I just wanted to know if any of you are Anarchists or Communists. If you are I would like to add you to my friends and ask you to join my Anarchist group. If you aren't either then talk to me anyway so I can make you one. ;)

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My post above ended with a copy-and-paste error. The final sentence should have read "If employees didn't like their work, the could quit and move west, and get free land for at least subsistence farming."
Darren wrote on July 18:
“The Labor Theory of Value?? Seriously? Value, plain and simple, is determined on an individual level and measured by what that individual is willing to pay for something. That's all there is to it. If a worker is willing to go to work for X dollars per hour, then that's the value he places on his labor. He values that money more than the time he spends at work--otherwise he wouldn't take that job. The employer prefers that person's time over the money they're paying him--otherwise they wouldn't hire him. Since it's a voluntary arrangement, we know that both parties are benefiting from the transaction.”

Are you denying the role of supply and demand in setting the price of commodities? It is easily demonstrated in classroom games, where half the students are designated buyers, with different price limits, and the other students are sellers, with different production costs. The transactions they make determine a market price, which excludes some buyers and some sellers from the game. It is true that prices fluctuate for all sorts of marketing gimmicks, such as loss leaders, but the overriding principle is that producers always set their prices so as to maximize profit.

Supply and demand also sets prices on the job market. The pay for any job will fall within a range, dependent upon the applicant’s education, job experience, congruence to the corporate culture and so forth. But anyone out on the job market who finds that his job skills and experience are in declining demand will tell you that his prospects for a high paying job have been harmed by the market.

Darren continued:
"Markets have cycles as they continually try to achieve equilibrium--sometimes the cycle favors the employee, sometimes if favors the employer--but they both are always benefiting from the arrangement."

This is all true, but as I stated in a previous post, the mechanics of the market ensure that the effect over time will always be to increase the rate of exploitation,. The employer has one overriding requirement, to make a profit. In order to do this, he must always compete against other producers to gain a price advantage in the marketplace. When the price demands of competition force the employer to reduce production costs, where they always turn is to cut their manpower costs. They do this principally by layoffs, but also use wage freezes, benefit cuts and so on. Businesses that cannot cut production costs at a pace with their competitors go out of business.

The constant downward pressure on wages required by the market economy results in workers being paid a declining share of the value that they add to product by their labor, which in turns leads to profits growing faster than wages. Unfettered, a market economy will progressively stratify wealth. This was foreseen as long ago as Adam Smith and David Ricardo.
Are you denying the role of supply and demand in setting the price of commodities?

Of course not. I was talking about value, which is not the same as a market price.

...the overriding principle is that producers always set their prices so as to maximize profit.

Well, I should certainly hope so. And that applies to producers of labor as well. And consumers always make their purchasing decisions in the same way--to maximize the value they receive from the purchase.

But anyone out on the job market who finds that his job skills and experience are in declining demand will tell you that his prospects for a high paying job have been harmed by the market.

Well, I would say that his prospects have been hurt by his failure to develop skills that are more in demand, but I guess he can phrase it however he wants. Regardless, I'm not quite sure where you're going with that.

The constant downward pressure on wages required by the market economy results in workers being paid a declining share of the value that they add to product by their labor, which in turns leads to profits growing faster than wages. Unfettered, a market economy will progressively stratify wealth. This was foreseen as long ago as Adam Smith and David Ricardo.

First, Smith and Ricardo, despite their great contributions, got a lot of things wrong, most importantly their ideas on the Labor Theory of Value. At any rate, it's simply not true that workers are paid an ever-declining share of the value they add to a product (to use your terminology). Just as there is a constant downward pressure on wages from the employer side, there's a constant upward pressure from the employee side--hence the whole dynamic equilibrium thing. Sometimes wages go up, sometimes they go down. Sadly, they would go up a lot more than we've seen in reality if the government didn't throw a monkey wrench into the system by controlling currency, levying taxes, regulating business operations and transaction, restricting trade, etc. All of those things that petty populist voters and politicians have pushed for do nothing but either destroy wealth or transfer it from one group to another.
Darren wrote on July 19, 2008:
“(A)t no time does a willing employee receive less than they're willing to work for because then they simply wouldn't take the job--that's just the definition of willing.”

You’ve hit the nail on the head here, Darren. The capitalist system requires a large population willing to sell their labor power. This is going to be abundant when most people not only must sell their labor power in order to survive, but doing so holds the promise of an improved future for themselves and their children.

