Finding Equity in Labor

(note: this is part 3 in this week's 5-part series on the brandification of our lives) 

Earlier this year, I wrote that Karl Marx was prescient when it came to explaining the woes of corporations that find themselves chasing the same consumers.

Without ever having sipped a double espresso skinny latte, he worked through a model that predicted companies would tend to pursue monopolies (via acquisition, or simply by destroying the competition), vertically integrate, squeeze workers until they earn the least possible, and then commoditize human experience. 

His analytic recipe was to mix one part facts with two parts poetry and philosophy, with a pinch of angry, personal emotion thrown in for spice.  But he nailed much of what's fueling the desperate chaos that was once erstwhile opportunity for brand names like Starbucks or Dell. 

Too bad Lenin, Mao, and that nutcase Chavez in Venezuela (among others) gave the guy's observations such a bad name.  Their political machinations, not to mention stupefying evil, made the anti-Christ out of a grubby, dirt-poor vagabond who spent much of his adult life sitting in the British Museum for light and warmth. 

Marxism, the brand, is about as toxic as you can get.  That leaves us with one brand -- Capitalism -- as the guiding principle for every economic event in our lives. 

Capitalism is based on numbers, no more real than those Marx used in his Das Kapital.  It also invents variables, and then weaves them together into equations intended to yield meaning and relevance, just like Marx. 

Only Capitalism, the brand, has proven time and time again that it works a helluva lot better than its former competitor. 

That is, until it fails utterly, either on a topical or philosophical level.  And when that happens, we have no other brand of economic thought to consider or choose. 

So when oil prices climb, the culprit is some vague entity called "the market" that exists beyond the reach (or complete understanding) of governments or consumers.  Same goes for the way health care is priced and provided (or not) in America.  The free market is an unassailable absolute, driving our sole brand of economic thought.  It's beyond reproach, even when it challenges the experience of our senses, like when we're told "destruction" is "creation," or that the way to collect more tax revenue is to lower the rates at which they’re collected.

Humm.  I wonder whether we'd be better able to understand topical news events if we had another brand of explanation from which to choose?  It's how consumers make value judgments on products: compare and contrast "A" and "B" on functionality, experience, and price. 

I doubt we're ever going to see Marxism (or Socialism, or even, gasp, Communism) as a brand alternative offered up to help explain the sub-prime mortgage crisis in tomorrow's newspaper, for instance. 

On a more philosophical level, living with a single brand of economic thought means we get only one version of those variables and equations I mentioned earlier.

Think about the idea of value for a minute. 

Capitalism determines the ultimate value of goods and services primarily based on cost (to produce and/or to acquire).  There's established math that tracks and affirms it, which the market uses to continually reset those valuations.  And it's from that math that we define major metrics for our social experience, not just economic: "gross national product" is a measure used to determine lots of things beyond the dollars in in which it's priced.

So what’s the value of, say, a healthy environment?  How about commute times, or spiritual well-being?  Is there a value inherent, as lots of literature would suggest, in the very act of making something, whether it's a sense of accomplishment or satisfaction?  Do the experiences of respect, or cordial neighborliness, have value?

Capitalism, the brand, promises to factor in all of these variables, only it doesn't.  Most of these variables are externalities because they defy quantification. 

Yet it's why so many of our economic answers don’t neatly fit the questions that arise from our experience.  Time wasted sitting in traffic should shift commuters to other means of transportation, only it doesn't.  The long-term cost of pollution should be factored into the short-term pricing of energy, only it isn't.  Jobs are described in terms of salary rewards, not function.

Marx (and other economists, like Ricardo) believed that labor had an inherent value, or LTV.  Maybe they would have quantified other qualities of our lives.  And maybe that math might never have added up.  But because we only get to choose from a single brand of economic thought, we'll never know.   

If competition yields better choices, might it help to have an alternative to Capitalism to consider now and then? 

Even if another explanation was wrong, at least we would have a basis -- other than the catchy shorthand of branding -- to know that we what have chosen was right.

Comments

[Jonathan]

Lee, thank you for your really thoughtful comments. I agree that Marx over-simplified the human condition, missing entirely even economic factors like innovation, not to mention the 'softer' qualities -- kinship, religion, whatever -- that drive behavior many times more than absolute economics ever do.

And I agree that Capitalism is the best answer we've got, and that it has enabled incomprehensible growth and well-being for many millions of people (yours truly included).

But to describe the movement in oil prices in terms of 'supply and demand' is to miss those very influences that you yourself described in your comment. And I can only imagine how convoluted and inefficient the health care system might be (again, happily acknowledging that it also provides lots of service to lots of people).

So my point was that we -- meaning the media, mostly, but also most of us engaged in polite conversation -- don't question the very tenets of Capitalism when we encounter these realities, whether in oil prices, health care, or anything else. We give a collective shrug, and by attributing the cost/benefit equation to the economics of Capitalism alone, we impede our ability to actually see what might be really going on..and take action about it.

Who needs to act if a mythical 'free market' is setting prices at their most efficient levels. It almost sounds like something Marx would say. And if we had another 'brand' of thought to choose from, at least we'd get a different take on the facts and, perhaps, be able to see more clearly what's really going on?

And I agree that none of the economic philosophies explain Wikipedia or Craig's List, per se. But I wouldn't expect them to, as I see those services less as independent or new phenomena, and more as integrated activities that are part of very traditional experiences (sharing information, etc.).

I wonder how much they've really challenged economic thought as they've simply shifted the 'when' and where' we do our accounting...

...but I'll definitely check out your review, and look forward to the other one.

Again, thanks for the post!

[Lee Aase]

Gotta take issue with this, Jonathan:

"So when oil prices climb, the culprit is some vague entity called "the market" that exists beyond the reach (or complete understanding) of governments or consumers. Same goes for the way health care is priced and provided (or not) in America. The free market is an unassailable absolute, driving our sole brand of economic thought. "

Oil prices are through what we perceive as the roof right now, but that's happened before. Then Americans switched to smaller cars, and with some other factors involved we saw the price of gasoline cut in half. Capitalism explains it pretty well; it certainly doesn't "utterly fail."

Likewise with health care; even in the U.S., the system we have bears little relationship to the "free market," particularly with Medicare price controls setting artificial prices below the cost of providing care. (Disclosure: I work for a large medical provider, but these are my opinions.)

The problem with Marx is that he tried to reduce everything about man to economic man, so that economics was supposed to explain all of human behavior.

I think you would find a good alternative in a couple of interesting books: Wikinomics, which I reviewed here:

http://social-media-university-global.org/2007/07/22/wikinomics-book-review/

and Clay Shirky's "Here Comes Everybody: The Power of Organizing Without Organizations." I hope to be reviewing that soon.

Neither Capitalism nor Marxism explain Wikipedia or Craig's List. Wikinomics is a start, though, and it's a lot closer to Capitalism.

Markets aren't perfect for identifying the true "value" of something, but when they are more free they represent "The wisdom of crowds," which is better than some single source making those judgments.

Only God knows the true worth of something. Capitalism is the best overall system that enables us to make a reasonable approximation, while understanding that people work for more than just money.