Labor Market and Mainstream Economics

Market and labor in market are crucial questions both to capital and labor. The questions have been discussed and answered by economists, from the mainstream, and also from the camp of labor.

“Markets”, writes Michael D. Yates in his Work Work Work: Labor, Alienation, and Class Struggle (Monthly Review Press, 2022), “act as a veil, hiding the face of the system. They are impersonal mechanisms, which allow us to use them without knowing what is underneath.”

Yates elaborates the issue: “We buy goods and services and are thereby dependent on those who produce our food, clothing, shelter, and services of every kind. However, we simply exchange money for them. And as the Romans said, Pecunia non olet. Money has no smell.”

He shows the argument employers use to defend self-interest: “Employers say that they pay the market wage. If it is too low for survival, that is no fault of the boss.”

Bosses never “coerce”

Bosses “are” always faultless! They define what’s right and what’s wrong, what rights are and what goes beyond rights, what should be enforced and what shouldn’t be. It’s now an old, well-known fact: “In former times,” writes Marx, “capital resorted to legislation, whenever necessary, to enforce its property rights over the free laborer.” (Capital, vol. I, Progress Publishers, Moscow, erstwhile USSR, 1977) He cites example from 1815: “The emigration of mechanics employed in machine making was, in England, forbidden, under grievous pains and penalties.” That, pains and penalties, was “faultless”, “no” fault by the bosses. There was “no” coercion; bosses “never” coerce. This story of pains and penalties isn’t told today.

Coercion-“free” arrangement

This “faultless”, coercion-“free” arrangement and environment is also present today, in countries, in markets, in labor markets, in varied forms, which is overlooked tenaciously. “The Roman slave was held by fetters”, as Marx again tells another fact, “the wage-labourer is bound to his owner by invisible threads.” (ibid.) So, what’s now told is what’s called the “push” and “pull” factors: Peasants turn landless, find no “suitable” labor market in their rural surroundings, feel the pull to be a slum-dwelling slave in a glittering urban setting, gets an Eid (Moslems’ main festival), bonus, if she or he is fortunate enough, rides a train like beasts pressed into compartments or on the roof of the compartments to have a few days of festivities with family members in her/his village home. But she or he has to come back if she/he likes to survive, even though that be a slave’s survival. It doesn’t matter how much the worker dislikes the slum-slave-life, the worker has to come back to the slum, pull on or push through a machine or burden like a beast. The worker and the family will die if the worker disobeys the market – it’s the labor in market with “invisible threads”. The story is the same with migrant laborers crossing the Mediterranean on engine-driven boats, risking their life. Capital hasn’t organized labor markets for the laborers’ survival. Not in the shore of the sea, be it Libya or Lebanon or in any distant land. Facilitating the laborers’ survival is no concern of capital. Rather, capital has arranged a “lucrative” market on the other shore, Italy, and from Italy to some other land. The labor has to move, the labor has to risk life for the sake of life. This is in Gaaibaandaa or Paatharghaataa in Bangladesh. This is in Bihar in India, or in Nepal, or in the southern part of India. The workless-working people have to move to labor markets in Mumbai or some other industrial areas in India, or to the lands along the Persian Gulf. A labor market map and a labor mobility map will show the workers’ path to “freedom” or to serfdom, and the labor market’s power to pull and dominate labor across this earth.

A difficult issue is said by Yates in his book cited above: “We can’t be concerned about the conditions of labor endured by those who make what we buy.”

The market doesn’t allow us to think about the conditions of labor. Even, the market’s mechanism and tricks are overlooked by most of us. It’s the market’s power to control our thought process.

Market and good society

Yates puts forward a hard question: “Yet, how is it imaginable that a good society can be constructed on the basis of markets for everything imaginable?”

The question of having a good society is relative: To capital, a society is good if that society doesn’t create any obstacle on the path of capital’s dominance. It is even the case that dissecting and questioning capital and its activities are considered as a hindrance to a good society by the bosses, the owners of capital. Marx, thus, dissecting capital with a radical view, turned out as an archenemy of the bosses.

