“Equal Pay for Equal Work” – socialist or capitalist? Part 1

An interesting contrast between political debates of the last few decades and those before is the way that the idea of ‘receiving what you worked for’ has shifted sides.

That is, in the 19th century, the claim that the products of people’s labour were being taken from them unfairly for the benefit of those who hadn’t worked as hard was a typically socialist claim – the workers should throw off their ‘parasitic’ employers and establish the sort of just society in which people are given only as much as they produce. The value of work and effort was affirmed, the way that it justified and ennobled the worker.

Since the establishment in many Western countries of a substantial welfare state, though, that same idea has to some extent become a conservative and pro-capitalist talking point: that ‘the state’ is ‘robbing’ productive people of the wealth that they’ve earned and then unfairly lavishing it on the feckless and workshy. It’s more common now to see people on some sort of ‘left’ defending the idea, not of everyone receiving as much as they contribute, but of people receiving even if they haven’t contributed.

Now this presents an interesting spectacle for those who want to both maintain an ongoing connection with the 19th-century socialist tradition, and also deal fully with modern developments. In particular, it poses the question: what should socialists think about this principle, of receiving only what you put in?

Now of course something that needs to be stressed is that in practice, many extraneous factors come into play. For example, conservatives who protest about the rich being deprived of the wealth that ‘they have earned’ can be criticised not by attacking or defending the abstract principle of ‘receiving what you have earned’ but with the accusation that the ‘earning’ they talk about is misdescribed: that wealth was largely created by other people’s effort and work, not theirs.

Similarly, when considering the issue of unemployment benefits, it’s obviously not sufficient to think only of the abstract question of justice: there is also the fact that if unemployment benefit exists, then workers will have less fear of unemployment, and thus be able to demand higher wages and better conditions. That is, the welfare state strengthens the position of the working class. For class-struggle socialists, that is held to be the most important factor in practice.

However, there’s no reason to think that this sort of question and the clash of principles involved will vanish with the abolition of capitalism. Post-revolutionary societies will have to ask similar sorts of questions, though in a quite different context. So it is of philosophical interest to consider such questions today.

The second big thing to note, then, is that one interesting suggestion has already been made by a Mr. Marx, who in his Critique of the Gotha Program distinguishes between “communist society…as it has developed on its own foundations” and “communist society…as it emerges from capitalist society”.

In the latter society, which is “economically, morally, and intellectually, still stamped with the birthmarks of the old society”, and which Marxists have sometimes called ‘socialism’ to distinguish it from more fully developed ‘communism’, there remains the principle of ‘equal pay for equal work’ – a right that Marx explicitly calls ‘bourgeois’.

So labour is measured and quantified, and in proportion to that each individual is given a certain amount of ‘labour vouchers’ or some such, with which to purchase consumption products. This co-exists, of course with a greatly extended version of what we would now call ‘welfare’ and ‘public services’, but nevertheless it remains – and it generates a low level of ‘inequality of wealth’ that replicates ‘inequality of talents’.

In the more fully developed form of communism, however, it’s suggested that “the narrow horizon of bourgeois right [can] be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!”

Now I think this overall picture is a good one.

One might wonder about the idea of the ‘transitional stage’, and be concerned that the power-relations involved in this kind of ‘maintenance of bourgeois right’ might have their own potency, might hold back of affect the ‘progression’ to a fuller communism. This kind of concern mirrors the concern over the idea of the ‘workers’ state’ overseeing socialism before eventually ‘withering away’ of its own accord, and so it’s not surprising that it is often found among anarchists – Kropotkin for example is emphatic on this point.

But be that as it may, the basic judgement on the principle at issue is clear and I think correct. That judgement is two-fold:

  • firstly, that it is a capitalist principle, appropriate to a capitalist frame of mind, and flawed and false insofar as capitalism is a flawed and unjust society; but
  • secondly, that capitalism violates it, and that a society which upheld it (by abolishing income from capital, hence abolishing private ownership thereof) would be in its essential content socialist.

This principle is thus one of the ‘contradictions’ of capitalism: though in the abstract, and in the long run, it is reactionary and wrong, and should be set aside, it simultaneously functions as an internal criticism of capitalism.

In my next post I’ll talk about the principle itself in more detail, laying out precisely why it’s a false one and how it relates to capitalism.

