Date: August 28, 2009

Greetings,

Labor produces all wealth...

Punkerslut:
"My argument has always been that profit is consuming the labor of others without contributing."

Hogeye Bill:
"But it is false that providing capital and/or ideas is not contributing. You overlook all but one of the factors of production."

Hogeye Bill:
"As noted, this is a basic point of disagreement. I think that there are other factors of production just as necessary as labor for most production: capital, land, time, technical/scientific knowledge, and entrepreneurship."

     The factors of production, i.e., capital and capital goods, are likewise -- nothing more than the products of labor. As far as the ideas and entrepreneurship, those could have just as easily been provided by the workers themselves. This has already been the case for hundreds of years, with worker cooperatives or through Capitalists stealing ideas from their workers (as in the production of the automobile engine, or the steam engine, or the textile industries). Capitalist entrepreneurship provides nothing, and its definition is rooted in owning and possessing.

     That is to say, when the workers are properly organized, they are just as capable of providing the "skills" of entrepreneurship -- they do not have the economic means of it, though. Essentially, 'being the owner' is not a contribution, and the workers have never had difficulty fulfilling this arduous, unavailing, back-breaking, and blacklung-giving "job."

Vanderbilt...

Hogeye Bill:
"Childs said that the pool (i.e. the cartel) lasted for six months, not the Vanderbilt empire. That the attempted cartel fell apart after only six months supports my contention."

[...]

Hogeye Bill:
"You're repeating a quote I've already refuted - a tactic that Vanderbilt himself defeated with his pirate steamboat businesses. In real life, that tactic rarely if ever works. It's an anti-capitalist myth."

     The definition of a cartel is a group of industrialists that work together in order to control markets by their collusion. It does not begin and end at the moment that someone declares it to be so. It is a cartel, by the acts of its members, and not by what they call it, or whatever historian wants to revise it as. I had provided a reference earlier for this. [*1] Let me provide another historian, "'Wherever his keen eye detected a line that was making a large profit... he swooped down and drove it to the wall, by offering a better service and lower rates' -- for a time. Then with the opposition driven out, he would raise his rates without pity, to the lasting misery of his clients." [*2] Another history book gives an accurate description of Vanderbilt's model, "...compete fiercely by means of price until the opposition is either broke and can be bought out or pays you to stop competing..." [*3]

     Did Vanderbilt have a cartel? Maybe not. But with the other industrialists, he fixed prices on the market. This is monopoly -- when a market is controlled by a very few interests, and everyone else are its subjects.

BitTorrent...

Punkerslut:
"Downloading music via BitTorrent isn't really done with the consent of the music cartel, since they're stealing and redistributing the music for free. So, I don't think that qualifies as 'absence of price-fixing.'"

Hogeye Bill:
"No, it simply demonstrates that such price-fixing is amazingly unsuccessful."

     That's a quantum leap in deductive reasoning. A black market exists for a product, therefore, price-fixing and collusion among the legal industry is "unsuccessful"? Of course -- the illegal drug market definitely proves that the price-fixing and monopoly of legal healthcare is also amazingly unsuccessful, right? Black markets exist for food, cigarettes, even money. I suppose all monopoly is unsuccessful, and there's no point in even worrying about it.

Concentration of Wealth into the Hands of a Few...

Hogeye Bill:
"J.P.Morgan had a lot of govt help. He first made it big by a govt contract to sell outdated rifles during the Civil War. He bought them from the govt for $3.50, remachined them, and sold them back to the govt for $22 each. They didn't work well and blew off a lot of soldiers' fingers. Later, Morgan used govt power to cartelize the railroad industry under the Interstate Commerce Act. I could go on, but the point is that the industries that you claim didn't use govt aggression in fact did."

[...]

Hogeye Bill:
"Some would no doubt try, as Adam Smith pointed out. But history shows that they would not be successful at it, or at least successful for very long. The examples we've been discussing demonstrate this. In short, we agree that (some) firms will attempt to cartelize, but we disagree about how successful they would be without resort to State aggression. I think they would be rather unsuccessful; you think they would be amazingly successful."

     We both agree that Capitalists, property owners, and other privileged classes of society have used the state to advance its own interests. However, only over the past two hundred years has the means of production changed from the hands of many to an isolated few. It was the introduction of machinery that changed these relationships. Landowners have ranged from industrialists and landlords to poor, destitute farmers. It was not the state, but the evolution of the means of production, that determined the relationship between the workers and the tools that they use.

     State aggression has existed since the dawn of civilization, but the majority of society being employed by a few is a very new fact. Tracing the history of industrialism, however, explains the class division much more logically.

Workers' Emancipation...

Punkerslut:
"My claim is that they [Capitalists] each ... receive wealth that was produced by the laborers."

Hogeye Bill:
"I don't dispute that, but to me there is absolutely nothing wrong with that unless aggression is used. I don't subscribe to the Marxian exploitation theory or the labor theory of value."

