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Slavery and Capital

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http://fortheyknowwhattheydo.tumblr.com/post/100271771688/the-evolution-of-slavery

 

Far from peer reviewed, but Tumblr keeps telling me to read it so I'll share it.

 

 


With some horrifying exceptions, most of us are not slaves. We are not listed among the possessions of a landed aristocracy, nor do we toil beneath the lash on someone else’s soil without a penny in return. Within certain limits we can choose our occupation and who to work for, and for our labour we are paid in money which we can largely dispose of as we see fit. Supporters of capitalism never tire of reminding us that capitalism put paid to slavery and turned us into ‘free’ labourers, autonomous economic actors who, with a bit of luck and elbow grease, can even become wealthy capitalists ourselves. The wage contract, wherein we agree to give a capitalist the use of our labour power for a certain length of time each day and in return the capitalist is legally bound to pay us, is held up as the pinnacle social achievement of liberal civilization, the very essence of freedom. The appropriate response to our condition as wage-workers, the capitalist and her admirers argue, is gratitude, since through capitalism we are delivered from the very real chains of slavery and serfdom.

 

These positions, like all positions, contain a decent kernel of truth. Slavery is indeed a different animal to wage-labour, and the gulf between the two in terms of the quality of life and material well-being of individuals is enormous. There can be no doubt in anyone’s mind that being a wage-labourer is many orders of magnitude better than being a slave. In clarifying the differences, however, we can intuit the similarities that still linger, and lay bear the historical residue of slavery and subservience in the capitalist mode of production. The social relation of capitalist to worker is not the dissolution of the master-slave relation, but rather its evolution into a form better suited to the world in which it now finds itself. The reproduction of privilege is a key function of capitalist social relations, performed almost as if in memory of the legacy of slavery and serfdom.

 

So, why is a wage-worker not a slave? First and foremost, it is because he is not considered the property of another human being. The capitalist possesses no legal title to the worker, and so the worker’s physical body ceases to be a commodity circulated on the market. Since the worker is not a commodity owned by the capitalist, he is not subject to the will of the capitalist; the capitalist is not entitled to dispose of the worker as he sees fit, such as by making him work (or by killing him, torturing him, or anything else). The slave loses a certain degree of legal protection by this change, because he is no longer someone’s property and protected from others by law. What he loses in this respect, however, he gains in the far greater respect of being considered a juridically equal member of society: equal before the law. He is now protected from bodily harm and criminal behaviour (including theft of his own property) by the full force of the law, just as is the capitalist or the slave-owner whose property he used to be.

 

Of course, in reality workers receive a good deal less protection from the law than capitalists because of the nature of property and its distribution and the walled-off apartheids that develop between rich and poor regions, not to mention the symbiotic links between the political class (those who command the police) and the business class (those who command the political class in capitalist societies). Nevertheless, being a citizen subject to the law is a good deal better than being a commodity subject to its owner.

 

So far so good. Now, what are some of the other effects of being freed from slavery and welcomed into the fold of ‘free labourers’? The fundamental condition that must be met if a person is to be a free labourer is that they cannot, with the means available to them alone, reproduce their own subsistence and therefore their lives. A wage-worker is someone who does not have access to or ownership of the means to produce his own food, clothing and shelter, or in other words his livelihood. He must be separated from what Marx called the ‘means of production’, the physical resources, tools and machines required to reproduce himself. It is only in this condition, after all, that workers will consent to being wage-earners, since no-one would work for another if they could earn a decent living working for themselves. Of course, slaves did not have their own means of production either, but the point is that the transition to wage-earner doesn’t alter this condition in any way whatsoever. If he is to survive, the wage-earner must work for a capitalist, which is someone who owns or has access to part of the means of production (factories, farms, mines, power stations, oil refineries) or even of circulation (supermarkets, banks etc). The worker is therefore under every bit as forceful a compulsion to work for someone else as the slave is, although the conditions under which that work is carried out differ enormously.

 

Unlike the slave, the wage-earner is free to seek out work under different ‘masters’, in his case capitalists. He is not bound to one capitalist for his entire life, or until that capitalist decides to sell him, and this gives him a considerable degree  of autonomy. There are also, of course, many limits to this autonomy. He is limited first of all by his own abilities and education, whether genetically or economically distributed, and his range of options, as well as his capacity to earn money, is accordingly narrowed. His is limited by the range of capitalists in appropriate industries in his vicinity, and on whether it is feasible for him to relocate to find different capitalists to work for (and when enough people move away, of course, traditional communities disintegrate). Capitalism necessarily produces unemployment, and so he may find it impossible to find anyone to work for; since he is a wage-earner and separated from the means of production, this can have dire consequences such as homelessness, malnourishment and psychological trauma, as well as reducing his chances of future employment. Realistically, most individuals have no more than a handful of jobs to choose from that meet their requirements; sometimes, and particularly during the regular crises that capitalism begets, the choice is narrowed to just one or two (or zero in the case of the unemployed). Many wage-earners do not feel their autonomy in this case to be particularly valuable, wishing instead for the security of well-paid and secure, if inflexible, employment.

 

What makes the insecurity of uncertain employment and the alienation (a term used by Marx to mark the lack of an organic relationship between the worker and what he produces for the capitalist) generated by having to work for someone else tolerable for the wage-earners is, of course, the wage itself. While the payment of a wage is obviously an massive improvement for the worker over the non-payment of slaves, we should be attentive to what wages mean for the person paying them: the capitalist. Put simply, wages are the cost of an input to production; workers cost the capitalist money just as do machines, light bulbs and microchips. Of course, slaves also cost their owners money, and in this similarity the social edifices of capitalism and slavery reveal their blood relation. The cost of the slave to his owner was the cost of the food and water to keep him alive and in working condition (like the cost of maintenance on a machine) and the shelter and clothing required to protect him from the elements (like the stable and horseshoes needed to keep a horse). The slave-owner could have paid the slave a wage to enable him to buy these things for himself, but this was inappropriate given the social relation of ownership under which it was the slave-owner’s responsibility to keep his own property in working order. In the transition to wage-labour, the slave-owner/capitalist must provide for the upkeep of his labour-inputs by giving his workers a wage with which to perform this function themselves.