9 Responses to ““Equal Pay for Equal Work” – socialist or capitalist? Part 1”

  1. Colm O'Connor Says:

    I think that most of the reason that capitalism has enabled the exploitation of the worker is because of three things – market corruptions (interference in markets, whether by powerful interests or governments), land ownership and giving people an unequal starting point (e.g. inheriting wealth).

    In the 19th century the capitalists who exploited the workers had the money and the land, which they used to exploit workers to create more wealth, most of which they kept.

    Had the workers been able to compete on equal terms (i.e. they had the resources and the land to build their own factories and run them themselves) there would likely have been a more equal society. This, in my opinion, would be the ‘transitional stage’ – public land ownership and markets that aren’t rigged to ensure one class has an unfair advantage.

    Likewise today, the reason rich people get or stay rich is because of already existing economic inequalities being used to exploit people, *or* some sort of market corruption — e.g. state handouts to banks or using the existing legal framework to exploit employees.

    Because the system is rigged in such a way to allow people to exploit market inefficiencies to create personal wealth, the working classes fought to try and ‘correct’ this exploitation by introducing socialist reforms — e.g. tiered income tax, welfare, etc. However, most of these reforms are ‘sticky-plaster’ approaches to correct the problem of wealth inequality that don’t address the root cause.

  2. Alderson Warm-Fork Says:

    Well, predictably I disagree. I think that capitalistic market systems are prone to throw up exactly the kind of inequalities that you blame their failings on. If everyone were to start as a petty proprietor or member of a collective, then whoever worked hardest or most efficiently or had the best luck would be able to accumulate more capital, while others would lose theirs. Their children would then inherit different amounts. Wage-labour would re-assert itself, and with it exploitation. In short, for the kind of equal starting point you describe to remain equal, it would have to be an equal distribution not of private property but of something functioning in a very different way.

  3. Colm O'Connor Says:

    I would throw inheritance out of the mix – there is nothing inherently capitalistic or socialistic about it. It’s just another form of persisting inequalities in wealth, and since all wealth is generated in the context of a society, it makes sense for that wealth to flow back to the society after death.

    Likewise I don’t think it makes any sense for land ownership to be private – it’s not like you invented it, built it or deserve it. You either have it because you inherited it from somebody who killed somebody else for it, or bought it from somebody who did. Or somebody who bought it from somebody who bought it from somebody who did, etc. All land (and resources in that land) belongs to all humanity – so you should rent it from humanity.

    Putting all that aside, these ‘petty proprietors’, or members of a collective can generate more wealth than other proprietors by working harder, as you rightly said, and this could give them a capital advantage (assuming they didn’t blow all that money on beer & hookers).

    However, if they work harder they would not generate significantly more wealth. You can’t work 1000x times harder, but maybe you can earn 2-3x than average (even that is too tiring for most). The accumulation of wealth would be long and slow, and arguably, really very well earned, as others would enjoy the fruits of your labors, so why not reward you? You did say equal pay for equal work…

    If you work more efficiently, the same applies, however, if you render most of the legal framework that makes competition and the sharing of knowledge illegal (i.e. non-compete clauses + intellectual property), it would not be long before your efficiency improvements were rapidly copied, so again your advantage would be transitory. Efficiency improvements require hard work and an inventive approach which creates wealth that we all share, so why not reward it? If by equal work you mean equal results, and not simply equal effort…

    And also, you can get lucky. However, while you may get a streak of luck and, eventually you will burned if you take too much risk. However, those who take small, incremental entrepreneurial risks create far more wealth (for society, as well as for themselves) than those who take no personal risk at all. So, personally, I think those risks should be rewarded. I’m not sure what your opinion on this is, but I’d be interested to know.

    The latter, in particular, is how capitalism generates wealth – by ensuring that there is a mechanism where you can take a risk on your own money in return for reward. Building say, a makeshift electronics factory in your basement, in return for more money, instead of, say, spending it on beer and hookers.

    Sadly, nowadays, there seems to be precious little of that kind of wealth creation around, probably because most of us cannot manage our own risks sensibly (often because in our complex society it’s nigh on impossible to understand them, not because it’s necessarily our fault), and partly because we are ruled by a bunch of twats who look out for themselves and those who got them where they are. It bugs me more than anything to see people who pay lip service to free markets and capitalism, and then bail out failed businesses because they’re run by their mates or because it employs their core constituents.

