
It
does make you wonder why so many people insist on raising wages, making
everybody worse off, and don’t see the obvious solution.
#30#