 

The distinction between these two forms of the upkeep of labour is both substantive and superficial. It is substantive in that the freedom which the wage-earner has to spend his money as he pleases gives him far greater autonomy than the slave, even if he has to spend the vast majority of it on the basic necessities of life (we should also remember that this autonomy benefits the capitalist in furnishing the market with demand for his products). At the time slavery was prominent, the average wage would not have provided for a much better standard of living than the room and board provided to slaves, but as productivity has increased so too have wages (to a greater or lesser degree). It is difficult to say what the standard of living of the average slave in a Western European country would be today if the practice had continued, since economic conditions, social mores and cultural standards of acceptability have shifted enormously; it is likely, however, that the greater capacity of wage-workers to combine into unions and other solidary organizations has given the working class a far greater ability to raise the compensation of workers than would ever have been possible for slaves. In this respect, then, the wage-form of labour upkeep is very substantively better for the labourer himself than the slave-form, and since this shift was dictated by the development of capitalism itself, it has no doubt been substantively better for the capitalists too.

 

The distinction is also superficial, however, in that in both cases the function of the upkeep-mechanism is to reproduce functioning labour-power for the gain of a privileged class. What slave-labour and wage-labour have in common is that they refer to a social relation between unequal parties: between slave-owner and slave, and between capitalist and worker. Society itself can only be reproduced on the basis of the labour of the individuals that comprise it, and every form of society has to provide in some way or another for the upkeep of its labour force. A fair society, we might imagine, would see its labourers less as productive inputs and more as equal participants in the construction of social life, actively and collaboratively organising the activities of work and compensation for work in ways that bring the trade-off between the two into direct political focus. The organisation and reproduction of labour under both slavery and capitalism proceed on a basis that deny us this participation by consciously subordinating the joint processes of production, work and compensation for work to the interests of an exploitative minority. Capitalists are not slave-owners, but like slave-owners they view the common man as an input to a productive process which they feel as though they are themselves setting in motion, and from which they expect the greatest returns.

 

So yes, lovers of capitalism, wage-labour is indeed a vast improvement upon slavery. Non-terminal cancer is also a vast improvement over terminal cancer; in both cases, of course, we are still dealing with a very sick individual. In the transition from slavery to capitalism, the wage-earner loses his status as property and gains the status of citizen, but the law still treats him as second-class. He is freed from his chains but remains ‘free’ also from the means to reproduce his own life, and must therefore sell himself anew. He can work for different masters over the course of his life, but the price he pays for this is fear, insecurity and the loss of his traditional community. He sees society constructed through his efforts, but he has the fruits of those efforts alienated from him, part of it sold purely for the enrichment of his employer. He is paid a wage in money which he can spend as he likes, but he is still regarded as a material cost in a production process owned and operated by a privileged class that appropriates the lion’s share of his product.

 

We are no longer slaves because slavery has evolved. In time it will evolve again; the question we should ask ourselves is whether we are willing to tolerate the genetic through-line of this evolution being the subjugation of man by man, the endless perpetuation of privilege.

 

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Ellerman '14 (David P., Masters in Philosophy of Science and Economics, Ph.D. in Mathematics from Boston University, former advisor to the Chief Economist (Joseph Stiglitz) of the World Bank, currently visiting scholar at UC Riverside and Fellow of the Center for Global Justice at UC San Diego, "Contract: What is the Employer-Employee Relationship?" Last Updated 2014, Accessed 11/16/14, Published on Abolish Human Rentals.org, http://www.abolishhumanrentals.org/history/self-rental-vs-self-sale/)//lolwut5


