All forms of individual labor in the broader sense join in the creation of new, extra value. The new term “extra value” is not the same as the traditionally used term “surplus value”, because what is considered “surplus value”, in the light of the new three-source value theory, actually does not only contain values from current individual labor, it also contains Nature-endowed values from original raw materials and values from collective human wisdom, and, besides, also new values emerging from the integration of all the three-source values. As we know, the total value generated from an organic integration of values from different sources should be greater than all the separate kinds of values mechanically added up. What is “greater” is here called “extra value”, which, obviously, is only part of the “surplus value”.
From the above description of the three-in-one integration and extra generation of values, we can deduce the following two conclusions:
First, obviously, the values coming from the three different sources but integrated in the means of production can in no way be alienated from each other or measured/quantified, either separately or as a whole. The quantification of labor value in current economic theories is realized only by ignoring/obliterating the Nature-endowed values and values from collective human wisdom and counting human individual labor as the sole source of value, and is done only in the sense of exchange value, not the utility value of the final products, which is immeasurable without comparison. Therefore, these theories are not adequate for a discussion in the science of political economy about what kind of ownership system matches the truth regarding the source of value of all social products.
II-3. Labor as Capital
The second conclusion is: Without the joining in of all forms of individual human labor, any Nature-endowed value or value of human collective wisdom could in no way be realized automatically and generate any “extra value”, or be converted into “surplus value”. Logically, all categories of labor investors have the right to have an equal share in the control of means of production, in the management of the production process and in the distribution of gains from production. If distribution only compensates the laborers for their cost of labor, then the values from the endowment of Nature and from collective human wisdom – both of which should belong to all mankind -- and the extra value from the three-in-one integration -- which should belong to all kinds of laborers contributing to its creation in the broader sense – would be usurped by capital owners alone. And this is the reality of today’s world. The essential nature of this reality is the forced subordination of labor to capital.
Although the subordination of modern laborers to capital is different from that of slaves on slave-owners and of serfs to feudal lords in ancient and medieval times – the former have been enjoying greater freedom than the latter – in spite of this, modern laborers, within their working hours (or so-called “company time”), are still subjugated to the control and domination by capital-owners and/or their appointed managers while laborers have no right to choose or supervise over their managers (as against the spirit of “democracy”). And in places where capitalist social order is the “way of the world”, modern laborers, both within working hours and at their leisure or spare times, are universally subjugated to the befooling and manipulation by capitalist ideology, which permeates both academia and mass media. This physical and spiritual subordination cloaked under the rhetoric of “free exchange and free thinking” is an undeniable blare fact of the day.
II-4. Labor’s subordination to capital: why not co-operation between equals
As to why labor has been subordinated to capital, scholars have given varying answers.
Dingding Wang, a Chinese scholar, said in his article entitled “Why ‘capital hiring labor’, not ‘labor hiring capital’?” that it is because capital is scarce . (Wang, Dingding 2000, P. 18.) This answer may be applicable to a developing country, but not to a developed country, where capital is so abundant as to be exported all over the world to gain “financial and monetary hegemony”, which is now the leading form of external expansion of today’s world capitalism. (Wang, Jian 2002.) But in those countries, “capital hiring labor” is still the mainstream in business practice. So, Dingding Wang’s answer does not seem to satisfy.
.As a matter of fact, if current capital can be regarded as a converted form of past labor, or “just capital” (in the case of “unjust capital”, that would be another issue, to be discussed later), then the question could be: Why not joint ownership and management of business and joint decision about distribution of gains on the basis of co-operation between equals, instead of one hiring the other and excluding the other in all decision-making? As to the issue of relative “over-abundance” of labor and scarcity of capital, it can be resolved by raising the value rate for capital shares and lowering that for labor shares according to the law of supply and demand, which would not, and should not, affect the equal status in other aspects between labor and capital, just as all citizens of a country should be equal politically in spite of their unequal contributions (for instance, the unequal amount of taxes they pay). Furthermore, in many developed countries like Germany, Spain, United States, etc., some businesses are already owned and managed or co-owned and/or co-managed by workers, providing good examples for reforming the mainstream capitalist business practice. (Dow 2003, Blair and Roe 1999.) Therefore, the root cause for labor’s subordination to capital should be sought from a different perspective.