Yates tells the hard truth applicable in all exploiting societies: “[M]arkets benefit those who have the most money […]”

Every commoner experiences this fact – benefits are derived by those having the most money – every moment of every day in every land with the system of exploitation. Living with an exploiting system; none can escape this reality.

Then, Yates throws a challenge that the mainstream can’t face: “[T]here never has been and never will be a capitalist system in which money is not unevenly distributed”.

Capital doesn’t go for even distribution of anything, be it money, the commons, and even, suffering. The last one is for the weak, for those having no power of any sort; and the rest, all the good and comfort, is for the owners of capital. The mainstream scholarship, be it with the economists or the idealist philosophers, can’t change this fact.

“All markets”, writes Yates, “are built around individualistic, self-centered behavior, impersonal in its callousness to what goes on behind the veil.”

Can the mainstream economists or idealist philosophers deny this fact – a system for aggrandizement by a few? The few are concerned only with their comfort, luxury, security – a self-centered approach; and for having these endlessly, they are concerned with securing a system that ensures these, that denies and wipes out all alternatives, that demolishes all possibilities of challenging it.

Michael D. Yates tells these, the parts cited above in chapter 2 – “Labor markets: The neoclassical dogma” in Work Work Work: Labor, Alienation, and Class Struggle. The chapter is based on a commentary on a 58-minute film by Mary Filippo, My Mis-Education in 3 Graphics.

In 2004, according to Yates, “Filippo began to audit economics classes hoping that she could ‘learn something about globalization’: Does it really help people in developing countries? What are its downsides? She did not learn these things. She says, ‘What I found in these courses was instead a difficult to understand presentation of the economy through graphic models.’”

An interesting description is given by Yates: “Throughout the film, she [Filippo] shows several purveyors of the wisdom of the “dismal science” making statements, with a straight face and with the discipline’s ubiquitous graphs, that seem ridiculous to any thinking person. These are offered without evidence, and when Filippo asks for proof, they resort either to silence or subterfuge.They draw supply-and-demand graphs and assume that what they show is obvious.”

There in the film comes Gregory Mankiw, “author of an economics textbook that has made him millions of dollars, he said that the need for cash to make demand effective is taught in a subsequent course!”

The wise Mankiw has some more sayings, as Yates writes: “Mankiw, surely as callous and simple-minded a man as ever obtained a PhD, says that to ask questions about inequality, poverty, and so forth, reflects value judgments, which, by definition, are not scientific. They are beyond the purview of the economists but rather are the stock-in-trade of journalists, for whom, as his words and demeanor imply, he has a low opinion. He argues that the objectivity and value-free nature of economics is partly due to its use of mathematics to buttress its theory, the idea being that since mathematics is value-free, any subject that uses it must be value-free as well.”

Failure in interpretation

Yates, then, talks hard — hard, but factual:

The claim that economics is a science is one of the greatest frauds perpetrated by the adherents of any branch of learning. A professor who taught at the university I attended in graduate school said without irony that economists were physicists of society. This claim would surely have generated howls of laughter had there been any physicists on hand when he uttered this nonsense. Real scientists know that although the starting part of scientific investigation is a hypothesis based upon certain assumptions, this is not the end point. The logic of the assumptions is worked out, typically with mathematics, to generate the hypothesis. But then the predictions generated in the hypothesis must be tested. Scientists have devised many ingenious experiments to test their hypotheses.When other researchers replicate their experiments and obtain the same results, then our confidence in these results is deepened. If anomalies begin to appear at a future time, then scientists have to return to the drawing board to explain them. Sometimes, entirely new theories come into being as a consequence, as when Einstein explained anomalies in Isaac Newton’s physics of the universe with a new theory, that of general relativity.

