Friday, August 13, 2010

The Orwellian Language of "Job Creation" (Or: "Free Market" does not equal "Capitalism")

At the outset of almost every intro economics textbook, we are told that there, at bottom, two ways of organizing economic structures -- the "free market" and "command and control."

Economics typically likes to conceive of itself as a science in the strictly modern sense of the term. Normative claims are not to be conflated with positive claims. The evaluative is to be strictly separated from the descriptive.

As soon as it announces these laudable goals, it immediately, in that very instant, transgresses them. There are innumerable examples of this. The description in the first paragraph is just one. Do these two descriptions of economic systems sound value-neutral to you? Would you rather be free -- or commanded and controlled? The deck is stacked from the very outset.

But how else to describe them? Well, let's look at "command and control." One less loaded way of describing such a system might be to be call it a "planned" economy. Command and control implies an authoritarian structure. But what if the plan were arrived at through democratic means? Is democracy itself not a value? And can economic decisions arrived at via democratic means be, at all plausibly, described as a series of commands?

Now let's look at the "free market." This is typically taken to be synonymous with "capitalism." Of course, the first term has the word "free" in it -- so it's rather obviously more appealing. But is this equation of "free market" with "capitalism" a fair one?

The term "free" in free market refers to freedom from government regulation. The inability of economists to see power relations in any place other than state-citizen relations is a fantastic blind spot, at best. Economic relations are themselves power relations. And freedom and power are two sides of the coin. In any relationship (economic or otherwise), the more power you have, the less freedom I have. Can anyone who has worked in a capitalist economy say that they have not had this kind of experience? Is not the case that most people who work have a boss? Do we call the boss the "boss" for entirely arbitrary reasons?

But let me leave that aside for here (the meaning of "freedom"), since this is supposed to be a mere blog post. Let me focus simply on the term market. A market, if it is to mean anything, refers to mutual consensual economic transactions. Buying and selling.

If it is to be said that a market ("free" or otherwise) is to be equated with capitalism, then we have completely eviscerated the meaning of capitalism. The buying and selling of commodities is a phenomenon that we can find going exceptionally far back in human history. It even occurs (with merchant capitalists) alongside feudalism.

So what is it that marks "capitalism"? What new institution arises as recently as three centuries ago (at most)?

It is the institution of wage-labor. The analysis will be familiar to anyone familiar with a Marxist reading of history, but, ideological predispositions aside, it should be straightforward. What we start to see at that point in history is that labor-power itself becomes commodified. (I use Marx's term "labor-power" rather than "labor" because I believe it to be a better description of the process, and also analytically more fruitful. But I cannot go into the details of that analysis here.) Previous class systems entailed class exploitation, and the appropriation of surplus product by one class to another (e.g. the appropriation of surplus product by the Lord from the Serf), but it did not take the form the buying and selling of labor-power as a commodity.

What were the historically necessary conditions for the creation of labor-power as a commodity? Again, the story is familiar. Working requires tools and workspace (i.e., the "means of production.") If, by custom or tradition, one has certain rights to some access to the means of production (even if not formally recognized), then there is no necessity to sell labor-power. One need not do so, because one has the tools with which to employ one's own labor-power without selling it. But if no such access to the means of production is available (whether via custom, tradition, or formal recognition), then one has no choice but to sell one's labor-power to those who do own the means of production.

And this is the only description of capitalism that captures its essential features. It is the only description that distinguishes it from the selling of any commodity (which long predated the commodification of labor-power). And it is also the only description that accounts for the irrationalities and waste to be found in the system as a whole.

The above description is admittedly long, and likely laborious, at least for those reading this who are already quite familiar with the argument. But others are not. As such, this background history is exceptionally important.

Why? Because unless we make this history transparent to ourselves, it becomes impossible to imagine that work can be organized in any manner other than wage-labor.

Therefore, under conditions such as today, we find ourselves able to say nothing other than "give us more opportunities for wage-labor!" -- or, in more common parlance: "create jobs!"

