Friday, January 18, 2008

When Is Labor Exploited?

Earlier discussions of Joan Robinson on how it is better to be exploited than not to be exploited at all (unemployed) reminded me of the deeper issues involved. Was Marx right that it was working for private capitalists that led to exploitation? Is it a matter of what one is paid, either relative to some marginal product or some broader level? Is it a matter of self-management or being bossed? Were workers exploited in Soviet socialism, as the post-modern, Wolff and Resnick group argues, that the USSR was "state capitalism?" Is a society in which workers are not exploited possible?

In his _Socialism After Hayek_, Ted Burczak argues that such a society would be a decentralized market "socialism" of worker-owned cooperatives, funded through a wealth tax, with a generous social safety net oriented to "personal capacities" a la Nussbaum and Sen, with freedom and democracy. This supposedly avoids exploitation, as well as the sorts of flaws of information and incentives that Hayek found in command planned state socialism of the Soviet type. (I have commented on all this further in a paper on my website at, entitled, "Has Burczak Shown How Socialism Can Survive Hayek?")


Peter H said...

Very interesting paper, Barkley. How has Mondragon avoided the problems you talked about - i.e lack of financing/workers taking their earnings out of savings, etc?

Anonymous said...

I dunno Barkley

but it is or should be clear that over centuries and still, labor was transformed into a commodity, labor power, and that ownership of this commodity = ownership of that which it produces, while on the other hand, the price paid for this special commodity need only be sufficient to allow its reproduction and that this price be lower than value created...a surplus value which, having been monetized via sale of produced commodities becomes, or can become, profit and further accumulation of means of production. Sort of a self-expansion thingy based in the unseen unpaid labor of exploitation...

or I guess we could imagine that surplus value rise not from labor but instead where it seems to originate, the activity of exchange, but then that would not be too surplus but mere redistribution

or heck, we might even combine the two, obtaining both profit of production and profit of circulation as capital engages in unequal exchange with semi-proletarian and other such partially or wholly self-exploiting populations.

now, if those worker folk get all uppity and demand more, maybe even control of the production process, what steps in (the state) on which side (not often theirs).

Back in the USSR, state owned means of production but who owned the state, not the workers.

was Marx right? right enough.

Myrtle Blackwood said...

Interesting paper on a fairly urgent question IMO.

I believe there is far too much emphasis on the production process in economics. There should be far more on how to preserve and better take advantage of the free goods that we have. Sunlight, clean air, forests, clean water, good soil, native animals and plants, time and talent.

I observe a great number of ordinary citizens appear to willing to work long hours for the sake of superfluous consumption (in terms of the individual) and toxic consumption (in terms of the planet).

How can an individual - one that doesn't wish to pursue much in the way of material wealth - opt out of as much work as is possible in a worker's cooperative society or in a capitalist system?

How does a 'democratic' or 'socialist' society deal with entrepreneurial incursions on the commons? In Barkley's paper the legal system is rightly posed as a solution but we have one and it clearly doesn't deal with many, many alarming forms of trespass. Most probably because those most involved in exploiting others are the ones who make them in the first instance.

In Australia the reason for the non-development of cooperative economic systems is very clear. Construction for multiple occupancy is banned. There are tight limits on the number of 'sheds' an individual land-owner can build on their land. Ordinary citizens have to compete in the land-market now with huge multinational corporations. The latter are eligible for flows of investment money from 'Collins-Street farmers' who receive a 100% tax deduction for investing in corporate tree farms and other such agricultural monstrosities. Others are denied such lurks.

Open auctions for natural resources don't exist. (This is while the 'free market' is touted incessantly).

The exploitation certainly appears to begin with the laws and in the way they are framed. Along with how (or whether) they are enforced.

Robert D Feinman said...

Marx and others focused on ownership, this was probably appropriate given the long history of aristocracy, feudalism and capitalism, but he misread the future.

Workers were able to better their station without the state taking over the means of production, because labor organized. Once they had some power their were able to advance their interests.

Let's say that firms have three stakeholder groups, "owners", workers and consumers. At various times the balance of power has shifted. Right now the controlling forces in most firms are none of the above, but are, rather, the managers. This is unprecedented and society hasn't figured out how to deal with it.

I claim that the important factor is not "ownership", but governance. Under ideal conditions unions are democratic institutions, "owners" are stockholders who have some say in governance through the control of the selection of top management and consumers are represented via regulations created through a democratic process of selecting government.

The rule of law only works when the various segments of society have similar levels of power. There is no such thing as an abstract level of law that will be adhered to because of its inherent justice or fairness. The world still is controlled by "might makes right".