His argument goes further:

Economists cannot typically perform the kind of experiments scientists do. The social world isn’t a laboratory where the variables being examined can be controlled while the scientist records what happens when a change is introduced. Occasionally, the social world throws up what we might call ‘natural experiments’ in which, for example, two circumstances are pretty much alike except for one variable. Then differences in social outcomes might legitimately be thought of as the result of this one difference. When such natural experiments are not available, other, more indirect methods can test predictions. These must be employed with great care to avoid circular reasoning.

Unfortunately, mainstream economists, especially when teaching the classes that Mary Filippo audited, never discuss testing. They do mention the assumption that underlies their prediction-generating model.

The arguments about bourgeois economics Yates presents can generate debate. The chapter of the book is, thus, useful to those grappling with bourgeois economics. Yates’ analytical comment reminds us of Marx’s comment: “To the present moment political economy, in Germany, is a foreign science.”(“Afterword to the second German edition” of Capital, January 24, 1873)

Marx made a reference to Gustav von Gulich’s Historical Description of Commerce, Industry, &c., the first two volumes of which were published in 1830. The remaining three volumes were published within 1845. The book, according to Marx, “examined at length the historical circumstances that prevented, in Germany, the development of the capitalist mode of production, and consequently the development, in that country, of modern bourgeois society.” Then, Marx made the following comment:

“Thus the soil whence Political Economy springs was wanting. This ‘science’ had to be imported from England and France as a ready-made article; its German professors remained schoolboys. The theoretical expression of a foreign reality was turned, in their hands, into a collection of dogmas, interpreted by them in terms of the petty trading world around them, and therefore misinterpreted. The feeling of scientific impotence, a feeling not wholly to be repressed, and the uneasy consciousness of having to touch a subject in reality foreign to them, was imperfectly concealed, either under a parade of literary and historical erudition, or by an admixture of extraneous material, borrowed from the so-called ‘Kameral’ sciences, a medley of smatterings, through whose purgatory the hopeful candidate for the German bureaucracy has to pass.”(ibid.)

Many parts of the bourgeois economics haven’t been rescued from this funny condition. It’s their “scientific” cecity, or inactivity moored in exploiting interest. Their fundamentals and appendages fail to interpret labor’s life, and expose exploitation.

Magical market

“The key term used is ‘the market,’ which is assumed to be the most important social institution that economists must study”, says the chapter.

No doubt, after so many years of ravages markets have created in the life of the commoners, it is not surprising that markets should be identified as magical to a few, bringing fortunes to these few, and murderous to many. Despite these facts – magical and murderous – the market is touted as useful. Forceful propaganda is everywhere: “Free market is the panacea”, “Keep market free”.

But, in reality, there’s nothing like free market. “The free market doesn’t exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them. How ‘free’ a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketeers are as politically motivated as anyone. Overcoming the myth that there is such a thing as an objectively defined ‘free market’ is the first step towards understanding capitalism.”(Ha-Joon Chang, 23 Things They Don’t Tell You About Capitalism, Bloomsbury Press, 2011)

To let markets operate freely, there are international/multinational organizations with their interferences that include rules, regulations, conditions; there are treaties, pacts and protocols with policies related to taxation, subsidy, quota, labor, etc.; there are authorities, national and international, arbitrations, and legislations. Yet, amazingly the market is touted to be free! Moreover, in the period of dominance by imperialist capital, markets can’t move beyond capital’s requirements. Competition is controlled by powerful capitalist interests.

After discussing wage, productivity and a few features of capitalism, Yates makes an essential statement:

“We must understand that stating the obvious fallacies of neoclassical economics and the manifest shortcomings of its proponents will not weaken its hold. It will only collapse if a significant number of students and economists ally themselves with working men and women — those who can and must be the agents of radical change — teaching them, writing for and with them, becoming one of them in their workplaces.”