     You have no problem with Capitalism? Do you not see, though, that it is at least undesirable by the vast majority? That is to say, the interests of the Capitalists are directly opposed to the interests of the workers. In the words of Marx, "The share of (profit) increases in the same proportion in which the share of labor (wages) falls, and vice versa. Profit rises in the same degree in which wages fall; it falls in the same degree in which wages rise." [*4] This is not a moral statement about exploitation. It's a very lucid and simple explanation of the economic facts, as far as they concern the majority of people in the economy. In the US, there are 6 million businesses, [*5] but 155 million workers. [*6] And the interests of small businesses are just as opposed to their workers as big businesses. Is it not at least desirable that Capitalism is abolished? The property owners live by possessing, by trade, by speculation. Wouldn't it increase the wealth of each individual in society, if we were to reclaim those profits? Wouldn't industry be directed towards the good of society, instead of polluting, selling poisoned food, and propping up dictators in third worlds?

     In the words of Proudhon, to be an employee is to be "subordinated, exploited: his permanent condition is one of obedience." [*7] To be employed means to be splitting part of your wealth with your employer; to be taxed by merchant, middleman, industrialist, and the state for the right to work. All of those parasites must consume as much as possible, otherwise there will be a fall in revenue, and then workers will be laid off, and then less consumption, and then even more layoffs. The economic fluctuation has produced a permanent army of the unemployed; and they are not unemployed because there is not labor to be done, or value to be created and exchanged. It is because the land and the machinery are in the hands of a few; and so long as this fact persists, so long as the productive means of production are in the hands of the few, it will always be directed towards the interests of the few.

     And likewise, in all spheres of economic life of the worker. Factories should be well-ventilated, clean, supplied with safe machinery, and with an efficiently organized means of production; but all of these things are rejected or compromised because of Capitalist' interest in profit. Low-quality, expensive and unhealthy foods await the consumer at the market; streams and rivers that once belonged to communities are sacrificed to the pollutant greed of an industrialist; and always, the depressions and recessions that arise when the wealthy, masters of all things, decide to consume and invest less.

     There is everything wrong with this system. And it is in the best interest of every individual, except those of the wealthy Capitalist class, to abolish it. Essentially, to create a society where individuals can exchange with each other on equal, economic footing. It is when the majority of people must beg for the right to work the land that exploitation and poverty become common. Such a misery can only be ameliorated by giving each the means of production, to make worker and capitalist one -- and to destroy the social ills that arise from the conflict of these two interests, without sacrificing the gains of the Industrial Revolution. In the words of the Anarchist James Guillaume...

Immediately after the Revolution the peasants will be faced with a mixed situation. Those who are already small proprietors will keep their plots of land and continue to cultivate it with the help of their families. The others, and they are by far the most numerous, who rented the land from the big landowners or were simply agricultural wage laborers employed by the owners, will take collective possession of the vast tracts of land and work them in common.

Which of these two systems is best?

It is not a matter of what is theoretically desirable but of starting with the facts and seeing what can be immediately achieved. From this point of view, we say first that in this mixed economy the main purpose of the Revolution has been achieved: the land is now the property of those who cultivate it, and the peasants no longer work for the profit of an idle exploiter who lives by their sweat. This great victory gained, the rest is of secondary importance. The peasants can, if they wish, divide the land into individual parcels and give each family a share. Or else, and this would be much better, they can institute common ownership and cooperative cultivation of the land. [*8]

Hogeye Bill:
"To me, authority (at least the bad kind) necessarily involves aggression. Economic 'authority' is an oxymoron. The economic means is the opposite of the political means (in Franz Oppenheimer's terminology.) Economic power is the power to offer others something they want; political power is the power to coerce others through aggression. Liberty vs. authority."

     I've brought up the example of blacklisting multiple times, but you never want to look at it in the face. All of the businesses get together, and refuse to hire a particular worker, because of their social, political, or cultural ideas. Yes, free in every sense, that you are free to starve; the phrase "give me liberty or give me death" isn't providing two options, but really just gives two names for the same thing. Hence, I use the phrase economic authority to distinguish from political authority. One prohibits the individual from working the land, the other imprisons the individual; in both cases, the person ends up either dead or in absolutely miserable conditions.

     Thank you,

Andy Carloff,

Resources

*1. "Wall Street: A History : From Its Beginnings to the Yall of Enron," by Charles R. Geisst, 2004, First Edition, page 77.
*2. "The Robber Barons: The Great American Capitalists, 1861-1901," by Matthew Josephson, page 13.
*3. "An Empire of Wealth: The Epic History of American Economic Power," by John Steele Gordon, 2004, page 210.
*4. "Wage Labour and Capital," Karl Marx, December 1847.
*5. US Census Bureau, Statistics of U.S. Businesses, U.S. & states, totals, 2006.
*6. "Consumer Price Index Summary". Bureau of Labor Statistics. September 2009.
*7. "General Idea of the Revolution in the Nineteenth Century," by Pierre Joseph Proudhon, 1851, Sixth Study.
*8. "Ideas on Social Organization," by James Guillaume, 1876, Bakunin on Anarchy, translated and edited by Sam Dolgoff, 1971.