Thanks to a Twitter friend, I just stumbled across remarks from 2005 in which Walmart CEO Lee Scott called on Congress to pass a higher minimum wage:
“The U.S. minimum wage of $5.15 an hour has not been raised in nearly a decade and we believe it is out of date with the times. We can see first-hand at Wal-Mart how many of our customers are struggling to get by. Our customers simply don’t have the money to buy basic necessities between pay checks.”
At first glance this seems decidedly odd, coming as it does from the CEO of a company which — as you know if you’ve been following the Black Friday news — is notorious for keeping its workers’ pay as low as humanly possible.
But if you think about it, there’s really no contradiction at all. There’s a fundamental prisoner’s dilemma at the heart of capitalism. It’s in the interest of large corporations collectively to guarantee sufficient purchasing power to keep the trucks moving and the inventories turning over. But it’s in the interest of individual large corporations to keep labor costs as low as possible.
Likewise, it’s in individual employers’ interests to pay only enough to maintain employees in subsistence while they’re actually working, without enough of a surplus to save against periods of sickness or unemployment. But it’s in the collective interest of employers to pay enough to cover the minimum reproduction cost of labor power.
Overcoming such prisoners’ dilemmas is the main purpose of the capitalists’ state. When the state mandates a minimum wage sufficient to facilitate the reproduction of the workforce (of course it doesn’t in practice, outside the European “social democratic” model of capitalism), the cost falls on all employers in a given industry equally. And unlike the case of a private, voluntary cartel, individual employers are unable to defect for the sake of a short-term advantage from double-crossing their competitors. So funding the minimum reproduction cost of labor-power is no longer an issue of cost competition among employers; it’s a collective cost of an entire industry that can be passed on to consumers as a cost-plus markup, via administered pricing.
Marx had a lot to say about this phenomenon, as illustrated by the Ten-Hours Act in Britain (Capital, vol. 1 ch. 10).
“These acts curb the passion of capital for a limitless draining of labour-power, by forcibly limiting the working-day by state regulations, made by a state that is ruled by capitalist-and landlord. … [T]he limiting of factory labour was dictated by the same necessity which spread guano over the English fields. The same blind eagerness for plunder that in the one case exhausted the soil, had, in the other, torn up by the roots the living force of the nation.”
This common interest in preventing “exhaustion of the soil,” Marx argued, explained the counterintuitive support of many capitalists — as exemplified by employer Josiah Wedgwood — for the Ten-Hours Bill.
The state, in many ways, functions as an executive committee of the economic ruling class, carrying out for them in common many necessary functions it’s not in their interest to carry out individually. The state, in short, cleans up the capitalists’ messes for them.
Things like the minimum wage, collective bargaining, and universal healthcare may be perceived by individual capitalists as a restraint or an imposition. But they’re supported by the smarter capitalists — especially those in the industries that benefit most from them. Just consider the role of General Electric CEO Gerard Swope in the business coalition behind the New Deal.
The minimum wage increases aggregate purchasing power among the working class at large, and helps secure employers a reliable pool of labor power on a sustainable basis. The welfare state keeps unemployment, hunger and homelessness from reaching politically destabilizing levels that — without the state cleaning up the capitalists’ mess at taxpayer expense — might result in capitalism being torn down from below. Universal healthcare, whether on the British or Canadian model, externalizes labor costs on the taxpayer which would otherwise be (and are, in countries like the U.S.) borne by employers who provide health insurance as a benefit.
Any time you hear soccer mom rhetoric about “our working families,” or self-congratulatory platitudes to the effect that “Democrats care,” look behind the voice and take a look at what the hands are actually doing. In a freed market — without the state to do the capitalists’ bidding — corporate capitalism would wither like a garden slug with salt on its back. The state works for the capitalists, not for you.
Translations for this article:
- Spanish, La Función Fundamental del Estado del Bienestar es el Bienestar Corporativo.