Convert life into commodity

“Work is hell” (chapter 3 of Work Work Work) tells:

Economists seldom say much about work. They talk about the supply of and the demand for labor, but they have little to say about what we do as we earn our daily bread. Like most commentators, they believe that modern economies will require ever more skilled workers, highly educated, performing their tasks in clean and quiet quarters and sharing in decision-making with managerial facilitators.

We should disabuse ourselves of such notions. In the world today, most workers do hard and dangerous labor, wearing out their bodies every minute they toil, fearing the day that they will be discarded for a new contingent of hands. Workers get a wage in return for converting their life force into a commodity owned by those who have bought it.

The cruel fact of capitalism is told by Yates: “Workers get a wage in return for converting their life force into a commodity owned by those who have bought it.”

Yet, this fact doesn’t reach workers, nor does a way to get rid of this system that converts the life force of workers into commodities. This hindrance is done by those who own the commodities. Workers have nothing other than losing and losing.

The chapter refers to the International Labor Organization’s World Employment and Social Outlook that examines unemployment, poverty employment and vulnerable employment.

Yates again tells a bitter fact in exploiting society: “For nearly everyone in the world, work is hell. The sad truth is that many are demeaned, worn out, injured, mentally and physically deformed, and all too often killed on the job so that a few can be rich.”

The arrangement is a few can be rich at the cost of work by nearly all. All who work for mere survival know this fact. But, again, they are refrained, or restrained, from changing this hellish work system that turns human souls into commodities.

To Restrain

The act of restraining the working people from questioning, challenging, rejecting and overthrowing the system is done with tactics known for a long time: overwhelm the people with ideas that favor the few, the rich, keep the people busy with issues that hoodwink them and keep them from addressing fundamental questions, keep the people inactivated from getting organized, bribe leadership at the helm of the people as much as possible so that the millions fail to initiate their program for getting rid of the hellish system, and, then, cut down the head if all these tactics fail.

These are done with ideology – ideology of the few that never questions the exploiting system; with propaganda – a form of propaganda that teaches us to see the world with the eyes of the exploiting interest. Ideological organizations, organizations and institutions that uphold the exploiting interest are formed. Moreover, there is undisciplined and unplanned work – haphazard work that burns out the creative energy of the activists engaged with organizing the exploited.

Thus, the definitions of the exploiting interests stand as universal definitions; a class approach to socio-economic-political issues is discarded. And the origin of classes, the content of class struggle, and the role of class struggle in history are never examined and analyzed to the exploited.

Consequently, organizations, including unions, the exploited organize begin serving and securing the exploiting interest, as these abandon a radical approach to questions of economy, politics, philosophy and science. The life of the exploited thus continues moving along the circuit of exploitation.

A long list

Chapter 3 talks about the informal economy, as it cites Martha Allen Chen, an authority on the informal economy (The Informal Economy: Definitions, Theories and Policies, Women in Informal Employment: Globalizing and Organizing, Cambridge, MA, USA, 2012): Street vendors, pushcart vendors, rickshaw pullers, jitney drivers, garbage collectors, roadside barbers, workers engaged in small shops and workshops repairing bicycles and motorcycles, recycling scrap metal, making furniture and metal parts, tanning leather and stitching shoes, weaving, dyeing and printing cloth, polishing diamonds and other gems, making and embroidering garments, sorting and selling cloth, paper, and metal waste, house maids, workers in restaurants and hotels, janitors and security guards, laborers in construction and agriculture, piece-rate workers in sweatshops, temporary office helpers or off-site data processors. There are many other types, and the list continues turning long.

They are “sympathetically” termed in many ways: “workers in the informal sector”, “own-account workers”, “self-employed”, “workers in unorganized sectors”. Even, poor debtors producing surplus value and obligingly and obediently handing over that value to creditors are identified as micro-entrepreneurs, not workers! What an amazing power of scholarship and propaganda of the exploiting interest! Tomorrow, they will innovate some other term with sweet-sound that will hide the fact of exploitation from the commoners’ head!

