Not my revolutionary, not my materialist
Donald R. McClarey of The American Catholic is disgusted but not surprised that Commonweal has published an article defending the ideas of Karl Marx:
That a Catholic magazine would give space to a man who thinks that perhaps Marx was right after all, and who is a bitter anti-Catholic to boot, might be considered shocking to some. (Marx would have found it bitterly amusing. He had nothing but contempt for those who attempted to mix Christianity and socialism. His phrase, “Christian socialism is but the holy water with which the priest consecrates the heart-burnings of the aristocrat”, summed up his dismissal of this mixture.) However, this is Commonweal, and it is merely reflecting a readership largely consisting of an aging cohort of uber liberal Catholics who have always had a soft spot in their hearts and heads for most things of the Left. [Terry] Eagleton, who apparently may now believe in God while remaining a committed Marxist, is a natural for this target audience.
Mr. McClarey’s assures us, without argument, that Marx “had little understanding of economics,” but his main complaint is that Marx was an atheist who profoundly misunderstood Christianity and a revolutionary whose ideas about what’s permissible in war have more in common with those of, say, Henry Kissinger or William Tecumseh Sherman than with Catholic just-war theory. McClarey quotes the famous bit from A Contribution to the Critique of Hegel’s Philosophy of Right about religion being the opium of the people; and to his credit, he provides enough of the passage for readers to see for themselves that Marx’s attitude to religion was much more complex, and more interesting, than McClarey’s description of it. (And, by the way, if you think Marx was wrong about Christianity, as McClarey and I both do, why would you care whether he thought it was compatible with socialism? Marx might be the best judge of Christianity’s compatibility with Marxism, but not all socialists are Marxists.)
The clear implication of McClarey’s post is that Catholics can have nothing to learn about political economy from atheists or advocates of revolutionary war. Which is why it’s so strange to find him ending with this:
For myself, when it comes to religion I will stick with the Church, when it comes to politics with Edmund Burke, the Founding Fathers and Abraham Lincoln, and when it comes to economics, with Milton Friedman, an easier amalgam of beliefs I think than attempting to baptize Marx.
Milton Friedman didn’t have a religious bone in his body and was no less a materialist than Marx; the Founding Fathers and Edmund Burke believed that the American colonists were justified in taking up arms against the British; Abraham Lincoln approved Sherman’s bloody March to the Sea. So McClarey will have to say a little more about what he objects to in Marx’s socialism (the subject of Eagleton’s essay) if he wants us to take him and his amalgam seriously.
McClarey claims that “nothing done by the Communist states that claimed Marx as their ideological father in regard to the suppression of adversaries and the use of mass terror to remain in power cannot find full warrant in the works of Marx.” Let him tell us, then, where exactly Marx writes about labor camps, show trials, and the mass starvation of inconvenient peasants. Certainly there’s no warrant for these things in the few passages he cites.
Finally, what makes McClarey so sure that Eagleton’s article reflects “a readership largely consisting of an aging cohort of uber liberal Catholics who have always had a soft spot in their hearts and heads for most things of the Left”? In fact, we published this article expecting that many of our readers wouldn’t agree with it. And judging from these comments by that “aging cohort,” I’d say we were right. (Does McClarey not age? Another market miracle!) In the four years I’ve been at Commonweal, I’ve found our readers to be a various and unpredictable bunch. But what do I know? I’m just a punk thirty-five-year-old. Maybe when I’m McClarey’s age I’ll understand the minds of aging Commonweal types as well as he does.
McClarey apparently makes the common error of confusing the morality of Marxian communism with that of Lenin and, worse, Stalin.
I was in college during the McCarthy era when most academics knew that it was worth their careers to say anything positive about Marx. The first time I ever heard an academic of any stripe say *anything* good about Marx was in the mid=50s at Catholic University. Msgr. John K. Ryan, then a philosophy professor, had the courage to say that Marx had a deep sympathy for the poor and loudly insisted on justice for them, so much so that he, Marx, sounded like an Old Testament prophet condemning the unjust and the greedy. His, Msgr. Ryan’s, was a voice crying out in the wilderness. He remains one of my academic heroes. Had there been more like him there would undoubtedly be fewer McClarey’s today.
Who is Donald McClarey?
Donald McLarey has no understanding of economics whatsoever. Just look at some of his posts on the subject. He would fail the most basic courses on macroeconomics. Plus, he wallows in the putrid ponds of American laissez-faire liberalism. Not worth the attention.
