Inequality, morals & Marxism

One thing this crisis is demonstrating is that there are plenty of bad employers: the Guardian and Labour List both have lists of them. Another is that, as Sarah O’Connor says, “the people we need the most are often the ones we value the least.” As Paulo dos Santos says, society “grossly undervalues” care work and other jobs essential to fighting the pandemic.

Both these facts show the need for a Marxian perspective.

First, we must ask: why are care workers and others so underpaid? It is certainly not because they lack moral desert. Nor is it because they lack skills: caring demands immense “soft skills” such as patience, discipline and an ability to get on with people as well as physical ones. From a purely technical point of view – that is, one divorced from socio-economic factors – it would be cretinous to claim that a nurse is less skilled than the grifter opinion-mongers who pollute the media.

Instead, care workers are badly paid because they lack power. Some of this is the result of longstanding norms: work done by women and immigrants has long been stigmatized, devalued and regarded as “unskilled.” But another part of it is simply a lack of outside options and hence of bargaining power. As Paulo says:

Market wages and conditions reflect the precarious social positions and sometimes utter desperation of those who typically perform them.

The point, of course, broadens. As Rick said, “all pay is, ultimately, a function of power.” It is trivially true that labour is the source of value, as this lockdown is reminding us. But how that value is distributed depends upon power. Your “skills” are only one element in your power: parlaying these into a decent income is another matter.

Power also lies behind the fact of bad employees. Big firms have a degree of monopoly power: they wouldn’t be profitable if they did not. Good employers use this power to share rents with workers. Bad ones, however, use their monopsony power to jack up the rate of exploitation.

What should be done about this? Some leftists think we need to make a moral case for paying key workers more and that we need to shame bad employers into improving.

Moral exhortation, however, might work sometimes but it is not enough. We do not reduce burglary or murder merely by appealing to criminals’ better nature. We use force as well. Similarly, we won’t abolish poverty pay and bad working conditions merely by asking nicely.

We must instead realize, as Marxists do, that material conditions matter. As the late great Norman Geras wrote in his essay Marxism and Moral Advocacy, ethical analysis and advocacy:

Need to be done with some thought for the social and material conditions of attaining any given ideals, the means of and agencies for attaining them, [and] the social interests and movements that can conceivably be coupled with or become attached to the ideals and imperatives in question.  

It is easy to see how we might abolish the material conditions that give rise to inequality, bad employers and poverty wages. Macroeconomic policy must be aimed at ensuring over-full employment. We need strong trades unions and a high citizens basic income to empower workers to reject bad pay and conditions. And government (and local authority) procurement should be used to encourage coops. 

Most social democrats would agree with this. We Marxists, however, have two doubts.

The first concerns how to get there. How do we mobilize the social movements and interests that would deliver a government committed to these, and weaken those that would prevent such a thing? 

The second is that these policies are only stepping stones, part of what Erik Olin Wright called an interstitial transformation (pdf). They will lead to a squeeze on profits. When this happened in the 70s, it led to a backlash against social democracy and to Thatcherism. The challenge is to ensure that it leads instead to socialistic forms of ownership. Historically, social democrats have resiled from this challenge.

This crisis has increased the salience of inequality and injustice. But there’s a huge distance between an issue being salient and it actually being properly addressed. We have little hope of closing this distance without a Marxian perspective.

Comments

[Scratch]

"The first concerns how to get there. How do we mobilize the social movements and interests that would deliver a government committed to these"

You'd need a discrete workers' party committed to these things and protected (by direct internal democracy) against bourgeois/liberal capture.

"and weaken those that would prevent such a thing?"

Not let them join it.

[Kevin Carson]

“all pay is, ultimately, a function of power.” Exactly. And for the marginalists who reply "No, it's a function of marginal utility," we can add that marginal utility is itself a circular concept that is reducible to power.