- Dutch, De Hoofdfunctie van de Verzorgingsstaat is het Verzorgen van Grote Bedrijven.
Citations to this article:
- Kevin Carson, Under Capitalism, Welfare State’s Main Function Is Corporate Welfare, Chicago, Illinois Times Weekly, 11/28/12
- Kevin Carson, State should ensure corporate welfare, Dhaka, Bangladesh New Nation, 12/03/12
- Kevin Carson, Under Capitalism, Welfare State’s Main Function is Corporate Welfare, Eastside Sun, 12/06/12
- Kevin Carson, Welfare State’s Main Function is Corporate Welfare, Urban Tulsa Weekly, 12/05/12
Eh, I would say that in places like Sweden they have found the optimum balance between Welfare and Protectionism. They have implemented a safety net that promotes the illusion that the government are on the side of the poor, whilst maintaining a productive class to leech off of.
Most of the employees at the area Wal-Mart are not worth minimum wage. They spend alot of time talking and hovering. None of them go that extra mile. They seem to have a major attitude also.
Know a lot about working people, eh?
"None of them go that extra mile."
LOL, were you expecting that fake smile favored by so many in corporate management? Or a complimentary cookie? Or a hand job maybe?
As a high school and college kid working in retail, I was hounded by "smile nazis" in management that were oh so concerned that I did not smile enough as I sold CD's and computer software. But I couldn't bring myself to put on that fake, shit-eating grin and pretend that my part-time job was anything but a temporary money-making venture. It was certainly not a career and I bet most of those Wal Mart employees probably feel the same way I did. These jobs are about paying bills and surviving, period. And their employer is concerned about making surplus profit off of their labor, period. So why should these employees go the extra mile?
tell us more about how hard it is to get good help these days
The greeters really get me. If there was any chance that the greeter was the person who actually dreamed up the stupid policy, or even the person in charge of implementing it (as opposed to a bored teenager who really couldn't care less), "fuck off" seems like a suitable response.
I had a job bussing tables at Chilis for about a week during college. One of the three (three!) manager-assholes pulled me aside one day and told me that if I ever wanted to have a chance to move up to manager someday, I'd have to hustle more. I thought, "Why? I can see the entire dining room from the corner right over here." I also found it kind of funny that he thought the chance to–maybe, if I played my cards right–become the flair guy from Office Space was supposed to be incentive to work harder.
This is an interesting argument by Carson.
It is built on two premises, both of which I am skeptical.
Firstly, he assumes that the minimum wage law raises aggregate purchasing power among among the working class at large. This is theoretically possible under a neoclassical model, but need not necessarily be so. I haven't read enough of the literature know if this is actually the case or not.
His second assumption seems much less tenable, without assuming very pervasive monopoly power, which is itself dubious. He assumes that the paycheck a low-wage worker receives is divorced from his marginal value product and is instead based on some level of economic need by the worker. He needs to make this assumption in order for Universal Healthcare to work as a subsidy to the firm.
If Carson wouldn't mind directing me toward the studies that made him accept these premises, I'd be grateful for it.
Why are we assuming that Lee Scott is truthfully asserting the primary reason why Wal-Mart corporate supported a higher minimum wage? If Wal-Mart has a labor cost to total cost ratio less than primary competitiors such as independent grocers and general stores, then an increase in labor costs will make thier competitors less competative comparitively.
Hi People,
A decent, universal healthcare is not an utopia. It is also cheap. I don't think we should mix it up with minimum wages, retirement pays, unemployed pays, and all these other "social security" stuff, wich is much more dependant on taxes, debt, and macroeconomic state planification. I don't know how Universal Healthcare worked in Sweden worked very, very, well in Spain until now, that is being ""privatized"". I mean, free access to healthcare except teethcare, including surgeries and hospitalization and almost all medicines.