On the whole, I enjoy reading what Eagleton writes. But I am worried by aspects of this article, though maybe the whole book would be different. One problem of course is that Marx himself, to say nothing of his disciple Engels, was extraordinarily prolific and one can cherry-pick quotations from here and there to prove just about any case one cares to make.
Not that I’m saying Eagleton does that. I think he has another problem. Since I’m a historian, I’ve always found Marxism useful as an analytical tool. You do not have to be a true believer in the Marxist view of the independent economic base and the dependent political and cultural superstructure to understand the important relationships between economy and culture, including politics, and to be grateful to Marx for hammering the point home. But you also have to be prepared to admit that Marx could be wrong — viz., his view in the Communist Manifesto of 1848 that nationalism would fade rapidly away as capitalism, and its international aspects, rapidly advanced. The next few decades would bring highly nationalistic wars (Germany, Austria, Italy, the Balkans, etc.) and of course the terrible conflicts of 1914 and 1939 lurked in the future.
But for many, Marxism has not simply been an analytical tool for social understanding. Instead it has become an ideology (what Marx himself called a “false consciousness”), and the belief in its tenets and its predictive inerrancy become the criterion by which one’s commitment is to be judged. (History, by the way, can also tell us much about what happens to churches when religion is allowed to become ideology.) Hence the ease with which self-styled Marxists too often became pushovers first, for Lenin, with his ideas of “democratic centralism,” for Stalin (or sometimes, Trotsky), and for Mao (whose labor camps, cited by Eagleton, were perhaps the least of his abuses. Since I”ve just finished reading Snyder’s Bloodlands, it’s also clear that Stalin’s Great Terror, which Eagleton also cites, was by no means the worst of his crimes).
Eagleton seems to me to be caught somewhere in the midst of Marxism-as-analytical-tool and Marxism-as-ideology in which we profess a belief, because it appears to answer our questions. I have no huge quarrel with Eagleton’s own analysis of the role of international capitalism today, and others have written of the problems of a clique of international super-rich gathering at Davos and such places to divide the world between them.
But today the Manifesto lies 163 years behind us, and there has been in the intervening years a lot of water over the dam which flew in the face of Marxism (forgive the REALLY badly mixed metaphor) Eagleton’s analysis of capitalism today of course makes use of various strands of Marxism as an analytical tool. But elsewhere his writing seems to verge towards Marxism as ideology, and then it becomes less convincing. (I also wonder whether the age of revolutionary nationalism is really behind us, as he suggests — perhaps from his perch in the E.U.).
P.S. On the question of “market socialism,” which Eagleton addresses: it is a term the Chinese are very fond of (they also call it “socialism with Chinese characteristics”). But outsiders, looking at the combination of Chinese capitalism, red in tooth and claw, and strict Party political and cultural control, are more apt to see it as Marxist-Leninism become Market-Leninism. Beijing thinks it is socialism; is it?
Of course Marx was right. But he knew of the institution of the factory not that of the 21st century corporation. It is only by wilfully stretching the meaning of ‘capitalism’ far beyond what either Marx or his neo-classical opponents meant by the term that modern economic life can be associated with market liberalism or bourgeois freedom. The world is corporate not capitalist. And it already was so in most socialist countries long before the political collapse of communism. Control over the means of production has passed long since to those who are no longer owners, namely the executives of the several thousand or so large companies which dominate world production, finance and trade. In fact and in law it is unclear who might own the corporation in any traditional sense, but it certainly isn’t the shareholders who only have ‘ownership’ of rights not real property. The state too has withered as Marx said it would, but as the captive of the corporation which dominates both the political and legislative processes. So that, as Nicholas Boyle puts it “…the state…becomes the local branch of Global Accountants Inc., issuing ever more regulations in ever finer detail to extend and reinforce the proletarian status of those who were once its citizens.” Eagleton’s question therefore is merely rhetorical, but like all good rhetoric provokes thought beyond conventional categories.
Upon what evidence does McCLarey judge Eagleton “bitterly anti-Catholic”? I have read a lot of Eagleton and find him to be a sympathetic fellow traveller.
I think that at this point it would be safe to say that none of the great 19th century economists got it entirely right. Not that this really matters; Adam Smith, who most definitely believed in government regulation has been born again a laissez faire capitalist while Marx has apparently turned into that stuffed monkey that rests in that granite box on Red Square.