[phoenix_rising]

First, a quote:

"Marxist exploitation theory places workers at the complete mercy of business, but just as businesses must compete against one another to attract consumer dollars, they must also compete against one another to attract workers. Hence, the idea that workers must accept whatever terms they are offered is a fallacy. Reduced to it logical conclusion, this fallacy means that business would be able to drive the wage rate down to zero. Marx’s theory ignores the market mechanism which actually determines the going wage rate: workers competing for jobs drives wages (and total compensation) down; businesses competing for labor drives wages up. The market wage rate is the point at which these two opposing forces intersect." —Glenn Jacobs

Economists say that for something to have value, it has to be both scarce and useful. While care workers are useful, they're anything but scarce.

Also, wages are not the whole picture. There is also that compensating differential.

When for example we allow teachers to strike for higher wages, we lose the ability to differentiate between those teachers that enjoy teaching, and those that are just in it for the money. Lower wages for teachers would drive the latter away, and we'd have a better quality of teaching.

A glut of workers in a given field means we are overpaying those workers, not underpaying them.

[KG]

Monopoly power is not some divine insight granted only to Mr Marx. Compassion mustn't become kitsch.

[Staberinde]

@phoenix_rising

Agree with much of this. Was it Ricardo who talked about economic rent, the idea that David Beckham could earn what he did because he wasn't replaceable by other random footballers?

There are a lot of nurses, delivery drivers, care workers etc. and they're all pretty fungible. One care worker does what another does, and largely just as well. A better care home employs 20% more care workers, not care workers who are 20% more empathetic.

There are plenty of jobs where the opposite is the case, and that's why collective bargaining is less popular there; its in both employer and employee's interests to set wages individually.

I disagree with your conclusion about a glut of workers though. Some work attracts a glut because it is interesting, fun, outdoorsy, high status, ethical etc. There's no shortage of people wanting to get into TV production or the arts, but it's certainly not because runners are paid too much!

[georgesdelatour]

“It is trivially true that labour is the source of value.”

It’s just one element in the mix, and it’s heavily dependent on other factors. It’s certainly possible to do a lot of labour and generate no value at all.

It wasn’t the labouring of Saudi bedouins and date farmers which made Saudi Arabia rich; it was the value of the easily extractable hydrocarbons buried beneath its sands.

[TowerBridge]

@Pheonix_rising

I was quite convinced by the blog, then your comment I thought was a good reposte. However, now I want to ask whether there is a difference between what scarcity is to the worker, is that not a form of power? If you are the only person able to do a task because you have the skills, you have power.

Here "When for example we allow teachers to strike for higher wages, we lose the ability to differentiate between those teachers that enjoy teaching, and those that are just in it for the money." who is doing the allowing and who does teaching for the money? Anyone at all?

Now I am thinking about it, there are lots of lawyers in commercial law yet they seem to be universally well compensated.

[georgesdelatour]

“it would be cretinous to claim that a nurse is less skilled than the grifter opinion-mongers who pollute the media.”

It wouldn’t be cretinous to claim that a nurse is less skilled than a senior consultant or surgeon. And surely that’s the more appropriate comparison.

Any well-functioning hospital, even in a taxpayer-funded system like the NHS, needs a hierarchy of competence, in which the person with the greatest expertise gets to decide which drugs and treatments are appropriate for which patients. No doubt such a system is flawed. No doubt it will make mistakes. It’s the worst system apart from all the alternatives.

Zhang Yimou’s 1994 film “To Live” depicts what happened to healthcare in China during the Cultural Revolution, when such a hierarchy was deliberately disrupted, leading to the Red Guards effectively making all those individual life or death decisions. A hierarchy of competence was replaced by a hierarchy of Communist enthusiasm. It was madness.

[Blissex]

«They will lead to a squeeze on profits. When this happened in the 70s, it led to a backlash against social democracy and to Thatcherism.»

This is an aside, but my impression is that The Establishment could tolerate that. What they could not tolerate was the attempt by the adventurist "syndicalists" (as in A Scargill and mates) to grab paramount power "one more heave" and become the new Establishment.