    Until we reach such a time where scarcity ends (that is, for an absolute minimal cost we can ensure everybody is as comfortable as they’d ever want to be), we, as a society, I think, *want* to be creating more wealth. Capitalism drives this wealth creation, and free (free as in non-corrupt, not free as in unrestrained/unregulated) markets drive equality. This is why I think a fairer, more efficient form of capitalism is that elusive stepping stone to true communism. Once our society is wealthy beyond belief it becomes tenable, but not until then.

  4. Alderson Warm-Fork Says:

    “I would throw inheritance out of the mix – there is nothing inherently capitalistic or socialistic about it.”

    On the contrary, it is central. Let’s say I live in your ideal capitalism, but there is a sort of 100% inheritance tax. Then as soon as I start getting older, or become ill, I just start giving my money to my descendents. Then when I die there’s almost nothing left to ‘return to society’. Inheritance is just a slightly more formalised version of alienability-rights, the right to decide who your money goes to. And if alienability-rights are taken away, then even if there are still personal use-rights, exclusion-rights, or alteration-rights, you don’t have anything really resembling capitalism or a free market.

    (On a terminological point, I’m not sure capitalism would be the right word for what you’re describing – you seem insistent that there be no distinct class of capitalists, who own without working and employ a class of proletarians, who work without owning. But many people would make that class structure definitional for ‘capitalism’. But then since I’m arguing that it would recreate that class structure maybe that makes sense…)

    “Until we reach such a time where scarcity ends…we, as a society, I think, *want* to be creating more wealth.”
    Absolutely in agreement here. But I don’t think the mechanism of wealth-creation you’re talking about is the only or best one. For a start, it’s not at all clear to me that these individual acts of entrepreneurship would be less common if they all worked on a sort of ‘loaned capital’ from society, i.e. without private ownership. After all, as you say, innovation is a public good, so we would expect a market system to under-produce it.

    More broadly – if the productivity of labour is higher than what’s necessary to keep the labourer comfortable, then wealth is constantly being ‘created’ because some part of that surplus can be invested to further raise productivity. The question is just who is in charge of those decisions.

    And thirdly, a lot of wealth creation is technological/scientific, and scientific research and development is clearly independent of capitalism, because it has and does function in many cases outside the market system, either funded directly by the state or by academic peer bodies of some sort.

  5. Colm O'Connor Says:

    >On the contrary, it is central. Let’s say I live in your ideal
    >capitalism, but there is a sort of 100% inheritance tax.
    >Then as soon as I start getting older, or become ill, I just
    >start giving my money to my descendants.

    Possibly. I’m not so sure everybody would though, especially if their children had decent opportunities and weren’t going to starve. Even those who did leave a lot of wealth they accumulated would not be able to ensure that their kids would be able to maintain and grow that wealth in a free market.

    >Inheritance is just a slightly more formalised version of
    >alienability-rights, the right to decide who your money
    >goes to. And if alienability-rights are taken away, then
    >even if there are still personal use-rights, exclusion-rights,
    >or alteration-rights, you don’t have anything really
    >resembling capitalism or a free market.

    I’m not quite sure I understand what you mean by alienability rights (and google isn’t yielding anything), but there isn’t a universal right to spend your money entirely as you choose right now.

    >More broadly – if the productivity of labour is higher than
    >what’s necessary to keep the labourer comfortable, then
    >wealth is constantly being ‘created’ because some part of
    >that surplus can be invested to further raise productivity.
    >The question is just who is in charge of those decisions.

    Well…. shouldn’t the labourer be in charge of those decisions? The labourer created that wealth, telling him how to invest it (or not) is somewhat paternalistic. Also, while capital is surplus wealth, just because you have created surplus wealth, it doesn’t mean that you have to use it as capital. The labourer could blow it on beer & hookers. The question is not just how to invest, but whether to invest at all. Who would you have decide that?

    >(On a terminological point, I’m not sure capitalism would
    >be the right word for what you’re describing – you seem
    >nsistent that there be no distinct class of capitalists, who
    >own without working and employ a class of proletarians,
    >who work without owning.

    I believe that capitalism is a process, not a class structure. The fact that it is highly compatible with a certain class structure, and may even create that class structure under the circumstances we’ve existed under in the past + present does not necessarily mean that it is equivalent.

    >But many people would make
    >that class structure definitional for ‘capitalism’. But then
    >ince I’m arguing that it would recreate that class structure
    >maybe that makes sense…)

    Even if the process always leads to the class structure, they’re still two separate things.

    >Absolutely in agreement here. But I don’t think the
    >mechanism of wealth-creation you’re talking about is the
    >only or best one. For a start, it’s not at all clear to me that
    >these individual acts of entrepreneurship would be less
    >common if they all worked on a sort of ‘loaned capital’
    >rom society, i.e. without private ownership.

