EDITOR’S NOTE:Mainstream Western ideology is characterized by abstract concepts and abstract reasoning based on binary thinking and atomistic-individualistic perspective, as is apparent in liberalist political economy. Therefore, to reform the existing institutions and correct the injustices rampant today, it is absolutely necessary to change the prevalent deceptive way of thinking at the same time.
THE TEXT
Foreword
As is known to all, in today’s Western-style democracies, while there is representative government elected through universal suffrage, with mutual check and balance between its three branches, authoritative power in grassroots business units are almost all monopolized by capital investors, especially big ones, and managing personnel serving their interests only whereas shop-floor workers have little say about business decisions affecting their basic interests and livelihood. In other words, while the nation-state is nominally democratic, the hundreds of thousands of economic cells which make up and support the state body, where hundreds of millions of people working to earn their basic living everyday, are “tyrannical”. With this glaring inconsistency, is such state-level democracy really trustable? Let us see how two American economics professors look at the issue: “Democratic institutions have often been mere ornaments in the social life of the advanced capitalist nations: proudly displayed to visitors, and admired by all, but used sparingly. The places where things really get done -- in such core institutions as families, armies, factories, and offices -- have been anything but democratic. Representative government, civil liberties, and due processes have, at best, curbed the mere glaring excesses of these realms of unaccountable power while often obscuring and strengthening underlying forms of privilege and domination.”（Bowles and Gintis 1986, P.5）In view of this, Robert Dahl, a famous American political science scholar, argues that economic freedom cannot justify capital ownership of business enterprises（Dahl, 1985, P.73-83）and that all workers should have democratic rights with regard to business management at their workplaces（Ibid. Chap. 4 ）.
But liberalist theorists exclude workplaces from considerations about economic democracy, alleging that, because labor power and means of production are all bought by capital through free exchange, its unilateral control of the above is the exercising of ownership rights and, hence, an issue relevant to the private economic realm only and having nothing to do with political democracy -- the management of public affairs. They contend that, so long as there are economic freedom and society-level political democracy, there is no need for democracy within business enterprises. This author will refute the above argument in the following five ways:
1. What can be exchanged in real free deals should be at least quantifiable in their values, but not so with what happens between capital and labor, therefore such transactions cannot be regarded as really free exchanges. The liberalist allegation only serves as a camouflage for obscuring capital’s tyranny over unquantifiable labor and unjustifiably unilateral usurpation and control of the society’s means of production.
2. The liberalist idea of ownership rights to private property that makes no distinction between means of production and means of consumption for living also serves to cover up capital’s unjustifiable control of means of production.
3. The binary thinking opposing “private/economic” to “public/political” also obscures economic and political inequality within business enterprises.
4. The conflict between economic freedom and political democracy is a false idea fabricated by liberalists and based on ego-centric “rationality”.
5. The liberalists, with their atomistic-individualistic view of society, have ignored, whether deliberately or not, the fundamental importance of micro-level economic democracy within business organizations to the effectiveness of macro-level political democracy.
I. Unfree Exchanges of Unquantifiable Values
As quantifiability of commodity values is a precondition for free and fair exchanges but we will see that the value of labor power and the utility value of means of production are actually not measurable, therefore free and fair exchange between capital and labor in a capital-dominated institution is impossible, because of the following reasons mostly based on this author’s new discoveries (see A New Political Economy: A theory of three sources of value & 3-tier joint community ownership (1)):
1. Three Sources of Value: The utility values of all commodities come from the following three sources:
(1) The Nature-endowed potential value hidden in the primary raw materials for production (the same as that in wild plants and animals etc. on which primitive humans survived before they knew about farming).
(2) The collective wisdom of all humanity accumulated through all generations, as embodied in all tools, equipments, skills, and processed materials used as means of production (and on which are based all current new discoveries and innovations by individual scientists, technologists, etc.)
(3) Current labor of human individuals, labor in a broader sense than Marxian, which includes:(a) On-the-spot labor of front-line workers; (b) Past-labor-turned just capital, such as savings from wage income used as current investment; (c) Creative labor of scientists and technologists as embodied in new inventions and innovations; (d) The organizing, operating and risk-taking work of entrepreneurs of business ventures and/or of new product developers; (e) The work of managers running a business; (f) The supporting work of laborers’ family members for maintaining their working ability and for raising the young and assisting the old as future and past providers of labor; (g) The work of cultural and educational workers for the personal development of all laborers and all people; (h) The work of government workers supervising and servicing society on a macro level, which is also an indispensable part of social production; etc.
2.Inalienability of labor from its owner-provider: On-the-spot labor cannot be separated, or “alienated”, from its owner-provider as capital can; labor delivered, only in vague terms of working hours and working skills, cannot be so accurately measured 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 of them. Compared with capital’s much 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.
3. Inalienability between values in means of production from the three sources: Though the values from nature and collective human wisdom should be shared by all humanity, that is, not to be privately owned, their inseparability from the value added by labor, in addition to the inalienability of labor from laborer, made it possible for capital to usurp and unilaterally control all the values in products coming from all three sources. – This is how capital, especially big capital, can expand at astronomical speed and become the real master of human society that controls the fate of all humanity today.
4. The result: Because of the above, the distribution of profits under capital-dominated management, even if the initial capital comes from a just source, would definitely result in capitals’ unjust usurpation of profits coming from all three sources. Therefore, when unchecked by a due democratic process either within a business or without, dispersive small capital would grow speedily into big capital or even monopolies through re-investment, acquisition and amalgamation, and monopoly capital groups, with their exceptionally abundant economic resources, come to dominate over not only small capital and individual workers but also the economy, political process and cultural media of a region, a state or nation, or even the whole world. This has been the root cause of all the troubles facing humanity today.
II. Private Ownership of Public Property
All property can be distinguished between means of subsistence and means of production. People’s rights to own justly earned means of subsistence should be protected by law, and, in principle, so should their rights to justly earned property used as means of production. What has become an issue is that the lumping together of the two different kinds of property under liberalist law has erroneously protected the unjust usurpation by private capital of public wealth in the form of nature-endowed value, the value of human collective wisdom and that added by labor. A law that embodies genuine freedom and democracy should, while defending all people’s rights to justly earned wealth, also protect the rights of the human community as a collective and of all individual workers in the broadest sense to jointly possess, control and manage the means of production, so that the gap between the richer and the poorer would not go to excesses as is the situation today.
NOTES
Bowles, Samuel and Herbert Gintis, 1986, Democracy and capitalism: Property , community, and the contradictions of modern social thought, Basic Books, New York.
Dahl, Robert, 1985，A preface to economic democracy, UC Berkeley Press.
Dow, Gregory and Louis Putterman, 1999, "Why Capital (Usually) Hires Labor: An Assessment of Proposed Explanations", in Blair and Roe 1999. |