The way to ensure that the might is not concentrated in one sector is to make each sector subject to democratic forces. What we have now is a weak electorate, a decimated labor movement and powerless "owners".

We can discuss how to restore each sector to more democratic governance, but that has nothing to do with abstract models of social organization and everything to do with power politics.

Anonymous said...


Marx (and 'Marxists') focused on social relations which include but are more than ownership. One set of relations compose what's termed 'exploitation', the struggle against which is seen in the class organizing you mention. Unless simply a resultant of further division of labor and ideology, I've never understood why so many refuse or are unable to grasp that Power relations are in his theory. The political, the social, the economic, the cultural are not autonomous spheres.

The shift into corporate form and 'the managerial revolution' is at the least implicit in parts of Capital, the Grundrisse, and passages elsewhere re. the East India Company (may be explicit but not recalling right now). Joint stock companies were already in existance and a dialectical method could not have missed their further development, the further seperating of ownership and control.

But, his larger perspective was movement from formal to real subsumption, the latter creating what Marcuse called the "one dimensional man", i.e. capitals relations of production and REproduction becoming so internalized that perception, even thought, beyond/outside of these ceases. The system is eternalized and protected. Which is generally what organized labor does, struggles to gain more from that which it also must save, but the struggle is education so carries the possibility to move beyond its own limitations.

'free and associated producers' did not mean 'free' within the confines of present dominant political economic relations, does not mean state ownership of means of production but an ending of the state, the state becoming the people and the people becoming the state, freely associating in their mutual production and reproduction.
Marx would have considered state capitalisms to be despotisms, to be antithetical to communism. said...

The ownership issue seems to have become muddled in recent years with the rise of stock options and ESOPS and so on, with many workers, at least in the US, becoming at least technically part owners of the companies they work for, even if these are hardly cooperatives. Also, one can certainly find plenty of public sector workers who would tell you that they feel exploited, either dut to underpay, or overmanagement, or whatever, even though they are not working for a private capitalist (and public sector unions are a lot more alive than private sector ones in many countries).

Regarding the whole question of managerial hierarchies, it may be that this is just very hard to avoid once one starts to deal with organizations over a certain size, in whatever society. I have heard the number 60 thrown around, usually in the context of startup, high tech, entrepreneurial firms that may have lots of stock options and thus worker ownership, with very flexible work environments and efforts at mutual and joint management. As long as such firms have fewer than 60 employees, it seems that it is possible in effect for everybody to know everybody else, and some kind of group identity/familistic atmosphere with lots of cooperation and little hierarchy can function. Above 60 it seems that this just breaks down. Such firms end up bringing in "professional managers," often with the founding entrepreneur getting "kicked upstairs," and a more hierarchical structure and style emerging.


Robert D Feinman said...

I posted an essay on how social organizations tend to exist as centralized command and control structures:
Command and Control Social Organizations

I agree that this seems to be the model at the present time, but this doesn't eliminate a discussion of governance. One can choose mangers democratically and one can have mechanisms in place to replace them when they fail to do the job they were chosen for.

Right now corporations don't have such a governance structure. The nominal one of elections by stockholders is inoperative. Even holders of a sizable block of stock have been disenfranchised. There was a recent case dealing with one of the California retirement plans. In other cases stockholder motions which have received a majority of votes have been declared "advisory" and ignored.

There may be another feedback mechanism besides democracy, but I don't know what it is, and democracy is exactly what is lacking in most organizations: business, military, church, non-profits and quasi-governmental agencies.

If we aren't going to have democratic processes then we need to have a balance of forces. For industry this was organized labor. I don't know what will restore some balance.

PS. The Zeiss optical company was worker owned for over 100 years. It was deeded to the workers by the first generation of owners and stayed that way until it was split up by WWII. It was very successful, both financially and in terms of innovation.

Anonymous said...

Barkley & Robert,

Perhaps it has less to do with ownership than degree of control?

While recognizing there can be no 'one size fits all' and that it's not been an overcoming of capitalist relations, Ricardo Semler and SEMCO's example could be applicable.

reason said...

The answer to your first question, is ensure that demand exceeds supply. An often not mentioned feature of the labour market is that labour is differentiated, that moving from one differentiated category of labour to another is costly and time consuming and that as a result disequilibrium in labour markets can persist for a long time. Excess supply results in an OPEN ENDED fall in wages. The neo-classical economist hides behind the equilibrium ASSUMPTION. We need global disequilibrium models to really understand the world as it is.

reason said...