What we are seeing coming back isn’t Marx, but the kind of questions that Marx and others asked in the 19th century that we haven’t been asking enough these days. The question is; are there social classes of capital and labor and if so what rights do these classes have in the economy? Or to put it another way, is the economy a moral and social order? The thrust of modern capitalist apologetics is that the economy is a technical order. It is a “neutral” vessel within which are contained moral orders. Capitalism is only in danger of becoming a moral order when people start talking about the “rights of workers”. This totally unwarranted intrusion of morality into the technical system causes the technical system to operate inefficiently. In certain cases, the technical capitalist order can break down entirely and turn into a monster called socialism. The real threat in modern society isn’t church and state but church and economy. That’s why someone like Donald R. McClarey who would probably describe himself as a “conservative catholic” can say with a straight face “when it comes to religion I will stick with the Church, when it comes to politics with Edmund Burke, the Founding Fathers and Abraham Lincoln, and when it comes to economics, with Milton Friedman.” In fact, what the Church requires is that a Catholic is a Catholic in religion, a Catholic in politics, and a Catholic in economics. This doesn’t mean that the Church requires these things to be dominated by people who call themselves Catholic. It means that the Catholic virtues of justice, temperance, prudence, fortitude, charity, faith and hope should not be held in abeyance while some sort of amoral technical system of economics and politics works its diabolical magic.
For what it’s worth,I second unagidon’s remarks.
I ignore all economists who can’t say it’s essential to have preferential option for the poor.
The Catholic virtues apply to all persons, and thus we must never neglect the poor and the vulnerable.
unagidon —
I think there’s a great deal to be said for calling an economic system a “machine”, or, as you put it, “a technical system”. An economic system, like a machine,embodies certain laws that cannot be eliminated. so there are certain inevitabilities about how they behave, and conservative economists are right to recognize the fact.
However, economic systems are not *entirely* deterministic. They are the kind of machine which has movable parts or changeable parts. They are like, for example,old-fashioned typesetting machines which had varied outputs depending on which parts the typesetters took out or put in. They’re like musical organs played by a musician who varies the stops and gets varied results. The results are not random — they too are inevitable, but dependent on changes within the machines.
Economic systems are also like guns, which are also machines.. Like guns economic systems exist inevitably within a psychological and moral dimension, and like guns they are means to human ends. As such the contingent decisions of the system executives cannot be separated from the rights, needs of and desires of workers, owners, and the public.
So the conservative economists are right to appeal to certain rock-hard, even merciless economic laws in making some decisions, but they can also be terribly wrong when they do not factor into their decisions the wider psychological and moral dimension in which the system operates.
Perhaps this should not be mentioned, but some who did not find The American Catholic blog to be the most reasonable and appealing site on the web created a parody of it called The Catholic Fascist, which, while not really the best satire I have ever seen, does have an amusing home page.
If you check out the post on The American Catholic, do read the comments by WJ, whom I bump into on various other sites and who strikes me as very intelligent, knowledgeable, and fair minded.
I’m not sure how the 1971 Paris Commune, which Marx supported doesn’t fit any theory of Just War.
Furthermore, Marx admired Abraham Lincoln and wrote a series of articles covering both war in the US and the press coverage of it in Britain which he criticized.
Here’s one on the expanding Southern slave trade and another from 1861 that concludes that only a march through Georgia will defeat the South.
The war ended with the liberation of four million slaves, worth some $3 billion at the time, over $1 trillion dollars in today’s terms. Marx wrote, “Never has such a gigantic transformation taken place so rapidly.” When we consider slaves as property and realize that the emancipation of the slaves meant the expropriation of $1trillion from a stratum of approximately 300,000 people (slave owners) – you can see, in economic terms, how revolutionary an event this was.
Ann, accounting is a technical system. There are technical aspects of economics (like accounting and finance) but economics is political economy and political economy (whatever the political economy is) is the moral system within which we produce, consume, and exchange things. The idea that it is in some way a machine (and especially the idea that capitalism is some kind of fragile little machine that can be easily broken by greedy workers) is pure metaphysics. And not even good metaphysics.
“However, economic systems are not *entirely* deterministic. They are the kind of machine which has movable parts or changeable parts. They are like, for example,old-fashioned typesetting machines which had varied outputs depending on which parts the typesetters took out or put in. They’re like musical organs played by a musician who varies the stops and gets varied results. The results are not random — they too are inevitable, but dependent on changes within the machines.”