But what does it mean to say that a capitalist enterprise creates jobs? It means nothing more than this: a class which has exclusive access to and ownership of the means of production permits other people onto their property (the workplace) -- hence my claim that the language of job creation is Orwellian. To "create a job" is simply to allow someone with no claim to the means of production to be permitted access to such means, so that they may enable the capitalist to produce a commodity. Nothing has actually been "created."

Put otherwise: to create jobs is not to create work. The need to work or labor is ahistorical. It is only the separation of the worker from the means of production that creates the illusion that something has been "created" when the owners of the means of production (the capitalists) allow the worker onto his property to produce commodities for sale. Absent that historical act of separation, we would not be under the delusion that something has been "created" for us.

But there is nothing necessary about this separation. It is unquestionably a historical fact; but it is not a necessity, neither economically or logically.

And we have already seen (at least from at least one post) the absurd consequences of this separation -- i.e., the necessity for GDP growth, even if that's not whats desired. We can thus avoid the irrational imperative for endless growth and endless consumption if we can change the way work is organized.

What conclusion should we arrive at? Cut through, rupture, disrupt and disperse, the entire language of "job creation." Stop begging the capitalist class to let the working class on to their property. The means of production must be held in common by those who work with such means (i.e., class itself must be abolished). To allow everyone the possibility of meaningful, rewarding work (financially, psychologically, and, dare I say, spiritually), everyone must have access to the tools with which to work.

This must be the demand. This must be the goal. How we get there is a matter of considerable debate. Perhaps I will return to the "how" in another post. But that we must is unavoidable, both as a matter of ethics, of rationality, and of bedrock principles for our continuation as a "species-being."


  1. A quick thought on the beginning of your post. I will come back and leave a more detailed comment later if I remember on the rest of it.

    I have always found this sliding scale between markets and planning peculiar. Can I not centrally plan levels of production and then use markets to distribute said production? Is this then the in(famous) "mixed economy"? According to the way these terms are usually defined it is not. A mixture would be planning in some areas of production/distribution and market forces for other (usually less essential) goods.
    Perhaps I am nitpicking something that does not really matter, but I guess I need need to stop getting angry with news outlets that don't know what capitalism is when economics books are not even clear on the fact that either a free market or planned or some combination thereof economy can be capitalist if the labor relations are right.
    I am just so tired of hearing references to the socialism of the current administration in the media and want to point the finger somewhere other than college educated news reporters having no idea what the term socialism even means. oh well. I need to stop since I have written nothing of substance here and I am about to enter a full fledged rant.

  2. James, I don't think this is nit-picky at all. As Steve R said, different people have different definitions of capitalism. I do think you miss something essential if you don't include wage-labor in the definition.
    I actually, though, have trouble with the view that "either a free market or planned or some combination thereof economy can be capitalist if the labor relations are right." More specifically, I think it's stretching the definition too much if we call an economy capitalist even if all distribution is planned. I would still go with the classic Marxist view that capitalism is a unity of production and circulation. So, wage-labor is a necessary condition of capitalism, but not sufficient (in my view). But I stress it because it seems to me to be the most obscured fact about it in standard presentations of economics -- as though markets necessarily included labor markets, which, historically, is just inaccurate.
    Yeah, it is annoying, to say the least, to keep hearing the Obama administration being called "socialist." It's absurd, even under the definition that they are using (i.e., something approximating the Soviet Union.)
    But on the question of whether they are wrong to equate the Soviet Union with socialism -- well, technically they are wrong, based on the historical understanding of the term. But if the Soviet Union co-opts it -- and becomes the most notorious State to act in the name of "socialism" -- then it does become hard to blame anyone for thinking that's what "socialists" want. In fact, I sometimes wonder whether we should just chuck the term entirely -- meaning, those of us on the left. The Soviet Union has made it mean something other than it's original meaning. So maybe we need some new kind of language?

  3. In some sense, I think its fair to state that the meaning of socialism is one of the great victims of the two greatest propaganda machines the world has ever seen. Still, even though I recognize how useless the word might be nowadays (Rick for example is talking of democracy all the time, which leads him, in my opinion,, to get too overly excited about cooperatives), one should not give up the analysis that might explain how this notions associated with the word came to be, the same way that one has to look at the history of the labor market as a generalized institution to be able to make distinctions between capitalism and the "free market" option that is usually associated with it.