Thursday, September 26, 2013

Marx vs. Mises

There I was, lying in bed at three in the morning, in between sleep periods, and I had a thought.

Marx's fundamental argument is that wage labor is alienating.  What starts out as social, working for use, ends up as commodification, labor for exchange.  Under capitalism the worker mindlessly churns out labor for the market instead of for the use of himself, his family, and his neighbors.  Labor becomes a commodity, bought and sold on the market, instead of a personal thing.

In reality, of course, people have been laboring in exchange for thousands of years.  Labor in exchange didn't just start with the industrial revolution.  We know that trade took place even in the ancient world.  After all, how did those Homeric warriors get their goodly bronze armor and spears?  From a copper mine in the back yard?  I expect that the truth is that the guys mining the copper were not even wage slaves but actual slaves, war plunder, working for food if they were lucky.

And we know that, e.g., the Ericksons in treeless Iceland a thousand years ago were raising sheep on their grasslands and weaving wool on hand looms in their sod-insulated houses.  The finished textiles were transported by long-ship to the wool markets of NW Europe.

So the dramatic revolution in labor proposed by Marx is at best a gross exaggeration.  What is true is that the industrial revolution provoked a massive systematization and mobilization of labor unthinkable in former times.  And system is domination.

But then comes Ludwig von Mises in 1920 and his argument that socialism was impossible because it couldn't compute prices.  And without prices you can't figure the cost of anything.

Notice the bigger point Mises is making.  If you don't know the cost of things then you are at risk of wasting valuable resources.  And the most valuable resource is human labor.  What is worse?  Commodifying labor with market-set wage rates, or wasting human lives doing pointless and wasteful things?

We know the answer to that because we have the example of the Soviet Empire.  The result of 70 years of socialism was enormous and tragic waste.  There was a prodigal waste of natural resources, as the Soviets mindlessly mined and laid waste to the land of the Soviet Union.  And there was tragic and brutal waste of humans, from the relatively mild waste of ordinary workers that "pretended to work for a government that pretended to pay" them to the utterly cruel waste of prisoners worked to death in the labor camps and the Kolyma goldfields.  In those days the London Economist used to write about "subtracting value" in the economies of the Soviet empire.

It's all very well to assert that in the best of all possible worlds workers would be happily working for their own needs in Arcadia.  But no human has ever lived in such a world.  Every human group has always had to fight for its food and shelter, and thus every human has been subjected to the need to fight for the welfare of the community.

The reality of human labor was, in the hunter-gatherer days, that all work product was the property of the whole community, so the individual laborer did not own the product of his labor.  The reality in the agricultural age was that the product of the individual labor was probably owned by his liege lord.

It is only under capitalism, in a system of labor in exchange, that the individual laborer has a chance to own most of his production.  And if the laborer looks around him he can find, with a bit of effort, that if he upgrades his skills a little he can produce a more valuable product and earn more wages.

There is no doubt that the price system is a hard master.  It's a system and all systems are dominatory.  The price system is constantly peering over the worker's shoulder asking if his is really making the best use of his talents.  And worst of all, when a worker's skills become superseded by some new invention or automation, the worker must either work harder, find a new skill, or accept the cruel verdict of the market that tells him that his skill is not that valuable any more.

The question always is: compared to what?  You don't like the price system?  Then come up with a better idea.  Marx and his adepts thought they had found that better idea 150 years ago.  It turned out they were proposing a cure that was worse than the disease.

And that returns us to the old Hippocratic oath, which begins with the injunction to do no harm.