tag:blogger.com,1999:blog-4900303239154048192.post1337048750625350830..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: Theory of Abstinence ReconsideredUnknownnoreply@blogger.comBlogger7125tag:blogger.com,1999:blog-4900303239154048192.post-67661099291741647282014-04-20T13:07:00.723-04:002014-04-20T13:07:00.723-04:00Years ago, while taking a LaSalle law course, my f...Years ago, while taking a LaSalle law course, my father would say that when he got stuck regarding the judge's verdict, he decided in favor of the stronger party. His answers were rarely wrong.<br /><br />Reading the economists, one might think there were no laws influencing economic power relationships. <br />Where are the studies showing otherwise?<br /><br />I'm approaching the problem from a different angle, trying to show how “economic” theories conceal power relationships, focusing at the moment on the economists' supply and demand stories.<br /><br />A note about utility. Economists embed the concept of scarcity into that of utility, making it seem to be an aspect of “satisfaction” rather than of power. Scarcity (absence) is not usually necessary for satisfaction; it is usually necessary for economic power.allishttps://www.blogger.com/profile/04463192545138771432noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-62487072993974014062014-04-19T21:53:34.258-04:002014-04-19T21:53:34.258-04:00Adam Smith Wealth of Nations, Book 1, Chapter 8, &...Adam Smith <i>Wealth of Nations</i>, Book 1, Chapter 8, "Of the Wages of Labour"<br /><br />Not to mention The Master and Servant Act.Sandwichmanhttps://www.blogger.com/profile/11159060882083015637noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-64309009718692075612014-04-19T20:06:22.372-04:002014-04-19T20:06:22.372-04:00" It is not, however, difficult to foresee wh..." It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate."JW Masonhttps://www.blogger.com/profile/10664452827447313845noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-32955237404843333762014-04-19T17:55:08.988-04:002014-04-19T17:55:08.988-04:00Yes, allis, it is precisely that "abstinence ...Yes, allis, it is precisely that "abstinence advantage" that I'm hoping to explore in this series of posts. One important aspect of that is clearly "the law" -- or, as some would argue -- an arbitrary and class-biased interpretation of law by judges. Sandwichmanhttps://www.blogger.com/profile/11159060882083015637noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-50285528766052933062014-04-19T17:15:17.896-04:002014-04-19T17:15:17.896-04:00“'Abstinence,” then makes its re-entry not in ...“'Abstinence,” then makes its re-entry not in the form of a pious moral justification for profit but for a strategy for leveraging profitability by regulating the 'scarcity' of capital relative to labor value.” Sandwichman.<br /><br />Capital requires labor to actualize its potential value; labor requires capital (or property) to actualize its potential value. The value realized by capital must at least reach its threshold costs. If these costs (interest payments, maintenance, amortization, etc.) are not met, the capital will cease being productive and the owner will lose his income from it. Similarly, the value realized by a worker must at least reach his threshold costs, or he will cease being productive. As Hale noted, even slaves require “incomes” of food and shelter.<br /><br />When capital and labor actualize each others' potential value, the actual value realized normally exceeds the sum of the threshold values, and can be viewed as a firm's “income” or “surplus” or “profits.” Various outside claimants, like creditors and landlords and governments, normally take their cut first, and what is left over is distributed between the workers and capitalists (although the workers full share may be paid out before revenues are received.) The workers' ability to get any share above their threshold cost depends, as Hale noted, on their ability to withhold their labor (“coercion”) or, possibly, on outside coercion such as legally enforced minimum wages, which force the workers' price (wages) above the workers threshold cost (“subsistence' or slave rates).<br /><br />Unfortunately for workers, without legal support for their efforts to withhold labor (union strikes) or without laws to raise their price (wages) above their threshold costs, the bulk of the surplus will be taken by the capital owners, who have an advantage over workers in the practice of abstinence.<br />allishttps://www.blogger.com/profile/04463192545138771432noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-67268545398440540112014-04-18T10:02:58.914-04:002014-04-18T10:02:58.914-04:00You may turn out to be right. This is very explora...You may turn out to be right. This is very exploratory and I'm working it out as I go along. The reason I referred at the outset to physiology has to do with fatigue rather than muscle power. We'll see how that goes but it is good to be on notice that the argument there has to be explicitly worked out. <br /><br />Your point about the social sanction for some kinds of sabotage (but not for others) is crucial and I'll need to incorporate it. Obviously, I've also glossed over the "socially necessary" and "abstract" aspect of labour power/time as the numeraire.Sandwichmanhttps://www.blogger.com/profile/11159060882083015637noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-48212942195401663202014-04-18T08:53:54.350-04:002014-04-18T08:53:54.350-04:00I love the starting point here. But I would depart...I love the starting point here. But I would depart from it in a slightly different direction.<br /><br />First, productive activity is inherently social -- it involves the coordinated activity of the entire community. In any production process that is extended over time, there are many different points at which it could be disrupted. Yes, having a crop next requires that whoever is in possession of the seed corn abstain from eating it. But just as much it requires that everyone in possession of a match abstain from setting the silo on fire. The capitalist is no different from any of us in abstaining from any of the billion possible things we could do to interrupt the production process. What makes the "abstinence" of the capitalist special is that he is socially recognized as having the right to engage in sabotage, not that he is uniquely capable of it.<br /><br />That's where I thought you were going with this.<br /><br />But instead you link labor to physical facts like population and physiology, which seems like a wrong turn. There's nothing physiological about labor. There's no basis in biology for distinguishing any particular set of human activities as work, or comparing their magnitudes. Labor is a social category, not a physiological one. And the homogeneity of labor that makes it suitable as a numeraire is not something that is true in general, but is a specific sociological consequence of the development of capitalism. In a world in which each person had their own kind of work, which was tied up with their social identity and the particular use-values they could claim from the product, it would not make any sense to link particular use-values to quantities of abstract labor. That has been the world the majority of people have lived in. Commodity production is a new way of organizing human productive activity, which has only become general in the last couple hundred years. It's only because the actual capitalist labor process separates people from the means of production and from claims on any particular use-values, and because it standardizes and deskills work and renders it socially meaningless, that we can think of labor as a quantity.<br /><br />As for Keynes, what he was doing was postulating a similar homogenization of workers' consumption. The usefulness of the wage-unit depends on the assumptions that (1) the number of people whose claim on the social product takes the form of wages varies in a regular way with aggregate expenditure and (2) each person exercising such a claim receives a standard set of use-values. Physiology has nothing to do with it, I don't think. JW Masonhttps://www.blogger.com/profile/10664452827447313845noreply@blogger.com