The improving living standards in the United States and most developed countries has many contributing factors, but most important is the enormous increase in worker productivity. Total production output has increased many times more than the percentage increase in the size of the workforce. With productivity rising quickly, wages and profits can both rise, without creating inflation. But, as I stated in a previous post, the rate of exploitation will continue to increase, the return on investment will outstrip wage increases, and the gap between the rich and everyone else will continue to grow.

You pointed out that a market economy has cycles. During the down cycles, workers are laid off and total compensation falls. During the up cycles, the owners of the companies increase their wealth much faster than the workers. So, eventually, you reach the point at which the workers refuse to continue to play their part in a system that is stacked against them.

So, back to your point, what happens in a market economy when there are no longer any willing workers, when all workers refuse to sell their labor power?
So, back to your point, what happens in a market economy when there are no longer any willing workers, when all workers refuse to sell their labor power?

That's a great point. Darren seems unwilling to admit that people can allow to be exploited because of desperation so I'd love to see how he tackles this.
So, back to your point, what happens in a market economy when there are no longer any willing workers, when all workers refuse to sell their labor power?

That's easy. Employers must raise wages. Then they either raise their prices, reduce other costs, or reduce their profits, usually some combination of the three. This happens all the time. But as I've said before, government interference in the natural operation of markets has been skewing things and causing a lot of the stratification that easily-duped people have been attributing to the free market itself. Very Orwellian, and I commend the government and its agents in academia and the media for their brilliant strategy to convince people that too much freedom is the problem.
One result to note in situations where there is no longer willing labor, when the workers refuse to sell their labor power is that labor can be outsourced or imported from other labor pools. This is the case for migrant workers. It is also the case for many child workers. Mechanical labor is another option. These options are not always possible, of course which is the reason that labor strikes sometimes succeed. Realistically though, if the employer can resolve the situation without driving up costs, they will do so every time.
Darren wrote on July 20, 2008
(George Kane asked) Are you denying the role of supply and demand in setting the price of commodities? (Darren replied ) Of course not. I was talking about value, which is not the same as a market price.

True, but they are related – the price will always approximate the value. If pencils start selling for more than automobiles, the labor theory of value would indeed fall apart.

(George Kane continued)...the overriding principle is that producers always set their prices so as to maximize profit. (Darren replied) Well, I should certainly hope so. And that applies to producers of labor as well. And consumers always make their purchasing decisions in the same way--to maximize the value they receive from the purchase.

We’re in agreement so far. The Labor Theory of Value explains why products sell for more than the cost of all of the capital equipment, materials and labor that was paid to produce it. Labor added more to the value of the product than the workers were paid. It is a standard concept both in taxation (the Value Added Tax) and in materials management. It is why the standard costs of materials increase as they pass through the manufacturing process.

(George Kane wrote)But anyone out on the job market who finds that his job skills and experience are in declining demand will tell you that his prospects for a high paying job have been harmed by the market. (Darren replied) Well, I would say that his prospects have been hurt by his failure to develop skills that are more in demand, but I guess he can phrase it however he wants. Regardless, I'm not quite sure where you're going with that.

The problem is not that the workers are lazy and not improving their job skills. Technological advances in the workplace are specifically designed to reduce the need for the workers. The workers can handle the new technology, the problem is that because of the new technology, there are fewer jobs.

The downward pressure on wages is reflected in labor statistics. US real wages for all private non-farm workers reached a peak in 1973, weekly earnings of $331.39. In constant dollars, despite enormous worker productivity increases, it is now $277.57. It is not that the work force has gotten lazy or stupid. It simply reflects the well-documented decline over time of worker compensation in market economies.

Darren continued: At any rate, it's simply not true that workers are paid an ever-declining share of the value they add to a product (to use your terminology). Just as there is a constant downward pressure on wages from the employer side, there's a constant upward pressure from the employee side--hence the whole dynamic equilibrium thing.

What is the source of this upward pressure? In the 1990s a sharp drop in the unemployment rate created a job shortage that produced a spike in real wages, from $257.95 in 1992 to $275.62 in 1982 dollars. But the only upward pressure that workers themselves can apply is the threat to withhold their labor. That can be an effective tool when workers are organized, but union membership has dropped from 36.1% of workers in 1954 to 12% today, so that is a declining threat.
Darren wrote on July 20, 2008
(George Kane wrote) It is simply untrue that natural axioms of ethics are known a priori. (Darren wrote) No, it's perfectly true. A principle becomes an axiom when the person arguing against it is shown to be using it himself. Thus, self-ownership is an axiom, because you yourself are asserting ownership of your body (your vocal cords, brain, etc) by engaging in argument. If you did not have ownership in your person, you would have to get permission from whoever does own you to use your body. Perhaps I'm wrong--perhaps you are owned by someone else (or by a group of people) and you've already gotten permission to speak, think, etc.