These “elements”, human beings shackled to capital, are in developed and in so-called developing worlds, in Amman, Bogota, Cairo, Chennai, Dhaka, Delhi, Durban, Kolkata, Leeds, Madeira, Madrid, Manila, Nairobi, New York, Rome, Toronto. They work at anytime anywhere, “happily” working extra-long hours without counting working hour, they are sincerely working to increase income, and hoping “improve” their lot in someday in future. They don’t have time to think about tact of their master – capital, and about class awareness and organization.

The chapter discusses unemployment, working poor, vulnerable employment, tens of millions of people working in the informal sector, but not taken into account by official statistics, hidden unemployment, extreme working poverty and moderate working poverty, and points out statistical bickering. For example, “A self-employed person can be both vulnerable and poor, and he or she is counted in the labor force. However, in the statistical definition, an unpaid family member is only vulnerable; he or she is not counted in the labor force.”

What this chapter said as an example is an exposure of the exploiting economy: “[M]illions move to the cities […] No amount of economic growth will absorb them into the traditional proletariat, much less into better classes of work.”

No time to reflect

Michael Yates cites workers’ tales from Bangladesh, India, Nepal, Pakistan, US; of prison workers, workers in cruise ships, and of many other types of employment. These all are fundamentally the same: Inhuman hardship, suffering, exploitation, beast-like life, dehumanization. “For nearly everyone in the world,” writes Michael Yates, “work is hell. The sad truth is that many are demeaned, worn out, injured, mentally and physically deformed, and all too often killed on the job so that a few can be rich.” All who work know this – hell, demeaned, worn out, deformed, killed; yet many of them go without reflection of this reality, many have no time to reflect this reality, many have been robbed of the intellectual power to reflect this; and, thus, the rich keep on winning, keep on wielding their whip to subdue the many, almost innumerable, to keep the many obedient to the system that makes a few rich.

A mule, a monkey

Michael Yates cites pained voices from Studs Terkel’s Working: People Talk About What They Do All Day and How They Feel About What They Do (Pantheon Books, New York, 1974): “The blue-collar blues is no more bitterly sung than the white-collar moan. ‘I’m a machine,’ says the spot welder. ‘I’m caged,’ says the bank teller,and echoes the hotel clerk. ‘I’m a mule,’ says the steelworker. ‘A monkey can do what I do,’says the receptionist. ‘I’m less than a farm implement,’ says the migrant worker. ‘I’m an object,’ says the high-fashion model. Blue collar and white collar call upon the identical phrase: ‘I’m a robot.’ ‘There is nothing to talk about,’ the young accountant despairingly enunciates.” It’s the same like Gorky’s yarn about the millions of the exploited, as he wrote to Tolstoi in 1905:

“There are millions more muzhiks – they are simply starving, living like savages […]”

The well-off, the souls content with and deriving benefit from the system, don’t see these millions – hungry, life-like savages, just surviving to serve the rich.

But, these millions are around, teeming around, as without them the entire system will crumble down, all wheels of the system will come to a halt, the luxurious life of the rich will dry down.

So these millions are kept alive with bare minimum – productive consumption, which is not for a human life. Although a group of mainstream economists regularly measure the level of consumption by a certain group of the working people in a certain part of a land, a sampling procedure, quantify that finding, and declare with a self-content heart: The poor’s consumption has increased, Ooo! The “pro”-poor program is producing positive result. An exercise with a superficial interpretation of dire facts! A shameless exercise to serve dominating capital!

John Henry’s unromantic fact

These millions are to rise, rise in revolt and rebellion, therefore. Here, Studs Terkel cites John Henry, “A man ain’t nothing but a man”, and writes: “The hard, unromantic fact is: he [John Henry] died with his hammer in his hand, while the machine pumped on. Nonetheless, he found immortality. He is remembered.”

This content originally appeared on Dissident Voice and was authored by Farooque Chowdhury.

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