II-5. Inalienability of labor
To find the correct answer, some other scholars have put forward the concept of “inalienability”, which means, in brief, on-the-spot labor cannot be separated, or “alienated”, from its owner-provider as capital can; the delivery of labor, only in vague terms of working hours and working skills, cannot be so accurate in quality and quantity as that of material goods or money; and, so, the actual delivery of labor cannot be guaranteed by legally enforceable contracts, but only by direct supervision by the “buyer” of labor, i.e., the capitalist-employer, or his agent..( Bowles and Gintis 1986, PP. 75-79.) In contrast, capital has high mobility: some one person’s capital can be split as separate investments in several different businesses in order to lower risk ratio, whereas the cost and risk for transferring one’s labor to another capitalist “buyer” is much higher than transferring one’s money investment. As a result, most of the laborers have to live with the domination by capital so as to earn bare survival for self and family, and the institution of domination has thus been taken for granted. ( Dow and Putterman 1999. )
It is obvious from the above that the so-called “free exchange” between labor and capital is actually an unequal deal enforced by objectively unequal positions of the related parties. To most of the laborers, however high their personal ability and motivation, they cannot escape the disadvantaged position predestined for all laborers. Compared with capital’s greater freedom in choosing labor, labor’s freedom in choosing capital is much more limited. That is to say, labor’s inalienability from laborer has led to the dominating position enjoyed by capital (even “just capital”) over labor. And at the same time, this domination, combined with the inalienability between values from all the three sources hidden in the means and results of production, has made it possible for capital to have unchallenged control of two of the three kinds of values belonging to the whole mankind. In this way, even originally just capital (not to say about originally unjust capital) also becomes the unjust usurper of all three kinds of values and, with these unjust gains as new capital, generates hundreds, thousands, and hundreds of thousands of times more unjust new gains and unjust new capital. There will be no end to this vicious cycle until, if unchecked, the final disintegration of human society by its spin (see later).
With inalienable labor, the mankind has created the alien demon of money capital and have to let it go its way. Then, with its high alienability, capital turns its back on and exercises domination over man – this is human beings’ self-enslavement through the use of money; it is man’s self-alienation. Only by himself, by his own wisdom, can this kind of enslavement, this kind of self-alienation be overcome.
Wisdom tells us: the inalienability between labor and laborer and that between the values from the three sources are no reason at all for denying the equal role of any labor in creating new values and for denying laborers their equal rights in business governance. These two forms of inalienability are objectively existing disadvantages for all laborers, which are independent of their will, their personal effort and ability but are dictated by the nature of labor itself. Even if someday everybody becomes rich (which will never come true, however, if capital goes on dominating over labor) and so rich that everybody has abundant money to live on and to invest, there will still be the need for most people to be laborers. Labor is what distinguishes man from all other animals. Once it is trampled under foot, is detested and rejected, man will degenerate into beasts, and human civilization will degenerate and disintegrate. In fact, signs are showing already of this anticipated degeneration and disintegration. So, a just society should try every effort to keep laborers’ disadvantaged situation from being exploited, consciously or unconsciously, to subjugate them to an unequal status. Just as safeguarding (just) capital’s equal status can help nurture the spirit of diligence and frugality so as to increase investment for social production, realizing laborers’ equal status can as well greatly motivate their will and raise their productivity, and also help cultivate a healthy social-moral atmosphere for obtaining wealth through diligence while curbing the currently growing social tendency of trying to reap quick and short-term gains with little pains or even trying to get rich by unlawful or immoral means.
