Post No.: 0860
According to philosopher Karl Marx, a bourgeois society comprises of the bourgeoisie who hold the means of production and the proletariat who have nothing to offer except for their labour. And so the bourgeoisie constantly exploit the proletariat.
As eloquently conveyed in The Ragged-Trousered Philanthropists by Robert Tressell, which really summarised the main points of Das Kapital by Karl Marx in literary form – there are those who own the means of production, like the raw materials of the land for instance (which they got to own somehow even though it originally came from the shared public commons). But they’re lazy or cannot work on it to make the most of these resources alone, so they hire working-class people to work on it (the labour). These workers create value from that land, produce necessities like food, clean water, clothing, etc., which benefits the owners of the land. Those workers do get paid some money for their labour in return though – but they cannot eat, drink or clothe themselves with this money and so they must buy that stuff to survive. And they must buy that stuff from the types of companies that they all work for to produce that kind of stuff, and therefore they must essentially give back their wages to those with the means of production!
Online platforms like Roblox present this scenario clearly, where the creativity and labour (of young children even!) are exploited for essentially nothing in most cases. You get paid in Robux, the in-game currency, which you can only spend in the game, thus the money ultimately flows back to the Roblox Corporation. You can convert it into a currency like dollars and withdraw it, but after all the hoops you must jump through, it doesn’t seem worth the conversion.
The value of the assets of those with the means of production rise as a result, whilst those with the labour end up virtually where they started – with almost nothing. The former essentially get something for nothing and that’s considered fair in capitalism! Any employees will be branded as ungrateful for their jobs if they don’t like this arrangement. And if these companies decide to close their factories due to overproduction or any other reason, that leaves the working class starving. Meanwhile, those with the assets will politically complain that to give these poor people things like food and water for nothing, without working for it, would be unfair(!)
And if you need accommodation, you can rent a property from them too – some of your wages can go towards this rent, which can pay for the upkeep of that property. And once you leave, those who own the property will have a nicely maintained property while you’ll retain nothing to your name!
In a highly simplified example – say you work as a coalminer for a landowner who happens to have tons of minerals underneath their land. You get paid for your labour, but you need to heat your home to survive. So you use your wages to buy some of the usable coal that you essentially extracted with your own labour, to heat your home. You’re left with almost nothing at the end of the day, but the coalmine owner got the rest of the usable coal and much of your wages back eventually too. Your assets stay at zero, but the landowner’s total assets and wealth grows thanks to your labour on their land. It’s a nice flow of easy money going from the poor to the already-rich.
And it all started because somehow some people got to individually and privately own what used to be the commons and owned by everybody. It all started from a theft from the commons because no one could purchase it from anybody because no one could’ve legitimately sold it to them, and no one can buy it off everybody (even if the government was the one that decided to sell it on behalf of everybody) because everybody hasn’t been born yet to decide whether they wish to sell it.
In reality, if a working-class person can save or invest even a little bit of her/his wages, such as to eventually buy a property, then she/he can start building up her/his own assets. But while they’re doing this at a snail’s pace, the rich classes are building up their capital at a relatively lightning pace, and the overall general picture is that the already-rich get richer while inequality grows ever wider because the poor aren’t getting richer at the same pace. We don’t need to go to full-blown socialism at the other extreme end to full-blown capitalism – but we can see that full-blown capitalism has inherent problems with it, and it started with the start of it. So, at the very minimum, we should be able to understand that a robust welfare state increases fairness. Meow.
So it’s not to therefore say that communism is the solution. Both capitalism and communism have their flaws – well it’s been said that ‘under capitalism, person A exploits person B; but under communism, it’s the other way around’!
Arguably, the only reason why the working class toils at such hard labour while the ruling class lives off their back is because the working class have been led to believe that this situation is both natural and good for them (a ‘false class consciousness’). A good example would be the idea that low taxes are good and stimulate growth. High taxes are considered to de-motivate work and ambition. Yet how many of us work harder the lower the taxes are, or work less the higher the taxes are?
Another example is the ideology of ‘trickle-down economics’ (which was explored in Post No.: 0855) – give rich industries low taxes and all the freedom they want and they’ll, supposedly as a natural side-effect of what they do, trickle-down wealth to the rest of society. Yet the evidence shows that this widens inequality, and poverty still exists even as more multibillionaires are made. According to Oxfam, 85 people owned as much as the poorest half of the world’s total population in 2014! Then it became 62 people in 2016. Then 26 people in 2019!