Since we contend that the whole capitalism/socialism debate has been wrong-headed, it is incumbent on us to answer the questions:¶ (1) what is the root problem in both capitalism and socialism, and¶ (2) how would the third alternative variously called economic democracy, democratic worker ownership, or universal self-employment solve that problem?The problem is the employer-employee relationship itself. Both capitalism and socialism (as public enterprise capitalism) have assumed that basic relationship and have debated whether workers should all be employed by the government for “the Public Good” or whether they could also be privately employed “for private greed.” Since the employment relation is so pivotal for the negative appraisal of both capitalism and socialism, this chapter gives a preliminary analysis of the employment relation.¶ The basic normative distinction is between:¶ (1) the democratic worker-owned firm (or self-employment firm) where labor hires capital and the workers are jointly working for themselves, and¶ (2) the employment firm where capital hires labor using the employer-employee relationship and where the equity capital can be privately owned (including employee-owned) or publicly owned by the government.¶ The difference is the hiring relationship, capital hiring labor or labor hiring capital. Capitalism is capital-ist not because it is private enterprise or free enterprise, but because capital hires labor rather than vice-versa. Thus the quintessential capital-ist aspect of our economy is neither private property nor free markets but is that legal relationship wherein capital hires labor, namely the employer-employee relationship. There is astonishing false consciousness concerning the employment relationship in our society. This can be illustrated by an experiment conducted with beginning Economics students.¶ Yes, the system of renting people is our system, the employer-employee system. Of course, we do not say people are rented; we say people are “hired.” The students would have had no difficulty thinking of an economic system where workers are hired. The difference a word makes! When applied to things rather than persons, the words “rent” and “hire” are synonyms. One could say either “rent a car” or “hire a car” with the only difference being that Americans favor “rent a car” while the British will tend to “hire a car.” But American and British usage agrees that when people are rented, one says “people are hired.” First the students are told about the system of chattel slavery where workers are bought and sold as movable property. But just as a house or a car can be bought and sold, so one can also rent a house or car. Now instead of buying workers as in a slavery system, suppose we consider a system of renting workers. The students are asked if anyone knows an economic system based on the renting of workers. There is usually a puzzled silence. A Black student points out that during slack times, plantation slaves were rented out to work as stevedores, as hands in factories (for example, turpentine or sugar mills), or as common laborers. The Professor agrees that this happened but notes that it was the exception rather than the rule. We need an example of a whole economic system based on renting people. After another pause, some students offer, “Well, what about feudalism?” The Professor responds that feudalism was a system of indirect ownership of workers. Instead of being owned as chattel or movable property, serfs had the security of being attached to the landed estate which was then owned as real property. Thus we still need an example of a system of renting people. After more embarrassed silence and shuffling feet, finally a student, by the process of elimination if by no other logic, offers the answer: “Well, isn’t that sort of like what we have now?” From an abstract economic-legal viewpoint, the employer-employee relation is the rental relation applied to persons. What do you buy when you rent something? You buy its services, the right to employ or use the entity within certain limits for a given time period. In terms of the stock-flow distinction in economics, to rent the stock is to buy a flow of services from the stock. When one rents an apartment or a car, one buys not the apartment or car itself but some of its services. If one rents a car for three days, one buys three car-days. If one rents an apartment for six months, one buys the services, six apartment-months. Similarly when one rents a person for eight hours, one buys the labor services of eight man-hours (or person-hours), i.e., the right to employ or use the person within the limits of the contract for an eight hour period.The labor market is the market for the renting of human beings. Of all rental contracts, the employment contract has been the most modified and attenuated by social constraints. Labor legislation and the countervailing power of unions have both worked to mitigate the commodity nature of labor services and to insure that people are rented in a manner as “human” as possible. But all of these socially mitigating circumstances should not be taken as an excuse to obfuscate the basic fact that the employment contract to buy labor by the day, the week, or the year is the contract to hire or rent the person by the day, the week, or the year.Wages as RentalsWe say that employees are “rented” rather than “hired” to awaken people (like the Economics students) from the dogmatic slumber in which they do not realize they live in an economic system based on the renting of human beings. Often this statement is intentionally or unintentionally misinterpreted as being hyperbole. For instance, the statement might be “embraced” as follows:¶ This misinterprets the rental assertion as an example of hyperbole like “selling our souls” or “wage slavery.” But by the standard economic notion of a rental contract, the rental assertion is only a statement of fact couched in jarring language so one might see an old reality from a different perspective. When capital hires labor, the wage or salary payment is the rental payment.¶ Yes, employees are rented and, indeed, we all sell our souls in this system of wage slavery.¶ Much of the traditional criticism of the wage contract has centered on the size of the wage payments or human rentals. However, the amount of the wages will play no role whatsoever in our analysis. Indeed, one could imagine an equally dehumanizing relationship where the payment would go from the employees to the employer. That is, apply the idea of the employment contract to consumption rather than production.¶ One can even say that wages are the rentals paid for the use of a man’s personal services for a day or a week or a year. This may seem a strange use of terms, but on second thought, one recognizes that every agreement to hire labor is really for some limited period of time. By outright purchase, you might avoid ever renting any kind of land. But in our society, labor is one of the few productive factors that cannot legally be bought outright. Labor can only be rented, and the wage rate is really a rental. [samuelson 1976, 569]¶ A “Consumption Employment Relationship”¶ Workers take inputs and add value to produce the outputs. Consumers do the opposite; they take their consumer goods, consume them, and thereby produce scrap or used goods of lower market value. Ordinarily consumptive labor is self-managed; the consumers buy the inputs, make their own consumption decisions, and own the outputs (scrap or used goods). Consumption could be organized using the employment relationship. Since consumptive labor reduces value, the consumers would have to pay someone to employ them to consume goods. Instead of buying a turkey, consuming it, and owning the scraps, a family unit would pay someone to employ them to consume a turkey. The family would not buy the turkey or own the scraps. The analysis and critique developed here of the employment relation in production can be applied,mutatus mutandis, to this hypothetical consumption employment relation. The essence of the analysis is the role of human beings in the relationship, not the money payments one way or the other.