In any case, the conflict between the moral equality of (just) capital and labor on the one side and the comparative advantage/disadvantage in their positions in social production on the other side is not irreconcilable altogether. In fact, quite some reasonable approaches of thought and quite rich practical experience have been provided by many explorers of new models of economic order. (For instances: Duan 2001, PP. 328－350; Schumacher 1973, PP.290-312; Bardhan and Roemer 1993; Dow 2003; Blair and Roe 1999.) The key lies in a change in the way of thinking. In a word, the system of capital hiring and dominating over labor is not necessarily the most reasonable and effective pattern of economic relations.
II-6. Non-free exchange under banner of “freedom”
Human individual labor helps realize Nature-endowed value and collective wisdom value in social products and also helps create new extra value through their three-in-one integration. This can be done only by humans with life, mind and soul, with initiative and creativeness, not by any running machine with no life, nor mind, nor soul. Even if such a machine could be assumed to exist someday, it would have to be invented, installed, and ultimately controlled by humans. But liberal social economic theories and defenders of capitalist economic relations ignore the moral equality of (just) capital and labor and their actually different positions in social production, and ignore the radical difference between human beings and non-human beings. They degrade human labor to the same low status as that of a machine, as that of material means of production, and exclude labor providers from the rank of co-masters as equals with capital providers. This is the most outrageous instance of ignoring, degrading, and trampling on, deliberately or not, the humanness as well as the most basic human rights of laborers. This kind of theory or institution is definitely not unbiased, not just, not scientific! Just as Dingding Wang says, the modernization of economics “should take human beings as human beings into consideration and not regard them as things to be controlled as neo-classical economics does currently.” (Wang, Dingding 2000, P. 186.) To “take human beings as human beings”, we have to face up to the fact of inalienability of labor (from the laborer) and its value (from other values) and transform the capital-labor relationship from one of non-free “exchange” masked by the hypocritical banner of “freedom” to that of co-operative partnership between equals.
Followers of liberalism may acknowledge the different situations faced by capital and labor, i.e., the former’s alienability and the latter’s inalienability, but they would not admit the lack of moral equality between them in real economic relations. They would say that, under the system of freedom which they have argued for, everybody is guaranteed an “equal” opportunity to climb out of the rank of laborers up the social ladder to that of capitalists. But they always look away from the objectively existing fact, which has been evidenced again and again by history and reality, that the hegemony by capital, with no check or balance from the laborers’ side, has made a small handful of capitalists all the more extravagantly wealthy and all the more arrogantly powerful on an ever-broadening scale and in an ever-deepening degree – from economic to political and cultural spheres and from within one country to the whole globe and further to the outer space, while laborers, which always constitutes a largest part of a country’s and the world’s population, have been getting (comparatively) all the poorer and all the more desperate. This situation of extreme polarization between the rich and the poor is gravely threatening the stability and survival of human civilization, as will be discussed in greater detail later.
References:
:
Bardhan, Pranab K. and John E. Roemer, eds., 1993, Market socialism: The current debate, Oxford University Press, New York.
Blair, Margaret M. and Mark J. Roe, eds., 1999, Employees and corporate governance, Brooking Institution Press, Washington, D.C..
Bowles, Samuel and Herbert Gintis, 1986, Democracy and capitalism: Property , community, and the contradictions of modern social thought, Basic Bookx, New York.
Dow, Gregory K. , 2003, Governing the firm: Workers* control in theory and practice, Cambridge University Press.
Dow, Gregory and Louis Putterman, 1999, "Why Capital (Usually) Hires Labor: An Assessment of Proposed Explanations", in Blair and Roe 1999.
Duan, Zhongqiao (ed.), 2001, Dangdai Guowai Shehui Sichao (Contemporary Social Trends of Thought Abroad), Chinese People’s University Press
Schumacher, E.F. , 1973, Small is beautiful: Economics as if people mattered, Harper perennial.
Wang，Dingding， 2000， Zhou xiang bianyuan （Toward the margin），San Lian Publishing House
Wang, Jian, 2002, “Shijie zibenzhuyi de xin jieduan yu huobi zhidu weiji” (“A new phase of world capitalism and the crisis in monetary system”)， March 8，