    It would be perfectly possible for society to ‘loan’ entrepreneurs money which they later paid back in interest. It’s not clear to me if you are suggesting that this ‘loaned capital’ would be a separate currency, or indeed, quite how this process would work.

    >After all, as you say, innovation is a public good, so we
    >would expect a market system to under-produce it.

    Would we? I think it creates a great deal of it, actually.

    Firstly, I don’t think that innovation is a public good – just information. Innovation in your business confers a temporary advantage in the market, which is highly attractive. You work less for the same money (or the same for more). Nevertheless, this innovation has a shelf life – either, as I would have it, for as long as it took for somebody to copy you. Or, (under the current system) as long as the lawyers/the arcane set of IP laws lets you copy it.

    Nevertheless, as you point out, not all innovation/information that a society would want at its disposal would be created under this system. Just like our current system doesn’t either.

    >More broadly – if the productivity of labour is higher than
    >what’s necessary to keep the labourer comfortable, then
    >wealth is constantly being ‘created’ because some part of
    >that surplus can be invested to further raise productivity.
    >The question is just who is in charge of those decisions.

    Well, who would you put in charge of those decisions? Other than the labourer who produced that wealth?

    >And thirdly, a lot of wealth creation is
    >technological/scientific, and scientific research and
    >development is clearly independent of capitalism, because
    >t has and does function in many cases outside the market
    >system, either funded directly by the state or by academic
    >peer bodies of some sort.

    Yes. Just like now. Information creation (e.g. drug formulae) has completely different economics to the creation of scarcities (e.g. hamburgers, ball bearings and rubber footballs), and so there needs to be a parallel economic system to facilitate it (universities are one example).

  6. Alderson Warm-Fork Says:

    “I’m not so sure everybody would though, especially if their children had decent opportunities and weren’t going to starve. Even those who did leave a lot of wealth they accumulated would not be able to ensure that their kids would be able to maintain and grow that wealth in a free market.”

    They’d be able to do so as much as they do now.

    “I’m not quite sure I understand what you mean by alienability rights (and google isn’t yielding anything), but there isn’t a universal right to spend your money entirely as you choose right now.”
    My apologies – I mean that owning X means the right to decide to pass ownership of X to some other person you choose (to alienate it), in a way that liberty, for example is ‘inalienable’, i.e. you cannot (in theory) sign a contract to say ‘I hereby enslave myself’.

    That right to pass ownership to others is qualified but it needs to be very substantially there in order for free trade to happen.

    “I believe that capitalism is a process, not a class structure.”
    Cool, you can use the word like that.

    I won’t comment further on whether wealth creation is best served by capitalism; we both agree it happens now and it can also happen with other systems.

    “who would you put in charge of those decisions? Other than the labourer who produced that wealth?”
    Well, I’d try to have the labourer(s) have a substantial say, but not have it be anyone’s exclusive decision, given that, after all, all products to some extent reflect the unquantifiable contributions of past generations, and of all those who contribute to maintain a social context (security, emotional and physical health, education, etc.) in which production is possible.

    So in practice, a network of federated directly democratic workers’ and consumers’ councils, with higher-level decisions made by councils made up of their recallable and mandated delegates, and with a balance between overall (collaborative) social oversight and autonomy for local councils and individuals to make personal decisions.

    The real issue, though, is that if you say that it’s “the labourer” and then interpret that to mean they have private property ownership of that product in a recognisable sense, then you’ve set up the route for that labourer to become an employer who owns the products that others make using their property, and thereby invert the ‘decisions made by labourer themselves’ principle. That is, private property may start out with an appearance of justice, but it rapidly passes into its opposite.

  7. Colm O'Connor Says:

    >They’d be able to do so as much as they do now.

    Right now you can make employees sign restrictive contracts that ensure that they can’t compete with you, can’t talk to your clients, can’t use your “intellectual property” and much more. Meanwhile *you* still have to compete with other people selling their labor.

    The ability to enforce these contractual restrictions is there to support the interests of entrenched capital (i.e. the rich). Without the ability to enforce these clauses (and other similar contracts), wealth disparity would lessen incredibly (possibly almost totally).

    On the other side of the coin, right now, if you don’t have any money, you *have* to sign a contract like this otherwise you’ll starve.

    Clearly if you didn’t have to work, the ability to coerce and exploit you is minimalised.