¶ Human Leverage¶ Some of the implications of the employment relation can be appreciated by considering the notion of capital “leverage.” If the owner of $5,000 can hire or borrow $10,000 and put it all to work in an enterprise, the original $5,000 is called “equity capital” while the borrowed $10,000 is “debt capital” or “loan capital.” The borrowing amplifies or magnifies the effects of the equity capital. With only $5,000 invested, $15,000 is put to work. The equity holder gets the profits and losses from three times the equity capital. Suppose the net income before 10% interest on the loan capital is $2,000. Subtracting the $1,000 interest (10% of $10,000) leaves a $1,000 profit on $5,000 equity for a 20% rate of return. If there was no leverage (i.e., all the $15,000 capital was equity capital), then the $2,000 return on the $15,000 capital would be only a 13.3% rate of return (rather than 20%).¶ This amplification due to using hired capital is called “financial leverage” (or “gearing” in England). It should be noted that losses are also amplified by leverage. With less leverage, there are less interest expenses and the remaining losses are thinned out over more equity capital. Who’s in, and who’s out? Loan capital, like equity capital, is being used in an enterprise, but the suppliers of the loan capital are outsiders to the enterprise. They are creditors of the enterprise, while the suppliers of equity capital are the “insiders” (from the legal or de jure viewpoint).¶ The same considerations can be applied to any resources including “human resources” (to use a popular and telling expression from modern business jargon). Since human beings may also be rented, there is the phenomenon of human leverage. The net results of many peoples’ efforts can count as the results of one person’s effort if the one hires the many. The employment relation allows one or a small number of people to “leverage” their enterprise by hiring tens, hundreds, or thousands of other people. The results of human leverage show up in the income distribution. Some researchers found the income distribution of the highest 1% of the population distinctly shooting off with a different trend than the other 99%.¶ Using income data for 1935-36, the average amplification factor was estimated at 16.8.¶ No one would dispute the fact that the wealthy differ from the lower 99% in the manner that they accumulate income. While most people are paid by the hour, or the number of widgets they produce, the wealthy frequently accumulate their extra wealth by some amplification process; that process varying from case to case. … Perhaps one of the most common lower-level modes of amplification is for an individual to organize an operation with others working for him so that his income is amplified through the efforts of others (a modest-sized business, for example). [Montroll 1987, 16-17]¶ In fact, the business is carried out by all the people working there, but in law it is the enterprise of only the employer. The employees have a legal role like that of an instrument, indeed that of a human lever, working as a means to leverage or amplify the ends of the employer. The employees are not part of the ends of the enterprise. The employer does not act as the representative of the whole group of people working in the firm. The employer acts only in his own name, and the employees are “employed” to that end. The possibility of human leverage also supplies the simplest and most direct explanation for the prevalence of employment firms in a free enterprise economy which allows the employment relation and where there is a sufficient supply of labor willing to accept the employee’s role. The choice of firm structure is exercised by the entrepreneur or entrepreneurial group who organizes the firm. Since (by hypothesis) the firm is expected to be profitable, it is in the self-interest of the organizers to leverage the other people involved in the firm by employing them.¶ This number is not surprising since one of the most common modes of significant income amplification is to organize a modest-sized business with the order of 15-20 employees. [Montroll 1987, 18]¶ The Comparison with Slavery: VoluntarinessIt is crucial to understand the similarities and differences between the employment system and slavery. When the details are stripped away, there are two important differences (in spite of the rhetoric about “wage slavery”): the voluntariness and the duration of the relationship.¶ In the conventional understanding, slavery was involuntary and the employment relation is voluntary. We accept this standard understanding of the historical facts. However, it is important to see how both assertions have been challenged in various ways. One the one hand, there is a whole school of liberal thinkers who argued that slavery was or could be considered as deriving from voluntary contractual arrangements [viz. Philmore 1982]. One the other hand, there is an old tradition prominently including Karl Marx which argued that the worker’s “choice” to sell his or her labor was a Hobson’s choice, and that the employment contract was “socially involuntary.” But the claim that slavery was voluntary as a matter of historical fact is absurd. And the argument that employment is “socially involuntary” is a rather weak special plea. The labor contract would satisfy any workable juridical notion of voluntariness. The worker, particularly the unionized worker, has considerably more bargaining power than, say, the unorganized consumer who must take price as given.The involuntariness argument is also not necessary for a critique of the employment contract because voluntariness is a necessary but not a sufficient condition for the juridical validity of a contract. Indeed, if slavery was wrong because it was involuntary, then what about a system of voluntary contractual slavery? In the years prior to the Civil War, there was explicit legislation in six states “to permit a free Negro to become a slave voluntarily” [Gray 1958, 527; quoted in Philmore 1982, 47]. But when slavery was abolished, both involuntary and voluntary slavery was prohibited. The contract to voluntarily sell oneself is no longer considered a juridically valid contract.¶ We shall argue that the contract to voluntarily rent oneself out, i.e., the employment contract, should also be considered a juridically invalid contract. The immediate retort is that the abolition of renting people would violate the “freedom of contract.” When one thus hears the rhetoric of liberal capitalism, it is important to remember the invalidity of the self-sale contract. For example, there is Sir Henry Maine’s high-minded dictum that the movement of progressive societies has hitherto been a movement from Status to Contract[1861, reprinted 1972, 100]. Yet the abolition of the self-sale contract means precisely that one’s social position as a free person unowned by another person is a matter of status and is not a question of contract. Do free marketeers consider the invalidation of the self-enslavement contract as being retrogressive rather than progressive because it moved personal freedom from the realm of Contract to the realm of Status?