We’re still reeling in disbelief here at CESJ global headquarters . . . and we’re almost out of fish line. And as for the pole . . . well, we’re talking to him next week, and we’ll see what he has to say. But enough of bad fake Marx Brothers jokes. On to the point of today’s Horror Special . . . the wage system!
In The Cocoanuts, a comedy about land speculation in Florida during the land boom of the 1920s, Groucho plays the man in charge of a hotel . . . who is not paying his workers. Instantly, Groucho is in top form as the fast-talking, slow-paying, semi-lovable scalawag (funny to watch, not so funny to be watched) who has to convince his employees that they don’t really want to be paid, do they? They don’t want to be wage slaves, do they? And what makes wage slaves? Why, wages, of course! Groucho won’t enslave you to wages because he won’t pay you any!
Of course, that being said (if you could keep up with it, that is), what really makes wage slaves is being without capital ownership in any significant degree. With capital carrying out most production these days, and the market rate of wages declining in value relative to the cost of capital, what locks people into the wage system in which most people get the bulk of their income from wages is lack of access to capital credit, not the wages, per se.
Does that mean we are against wages?
Hardly. A just wage is mandatory in any system. Non-owning labor must be compensated fairly; we have never said anything different. In common with such luminaries as Karl Marx, Dorothy Day, G.K. Chesterton, and Pope Leo XIII, we call for the abolition of the wage system, not the abolition of wages.
Where we differ from the usual run of social justice advocates (many of which may not be entirely clear on what constitutes “social justice” . . .) is how we define a just wage. In keeping with the general rules laid down by, e.g., Thomas Aquinas, we define the just wage as the rate determined by the free market.
Having said that, however, confusion sets in. Is the free market rate of labor the sole determinant of a just wage? Ordinarily, yes. Given equality of bargaining position, full knowledge, and so on — free market, remember? — the market rate of labor will approach true justice. As Pope Leo XIII explained, “Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages.” (Rerum Novarum, § 45.)
What about the exceptions, however? What happens when the free market rate is insufficient for the worker to meet ordinary expenses, or something interferes with the free market in labor, e.g., when the propertyless laborer is forced to take less than justice demands simply because he is in a bad bargaining position? Leo XIII addressed that, too:
|Pope Leo XIII|
[T]here underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice. In these and similar questions, however — such as, for example, the hours of labor in different trades, the sanitary precautions to be observed in factories and workshops, etc. — in order to supersede undue interference on the part of the State, especially as circumstances, times, and localities differ so widely, it is advisable that recourse be had to societies or boards such as We shall mention presently, or to some other mode of safeguarding the interests of the wage-earners; the State being appealed to, should circumstances require, for its sanction and protection. (Ibid.)
Thus, when strict — that is, commutative — justice is insufficient, something else must be added, as commanded by “a dictate of natural justice.”
This creates a seeming paradox, however. If strict justice is violated by interfering in free agreements, how is it possible to call what results “a dictate of natural justice”?
Very simple, actually. Charity is the soul of justice, completing mere justice and bringing it into conformity with nature: “natural justice.” Thus, where in strict justice an employer owes his workers only the free market rate, in natural justice he owes them strict justice completed and fulfilled by charity.
Not surprising, this is precisely what Pope Pius XI said should be the guide for determining a naturally just wage. As he explained in Quadragesimo Anno,
|Pope Pius XI|
Let, then, both workers and employers strive with united strength and counsel to overcome the difficulties and obstacles and let a wise provision on the part of public authority aid them in so salutary a work. If, however, matters come to an extreme crisis, it must be finally considered whether the business can continue or the workers are to be cared for in some other way. In such a situation, certainly most serious, a feeling of close relationship and a Christian concord of minds ought to prevail and function effectively among employers and workers. (§ 73.)
Since the present system of economy is founded chiefly upon ownership and labor, the principles of right reason, that is, of Christian social philosophy, must be kept in mind regarding ownership and labor and their association together, and must be put into actual practice. First, so as to avoid the reefs of individualism and collectivism. the twofold character, that is individual and social, both of capital or ownership and of work or labor must be given due and rightful weight. Relations of one to the other must be made to conform to the laws of strictest justice — commutative justice, as it is called — with the support, however, of Christian charity. (§ 110.)
The calculation of a naturally just wage is thus very simple, at least in theory. First, whatever the free market rate happens to be in strict justice. If that is insufficient, enough should be added in charity to ensure that the worker is able to meet ordinary expenses adequately, thereby fulfilling and completing the requirements of natural justice, that is, justice completed and fulfilled by charity.
But does it end there? By no means. There is a serious problem with paying workers more than the free market rate of wages. It increases costs to the consumer (who is usually the worker under another hat), and builds an entitlement mentality.
And the popes recognized this problem. As Pius XI noted especially, what he said about the just wage applied in the current state of society, not the reformed and restructured society that was his goal. As he said, “the present system of economy is founded chiefly upon ownership and labor” [emphasis added], he necessarily implied different rules apply when the economy is more justly arranged, and workers (and everybody else) can gain income from both labor and capital. As Leo XIII had already pointed out, that would be a more just system:
|People pay most attention to what they own.|
Many excellent results will follow from this; and, first of all, property will certainly become more equitably divided. For, the result of civil change and revolution has been to divide cities into two classes separated by a wide chasm. On the one side there is the party which holds power because it holds wealth; which has in its grasp the whole of labor and trade; which manipulates for its own benefit and its own purposes all the sources of supply, and which is not without influence even in the administration of the commonwealth. On the other side there is the needy and powerless multitude, sick and sore in spirit and ever ready for disturbance. If working people can be encouraged to look forward to obtaining a share in the land, the consequence will be that the gulf between vast wealth and sheer poverty will be bridged over, and the respective classes will be brought nearer to one another. A further consequence will result in the great abundance of the fruits of the earth. Men always work harder and more readily when they work on that which belongs to them; nay, they learn to love the very soil that yields in response to the labor of their hands, not only food to eat, but an abundance of good things for themselves and those that are dear to them. That such a spirit of willing labor would add to the produce of the earth and to the wealth of the community is self evident. And a third advantage would spring from this: men would cling to the country in which they were born, for no one would exchange his country for a foreign land if his own afforded him the means of living a decent and happy life. These three important benefits, however, can be reckoned on only provided that a man's means be not drained and exhausted by excessive taxation. The right to possess private property is derived from nature, not from man; and the State has the right to control its use in the interests of the public good alone, but by no means to absorb it altogether. The State would therefore be unjust and cruel if under the name of taxation it were to deprive the private owner of more than is fair. (Rerum Novarum, § 47.)
And how to bring about this state of affairs? Capital Homesteading suggests one way.