    >That right to pass ownership to others is qualified but it
    >needs to be very substantially there in order for free trade
    >to happen.

    Yes, of course.

    >Well, I’d try to have the labourer(s) have a substantial
    >say, but not have it be anyone’s exclusive decision, given
    >that, after all, all products to some extent reflect the
    >unquantifiable contributions of past generations,

    Let’s say the worker has some spare cash. He is compensated for his work. He also pays a tax of some sort to society. Lets say he wishes to invest it on materials and, using his own labor, start operating a company. Are you going to stop him on behalf of past generations? Are you going to tell him he has only a partial say in buying said materials?

    >and of all those who contribute to maintain a social
    >context (security, emotional and physical health,
    >education, etc.) in which production is possible.

    Right, but those people who contribute security, emotional and physical health and education can be compensated with the proceeds from taxation.

    >So in practice, a network of federated directly democratic
    >workers’ and consumers’ councils, with higher-level
    >decisions made by councils made up of their recallable and
    >mandated delegates, and with a balance between overall
    >(collaborative) social oversight and autonomy for local
    >councils and individuals to make personal decisions.

    So you’d implement a bureaucratic democratic process in order to allocate capital?

    I agree that this is one possible way to do it (both methods can coexist in my opinion), but depending upon how this system is implemented it could be run relatively well or it could be run abysmally.

    I particularly don’t like the implication of a hierarchy in the decision making process (higher level decisions).

    Also, even with the best IT the decision making process will be slower than the individual’s, and probably less efficient. I have to convince a bunch of people that my idea will create wealth in order to get it to happen. Political interests will come into play, and the sweet talkers will be the ones who gain access to capital.

    In the end, there’s no substitute for taking on personal risk.

    >The real issue, though, is that if you say that it’s “the
    >abourer” and then interpret that to mean they have
    >private property ownership of that product in a
    >recognisable sense, then you’ve set up the route for that
    >labourer to become an employer who owns the products
    >that others make using their property,

    Possibly, yes. But the only thing that would stop others from doing the exact same thing is access to capital and the aforementioned anti-compete clauses. Also, that employer could be risking his or her capital on making products that they own but nobody else wants. So they’re perfectly capable of screwing themselves by doing this, while the worker still gets their paycheck.

    >and thereby invert the ‘decisions made by labourer
    >themselves’ principle. That is, private property may start
    >out with an appearance of justice, but it rapidly passes
    >into its opposite.

    Does it? I don’t think that employment by its very nature is unjust, just the form of it we see today.

  8. Alderson Warm-Fork Says:

    “They’d be able to do so as much as they do now./Right now you can…”
    I just meant, if you can trade you can give things away, if you can give things away you can pass them on to your children. So inheritance will persist as long as trade (in this strong sense) does.

    “Let’s say the worker has some spare cash…he wishes to invest it on materials. Are you going to stop him?”
    You’ve presupposed capitalism in presupposing ‘has some spare cash’. Obviously it would be silly to first set up a currency that is both a means of personal consumption (received as wages) and also a means of accumulating capital for investment (paid as wages) – and then say, we don’t want private ownership of capital. You might as well crown a queen and then stop her doing anything in the name of republicanism.

    What I mean is, don’t stop anyone buying anything – just don’t put it up for sale.

    “I particularly don’t like the implication of a hierarchy in the decision making process (higher level decisions).”
    I mean, decisions at the national level as opposed to the regional, regional as opposed to local, etc.

    “you’d implement a bureaucratic democratic process in order to allocate capital?”
    I’d regard it as a participatory rather than bureaucratic but perhaps we use different definitions. Anyhow, parecon is a good model of what I’d regard as a medium-term post-revolutionary anarchist socialism, and it will provide much fuller detail than I could.

    “the only thing that would stop others from doing the exact same thing [becoming capitalists] is access to capital and the aforementioned anti-compete clauses.”
    Well, no. If one person has a gene giving disposing them to greater tiredness, or another was raised by more supportive parents, or whatever, one may work more and earn more, so that they can afford to enter the market as a capitalist and the other can’t. Then they can use their greater wealth in innumerable ways (influencing legislation, obtaining more market info, exploiting economies of scale, etc.) to further increase their wealth.

  9. For Revolutionary Moderation: How to Make Socialism Appealing to the Public « Directionless Bones Says:

    […] could be fairer? Marx says, and I agree, that this is not yet the ideal economic system – full communism, which abandons the […]


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