Tuesday, June 16, 2015

Trigger Warning! The Wage Prisoner's Dilemma

At Foreign Affairs, Erik Brynjolfsson and Andrew McAfee trot out the legendary Luddites and the proverbial lump-of-labor fallacy as they ask, "Will Humans Go the Way of Horses?"

Humans, stuffed and mounted?
In their penultimate paragraph, B. and M. make a welcome call for discussion about "what kind of society we should construct around a labor-light economy" and ask "How should the abundance of such an economy be shared?"

It's a good question. It's actually quite a simple question, if it weren't for a dense propaganda smokescreen, this magazine of untruth, laid down over more two centuries.

There are three issues here. One is that reducing the hours of work would be a marvelously effective way of sharing the abundance of a "labor-light economy." That's the good news. The second issue is that it takes materials and energy to construct and operate robots. Did someone mention greenhouse gas emissions and climate change? I didn't think so. The third issue is that the good news answer to the first issue is a taboo "fallacy" according to the lump-of-labor smokescreen.

Karl Marx, to whom Brynjolfsson and McAfee refer in their second paragraph, described the "great beauty of capitalist production" as consisting of the fact that "it not only constantly reproduces the wage-worker as wage-worker, but produces always, in proportion to the accumulation of capital, a relative surplus population of wage-workers [emphasis added]."

By "beauty," I don't think Marx meant aesthetically pleasing. More like "it's a feature, not a bug." The relative surplus population of workers, the reserve army of the unemployed, is not incidental to capitalist production. It is not a "market failure" or an "externality." It is how the system works. To solve the problem of a relative surplus population of workers would require abolishing the wages system -- thus Marx's declaration, in the June 27, 1865 conclusion to his speech on Value, Price and Profit to the First International Workingmen's Association:
...the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: "A fair day's wage for a fair day's work!" they ought to inscribe on their banner the revolutionary watchword: "Abolition of the wages system!"
Abolish the wages system? But how?

Conveniently, the beneficiaries of the wages system (those FT monkeys) have been telling us how for 235 years. Only they have been screaming, "Don't!" Why is the reduction of the hours of work denounced as being based on a fallacy? Because ultimately, eventually, it could lead to the abolition of the wages system! We wouldn't want that to happen, would we?
Thus the law of supply and demand of labour is kept in the right rut, the oscillation of wages is penned within limits satisfactory to capitalist exploitation, and lastly, the social dependence of the labourer on the capitalist, that indispensable requisite, is secured...
To the naked eye, abolition may look like a one-shot, all or nothing proposition. Not so. Abolition can be incremental. It can proceed in stages. The first stage can consist of simply not forgetting that in their everyday struggles over wages "they [the working class] are fighting with effects, but not with the causes of those effects."

Going beyond not forgetting, I have proposed a form of unionism, the "labor commons", that regards labor power as a common-pool resource to be collectively managed rather than as a commodity to be sold by each individual worker. Conceiving of labor as something other than an extension of and thus the private property of the individual worker is a tall order. The principle of labor as private property is enshrined in chapter five, "Of Property," of John Locke's Second Treatise of Civil Government:
...every man has a property in his own person: this no body has any right to but himself. The labour of his body, and the work of his hands, we may say, are properly his.
Except for the most part we are not talking about "the labour of his body, and the work of his hands." We are referring to a complex division of labor, co-operation and means of production that dwarfs the manual labor of a person. Regarding labor power as a common-pool resource recognizes the greatly-enhanced social productivity of labor. The wages system is calculated to siphon off the lion's share of that social productivity and award it to the owners of capital.

How does that happen? Consider the wage prisoner's dilemma: given a choice between working long hours for more money and working short hours for less money, many will chose to work longer hours. But if a preponderance of workers choose (or are compelled) to work long hours, they will oversupply the labor market, depressing wages. They may end up working longer hours for less money.

This is not rocket science. It is elementary supply and demand: an observed regularity. And, no, it does not imply or assume "a fixed amount of work to be done." If I flood the market with bananas, it is likely the price of bananas will fall even if the demand for bananas increases in response to the lower price. It is conceivable that the temporarily lower price could instigate a banana craze that subsequently overwhelms the initial price decline. But as a rule...

Imagine the following scenario: 

One hundred workers are fully employed for 40 hours a week. The current wage is $10 an hour. Due to some inscrutable technical feature of the production process, it is determined that optimal scheduling requires workweeks of either 36 hours or 44 hours.

After adjustment to the new schedules, the uniform wage rate will be adjusted to somewhere between $9.09 and $11.11 an hour, depending on the proportion of workers who choose each schedule. Weekly pay will thus range between $328 and $400 for those working a 36-hour week and between $400 and $488 for those working a 44-hour week.

If half the workers choose a 36-hour week and half choose a 44-hour week, hourly wage will remain at $10 and thus the weekly pay will be $360 and $440 respectively. If a majority of more than 55% of workers chose the 44-hour schedule, some workers will have to be laid off, starting with those who have opted for the 36-hour schedule. That should be about enough information to figure this out.

Which schedule would you choose?

1 comment:

Michel Bauwens said...

Dear Tom,

here is the strategy of the p2p foundation, a bit more complex perhaps than your five proposals, but possibly convergent with it; my key argument would be that you need to change the mode of production, and this is also not a all or nothing process, it needs to be prepared: