The Capitalist view of wage labour
The ideology is simple. In an imaginary free market, both employer and employee only ever sign voluntary agreements. There is never any differential of power or need, and the market always values labour and skills at exactly the right value, or the contract would not be signed by either party, who are perfectly free to turn the contract down.
No contract, no matter how exploitative, can in this sense be defined as unfair or exploitative – because it is ‘voluntary’.
In neoliberalism, the same kind of argument is used to try and persuade people that everything they do in a free market is voluntary; from being homeless, having no access to education, not being able to afford medical treatment, to having to risk covid to earn an income.
In reality this is a largely motivated delusion. It suits employers and helps make them virtuous almost no matter what they do.
Objections to the Capitalist view
Self-sufficient Labour?
The capitalist argument about employment contracts might approach truth where the worker has a guaranteed source of food and shelter independent of their labour for an employer. But in capitalist societies this is exceedingly rare. Indeed capitalists have historically tried to stop that situation of freedom from arising, especially in colonial societies because they have repeatedly found that people will not submit to work for hire if they can avoid it. People’s apparent reluctance to hire out their labour and skills, if they don’t have to, is important to acknowledge.
Working for bosses, only possibly becomes voluntary where workers can survive without having to work for others. An aim of capitalism, particularly neoliberal capitalism, seems to be to make workers precarious, with as little support and independence as possible, so that they do have to work for bosses. This inability for most people to control their own labour is one of the primary causes of lack of responsibility, lack of self-reliance, lack of care, and what Marx called ‘alienation’.
Suppression of connections across hierarchy
This worker ‘precarity’ is reinforced if there is no other kind of relationship between worker and boss, other than the contractual relationship – no friendships, no obligations of wealth, no protections. That is, there is no mutual obligation on the bosses’ part to support workers in hard times. Conservatives like GK Chesterton were, as a result, often nostalgic for feudalism, where lords did have obligations towards their workers. This, fundamental human obligation to each other, is something which is usually suppressed in capitalism and reduced to contracts. When capitalists talk about mutual obligation, it nearly always means the obligation of the poorer person to the richer person (in return for an income, or even potential income, no matter how small). In Neoliberalism, any ties between non-related, non-elite, people are a potential impediment to the market.
This suppression of human ties and mutuality, is a break up of community responsibility and another cause of lack of responsibility, lack of self-reliance, lack of care, and what Marx called ‘alienation’. Max Weber seems to argue that Protestantism tended to make this breakage of connection much easier, because in extreme Protestantism you had no responsibility to others, and all that counted was your own salvation, which was won by faith not by charity.
Capitalist team-ups
Employers in a town (or country if they are big enough) can team-up to decide wage ranges. As Adam Smith wrote:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the publick, or in some contrivance to raise prices.
There is no reason to assume they will not keep this agreement between themselves unless, perhaps, there is a labour shortage and they get desperate for workers. If there is a labour shortage in an area, workers elsewhere then have to decide whether it is worth losing contact with their friends and support networks, and familiarity with the local system to get a job which may not last more than a week or two, or run the risk that enough workers have also moved and turned up to compete to run wages down again.
Most, perhaps not all but certainly most, employers have more capital than workers, enough to borrow money anyway. That is why they can employ people. So they have more power, and more ability to hold out. So they tend to win in negotiations, unless workers can organise. At the least workers who try and organise to get decent wages or conditions will be blamed, through the capitalist media, for any problems that arise. The bigger the corporation the more power it normally has. Smaller businesses are much more desperate, and find organised labour much harder to deal with.
Fundamental liberty?
All this appears to mean that the fundamental capitalist social relation is between boss and worker. It requires that the worker obeys and submits to the boss in exchange for survival. That is capitalist liberty, and some libertarians argue that people should be free to sign contracts of slavery, presumably if they are desperate enough to work for nothing but food and shelter. Remember, in capitalism, no wage work contract can be exploitative if the winner can say you did not have to sign it. In general, your only choice is between who to submit to, if you manage to change, or get, other work.
Socialists usually require that it be relatively easy to obtain unemployment benefits so people can survive unemployment, and get some power of choice over who they decide to sign up with – a basic provision for liberty. Capitalists usually oppose this, just as they oppose workers organising and striking, to get better wages and conditions, but don’t actively business people organising to suppress wages, or support their own power and influence. In practice, pro-capitalists usually do not object strongly to tax payer subsidies for business, even if not needed, even if the companies were corrupt and stupid, and even if it interferes with the market. This has been demonstrated over and over again; recently from the 2007-8 financial crisis to Covid.
Socialists also try to encourage workers (and everyone else in a low power position) to self organise, to balance out the power differences, but these workers’ organisations always run the risk of selling out to big business if the members are not actively involved and resistant to such sell outs, and media demands for such sell outs. On the other hand, capitalism rarely encourages democracy or self-governance for everyone. It pretends we are like it should be (individuals without ties beyond our families), just as it encourages deep hierarchies and inequalities to avoid the possibility of challenge to wealth and profit.
Connections
Because some employers are much, much, wealthier than workers, they tend to have better political and economic connections, so they have much more influence over regulations and the use of state violence. They buy the regulations which make it easier to protect their property and lifestyles from workers who get fed up with the system. They make it harder for workers to organise. They control the media so they largely control the workforce’s ideas about the world. They make the system of exploitation part of every day life, and enforced by the rules, the law and people’s understanding. It is hard for workers to challenge this ‘everydayness’, with their own experience and interests. There is, nowadays, little in the way of media which is not tied to capitalist forms of organisation, and which can give people non-capitalist ideas – especially not Fox, Breitbart or OANN etc.
Workers and working conditions
Workers are a cost on business, so the general (not everyone but general) business drive is to get as much out of them for as little as possible in expense, to get maximum profit. Hence the urge for cheap dangerous working conditions, hence workplace injuries, insecure work and so on. Capitalists usually try to deskill, or AI, work as much as possible so they can hire anyone for any job, which results in a race to the bottom for wages as well as higher profit. Conservative Adam Smith famously argued that repetitive, cheap labour destroys the moral, intellectual and other ‘human’ capacity of workers – but that, apparently, is a consequence of profit and so cannot be challenged. It may also render workers less capable of figuring out what the contracts they are signing actually mean for their lives, which further benefits employers.
As a result, capitalists generally support cutting back workplace inspections and health regulations as it is a supposedly unnecessary interference in business. Again this is capitalist liberty. Just as it is capitalist liberty for pollution to be dumped on poor areas of town without cost to them – it helps increase profit. Anything which restricts profit is an interference with the market.
Your contract to work in murderous, exhausting conditions, is still fair by capitalist definition, even if you did not know about those conditions in advance. Socialists tend to want more equity in working conditions, and ensure (as best as possible) that people are not incapacitated or poisoned by work.
Hierarchy and the value of labour
This downwards pressure on wages and conditions is not always the case. People higher up the capitalist hierarchy such as high level executives, usually have enough power to be able to transfer some of the savings brought about by cheapening most people’s labour to increase the value of their own labour, and give themselves class luxuries even when these luxuries are a cost on business. Conservative David Hume argued, the value given to labour is a function of the labourer’s power as much as, if not more than, the value of what they contribute.
If such high up people lose a position through company failure or their own incompetence, they are likely to have enough money to hold out for a while, rather than have to rush to the meat packing works for income, and they probably have good elite social networks that they can use to ensure they get another well paid job of roughly the same level. So they are much more immune than the average worker to precarious conditions.
Marxism – to some extent
The Marxist argument is that capitalism is inherently exploitative, as workers have to produce more value than they get paid for, otherwise business could not make a profit. In other words, capitalist business needs to steal some of the fundamental human resource of labour from workers to be viable. This is not because bosses are inherently malicious (even though capitalism may encourage selfish malice and promote sociopaths who feel no obligations to others), but because it is what the system demands from them. They cannot act in any other way. In capitalism, labour is essentially extracted by violence, and the property and capital which results from this theft or extortion is then protected by the State.
Capitalism requires a State. There has never been a form of capitalism which has existed without a State, and it is rare for the wealth elites not to be dominant in that State, making sure the legislation and arrangements help preserve their power from challenge
This Marxist argument, it strikes me, is not entirely fair. The employer risks capital and their own labour and that risk could require some kind of return to make it worthwhile. If the employer does not succeed in making profit then (assuming they were not wealthy to begin with, with the right connections), they risk having to sell their own labour and becoming a worker themselves and being subject to the exploitation that other workers face. With that risk it is no wonder that employers are prone to authoritarianism, to cheating and malice, whatever their intentions otherwise. Hence the permanent presence of class warfare, directed from employers downwards towards people who have to seek employment to survive….
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