""Privatization"" wich is being made right now by the psychopats of our government means basically, lending the management of public hospitals to local governments friends' companies, and be paid 10x the cost it would be if totally public. So some "retired" polititian of as CEO of some muppet health company created ipso facto can obtain millions, crying a little bit for not gaining the money they spected, obtaining compensation paying, and being done a bigger new contract. The hole of spanish social security are the retirement pays for old people (It's a ponzi scheme) but the public healthcare system that is being dismantled and changed for a "private health company given the monopole by the government" in order to treat flus and cheap traitement illness so they cain obtain easy profit, and deliver the chronic and odd illness, witch are not and never will be profitable, to the public healthcare system. So it begins to collapse, people get bank-sponsored secure treatments that guarantees more inmediat access for the specialist but is sent to the public in not profitable treatements, and the expolititians and friends can make a health megacorp out of nothing, orchestating the spoil in a private/public immoral orgy as only these evil, psychopat neoconservatives can do.
The point is: universal Healthcare is really cheap. Even Cuba can handle a pretty decent healthcare system. I don't mind if it's State sponsorized or a morally, responsible and sustainable assurance system ruled by doctors theirselves and payed by individuals voluntarily, I think it's more a moral question than an economic one. I just think is inmoral to have people who are not doctors obtaining zillions of money out of healthcare. I don't know what's the ideal system, but hell, it's not that difficult to have doctors do their work and being paid for that, and everybody getting attended decently. I mean, I'd pay the bill for that even if the state didn't force me into.
I think I can address the first point.
My understanding is that minimum wage laws will increase aggregate purchasing power for workers if their wages are being artificially depressed — it's moving them back towards equilibrium.
As an example: Let everyone print a new dollar for every ten they earn, and in time prices should rise 10% to compensate. Real purchasing power will not increase.
But now imagine you take 10% off the top of every worker's wages and give it back to their employers (and real corporate welfare is much worse than this). You'd get a real disparity in purchasing power relative to free market results. There's no easy way for the market to compensate.
But now imagine you pass a law requiring employers pay employees slightly more than they're paying them now. Let's say the lowest-paid employees are getting $50 a day, minus $5 that goes back to the bosses, so a total of $45. Pass a minimum wage law requiring that employees be paid at least $52.50, and suddenly the lowest-paid employees are bringing home $47.25 — $52.50 minus $5.25 that goes back to the boss. This not only higher than their previous salary, it's higher relative to other employees who are already being paid above minimum wage, and even slightly higher relative to the employers who are, after all, having to pay out a little bit more. That's a rise in real purchasing power for the lowest-paid section of workers.
(Of course, I haven't looked at the issue of employees getting laid off because of the rise in minimum wage, but that's a much more complicated issue in the real world than many libertarians assume.)
Wut? First of all, why do you go to WalMart?
Don't you have a Crate and Barrel or Target?
Second of all, you should always work smart, not hard. A whole extra mile for minimum wage? The key word here is extra. You should do exactly the amount you are required to and payed to do. Any more than that without pay, is cutting into time with your family and living life. That sounded very "brand new middle management speak.", you should have tossed in the word strategy and paradigm.
Agreed, health care is cheaper then Americans think it is. American health care is absurdly expensive because of monopoly control (AMA, insurance companies, pharma, government regulation) driving up prices. Imagine if there was free medical education, and 10X as many doctors (and other medical professionals). This could potentially end unemployment.
We need a national health care system (essentially medicare for all, or universal health care vouchers) combined with comprehensive medical/pharma deregulation, and universal public education (most of it can be provided over the internet, and minimal fees can be charged for face-to-face education and certification/licensing, while those who wanted to pay for better education would be welcome to do so). Then every citizen would be able to consult a doctor (of their choice) for zero or minimal fees.
If BHL doesn't support universal health care, then I can't rate their position as much more than "utopian dreaming", since deregulating without instituting universal health care would leave us at the mercy of these odious insurance cartels.