¶ Or consider the oft-heard rhetoric about “free enterprise.” Several centuries ago, enterprise was based on the freedom to own other human beings. And workers even enjoyed the freedom to sell themselves. Those freedoms have now been abolished. Enterprise isn’t as free as it used to be.¶ This quotation from the predominant liberal capitalist economist of our time is important for several reasons. Samuelson acknowledges a major limitation on the “free enterprise” rhetoric, and he forthrightly recognizes that a person rents himself out in the employment relation. Testimony against one’s own interest is particularly valuable. Samuelson is not attacking the employment relation in favor of democratic worker ownership. He is simply giving a no-nonsense description of the employer-employee relation without the usual linguistic sugar-coating involved in saying employees are “hired,” “employed,” “given a job,” or “invited to join the firm. Given the conventional enthusiasm for the freedom of enterprise to rent human beings, one might expect capitalist philosophers and economists to promote extending these freedoms by revalidating the self-sale contract. Robert Nozick of Harvard University, a leading moral philosopher, has argued on libertarian grounds to allow all “capitalist acts between consenting adults.” This includes the contract of political subjugation, the Hobbesian pactum subjectionis, wherein people renounce their democratic rights and voluntarily become the subjects of a ruler or ruling association. A group of people might sell the right to self-government to a “dominant protective association” and an individual might do likewise.¶ Since slavery was abolished, human earning power is forbidden by law to be capitalized. A man is not even free to sell himself: he must rent himself at a wage. [samuelson 1976, 52 (his italics)]¶ Conventional economists constantly make social recommendations based on a utilitarian social philosophy that views all rights actually or potentially as marketable property rights (ignoring inalienable personal or human rights) and that views the efficiency gained from market exchange as the primary criterion of institutional choice. As Nobel laureate James Tobin has noted:¶ The comparable question about an individual is whether a free system will allow him to sell himself into slavery. I believe that it would. [Nozick 1974, 331]¶ Indeed, conventional economic philosophy implies: (1) that people should be allowed to sell their political votes, (2) that people should further be allowed to individually or collectively sell all their democratic rights in a pactum subjectionis, and (3) that people should be allowed to sell all their labor in a voluntary self-enslavement contract. All of these contracts could find willing buyers and sellers among fully informed adults so they should be permitted according to capitalist social philosophy. Yet there is enough social acceptance of the natural rights philosophy descending from the political democratic revolutions of the past that capitalist economists and philosophers usually refrain from actually making such recommendations. Robert Nozick is the exception either because he is more intellectually forthright or perhaps just more fashionably naughty.¶ Any good second year graduate student in economics could write a short examination paper proving that voluntary transactions in votes would increase the welfare of the sellers as well as the buyers. [Tobin 1970, 269]¶ The Comparison with Slavery: Duration and ExtentIn addition to voluntariness, the employment relation is distinguished from the historical master-slave relation by the duration and extent of the relationship. The difference is essentially the difference between renting and buying. Buying a house gives one the right to the entire future stream of services provided by the house, while renting only procures the housing services for a discrete time period. The slave owner owned all of the slave’s labor, while the employer only purchases certain labor services over a given time period. This relation between owning and renting people has been understood at least since antiquity. In the third century, the Stoic philosopher, Chrysippus, held that¶ The comparison between slaves and “hirelings” was commonplace in the South during the antebellum debate over slavery.¶ no man is a slave “by nature” and that a slave should be treated as a “laborer hired for life,” … . [sabine 1958, 150]¶ James Mill expounded on the distinction between buying and renting people from the employer’s viewpoint.¶ Our property in man is a right and title to human labor. And where is it that this right and title does not exist on the part of those who have money to buy it? The only difference in any two cases is the tenure. [bryan 1858, 10; quoted in Philmore 1982, Ê 43]¶ If the employment contract is compared not to the historical master-slave relation but to a hypothetical self-sale contract, then the only basic difference is the duration and extent of the two voluntary contracts. Accordingly, a number of classical liberal writers condoned civilized versions of the self-sale contract prior to the actual abolition of all slavery. In John Locke’s influential Two Treatises of Government(1690), he would not condone a contract which gave the master the power of life of death over the slave.¶ The only difference is, in the mode of purchasing. The owner of the slave purchases, at once, the whole of the labour, which the man can ever perform: he, who pays wages, purchases only so much of a man’s labour as he can perform in a day, or any other stipulated time. [James Mill 1826, Chapter I, section II]¶ But once the contract was put on a civilized footing, it would be a rather severe form of the master-servant relationship.¶ For a Man, not having the Power of his own Life, cannot, by Compact or his own Consent, enslave himself to any one, nor put himself under the Absolute, Arbitrary Power of another, to take away his Life, when he pleases. [second Treatise, section 23]¶ With the exception of Nozick’s libertarian atavism, the self-sale contract has not been a topic of active discussion since the abolition of slavery. Yet the self-sale contract as a sell-labor-by-the-lifetime employment contract has had a curious secret life in economic theory. A capitalist market economy cannot be fully efficient if there are restrictions on trade for any commodities with willing buyers and sellers. By removing the restrictions, trade will make the buyers and sellers better off and efficiency will be improved. There is one basic theorem which is so important in capitalist economics that it is called the “Fundamental Theorem of Welfare Economics,” namely the theorem that a competitive equilibrium in a capitalist economy is allocatively efficient. If the sale of future-dated labor services was forbidden, the Fundamental Theorem would not hold. A buyer and seller might each be made better off if labor were sold over arbitrary time periods, e.g., by the lifetime. In theoretical models of competitive capitalism, complete future markets are assumed to exist for all commodities including labor. A consumer/worker¶ For, if once Compact enter between them, and make an agreement for a limited Power on the one side, and Obedience on the other, the State of War and Slavery ceases, as long as the Compact endures…. I confess, we find among the Jews, as well as other Nations, that Men did sell themselves; but, ’tis plain, this was only to Drudgery, not to Slavery. For, it is evident, the Person sold was not under an Absolute, Arbitrary, Despotical Power. [second Treatise, section 24]¶ In such Arrow-Debreu models [Arrow and Debreu 1954], a consumer/worker is viewed as making a lifetime of labor contracts all at that initial time (not necessarily all with the same employer). Restrictions on the sale of future-dated labor services would be market imperfections precluding the allocative efficiency of competitive equilibrium. The fundamental efficiency theorem of capitalist economic theory must assume that the self-sale or lifetime labor contract is legally valid, even though the contract is now legally invalid. It is not surprising that capitalist economists absolutely loathe to admit this. One exception is the economist and econometrician Carl Christ who made the point in no less a forum than Congressional testimony.