A macro economy is the aggregation of many individual microeconomic actions and transactions. In other words, it is the sum total of many discrete human behaviors. An economy isn’t really deterministic except insofar as amassed human behavior is deterministic. It is certainly true that human behavior, taken on a large scale, is reasonably predictable. If economic behavior seems deterministic, it is because we are fairly adept at analyzing, understanding and even predicting large-scale human behavior.
Because economic activity is human behavior, economic activity also encompasses the limitations and quirks of human behavior. There is always room for human free will, human mistakes, and human sinfulness in economic activities, and that adds an element of unpredictability. For example, it is mistaken to assume that the value of a home in the US will always rise. And yet an entire economic structure worth billions – trillions – of dollars was built on that mistaken assumption.
Ann, I like your images of the typesetting machine, the pipe organ and the gun as metaphors for the economy. One way that the economy *isn’t* like any of these things is that the typesetting machine, organ and gun are all easily controlled by the typesetter, organist and marksman – those who have mastered the machines and are in possession of their faculties.
The economy isn’t a polished, well-oiled, discretely contained machine. It’s an enormous, ungainly pile of stuff – a towering heap of individual transactions. Once it starts tottering, there is no single person or agent who can easily right it again. Even strong central governments with their central banks, currency printing presses and taxing and regulatory authority are hard put to manage an economy, especially when it veers outside the boundaries of predictable behavior. It’s like a cowboy trying to control an entire herd of cattle that has become spooked, has broken through its fences and is running roughshod over the prairie.
“The economy isn’t a polished, well-oiled, discretely contained machine. It’s an enormous, ungainly pile of stuff – a towering heap of individual transactions. Once it starts tottering, there is no single person or agent who can easily right it again. Even strong central governments with their central banks, currency printing presses and taxing and regulatory authority are hard put to manage an economy, especially when it veers outside the boundaries of predictable behavior. It’s like a cowboy trying to control an entire herd of cattle that has become spooked, has broken through its fences and is running roughshod over the prairie.”
This sort of reads like a fairy tale doesn’t it? And it seems to contradict the idea that capitalism is somehow natural and robust, doesn’t it? In any case, if “it veers outside the boundaries of predictable behavior” we’re not really talking about something accessible to science any more are we?
“Christian socialism is but the holy water with which the priest consecrates the heart-burnings of the aristocrat”
Does anybody here disagree with this? And how many religious observe poverty today or ever? Might one conclude that it is better to take a vow of poverty than to be poor.
“if “it veers outside the boundaries of predictable behavior” we’re not really talking about something accessible to science any more are we?”
A surprising observation from an insurance executive :-).
“The question is; are there social classes of capital and labor and if so what rights do these classes have in the economy? Or to put it another way, is the economy a moral and social order? The thrust of modern capitalist apologetics is that the economy is a technical order. It is a “neutral” vessel within which are contained moral orders. Capitalism is only in danger of becoming a moral order when people start talking about the “rights of workers”.”
This will not surprise you, unagidon, or anyone else who reads my comments on these topics, but my view is that as soon as we start categorizing the economic world into capital and labor, and oppose them to each other (which I take to be Marx’s key insight, btw), we’ve already taken the wrong fork in the road, and one that leads to much evil and hardship.
To say that is not to deny that there are exploitative capitalists, nor that there are exploited workers. Of course there are. I bring up the example of WalMart often, and I don’t hesitate to bring it up again. WalMart owes its workers a living wage, and it’s an injustice that cries to heaven that they don’t receive one – while Sam Walton’s descendents are among the very richest people on Planet Earth. All over America, there are workers being exploited. A lot of them speak Spanish as a first language, and a lot of others work for hourly wages in cubicle farms, with headsets on their heads and their eyes staring at computer screens. They deserve more than they’re getting. They should unionize. The government should be doing more to help them. So should the Catholic Church.
Marx can’t explain Microsoft, Oracle, Intel, HP – huge and hugely successful corporations that pay their employees much, much more than a living wage, that share their profits with their employees, that have spawned entire industries of suppliers and channel partners that have also prospered, that are now bringing prosperity to corners of the world that have been desperately poor until now.