For the record, we are further to the left of field of BHL.
Plus, I wear the "utopian" label as a mark of honor. A wise man (or wise ass) once said, "If you ain't a utopian, then you're a schmuck." As the old Situationist slogan goes, "Be realistic; demand the impossible!"
Your analysis is good, but incomplete. How did the AMA, insurance companies, and pharma come about? How do they interact? What are their respective interests? How do they conflict? Where do they overlap? What are their stated rationales? How much do said rationales diverge from reality?
Your solution is not one, as anarchists, that we can endorse on principle. If by free education, you mean putting all knowledge on the net for self-education or professors of medical science uploading lectures for self-guided online study on youtube, then fine. If you mean funded and administered by any level of government, then I cannot endorse that. As for medicare for all, one book I'm looking to read is The People's Pension, published by AK Press. It's about social security, but it offers insight. It concludes by suggesting that it be taken out of the government's hands-not by privatizing, but by mutualizing.
For more doctors, open up immigration. Kill pharma? Abolish drug patents. Kill insurance companies? Then let us revive the old friendly societies. Lots of alternatives out there.
I agree with you on everything save for the "open up immigration" remark .In a statist society, immigration provides nothing but cheap labor and a large alien population hostile to the "native" people. Immigration is a globalist form of gentrification and must be snuffed out. In a free society, homogeneous societies will arise and protect their unique culture and heritage.
My recent post Is Secession the Answer?
And here I must depart from you sir. Not everyone seeks that kind of homogenity. Labor must be free, and that also means being free to move.
For the record, we do not endorse American Renaissance here.
An anarchist is necessarily an internationalist. Hence, I am a "globalist".
But, if you want to live in a community with nothing but white people…be my guest. Just don't be surprised if human behavior defies your predictions.
I don't disagree with opening up immigration, but to a large extent, the USA already does this. Many people educated in societies with free universal education come here to take advantage of the opportunities provided by corporatist exploitation.
Americans should extend the same educational opportunities to their own population in the name of justice. There are indeed dangers inherent in any government program or any large educational institution. That's why institutions require moderation via democracy.
If we are going to survive as a species we will have to learn to co-operate in mutually beneficial ways, and realize that the diversity of human contexts requires a diversity of ideological approaches–or what the Pirates call "post-ideology".
Just a few problems with this article that I thought I'd point out.
"The minimum wage increases aggregate purchasing power among the working class at large, and helps secure employers a reliable pool of labor power on a sustainable basis."
The minimum wage decreases aggregate expenditure as the minimum wage creates unemployment. It also decreases potential aggregate expenditure as people are not getting skills and human capital.
"Likewise, it’s in individual employers’ interests to pay only enough to maintain employees in subsistence while they’re actually working, without enough of a surplus to save against periods of sickness or unemployment. But it’s in the collective interest of employers to pay enough to cover the minimum reproduction cost of labor power."
Firms and workers engage in bargaining processes that gives the worker the highest amount of money a firm is willing to pay. That's from the laborer's perspective. From a firm's, the firm is trying to get as much productivity out of a worker at the lowest cost to the firm itself. It is not a firm paying subsistence level wages (if this were true, engineers and other hard sciences workers wouldn't be making 60k or 70k right out of college). I think that's a biased way to look at things – you aren't proving anything. Any state action, in your mind, is way to subjugate workers, and you'll find a way to make that be true.
In my opinion, it would make far more sense to erode the money monopoly and encourage secession away from the wage system and toward subsistence before even considering scraping the MW. This would allow for an emergence of new and/or formerly repressed services to create new ways of exchange, namely bartering and alt currencies. If one could find a to keep both forms of exchange valuable on this newly open market then the issue of a minimum wage is something of a moot point because some currencies would have greater value than others. Therefore, a person could be paid any way they wished by choice of currency and have the advantage of being able to refuse it if they chose not to because the act itself would be payment.