¶ is to choose (and carry out) a consumption plan made now for the whole future, i.e., a specification of the quantities of all his inputs and all his outputs. [Debreu 1959, 50]¶ The efficiency of perfect competition is surely the most thoroughly analyzed and discussed topic in mainstream economics. Yet in the textbooks or literature of the “science” of economics, the author has not been able to find a single other admission that capitalist efficiency requires that contract law be “modified to permit individuals to sell or mortgage their persons in return for present and/or future benefits.” In a society allegedly free of thought control, one would expect to find at least one textbook that would mention such a point.¶ Now it is time to state the conditions under which private property and free contract will lead to an optimal allocation of resources…. The institution of private property and free contract as we know it is modified to permit individuals to sell or mortgage their persons in return for present and/or future benefits. [Christ 1975, 334; quoted in Philmore 1982, 52].¶ The Language of the Employer-Employee Relation¶ This preliminary analysis of the employment relation must include consideration of the language of employment because “words tell a story.” We previously noted that a good many people are not even aware that they live in a society based on the renting of human beings. But before we suggest that “The Big Lie” or ideological false consciousness may also exist on this side of the erstwhile Iron Curtain, we should check if people at least know the traditional legal name of the employment relation. Slaves knew they were slaves, but do employees know their legal name? “Employer-employee” is not the traditional name; it is newspeak which has only come into English usage within the last century. Society seems to have “covered up” in the popular consciousness the fact that the traditional name is “master and servant.” Without special legal or historical education, one would think “servant” refers only to domestics. But domestic servants are onlydomestic servants, while all employees are servants in the technical legal sense of the word. The master-servant language was used by the 18th century Blackstone, but in the 19th century it had acquired such negative connotations that it had passed out of common usage. For instance, John Stuart Mill has no standard name for employee/servants in his classic Principles of Political Economy (1848) since the oldspeak of “servants” was unacceptable but the newspeak of “employees” had not yet been imported from the French. Mill referred to employees as hired “operatives,” “workpeople,” “labourers,” or even “the employed.” Even around the turn of this century, the English version “employee” of the French “employ” was not fully accepted. In 1890, Webster’s Unabridged Dictionarynotes:¶ Quote¶ The English form of this word, viz., employee, though perfectly conformable to analogy, and therefore perfectly legitimate, is not sanctioned by the usage of good writers.¶ The traditional language of master and servant is still used today in the area of agency law, the law governing the relationships between principal and agent, and any involved third parties. The relevant distinction is between a servant (i.e., an employee) and anindependent contractor. A lawyer or plumber in independent practice is an independent contractor while a lawyer or plumber on the staff of a corporation would be a servant or employee. The Chicago economist, Ronald Coase, quoted from a lawbook to describe the “legal relationship normally called that of ‘master and servant’ or ‘employer and employee'” [Coase 1937, 403].¶ In addition to not being independent (e.g., not paying for one’s inputs), the servant is marked off from the independent contractor by the employer’s control over the execution of the work. An agent could be either a servant or an independent contractor. In agency law, the distinction is quite important for the imputation of legal liability when a third part is injured within the scope of the agent’s work. If the agent worked as a servant rather than as an independent contractor, the injured party can also sue the master or employer who would have a “deeper pocket” than the employee. The legal responsibility of the employer is called “strict liability” or “vicarious liability” since the injury to the third party was not actually the fruits of the employer’s labor. Modern labor legislation uses the newspeak of “employer-employee.” The continuing use of the traditional “masterservant” language in agency law is not without controversy. Some writers consider the “master-servant” language to be so archaic that it can be used as technical terminology without any undue negative connotations. Other writers disagree.¶ The master must have the right to control the servant’s work, either personally or by another servant or agent. It is this right of control or interference, of being entitled to tell the servant when to work (within the hours of service) or when not to work, and what work to do and how to do it (within the terms of such service), which is the dominant characteristic in this relation and marks off the servant from an independent contractor, or from one employed merely to give to his employer the fruits or results of his labor. [batt 1967, 8; quoted in Coase 1937, 403]¶ For our purposes it suffices to highlight the social adjustment mechanism involved in the evolution from “masterservant” to “employer-employee.” When the social role of being rented acquired excessive negative connotations, society changed the name rather than change the relationship itself. There are other examples of proposed or actual language changes to alleviate social stress. For instance, in the slavery debates before the Civil War, some planters were quite willing to admit that the “master-slave” language could be objectionable so they suggested some newspeak.¶ Another interesting variation in the literature of vicarious liability relates to the language in which the subject is discussed. Justice Holt spoke of “masters” and “servants,” which were current coin in 17th century speech. These terms are perpetuated today in many judicial decisions, and in the Restatement of Agency. Students should be familiar with them but should not, we think, acquire the habit of using them. Defenders of the Restatement contend that these words, precisely because they are archaic, are neutral tokens of communication. It is clear, however, that the terms are still alive enough to be offensive to laborers and labor representatives. [Conrad, et.al. 1972, 104]¶ The “warrantor-warrantee” newspeak for “master-slave” did not take hold since the relationship itself was soon abolished. The same social pressures are at work today. It “sounds bad” to say that people are rented so one is supposed to say s omething else.