About Waged Labour: From Monetary Subordination to Exploitation

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Disagreements amongst economists are more important about the rate of wage than about commodity prices. These divergent theories of wages reveal a deep disagreement about the status of labour in political economy. They are not only analytical; three more general considerations are implied:

  • From the point of view of economic theory, the question is whether there are or not fundamental qualitative differences between a pure market economy (populated by independent producers only) and a capitalist one (populated by entrepreneurs and wage-earners)?
  • From the point of view of economic philosophy, the question is about exploitation, are wage-earners exploited by capitalists?
  • From the point of view of political philosophy, does it make sense to criticize modern societies as market or as capitalist economies?

The paper addresses the two first issues.

The presence of “labour services” in the commodity-space in mainstream theory is ill-founded; it is the result of a social prejudice – which takes the form of a “natural” assumption – and not of a consistent reasoning. The wage relationship has nothing to do with an exchange rules by equivalence since wage-earners are such as a consequence of their inability to produce for the market. They cannot produce for their own account but for the account of entrepreneurs.

The employment contract is illegitimate as contrary to the fundamental values of the social philosophy inherent in a market economy. Wage-earners are exploited by entrepreneurs not because wages do not respect a norm (a natural price or a marginal productivity) but because wage-earners are a means for entrepreneurs. In the terms of mainstream theory, the exploitation shows off as a difference between the arbitrages open to entrepreneurs and wage-earners: the former compare disutility of the effort with the utility of the reward given by the market; the latter compare the utility of the deviation of the effort imposed by entrepreneurs with the risk of being fired. The first arbitrage refers to the market, the second to the firm. The gap between these respective optimal efforts measures exploitation.

Posted for comments on 24 Mar 2017, 10:59 am.

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