Robert D. Feinman,
I read your essay. It makes some good points, which I mostly agree with. A point you don't make about about private property, however, is that private property (particularly land) is in itself and infringement of freedom. Try walking THROUGH somebody else's property. You personally (in all probably) did not agree to grant the owner the right to control that piece of land, a piece of land that is part of the common heritage of mankind. One man's freedom IS ALWAYS someone else's restriction. We can only maximise effective freedom by effectively constraining the freedom of others. It is the effectiveness of the constraints we choose that are the key. Don't be seen as arguing against freedom, frame it as arguing for maximising effective freedom.

Anonymous said...

Ted Burczak is hardly original, the idea of socialism as workers' co-operatives is the building stone of Proudhon's mutualism. It was taken up by Bakunin and later anarchists like Kropotkin, who downplayed the market aspects but kept the decentralised system of workers' control.

In fact, his book seems to be totally ignorant of the rich tradition of anarchist (or libertarian socialist) ideas which raised a critique of the centralised state socialist system long before Hayek was born.

Such socialists as Bakunin, Proudhon and Kropotkin argued for a decentralised system based on workers' self-management of production. They also predicted that state socialism would be exploitative, no more than a form of state capitalism.

But, of course, Marxists dislike mentioning anarchism (unless it is to promote the usual inaccurate diatribes). Probably has something to do with Marxists proving anarchist predictions right...

An Anarchist FAQ said...


Your point is well taken. Burczak does not cover the clearly relevant earlier discussions by anarchist critics of Marx and so on. In the essay by me that I linked to I noted the matter of the debate between Proudhon and Marx as being a central matter, which is probably where it started, more or less.

Burczak does add some elements not in some of those earlier discussions, such as his proposed wealth tax to support the financing of the cooperatives, and his emphasis on the "capabilities" approach of Nussbaum and Sen on how to approach managing a social safety net. I would also say that his discussion of Hayek is good, and while many on the Left, anarchist or socialist or otherwise, would prefer just to dismiss Hayek with as little discussion as possible, there is much in him that is significant to all this.

On this matter, one should check out the more anarchist book by Chris Sciabarra from 1995, _Marx, Hayek, and Utopia_, written sooner after the collapse of Soviet bloc socialism.

Anonymous said...


the graphic at the top of your link is not red or black but red and black, both sides are the same side.

Will Roberts said...

Speaking of inaccurate diatribes, Iain:

"Such socialists as Bakunin, Proudhon and Kropotkin argued for a decentralised system based on workers' self-management of production. They also predicted that state socialism would be exploitative, no more than a form of state capitalism.

But, of course, Marxists dislike mentioning anarchism (unless it is to promote the usual inaccurate diatribes). Probably has something to do with Marxists proving anarchist predictions right..."

Marx and many Marxists had and have substantive disagreements with Proudhon, Bakunin, et al., and I think the grounds for those disagreements are real: the Proudhon-Bakunin line of anarchism doesn't have a good grasp of how capitalism actually works, and is therefore romantic in its political strategies and utopian in its aspirations.

Most discussions of exploitation seem to treat it as a species of theft, or, even more diffusely, some sort of unfair distribution of the products of labor. I think this is simply wrong.

Labor is exploited when it is used for an end which is not its own, just as "natural resources" are exploited when they are turned from their own ends to serve human ends. In the case of labor, its own end is to produce some useful good or service. It is exploited when it is subordinated to capital's end--the production of surplus-value. Producing surplus-value presupposes the production of useful things, but entails more than this. Capital exploits labor not by stealing from it, or by keeping more than its fair share of the product, but by subordinating labor's end to its own.

Thus, I think most discussions of "market socialism"--including this one--ignore the specific role of the value form in Marx's critique of political economy. This is the same thing Marx castigated Proudhon for, and so it's no surprise that Proudhon pops up in this discussion. Without addressing the "mongrel" dualisms of use-value/value and concrete labor/abstract labor, any discussion of cooperative production remains on the terrain of capitalism, where it just looks like an inefficient way to accumulate investment capital.

Anonymous said...

yes Will, the capital relation is one of subsumption as the wage form effectively masks realities of sv creation which as Marx made very clear is not at the level of exchange where, as you say, theft is not the question.

Bakunin's belief in an immutable human nature that merely required freeing from state bindings in order to erupt in all its spontaneous glory was, at best, trivial...though did interfere to a more than trivial extent.

Red and Black can also be understood as the 'anarchism' inside of Communism, the sole means to realize of the freedoms and personal development which anarchists at least claim to seek.