The Washington Post recently published an attack on capitalism entitled “Tired of Capitalism? There Could be a Better Way.” What people should be tired of by now are the same old arguments against capitalism. This article rehashes arguments on property and labor markets that have been endlessly repeated–and refuted–since about 1840. But thanks to the Washington Post, we get to hear yet again about how capitalism ‘exploits’ workers.
When the physical resources necessary for production are privately held in the hands of very few, as in the United States, the majority of the population is forced to submit itself to well-financed employers in order to live. The precarious position of most workers in this position — desperate for employment but aware that they could lose their jobs at any time — is coercive on its face and susceptible to exploitation and abuse.
Labor protection in the form of safety laws, collective bargaining and prohibitions against harassment and discrimination have helped cut down on many of the worst employer abuses. But no amount of labor regulation can ever undo the fact that workers are confronted daily with the choice between obeying a supervisor or losing all their income. The only way to break the coercion at the core of the employment relationship is to give people the genuine ability to say no to their employers. And the only way to make that feasible is to guarantee that working-age adults, at least, have some way to support themselves whether they work or not.
We’re ready to bet a substantial sum that the author of this piece, Matt Bruenig, has never had a job in business where he had authority to hire people. If he had, he would know that a huge problem for businesses is retaining employees after spending a lot on hiring and training them. The fact is that workers already have “the genuine ability to say no to their employers.” They can quit, and thousands do so every day, often to their employer’s dismay. Workers quit in most cases because they have already found, or expect to find, another job. In other words, there is competition among employers for their services.
This competition for workers explains why the vast majority of employees earn more than the legal minimum wage. The author says that “the majority of the population is forced to submit itself to well-financed employers” and that “workers are confronted daily with the choice between obeying a supervisor or losing all their income.” But the other side of that transaction is that the employer is confronted daily with the choice between keeping his workers happy or losing them to another employer. As a result, employers must pay market wages, which for almost all workers are well above the legal minimum.
The Pew organization found that all but 2.6% of employees earn more than the minimum. Even this figure overstates those who earn only the minimum because some of these workers get extra income from tips. The real figure is somewhere between 1.2 and 2.6 percent; call it roughly 2 percent. If employers really have employees at their mercy, then why do they pay 98% of them more than the legal minimum? The answer is competition.
What protects workers is not primarily “safety laws, collective bargaining and prohibitions against harassment and discrimination.” What protects workers is competition among employers for their services. As a result, anyone who truly cares about workers should oppose socialism. Full-fledged socialism replaces competition among private employers with employment only by the state. When the state becomes the only employer, then the worker becomes subject to coercion and exploitation. State socialism, not free enterprise, is precisely the situation in which the worker is “confronted daily with the choice between obeying” and utter destruction. As Trotsky wrote of state socialism, “The old principle: who does not work shall not eat, has been replaced with a new one: who does not obey shall not eat.”
The author of the Washington Post piece calls for alleviating poverty with government welfare programs. Another fresh new idea from the 19th century! As if America did not already have dozens of means-tested welfare programs on which we spend nearly a trillion dollars every year. The author wants people to “have some way to support themselves whether they work or not,” as if America did not already have welfare, social security, and literally millions of people living on often-phony SSI disability claims.
By now, it is well established that capitalism is fundamentally built upon threats of force. As libertarian philosophers Robert Nozick and Matt Zwolinski have explained, the only way to turn unowned natural resources (such as land, minerals and other goods) into privately owned property is by violently preventing all others from using them.
Although the author cites modern writers, this idea that property is coercive and a form of theft goes back to at least 1840 and the writings of the French theorist Pierre-Joseph Proudhon. It’s amazing; for socialists like Matt Bruenig we’re always living in the Marxist-Dickensian world of the 19th century with grinding poverty, no welfare state, and no billions of people yet lifted out of poverty by capitalism–including hundreds of millions in China alone. Socialists are not just years out of date; they are centuries out of date.
Maybe by the year 2525–if man is still alive–capitalism will have terraformed Mars for human habitation and some scruffy Red professor at Red Planet University will still be droning on about capitalist ‘exploitation.’