¶ Slavery is the duty and obligation of the slave to labor for the mutual benefit of both master and slave, under a warrant to the slave of protection, and a comfortable subsistence, under all circumstances. The person of the slave is not property, no matter what the fictions of the law may say; but the right to his labor is property, and may be transferred like any other property, or as the right to the services of a minor or apprentice may be transferred…. Such is American slavery, or as Mr. Henry Hughes happily terms it, “Warranteeism.” [Elliott 1860, vii]¶ Labor History: Servus, Serf, Servant¶ The etymology of the word “servant” is of interest. Western history has seen three general types of economic systems: slavery in ancient times, feudalism in the Middle Ages, and capitalism (private and public) in modern times. The worker’s role in this evolution can be traced in the evolution of his name. The Latin word for slave “servus” evolved into the French “serf” (and Italian “servo”) under feudalism, which in turn became “servant” under capitalism. If the three word version of Economics is “Supply and Demand,” the three word version of Labor History is “Servus, Serf, Servant.” During the Middle Ages in France and Italy, there were a few slaves, often of Eastern European origin, in addition to the multitude of serfs. The presence of the lowly slaves caused some linguistic dissonance since “serf,” “servo” and sometimes even the original “servus” were used to refer to the serf who had a higher station. In this case, language readjusted by renaming the actual servi as “slaves.”¶ The affordable home products linguistic association of “serf” and “servus” also led to newspeak for “serf.”¶ By the end of the thirteenth century and perhaps in imitation of the Italians, they were called by a name that recalled the origin of many of them and that gradually slipped from its ethnic meaning to a purely juridical one: slaves, i.e., Slavs. [bloch 1975, 64]¶ In the course of its career, the word “servant” has denoted workers from the slave to the modern employee as if its own ontogeny had to recapitulate the servus-serf-servant phylogeny. Although servants are never called “slaves” (except as hyperbole), slaves were often called “servants” in premodern times. Even within recent decades, some dictionaries such as the 1959 Webster’s New Collegiate lists “A slave” as a second definition of “servant.” At the same time, lawbooks use “servant” as the technical legal term for the modern employee. Thus the three word version of Labor History could be shortened to one word, “Servant.”¶ In order to prevent any misunderstanding and although everyday language, unafraid of confusion with Roman law, continued to use daily the word serf, many notaries henceforth carefully avoided servus, judged inconveniently equivocal, and replaced it in deeds by various synonyms, notably homme de corps. [bloch 1975, Ê63-64]¶ SummaryMost people who work, work as employees. Yet they do not know employment is the rental relation applied to persons and they do not know the traditional name of the relationship. The system of social indoctrination has been so successful that the employer-employee relation is not even perceived as something that could be different. “To be employed” has become synonymous with “having a job,” to be “unemployed” is to be without work so “employment” has become the same as work. The employment relationship is accepted as part of the furniture of the social universe. We have even described the opposite system without the employment relationship as “universal self-employment” [which is akin to describing the opposite of the slavery system as universal self-ownership]. How could this happen? Part of the answer must be Marxism. Capitalism has been able to define its distinguishing features by the contrast with Marxism. The debate with Marxism has been focused on so many sideline issues that it gives new meaning to the phrase “red herring.” Since Marxist socialism models the economy as one big capitalist firm, the worker has the choice of being a cog on a private wheel or a cog on one big public wheel. It is as if slavery apologists had been able to successfully redefine the issue as the choice between public or private slave plantations. By diverting the debate, Marxism has been an absolute godsend to capitalist apologetics. If Marxism did not exist, capitalist ideology would have to invent it. The capitalism/socialism debate has not only diverted attention away from the renting of human beings, it has allowed capitalism to be positively identified with democracy, equality, justice in property, and treating people as persons rather than things. Yet the employment relation inherently denies all these ideals in the workplace. Slavery has been abolished both as an involuntary or as a voluntary relationship. But instead of creating a form of enterprise where people are treated as persons rather than things, we only have a system where workers are rented rather than owned. The transition from workers being an owned input to their being a hired input was certainly a moral improvement. But the capitalism/socialism debate has paid little attention to the alternative form of work where the human element is not “employed” at all by public or private employers where people rent only things rather than the owners of things renting people. Consider equality. There is a basic equality of rights in the political sphere. But prior to the democratic revolutions, there was a fundamental political inequality between ruler and the ruled where the ruler governed in his own name, and was not selected by and did not represent the ruled. Today in the economic sphere, that same type of authority relationship exists between the master and servant where the employer governs in his own name, and is not selected by and does not represent the employees. Or consider democracy. The capitalist democracies stands for democracy, but not in the workplace [viz. Dahl 1985]. In the next chapter, we will review the non-democratic tradition of liberal thought which founded autocracy on a voluntary contract, the pactum subjectionis. With the triumph of the democratic revolutions inspired by the natural rights philosophy of the Enlightenment, that non-democratic liberalism retreated to the capitalist workplace where it has flourished ever since as part of capitalist ideology. The employment contract is the pactum subjectionis of the employment firm. Or consider justice in the private property system. Under capitalism, doesn’t everyone get what they produce, the fruits of their labor? We will see quite the opposite, that when labor is hired, the fruits of labor go elsewhere. Labor is the natural basis for the appropriation of newly produced property; the natural “wages” of labor are the fruits. Instead of somehow being the economic system realizing justice in private property, capitalism systematically violates the basic labor principle of private property appropriation. It is again the employment relation which sets up the misappropriation of private property. In each case, we trace the root cause of the problem to be the renting of human beings, the employer-employee relationship. The alternative to the employment relation is not having everyone employed by the state. It is having everyone working for themselves (individually or jointly). This means restructuring companies so the membership rights are personal rights attached to the functional role of working in the firm. Then there is no human “employment” since working in the firm makes one a member so people are always jointly working for themselves.