Because you assume that I am stating what I believe and want to say, you conclude that ownership of oneself is ‘axiomatic.’ But a proposition cannot be an axiom if there are instances in which it is false, and clearly there are times when each of us says things that we do not believe, and do not want to say, for fear of social consequences such as embarrassment.

I think that your entire attempt to construct an ethical system as an eternally valid reflection of modern economic relationships if unworkable. Ethics is a cultural product that reflects the relationships of specific societies, and changes to reflect that society’s evolution. It always has to be looked at historical context.

In pre-agricultural societies, tribal conflicts required killing the opposing warriors. But once they developed permanent agricultural settlements, it became possible to capture opponents, hold them under guard as slaves, and put their labor to profitable use in the fields. Historically, slavery was a great moral advance, sparing the lives of defeated enemies. It was also a great economic advance, setting the basis for the great empires of the ancient world.

It is a good thing that they never discovered your fundamental moral axiom. If they did, and rejected slavery, we would probably all be subsistence farmers today.

Darren continued:
I never said that there had never been those who violated the right of self-ownership--I simply said that there exists in all humans such a right.

If they can be violated, your fundamental principles can be neither axiomatic nor a priori. The starting point for your “natural rights ethics” is a set of principles that you accept because you like them.

Darren continued:
I'm not talking about all the rights abuses that we know have occurred throughout history. I'm simply laying out what is and isn't ethical under natural law. And being owned by someone else or a society of people commonly owning each other do not qualify as ethical since the first one is not universally applicable and the second one demands the absurd condition that you must get permission from the entire to society to take any action, including eating and breathing. If you claim to not need society's permission to eat, breathe, defend yourself from attack, etc, then you have just acknowledged the fact of self-ownership.

Natural law is a Catholic invention that they used to justify their dogmas as universal and eternal. Where I’ve confronted the Natural Law argument most frequently is in discussions of social issues such as homosexuality. Catholics claim that it is god’s law that man and woman should join together. When I point out that homosexuality is certainly natural, since it has been observed in practically all mammals, and also in many non-mammalian species, they respond that in order to discover Natural Law, you have to understand god’s reason for his design. God designed sex for producing children, so homosexuality violates Natural Law. So “Natural Law” is not at all dependent upon what actually occurs in nature, but is simply a body of rationalizations to justify ancient prejudices.

Your “Natural Law” is pulling off this same shell game. Your axioms are refuted by examining actual social relationships in his
Darren wrote on July 20, 2008
(George Kane asked) So, back to your point, what happens in a market economy when there are no longer any willing workers, when all workers refuse to sell their labor power?

(Darren replied) That's easy. Employers must raise wages. Then they either raise their prices, reduce other costs, or reduce their profits, usually some combination of the three


And what happens when the workers still refuse? What happens when they say “The society that results from this system of labor exploitation is intolerable. It results in ever-increasing stratification of wealth. It is an economy in which I cannot reach the wealth and security of my parents, and my children cannot expect to match mine. So I will join with all of the workers and refuse to sell my labor to profit-driven enterprises.”

Skylar wrote
One result to note in situations where there is no longer willing labor, when the workers refuse to sell their labor power is that labor can be outsourced or imported from other labor pools. This is the case for migrant workers. It is also the case for many child workers.

Socialist revolution has to have two concurrent fronts. The active front is by labor itself, at the point of production, and the ultimate weapon is to withhold labor. The passive front is to utilize democracy to seize control of government. This can be useful to set laws like immigration and child labor as conditions require. But the most important function is to prevent the government from suppressing the workers by bringing the army down on them.
and the ultimate weapon is to withhold labor.

How about stop bying stuff?
I don't know if this has ever worked. If there is a consumer boycott to demand that worker pay be increased, at the best the company would comply while raising prices correspondingly. Unless you also boycott all competitors, he will be left at a price disadvantage in the marketplace. I am not aware of any cases of a consumer boycott in demand of higher prices.

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