Capital and labor are joined at the hip. When the employer prospers, the employees, as one of (but not the only) principle stakeholders, should prosper along with the owners. When the employer struggles … then perhaps the employees should expect to not be as prosperous. That strikes me as a profoundly Christian relationship – a relationship founded on peace, justice, equity and unity. Marx was about struggle, class war and conquest. No thanks.
Jim, I’m sure one was better off being a slave of Thomas Jefferson’s than a slave of, say, Nathan Bedford Forrest.
A class war between labor and capital is one road that people have gone down, but I’m not sure that it follows that there are no classes or that this is the only possible road. We see a transfer of wealth in this country that is systematic. It isn’t just “happening”. It isn’t just a natural function of an amoral economy. We see an entire political party whose stated function is to support capital and oppose labor. The worker isn’t a “principle stakeholder” in any company like the management is a principle stakeholder. The worker is an expendable tool that has been fully compensated by his last paycheck. Microsoft et al have been paying good wages in a rather short term job market where they are competing with each other for certain workers. But you should know that the age of the high paying computer programmer has been over for quite a while and while there may be some out there making a pile, the number that are is getting smaller, not larger.
There is no unity between labor and capital because labor controls capital. It is not a partnership except in capital’s propaganda. Capital will close down plants and destroy entire cities to increase their profit margins. There is no equity between labor and capital. Marx’s main point was that the capitalist buys the worker’s time and then uses it as he sees fit in order to increase his return from that payment. What he gets out of it he can keep. This is why we have seen productivity increasing dramatically while wages have stayed flat these last 20 years. There is no justice between capital and labor. The flow of a larger share of the national wealth is not just. There is no just reason why a smaller percentage of the population should obtain a larger share of the wealth. And of course, without justice, equity, and unity there will be no peace.
You might say that when the employer prospers the workers should also prosper. But that’s the point, isn’t it? There is no systematic reason for the employer to share the wealth with the worker and every systematic reason for the employer to take as much as they possibly can. Yes, capital and labor are joined at the hip. But only one is doing the carrying and one is doing the riding.
Opium schmopium.
Graham Greene’s Msgr. Quixote makes the point that in the 19th century, opium brought to mind not junkies and needles, but merely laudanum, which the poor could not afford. Greene/Quixote also points out Marx’s praise for the Church and christendom, especially as found in the Manifesto. A fine and thoughtful little novel. The movie, starring Alec Guinness, is also quite good and faithful to the book, but unfortunately quite difficult to get.
Craig –
I like Msgr. Quixote too. Very light-hearted for Greene, but it too has its depths,
“We see a transfer of wealth in this country that is systematic. It isn’t just “happening”. It isn’t just a natural function of an amoral economy. ”
To the extent that it is happening, it’s neither natural (if by “natural” you mean “a manifestation of the natural order”) nor systematic (if by “systematic” you mean “coordinated/conspiratorial”). It’s the accumulated outcomes of very many individual, unconstrained decisions and actions by many millions of people looking to their own self-interest. At the end of the day (or year or decade or generation), someone totaled up the national balance sheet and discovered that, on the whole, one group ends up farther ahead than another group. If we decide (whoever “we” are; who gets to decide these things?) that the outcome is unjust, then it would seem that some additional constraints need to be introduced into the marketplace in which those individual transactions and decisions take place.
Please note that “additional constraints” doesn’t equal “war between the classes” or “worker ownership of the means of production”.
“We see an entire political party whose stated function is to support capital and oppose labor.”
Even a cursory review of political donations during the ’08 presidential campaign illustrates that the political parties don’t divide along capital/labor lines.
“There is no unity between labor and capital because labor controls capital. It is not a partnership except in capital’s propaganda. Capital will close down plants and destroy entire cities to increase their profit margins.”
And labor will bankrupt capital to squeeze that extra $.50/hour out of it.
Nobody ever said it was a partnership. I said they are joined at the hip. By that I mean that their interests – their self-interests – run together.
“Marx’s main point was that the capitalist buys the worker’s time and then uses it as he sees fit in order to increase his return from that payment. What he gets out of it he can keep. This is why we have seen productivity increasing dramatically while wages have stayed flat these last 20 years.”
Having been in the work force the last 20 years, I can report from first-hand observation that workers are not noticeably brighter nor working noticeably harder today than they did 20 years ago. Research supports this: the average number of hours worked has been relatively flat since 1980. (Of course, over longer time horizons it has declined substantially).