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It's unclear to me how that system is distinct from our current system at all, except that it uses different labels for things. The unemployed are still left without help, the employed are still subject to bargaining difficulties because they don't want to be unemployed. What's the significance of giving "personal rights attached to the functional role of working in the firm" rather than giving a wage?

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Only a cursory glance over both articles/cards but I find it strange that both of these articles barely mention race

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Mentioning race in a historical discussion of real slavery makes sense to me as something necessary for a conversation. Mentioning race in a discussion of the more metaphorical slavery of today's capitalism does not seem necessary to me, though. Why do you see it as important to understanding the wage system?

I noticed that a discussion of international rich/poor gaps was missing, to my mind that is a more significant omission, albeit in a somewhat related category. Arguably people in the West are being overpaid for the amount of work they do rather than underpaid, when you look at equivalent jobs abroad. Our standard of living is very high from an absolute standpoint, even though relative differences in income are large within our country the more significant difference is that between our country and others.

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The first article seems to offer a historical materialist analysis of slavery.

I'm torn, because while there are a lot of elements of historical materialist analysis in the post, it simultaneously distinguishes racial slavery from wage slavery (it compares elements of freedom and suggests that even if Marxists are 100% right about wage slavery, it's still not even remotely comparable to racial slavery).

 

I would argue this card both argues and concludes against marxists (and in favor of treating Black slavery as incomparable and unique). I think it's more answers to the cap K than support for it. The line at the end about slavery evolving is ambiguous in its meaning, but isn't in an important part of the article (the best "Black slave ontology incomparable" cards are earlier). 

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I noticed that a discussion of international rich/poor gaps was missing, to my mind that is a more significant omission

This is definitely the weakest part of the article. It appears to assume a Western subject in describing the conditions of modern wage slavery, which substantially weakens its analysis.

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I'm torn, because while there are a lot of elements of historical materialist analysis in the post, it simultaneously distinguishes racial slavery from wage slavery (it compares elements of freedom and suggests that even if Marxists are 100% right about wage slavery, it's still not even remotely comparable to racial slavery).

 

I would argue this card both argues and concludes against marxists (and in favor of treating Black slavery as incomparable and unique). I think it's more answers to the cap K than support for it. The line at the end about slavery evolving is ambiguous in its meaning, but isn't in an important part of the article (the best "Black slave ontology incomparable" cards are earlier). 

Fair enough, only read the first two paragraphs to be honest. 

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Fair enough, only read the first two paragraphs to be honest. 

it is a dry read. marxists tend to suck at fun writing, even on tumblr apparently.

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Insofar as the original article is a response to the idea that capitalism makes people free and is thus a super duper economic system, I agree with the original article. But it's worth pointing out that coercion is to some extent an inevitability because there's no good economic system that can leave individuals unaffected by anyone else. Coercion in the sense that life is unfair is arguably more a precondition to choice than a hindrance to it, because if the right decision is obvious or automatic it's not much of a choice at all. Peter Watts talks about something similar to this in his novel Echopraxia, I believe.

That people's choices are influenced by the people and conditions around them is not something we can change nor is it something we should want to change, as decisions only have any value at all insofar as they're made by individuals in accordance with the desires they have for themselves, their environment, and those around them. Freedom from being able to choose which outcomes we want is not a freedom generally worth having, as in almost all cases, it's either powerlessness or nihilism given a misleading label. The problem with the current system is not a lack of freedom so much as a simple lack of well-being. Pointing out the ways in which the system fails to allow for people's choices to result in wellbeing is worthwhile, but pointing out the ways in which the system fails to allow for people's choices in general is impossible.

I don't really see the problem with today's economic system as the capitalist system or the wage system, rather I think we simply need more socialism. Alternatives to the wage system seem likely to fail to me, while we should decouple quality of life from work to some extent I think we'd run out of useful labor before we hit our target QALYs if work was wholly decoupled from wages because unpaid people won't do much work that's useful to society. Capitalism is nice because it encourages people to work in areas where it will suit other people's desires, that sort of targeting seems impossible to achieve through other systems because of the Economic Calculation Problem.

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Insofar as the original article is a response to the idea that capitalism makes people free and is thus a super duper economic system, I agree with the original article. But it's worth pointing out that coercion is to some extent an inevitability because there's no good economic system that can leave individuals unaffected by anyone else. Coercion in the sense that life is unfair is arguably more a precondition to choice than a hindrance to it, because if the right decision is obvious or automatic it's not much of a choice at all. Peter Watts talks about something similar to this in his novel Echopraxia, I believe.

 

That people's choices are influenced by the people and conditions around them is not something we can change nor is it something we should want to change, as decisions only have any value at all insofar as they're made by individuals in accordance with the desires they have for themselves, their environment, and those around them. Freedom from being able to choose which outcomes we want is not a freedom generally worth having, as in almost all cases, it's either powerlessness or nihilism given a misleading label. The problem with the current system is not a lack of freedom so much as a simple lack of well-being. Pointing out the ways in which the system fails to allow for people's choices to result in wellbeing is worthwhile, but pointing out the ways in which the system fails to allow for people's choices in general is impossible.

 

I don't really see the problem with today's economic system as the capitalist system or the wage system, rather I think we simply need more socialism. Alternatives to the wage system seem likely to fail to me, while we should decouple quality of life from work to some extent I think we'd run out of useful labor before we hit our target QALYs if work was wholly decoupled from wages because unpaid people won't do much work that's useful to society. Capitalism is nice because it encourages people to work in areas where it will suit other people's desires, that sort of targeting seems impossible to achieve through other systems because of the Economic Calculation Problem.

I'm getting a Deleuzean analysis of capitalism from your response - you believe Capitalism as a system is good; it's not a question of "we should replace capitalism because it oppresses us" (which assumes Capital submits itself to a moral order), rather it's a question of our relation to the capitalist system. 

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The article reiterates the basic Marxist assertion that the problem is alienation from the means of production - it would suggest that interrelationship is fine, but hierarchically dominant interrelationships that prevent access to the means of production (or disproportionately concentrate and reallocate those means) are unethical. How much access to the means of production is necessary/good is the crux of that debate. 

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