Friday, May 09, 2008

Capitalist-Worker-Owned Capital

I found this comic strip on a communist discussion board. Can you believe this dirty capitalist pig? Sucking the surplus value of labor right off their backs, what nerve.


Don't get me wrong, I love propaganda. But would the workers necessarily have higher wages if they were the owners of that capital? No, I think even a worker-owned production plant would have the same interest in paying average expenditure wages instead of wages that coincide with the marginal expenditures from each additional worker. That is, essentially, the claim that the comic makes.

A more important side-stepped fact in the comic is that there is more to a firm's cost structure than labor alone. Assume the workers bought out the capitalist and paid for the machines themselves - what would happen differently? I believe (a) they would still allocate labor and wages at a profit-maximizing equilibrium if they are at all concerned about keeping their spreadsheets and accounting balances in order, and (b) they would essentially be entrepreneurs and venture capitalists themselves, renting capital that other workers had made.

And isn't the point of the worker revolution so that workers own capital, thus becoming capitalists too?

Worker-owned production is a very positive way to organize labor and capital. Yet the arguments like the one above are evidence of nonsensical misunderstandings of factor markets and marginal productivity. It assumes way too much about the current allocations. Maybe I am just picking bones with the simplified version I see above.

Capitalists and workers are pitted against each other in non-collusive ways such that each worker has the incentive to extract as much from total revenue in the short run as possible. If the firm fails, workers can typically find new jobs; on the other hand, capitalists still have sunk costs to loathe and fixed costs to pay for. Unless workers are themselves capitalists or share interests with the capitalist class, their interests will always be in direct conflict with the capitalists over the firm's cost structure. So long as they have no stake in the long-term decision making process.

3 comments:

Mike Beggs said...

Hey Acumensch,

This is actually pretty close to a point Marx made himself. He ridiculed socialists who thought the point was to redistribute "the proceeds of labour" to the labourers. e.g. in 'Critique of the Gotha Programme'. Essentially for the reasons you mention.

Acumensch said...

One difference is that I'm saying workers can take control of the firm through the market itself by essentially becoming the shareholding and entrepreneurial class. Also, I'm talking about this on a micro firm level, not a macro societal level.

Worker's parties essentially aim at restructuring the political environment of the state to be distributive. I think you can achieve socialism without a state, and I think that's the only just way to achieve socialism.

I have not read the Gotha Programme yet, so thanks for the connection.

Mike Beggs said...

Hey again,

Yeah that's also a myth, at least about Marx. He certainly was no statist and saw the state as 'withering away' with communism.

Personally I'm agnostic about markets in the abstract. Sometimes they might be a good way of distributing some things; other times and other things, not so much. The real question is distribution or control of the means of production.