Rates of extreme poverty have been decreasing over the decades, but the widening inequality is still problematic (plus many contend that the definition of ‘extreme poverty’ – of living on only $1.90/day in 2017 – is too low a bar anyway). Although it can sometimes be wise for people to consider what they have in absolute terms if it’s sufficient – it’s not what people have in absolute terms that matters when it comes to power and influence but how much they have relative to others. If ‘money talks’ and makes things happen – if money is power – then the super-rich rule the world, which includes over you if you’re one of the poorer; without the need to go into any wacky conspiracy theories.
It’s not really a ‘favour’ for firms to merely employ workers and pay them wages because it’s two way – the labour these workers give creates profits for these firms, hence it should be regarded as a mutual benefit. Without the labour/workers, these firms wouldn’t function and would be nothing. So it’s not the case that firms are doing the workforce a one-sided favour. However, especially when corporations and top execs avoid paying their fair share of taxes while their employees fully pay theirs, yet firms still use the public roads, sewers, police, national security, legal/courts system and other public services funded by taxation – there’s a relative net transfer of wealth from the labour of a nation towards the private firm owners of that nation.
Increasing automation and low wages further exacerbate the problem. Automation, AI and hyper-connectivity may boost productivity for those already with jobs. They may bring growth to a business, and create new jobs even though old jobs get taken over by automation, which in turn, if demand for their products grows, may create some more human jobs in total. Yet we collectively cannot rely on expecting ever-increasing economic growth in a finite resource world. What we can sustainably have, we must share.
Large, rich and powerful corporations that are ‘too big to (let) fail’ receive government (i.e. taxpayer) bailouts, whereas shops that are important for their local communities are left to perish. Also, if a small business (or ordinary citizen) tries to avoid paying its taxes, the inland revenue department will go heavy on it. But a large multinational corporation like Vodafone will have the opportunity to negotiate essentially a sweetheart deal to settle its tax bill – and of course a company wouldn’t agree to a figure owed if it wasn’t less than what it really owed! The background to this is that many large multinational corporations use complex corporate structures and tax havens to offshore their profits and thus aggressively avoid their taxes. Some companies are even proud to boast about their tax avoidance strategies to their shareholders in their annual general meetings!
Large business owners typically like to promote the trickle-down myth – because they’re the ones who actually gain from it. (A similar myth would be ‘if humans are just freely allowed to do what they do for their own benefit, then the environment and other life in the ecosystem will naturally benefit from a trickle-down effect(!) Why would humans want to wreck the planet? Humans live here too!’) Many rich individuals like to promote the story that if people fail to lift themselves out of poverty after being born in poverty then it’s their own fault – because they’re trying to justify why taxing the rich and redistributing the wealth better is wrong. If the poorest 99% were rational though, they should back political policies that tax the richest 1% more highly. Metaphorically, why give the richest 1% the cake, hoping that they’ll kindly drop some crumbs onto the floor for you and the rest to fight over?! Human societies used to call ‘trickling-down from above’ as ‘divine right’ and that only a few religiously-important people were indispensable whilst the rest of the population were ‘subordinate’ – it’s how they kept people in line. It’s like deifying the super-rich as the saviours of our souls and giving them the money, thinking that they’ll use it to save us all(!)
The rich being taxed less means less wealth can be redistributed. Unproductive capital and assets like property have been gradually taxed less than productive labour and wages in the UK over the past few decades, even though properties are easy to tax because they cannot be moved abroad. The existing wealthy therefore get to keep their wealth and generate economic rents, while hard workers get taxed more greatly.
Wealth being spread around more may mean that others can have a chance to start up their own businesses and compete with the established rich one day, rather than the wealth being continually concentrated in the hands of a few large businesses, resulting in an economy that lacks vibrancy, diversity, motivation and innovation. Big supermarkets do employ many people, but so would lots of small shops that each pay their fair percentage of taxes that pay for vital public services. It’d also produce a far more vibrant, diverse and competitive local economy, which benefits consumers. If there’s demand, it’ll be fulfilled if local entrepreneurs are supported. Indeed, it’s demand that drives job creation i.e. ‘bottom up’ from the customers, not ‘top down’ from large companies, who’d evidently axe employees (often by the thousands at once) if demand drops. Collectively, small/medium businesses also employ the most.
I’ll finally point out that the priority of some of the richest people on Earth is to figure out how to incentivise their own guards and staff when an apocalypse occurs and money becomes worthless, rather than using their resources to figure out how to prevent a (climate) apocalypse! Thinking only about oneself doesn’t make the world better.