Robert Taylor, resident anarchocapitalist again, on why workers are paid poorly. It’s all the state’s fault. Get the state out of the way, and we will all be making “good high wages” the same way that in Lake Wobegon, everyone is above average:
It’s pretty clear to me why an evil capitalist can’t just step in a pay a dollar more an hour to steal the labor force from a competitor: Not because of Capitalism, but The State and it’s regulations. The same rules you want to impose to supposedly protect your workers actually end up hurting them in the long run, Robert. Regulations do a vast number of things including stifling innovation, stifling entrance into the market to compete etc. And then you blame Capitalism. No sir, this is not Capitalism. This is Mercantilism turning into Socialism. Capitalism involves free exchange. A voluntary trade. Once a voluntary exchange between two individuals is stopped it ceases to be Capitalism. If we could just get our terms correct it would be much easier to know when to invoke Capitalism and when not to.
First of all, the capitalist has no interest whatsoever in paying his workers well. That’s actually a bad idea. The less you pay your workers, the better, since your profits are higher that way. It’s true that an interesting and progressive trend did develop in capitalism in the 1930’s under the great Henry Ford. Henry Ford thought it was ridiculous that he should pay his workers so poorly that they could not even afford to buy the very cars that they are making. So he resolved to pay his workers well enough that they could afford to at least buy the cheapest cars that they were building on the line. A chicken in every pot, and a Ford in every garage. This progressive trend in capitalism was called Fordism. Fordism, the notion that if you paid your workers well enough, they could afford to buy your stuff, was a popular philosophy with progressive capitalists for some time. However, it has been on the wane for some time now. One issue has been the increasing inequality of the US. At the moment, the top 1 But honestly, Fordism is a long-term philosophy, and as Matt notes in the comments, capitalism nowadays is all about short-term gains. The sane people have noted that the economic downturn is due to poor consumer demand since the capitalists have been squeezing workers through mass immigration, union-busting, outsourcing and general wage reduction for some time now. Hence, capitalists ought to be Fordists. Yet they are not. Your average small businessman is voting Tea Party. So is your average corporate capitalist. The Tea Party’s project is the continuing decimation of the middle class. In the Third World, where the middle class has been decimated, often for centuries, as part of an elite project, the business class simply goes along with this goal. There is no Fordism in the much of the 3rd World. Fordism only develops in high income, typically White or Asian countries. Taylor’s theory founders on a couple of shoals. Workers are paid best in those countries where regulations on business are the greatest. This shows right away that the theory is wrong. Why put regulations on business? Regulations are generally put on business to protect workers, consumers, the public and society. When regulations are loosened, workers, consumers, the public and society are harmed. When regulations are increased, workers, consumers, the public and society are benefitted. If there is no benefit to workers, consumers or society, there is no reason to impose any regulation on business. Regulations on business are necessary because business has utterly failed at the task of volunarity regulating itself. Would that business could regulate itself! It would save us a lot of money regulating them! Business refuses to regulate itself because doing so is harmful to profits. The nations that have the least regulations typically have the worst wages. The nations with the most regulations have the best wages. Give a capitalist more money. Ok. Now what? He’s going to hire more workers, even if they unnecessary, just to be a nice guy? LOL, sure. He’s going to give everyone a raise, just because he has a bigger stash in the bank? LOL, right. This is supply-side thinking. This theory, enticing on text, utterly fails in real life. It’s been proven over and over. It’s based on the theory that humans, capitalist humans in particular, are basically nice people who voluntarily choose to lose money just to be nice. Humans, particularly capitalist humans, just don’t think that way. The era of public ownership has made nice guyism even more difficult for the capitalist. Most capitalist firms are now publically owned. That means that the management answers to stockholders. Stockholders want one thing and one thing only, the maximization of profits in the short term. If you try to be a nice guy and give your workers are raise just because you’re feeling generous or you don’t want to be a dick, your stockholders will fire you. That’s all there is to it. So Taylor’s theory fails again because stockholders will reject any capitalist who tries to implement it. Why should any worker believe, “If you regulate my boss less, he will pay me more” (LOL)? Even if this were true, and in praxis it is not, most regulations are there to benefit the worker, the consumer or society. Getting rid of regulations that protect workers will hurt workers. As workers are very much consumers, getting rid of regulations to protect consumers will hit workers very hard. As workers are often very sensitive members of fully-lived society in all its Technicolor good, bad and ugly (as opposed to penthouse and Lear Jet existence which is so divorced from actually lived existence of the masses as to be almost the same as living on another planet), regulations that protect and improve society will improve lived existence for workers outside of work. Taylor’s theories are the ultimate in pie in the sky, ivory tower empty theory. They make babbling university Marxists look like streetwise social Oscar Award winners. This sort of theory looks really great on paper and appeals to “common sense.” But when tested in the real world, it completely fails on all levels, other than benefiting the well to do and the capitalists and screwing everyone else, which is all it’s ever meant to do anyway.