My conclusion is that productivity has increased primarily because of investments in new plant and technology that allow those workers, who are not working any harder than previously, to produce more and better output. Those investments were made by – and the risks of those investments borne by – capital, not labor.
Our economic system is that those who bear the greatest part of the risks – capital – reap the greatest part of the rewards. You are arguing (if I understand your argument) that workers should share more in those gains. I ask you: what is your philosophical explanation for why workers – not just the hard-working workers, not just the risk-taking workers, not just the workers who receive sub-living wages, but all workers, simply by virtue of working – should receive a greater share than they do? I also ask: how do we know when justice has been achieved in this regard – how do we know when the workers have finally received enough? Is it possible, say in Wisconsin, that that public-sector workers have already reached – or exceeded – that optimum point?
unagidon –
There are some basic ambiguities in this discussion, notably “an economic system” can mean either an abstraction (like Marx’ writings) or an actual instanstantiation of an abstraction or some hybrid of abstract systems.
All I’m saying is that there are certain parts of actual systems which have necessary relationships witt each other and *some* of their actions are predictable with a high degree of probability. In this they are machinelike. When conservative economists appeal to certain economic laws they are recognizing this fact — there do seem certain inevitabilities that are beyond the control of the businesses within the system. Other results are not beyond their control, and for them the businessmen are responsible.
By the way, I think that the term “economic system” itself is itself something of an oxymoron. “System” usually means a set of related elements that work together in a harmonious fashion. But within an economic system basic parts — the businesses — have as one goal to gobble up or destroy each other. (Marx saw this clearly.) That seems to be the nature of economic competition. And therein lies a theoretical rub, not a practical, moral one. Or is it a sin for one business to attempt to gobble up or destroy others? Are non-socialist economic systems which do not include such competition even possible?
I’ll take a crack at this by looking at the whole thing like the businessman I am.
Jim you are saying that the holders of capital have unlimited upside to their capital investment because they might have some “risk” on the downside. You don’t define the downside, so you are in effect saying that there is no proportionality to the upside and the downside. Or to put it another way, if the capitalist risks “everything” then he deserves a return of “everything”. The worker, on the other hand, has no more than a static right to be paid on the basis of how hard he works. You seem to think that workers work no harder now than they did 20 years ago, so in fact it should not be surprising that wages have stagnated. The worker’s payment is set.
But does the worker have any risk? In your theory, only the capitalist has any risks. A worker learning a job, commiting himself to working well, buying a house, living in a community, investing in the community (in its infrastructure, public buildings, schools, etc), rearing his children to work for a future holder of capital; none of these things are risked in your scenario. Capital is prime. When there are risks, they are only risks to capital. When there are rewards, they are only rewards to the risks to capital. So the entire economic system of capitalism is set around a single value, which is the accumulation of capital. (This is in fact what Marx said.)
Your theory requires you to disaggregate things into individual transactions. So when the car company moves from Flint to Mexico, it isn’t the entire population of Flint that is hurt. It is individual workers in Flint who were not willing to work at Mexican level wages. After all, capital is what is important here. Your transactional assumption also individualizes the capitalist so that there are nice ones and bad ones. But everyone is just folks.
In your system, where capital gets all the rights, it may happen that the standard of living may go up or go down or that capital may accumulate in the hands of a small share of the population, but that is just fine. What is important is that the rights of capital are protected because only capital has rights. Oh, I know that you will say that of course workers and people have rights. But since you explicitly say that capital is the real creator of wealth and the input that should be most privileged, you are saying that capital is primary. You are in fact saying that capital comes first and then, somehow, the workers come next (joined at the hip or not).
It is interesting that you talk about risk. Since I am in the risk business, let me tell you how risk works. Risk is mitigated by being spread around as widely as possible. When a capitalist uses his capital, he is not “risking” it like he will lose it all. He will have all kinds of ways to mitigate risk. The risk is not only calculated; it’s spread. In the United States, capital is covered in all kinds of ways. Do you think it was just a coincidence that it was capital that was bailed out and not Joe Sixpack? Do you really think that the US and the industrialized world doesn’t have very sophisticated and interlocked political and financial mechanisms to protect capital? Capital is the game. What the worker gets can be viewed as a by-product of the economy, not its main goal.
“Or to put it another way, if the capitalist risks “everything” then he deserves a return of “everything”. The worker, on the other hand, has no more than a static right to be paid on the basis of how hard he works. You seem to think that workers work no harder now than they did 20 years ago, so in fact it should not be surprising that wages have stagnated. The worker’s payment is set.”