The fight against that has been the usual one of the english empire: scorched earth in the areas supporting their rivals, legislation to make trade unions largely irrelevant, to "reduce" them permanently, and blocking even accidental access to the levers of power by implementing the "There Is No Alternative" strategy.

Overall this has halved the rate of growth in GDP per head, which has done not very well for industrial profits, but other changes have meant that finance and property profits have ballooned, and "The Establishment" is as vested into finance and property as into industry, or perhaps more.

[Blissex]

«“It is trivially true that labour is the source of value.”

It’s just one element in the mix, and it’s heavily dependent on other factors. It’s certainly possible to do a lot of labour and generate no value at all.»

Please enough pointless discussions, our good old bearded man has been vastly misunderstood, in (large) part because he used rather opaque and misleading terms.

The problem of "value" for pre-Marx political economists was an attempt to define what is the intrinsic "worth" of economic goods, and that could be "beauty", "weight", "hours worked", "rarity", any metric that made sense and seemed universally applicable, to second guess "the markets". Such a metric is sort of arbitrary, but the yearning was to find a metric that was most plausible,

Dear old Marx chose "labour" because he was interested in what is called "cost accounting", in particular as to distribution of income among citizen humans. Thus for example the notion that the labour of animals produces no values, and neither does, technically, that of slaves.

When reading Marx I usually mentally read "value" as "cost" or better as "imputed cost".

Some additional notes may be relevant:

* A theory of the political economy needs a theory of costs, a theory of prices, and a theory of how the two relate.

* "Neoclassical" Economics is completely lacking any theory of costs, quite deliberately (see also JB Clark's expunging from Economics of the notion of economic rent).

* In retrospect as to the best basis for cost accounting and "worth" the pre-classical idea that it was agricultural production and the classical idea that it was labour were both only partially right being a special case of a much wider concept: energy expended. This because at the time of the classics the major source of motive power was still human muscle powered by farm produced food.

[georgesdelatour]

Hi Blissex. Hope you're well:)

1. “…what is the intrinsic “worth” of economic goods”:

“Intrinsic” implies context-independence, mind-independence, society-independence. In other words, it’s a claim that the value of an iPhone 11 is as ontologically objective as the mass of the planet Neptune. I don’t think economic value can be “intrinsic” like that.

Worth or value ultimately resides in the human mind. It’s connected to human desires and their satisfaction. It follows that economics is far closer to psychology than it is to physics.

2. “…the labour of animals produces no values”:

That seems unlikely. Pack and draft animals were vitally important in earlier times, and still are in much of the less developed world. There’s a whole theory that the takeoff of the industrial revolution in 18th century England was intimately connected to improved productivity from draft horses (http://unenumerated.blogspot.com/2011/06/trotting-ahead-of-malthus.html)

[Blissex]

«I don’t think economic value can be “intrinsic” like that.»

That's why the "classical" political economists debated "what is value" so much; and they mostly converged on "labour effort" because that is usually pretty intrinsic (see the ejection of Adam and Eve from Eden :->), even if whether it is the sole source of "worth" is very debatable.

My argument was that the choice of "labour effort" for Marx was motivated by his wanting to study the distribution of costs and revenues and among people.

«2. “…the labour of animals produces no values”:
That seems unlikely.»

I disagree with the notion that the work of animals or slaves produces no "value" in a proper sense, but that is matter of definition; in a sense for Marx animals and slaves are no different from trees or tools or machines, that is just insensate instrumentalities of their owners. One feeds hay to oxen just as one feeds diesel to a truck.

As I wrote, I think that for cost accounting in general what matters is not the labour of free men, that is in general muscle power, but motive power/energy input to whatever "engine", biological or mechanical, performs the work. But that because I like a point of view is that of the political economy as mainly a "factory", not as a mainly social system as for Marx.