“It is a truth universally
acknowledged, that a single man in possession of a good wife, must be in want
of a job.” That, of course, is the
famous opening line from fictional author Gianny Austin’s apocryphal novel, Property
and Prejudice, a comedy of manners in which ownership of the means of
production (except for an economic or political élite) is depicted as
being not quite polite, and the characters spend all their time cleverly
positioning themselves for higher wages and fixed benefits, and then wondering
why prices are so high and why other people keep telling them what to do.
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| Some things are just wrong. |
We, of course, made all of
that up. As far as we know, there is no
novelist or even writer named Gianny Austin, although there is a book titled Prejudice
and Property (but it’s not a novel) and another titled Pride, Prejudice,
and Property (that’s not a novel, either).
The problem of people locked into the wage system is, however, quite
real, and has had a serious and very damaging effect on our understanding of
human dignity.
As we saw in the
previous posting on this subject, both capitalism and socialism embody the
belief that the only way for most (if not all) people to gain a living income
is wages paid for their labor. In the
minds of many people, this has developed into the fixed belief that “human
dignity” absolutely requires a wage system job, and that you are somehow less
than human if you don’t have a “job.”
This was, in fact, embodied in Nazi theory and even the legal system
with the concepts of “useless eaters” and “life unworthy of life.” The whole “Culture of Death” is based on the
assumption that some lives are inherently worth more than others.
Even when someone has another
source of income, such as charity, welfare, or retirement savings or a pension,
the tendency is to view the income as a substitute for wages. For example, under retirement law in the
United States, a pension is viewed as “deferred compensation,” i.e.,
money paid in to a qualified retirement plan by a plan sponsor to be paid out
to plan participants after retirement as a sort of “continued wage” that was
already earned while the participants were working.
Even in Catholic circles the
idea has entered in with a vengeance that “human dignity” necessarily means “adequate
wage income.” This has given the “Pro-Choice”
movement one of its most effective propaganda weapons against the “Pro-Life”
movement: the claim that “Pro-lifers don’t care about people after they’re
born.” Believe it or not, we actually
got attacked by a “Pro-Life” leader or two when we recommended a “Pro-Life
Economic Agenda” that incorporated a recommendation that “as many as possible
of the people prefer to own capital” and generate a living income through
ownership instead of or in addition to wages.
One economist snarled that the “Pro-Life” movement already has an
economic agenda: the just wage . . . implying that we called for an unjust
wage!
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| Ditto |
In any event, there is a
definite prejudice in modern society against widespread capital ownership. Whether this has been enculturated by
capitalism (which we define as concentrated private ownership of capital) or
socialism (which we define as abolition of private ownership of capital) is
probably a moot point at this point. The
bottom line is that somehow the very thing that Aristotle and others down to
the present day have insisted is that private property in capital, the chief
prop of human dignity, has somehow become regarded as the principal thing
attacking human dignity!
As we saw, the argument goes
something like this. 1) Human labor is
inextricably linked to the human person and is therefore the natural way for
human beings to live. 2) . . . well,
there is no 2. That’s the whole
argument. That is, that’s the whole
argument in favor of labor. It’s when we
get into the argument against private property that things get
interesting. Or weird.
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| David Ricardo |
From the laboristic
orientation, human labor is the only thing that creates property because human
labor is the only thing that is productive.
This assumption caused a few problems for those advocating the labor
theory of value, but they were easily . . . or at least glibly dealt with.
For example, David Ricardo (1772-1823)
had a slight difficulty with what Adam Smith (1723-1790) handled fairly easily
. . . but then, Ricardo was “correcting” Adam Smith’s theory of the three
factors of production, land, labor, and capital. As far as Ricardo was concerned, there is
only one factor of production: human labor.
As he declared in the opening passages of his Principles of Political
Economy and Taxation (1817),
It has been observed by Adam
Smith, that “the word Value has two different meanings, and sometimes expresses
the utility of some particular object, and sometimes the power of purchasing
other goods which the possession of that object conveys. The one may be called value
in use; the other, value in exchange. The things,” he continues, “which
have the greatest value in use, have frequently little or no value in exchange;
and, on the contrary, those which have the greatest value in exchange, have
little or no value in use.” Water and air are abundantly useful; they are
indeed indispensable to existence, yet, under ordinary circumstances, nothing
can be obtained in exchange for them. Gold, on the contrary, though of little
use compared with air or water, will exchange for a great quantity of other
goods.
Utility then is not the measure
of exchangeable value, although it is absolutely essential to it. If a
commodity were in no way useful, — in other words, if it could in no way
contribute to our gratification,--it would be destitute of exchangeable value,
however scarce it might be, or whatever quantity of labour might be necessary
to procure it.
Possessing utility, commodities
derive their exchangeable value from two sources: from their scarcity, and from
the quantity of labour required to obtain them.
In other words,
where Smith said a thing is worth what the customer is willing to pay for it,
Ricardo said all things already have utility value (which is what Smith said), so they get their value from the labor it took to produce them (say what?); a thing is worth the labor it cost to produce it combined with its
scarcity. Of course, you’re not supposed
to ask, What if it takes immense labor to produce a unique item that nobody
wants?
That is what we
call “a can of worms,” and we will look at it and other problems associated
with the labor theory of value in the next posting on this subject.
#30#