In fact, I’ve said nothing about “deserves”. Nor did I say that workers wages have stagnated because they don’t work any harder. In point of fact, my belief is that how hard a worker works correlates only very weakly to how much she gets paid. Since you’re a businessman who presumably has employed many people, I’d expect you’d agree.
The labor market determines how much a worker gets paid. The clever shirker and the earnest workaholic in the same position usually earn roughly the same amount of money. In a union shop, they may well earn identical wages.
Flint is a shell of old Flint now instead of transforming itself into Mumbai, or even Chicago, because the global labor market pulled the wage rug from underneath it, and the two principal parties to the tragedy, the firms in the auto industry and the unionized workers in the auto industry, did an abysmal job of recognizing and reacting appropriately to the changing market. Whose fault is that? The conventional wisdom is, blame everyone – the employers, the unions, the government, the Japanese, etc. Really, though, blame the global labor market. But it’s like blaming the weather – complaining about it doesn’t change it. No single entity can change it.
Those workers in Flint followed the Catholic social teaching playbook, as expounded here, to a tee. They organized. They struck. They even gooned it up on occasion, for a good cause. They fought hard against the enemy – their employers. They were the little guy and they deserved more. For a while, they prospered. Essentially unskilled laborers – assembly-line and factory workers – had a taste of the middle class for two or three generations. Now they have nothing. Nothing. It’s all gone. Maybe what unions deliver is a couple-of-generations respite from the labor market.
For a larger-scale version of the story, move down I 75 a few miles and check out Detroit.
“But does the worker have any risk? In your theory, only the capitalist has any risks. A worker learning a job, commiting himself to working well, buying a house, living in a community, investing in the community (in its infrastructure, public buildings, schools, etc), rearing his children to work for a future holder of capital; none of these things are risked in your scenario.”
Not at all. none of us can live a risk-free life, and any representations to the contrary are so much snake oil or utopian pipe dreams.
You’re right about workers. They do invest a lot – they risk a lot. And in many cases – during the 20th century in the United States, seemingly in most cases – those investments paid off handsomely for the workers. The older generation in my extended family is filled with people who bought a house as a young adult for what would today be a ridiculously low amount of money, worked hard their entire lives, paid off their mortgages at some point, and now own property worth a multiple of what they paid. Good investment for them. There are entire towns like that, all over the US. For them, the risk paid off.
It isn’t just workers. Business owners, professionals – people from all economic classes and walks of life make those personal and community investments, take those risks. And risk being what it is, those investments don’t always have a happy ending. In a place like Detroit, it isn’t just the working-class neighborhoods whose houses have shrunk in value – there are tens of thousands of white-collar families who are underwater on their mortgages now.
Business owners do all of the above – they buy houses for their families, pay for public schools, etc. But they risk more besides. They also invest in their businesses. You’re right that sometimes those investments pay off spectacularly well. When they do, a lot of goodness flows from that – it creates a lot of jobs for a lot of people. Pretty often, though, the investments don’t pay off – that’s the nature of risk, even risk that is managed and spread around. Most business start-ups fail. Yes, there are ways that investors can shield themselves from much of the downside of risk, from incorporating to all sorts of other ways that you undoubtedly understand much better than I do. Should the workers share more in the failures of bad investments, too, besides losing their jobs? Or do workers only get to share in the upside of other people’s risk?
Here’s the thing: I don’t know what constitutes morally fair wages. I do know that there are certain human rights that must be provided: a living wage (whatever that means), decent working conditions, health care, education, leisure time, and so on. After that point has been reached, I don’t even know what moral criteria to apply to determine how much the owner gets to keep and how much should go to the workers.
The free market’s answer to that perplexing question is, he who takes the risks enjoys the rewards. If workers want to propel themselves into the capitalist class, then they need to take more risks – usually that means, go start their own businesses. It’s not perfect, and it’s certainly subject to abuse. I’d be open to a better way but haven’t seen one yet.
The unionist’s answer is, whatever you can squeeze out of the b*stards, you deserve; and what is ours is ours and who cares about anyone else – meaning, the owners, the taxpayers, the poor dopes who aren’t in the local, the other humanity inhabiting the planet. If that answer is better than the free market’s answer, I don’t know why. Do you?