Tuesday, September 13, 2011

Labor as something other than a conventional commodity, or why profit sharing is good.

Reading a bunch of left Marxist stuff prompts me to write a little bit about ideas of what labor is and is not.

It's said that a big part of the inequality of capitalism is the inability of workers to get a share of the benefits of capital itself, that is of the built up structure of business over time. While this is a very large part of it, I think there's a more direct defect in the compensation of workers, and that it comes from labor being treated as just another commodity, as a raw material opposed to something in and of itself. If labor is a pure commodity, it's not entitled to a share in any of the profits it makes over and above the market price of its work.

Look at it this way: if you had a garden, and paid a gardener to come in and tend it what you're doing is getting a direct personal service. But if you pay a gardener to come to a lot and garden,but it turns out that the garden they're working on is someone else's, and you're marking up the price, and making money off of it, it's a different story. If you were a gardener in that situation, wouldn't you first be upset, and second, want to raise your price a so that you'd get paid in line with what's being demanded from the customer?

Labor isn't a traditional commodity because it doesn't just passively work for itself, but in a very real way produces the profit the business makes. Admittedly, some of the profit that businesses make is produced by the folks who coordinate the business, who make a production and sales plan, but in the end they don't do the work itself. The value of a service, or a job includes what sort of value it can add to the finished product. And labor should be compensated with a share of that value. Instead, marketplace dynamics cause labor to be priced at a lower value. The tendency of the market is to reflect a high degree of downward pressure because of the control of that environment by the capitalists themselves. For sure, it's good that there's competition and the folks have to prove that they’re skilled and can work efficiently, but outside of unions there's no organization on the part of workers that can counter the institutional power of capitalists to influence the market and to cause the commodified definition of labor to be accepted as normal and natural.

In some areas, there's recognition of a difference between labor done for purely personal gain, as in the gardening in the first example, and labor done for the purpose of making money for other people. Software manufactures recognize it, for instance. A personal license for graphic design software is much less expensive than a business license, even though they're often the same product, and the reason is that the software makers know that the business who uses their software is going to use it to make money for itself. The same goes for licensing photographs, with non-commercial licenses being much less than commercial ones, and for music samples as well. No one really cares if DJs mix some records spontaneously during a live show, but if they make a CD using those songs it's a different matter entirely. It's acknowledged that the reason is that the songs are the product of someone else's labor, that now a person is making money off of them.

Why shouldn't general labor be treated any differently? If a company makes a good profit, the CEOs and executives will get bonuses, but the workers who produce the products won't. The difference is attributed to the great skill in coordination done by the executives, but in the end they're not the ones who actually make the products. The products themselves are what embody the basic value of the company, and if the executives in a particular year are responsible for the selling of more products, aren't they really responsible for the value that's already present in the products being recognized and bought by more people?

Surely, if a company has a good year, then some of that money should go back to the workers. Better yet, why not include it in regular wages as an addition to the normal price of labor? This could easily be negotiated through union contracts.

Looking at labor as simply an input ignores the profitability of the output, and the share of labor's responsibility for that profit over and above the market price of the skills involved.

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