Monday, August 29, 2011

How the first chapter of Capital translates out into reality

The first chapter of Capital isn't as mysterious as it seems, and is in fact quite useful if you can get beyond the terminology. The main point that Marx makes concerns the distinction the appearance of money and store bought commodities, and the reality of the part of the core usefulness of the commodities as well as the role that labor has played in their production. For Marx, the actual value of a good is determined by a combination of the labor needed to manufacture it and the usefulness of the good. What we see as its money price does not always reflect this. Raw materials are also included in the computation, through the labor needed to extract them, as well as their general scarcity. Each of the factors can modify the others.

The difference between the money value of a commodity and its real value can be illustrated as follows. When you see a good at the store, what you see is an object devoid of any sort of social context. You don't see how it was made, where it was made, or who made it. You don't see what materials were used or what byproducts were produced. Whether the workers were treated decently isn't visible, neither is the ecological impact of the manufacture of the good. Instead, all you see is an object with a price attached to it. The social relationships that the object exist in are invisible. Which is not to say that price is the only thing that people look at when considering buying an item. If you're considering buying something, you hopefully will look at the quality of it. If it looks like it will be truly useful and durable, and you think that that quality is congruent with the price, and with your budget, it becomes a good buy. But two similar products can be of comparable quality and price and yet be the outcome of vastly different processes. The real value of a good, whether it's truly a good deal or not, consists of the price and quality as modified by the social and ecological situation and impact surrounding its manufacture.

Mainstream economists rationalize the lack of attention paid to social context by arguing that the price system naturally puts pressure on producers, to rationalize and economize their production in order to maximize their own benefit---to sell more and make more money. In order to sell more, it helps to be able to give a lower price for a similar quality good than your competitors. Eliminating waste in production lowers cost. It also is supposed to lead to innovations in production that make more effective use of labor in order to get more of a return from each employee. The price of any goods used in the process of making other goods is in turn subject to the same pressures. But natural resources, non-renewable resources aren't viewed with an eye for the long term, people are treated as one more input no more different than metal, with similar rights and obligations due, and pollution is downplayed as a serious problem, to say nothing of the actual quality of the goods produced. Price takes on a life of its own that reflects the values and interests of those who set the prices of the goods overall, that is the producers.

For example, lets look at the difference between the price of a car that's assembled from parts made in the United States and that of a car whose parts are made in China. All that the market presents to us are two cars that have different prices, the car using Chinese parts most likely being much cheaper. If we want to be good consumer, we can press the dealer a little bit about quality of the parts, with the assumption being that Chinese parts are of a lesser quality, although there's no hard and fast reason why that should be so. Considerations about what having a plant in a country where people make pennies a day and where serious environmental regulation is non-existent would of course not be presented at the dealership. The damage done by the supply of part after part, produced by company after company, laborer after laborer, coming from a country where very little of what we make is imported, won't be featured. The competition might feature the corresponding benefits of buying a car that is made by union labor in the United States . Under a free-market regime, considerations about what effects what where isn't relevant, and shouldn't be a concern of national policy. Instead, companies should do their best to carve out a niche on the world stage. I would say that information about the social and ecological impact on all levels should not only be made visible, but should directly figure into decisions made not just on a personal level but on a national level as well.

However, none of this is to argue that protection and a preference for social and ecologically responsible companies should come at the expense of quality, or that it should become an excuse for lesser products. The flaw in the "Buy America" movement initiated by the auto industry is that that the Big Three auto makers expected people to buy their cars while they themselves chose to put little effort into modernize their production process, or into raising the quality of their products to entice consumers not to buy Japanese cars. Even in a non free-market system, there would still have to be mechanisms in place to ensure constant that constant upgrades in quality happen. Any invocation of the interest of workers, whether in a free-market system or not, to excuse putting out an inferior product is unacceptable.

The free-market system makes it very hard for regular citizens to influence industry through acting on the true value of goods in their behavior. Buying green, buying responsibly, buying healthy, all of these things help, and they have lead to the evolution of a set of alternative industries that are more responsible. One thing they don't do is lead to a sustained change on a mass scale, the kind of change that a political movement could create. It's unlikely that a mass change in buying alone will ever move things to the point where better ideals win out. Instead, what's needed on top of better consumer behavior is for the companies themselves to be forced to change their operations in order to conform to industrial, ecological, and labor values that promote a better economy, ecology, and quality of life. Forcing is meant here literally, in the sense of not giving them the opportunity or means to do anything else. The corporations who make up the commanding heights of the economy, down to mid size corporations, need to be taken over by society and simply not be given the option of creating industrial waste, of using resources indiscriminately, of giving their workers substandard wages, or of moving to another country. Action should trump the free market.

In this way, society would take its destiny back from the ideology of the free market, an ideology which provides cover for the power that corporations have to control and determine the shape of society, the environment, and the world. I see this as a zero sum game.

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