The Injustice of Poverty
Chapter 10: A Communist Economy
Section I: Introduction
The idea of a non-Capitalist society, by the standards of those just and fair, must in fact be quite a good idea. Capitalism has brought misery, to the domestic population and those in foreign lands. It has spread the famine of food, created artificial winters, done all it can in its power to increase its profits. If millions of people must starve, if millions must freeze, that the stock price rises by a half a percent, then those people will simply have to die. This is the attitude taken by the megacorporations, and history confirms again, and again, and again, that they will act out on this attitude. To destroy the evils that come with Capitalism, we must rearrange property relations in society. The mines, the farms, the factories, they can no longer be owned by the Capitalist class. They must be owned by the people, creating a truly just and Communist society. In this chapter, I will explain how this fantastic idea can be carried out.
Section II: The Real Distribution of Wealth
Before imagining what a society would be like in a Communist economy, a just understanding of a Capitalism economy is in order. It may be true that we understand the mechanics that control a Capitalist economy, such as class war, subsistence wages, competition, and the like. But, in our modern economy, just how much wealth that is produced goes in to the pockets of the Capitalist class, and how much into the pockets of the Proletariat class? To understand the nature of creating a Communist economy out of our current Capitalist society, we must understand the wealth distribution as it exists today. I shall answer those questions here.
Essentially, we are looking for is what economics refers to as an opportunity cost value. It is a difficult number to pinpoint. What does society lose when capitalists of the retail industry compete with each other? First, it requires greater manpower to supply the needs of all store-owners. By having a multiplicity of shops that all dispense the same products, each one only fulfilling a very small amount of its full operating potential, society has lost a certain amount of land and labor. If society were to collectivize the means of production in a manner that benefits the people, by centralizing distribution centers to their maximum potential, then the people would have that additional labor and land at their disposal. It is an inexact value lost by a profit-driven economy over a people-driven economy, as they each measure value differently.
In 2005 in the United States, workers received $7 trillion in compensation. [*2] The gross domestic product for personal consumption expenditures was $8.7 trillion. [*3] Even if the wage earners spent every dollar they had earned, there was still $1.7 trillion spent on personal consumption. This gives us a minor indication of the immediate differences between those who labor and those who earn a living by possessing property. If we were to absolve the economy of the trees that bore no fruit, we would see the loss of real estate, legal services, management, and administrative industries, relieving the total payroll of $1.17 trillion in payroll. [*4] Laborers of the retail and wholesale trades, the assistants and servants of the capital-owning class, provide no value in their services, and would also be removed from that economic position, granting $0.85 trillion in payroll. [*5] The finance and insurance industry, which provides no value except to those who own and control the industry, grants its employees $0.53 trillion in payroll. [*6] This brings the total of useless industries to $2.55 trillion in payroll. Certainly an economy must possess the means and methods to distribute products to the community; the present industry remains so bulbous from its intention. It does not seek to serve the people, but to gather a profit. Wholesale trade, for instance, does not deliver the product to the end consumer. It only places the product of the mines, factories, and farms into the hands of another who must then distribute it themselves. The role of those employed in this industry is to increase sales. The economy still retains its transportation and warehousing industries, sufficient to the purpose of this industry. Abolishing these useless industries would relieve the payroll costs of $2.55 trillion. Each person's wages increase by the difference, with the new, unused labor market joining a meaningful area of production. This, along with granting all profit to the worker, would give them a value of $8.7 trillion instead of $4.47 trillion.
The idea of eliminating useless industry as a means to improving the economy is not a new one. By increasing the wages and improving working and living conditions, many of the repelling aspects of laboring are removed. Where the population enjoys the benefits of its economy, there will be many more willing to contribute their efforts and toils to producing the social product. In his book Utopia, Thomas More entails a plan where the idleness of both wealth and poverty are removed...
Some may argue with me on the matter of removing the retail trade industry. Naturally, every economy must possess a method of distribution for the social product. If we were to keep the retail trade outlets, it would mean keeping the value of stores at the cost of a payroll at $0.467 trillion, for 2005. But, it certainly can be agreed that wholesale trade provides no value; it acts solely as a middleman merchant between vendors of products and those who produce them. Their total payroll for 2005 was $0.389 trillion in 2005. The mechanics of the economy direct and coordinate labor and capital in a manner that increases the labor of all, so that the capital-owning class can possess their profits. Not only does its losses allow for an idle group of owners and lords, but its inefficiency costs the whole of society a great deal collectively. If it can be given that an entire sector of a trade industry produces no fruit that is consumed by the public, then there is certainly a great deal of maximizing efficiency that can go on in the retail trade industry. There must be a reorganization of labor and industry according to the needs and direction of society. It is not simply a matter of giving the profit of the capitalist to the worker; but it is a matter of giving the right to the direction of the economy. Otherwise, the worker does not truly possess a right to collective ownership of the means of production.
Relieving the economy of the employees who provide no value would naturally output itself as unemployment, but in a Socialist economy, where capital is organized according to the interests of labor, it would simply reduce the amount of labor applied to the industry. The equation could be written another way. Instead of reducing the amount of workers employed in fruitless industry, those workers would migrate to useful and productive industry. In this case, laborers would receive the same pay, but with a significant reduction in the amount of time and effort necessary to achieve the final, social product. For instance, the $4.2 trillion difference of $8.7 trillion could be expressed as a 48% reduction in labor to create the same product, or it could be written as a 93% increase in payroll for the laboring class. In either case, it's a matter of socialization of the economy and capital in order to provide for the people's needs as they themselves desire. It should be enough for the economy to become socialized. Not only must it organize to eliminate non-value producing industries, but it should fairly distribute the social product to those who produced it. The numbers above provide a small sampling of the type of reorganizing that would happen. The greatest obstacles to a relationship between labor and those possessing the means of production are poor working conditions, low pay, and long hours, the results of a profit-driven economy. These minimal estimates are based on the present working model of the Capitalist system. It would be impossible to achieve an accurate figure of the complete value lost by the exchanges of Capitalism and the advantages of collectivizing the means of production, but these numbers are a start.
One of the primary arguments against such a collectivization of the means of production is that industry would lose its lords and masters. Without the merchants and traders of real estate, legal services, management, and administrative labor, the conflicting units of society would need to work together on mutual, associative, and free relationships in order to receive their subsistence of living. The farmer would need to rely on the steel worker for his tools, just as the engineer must rely on the farmer for his daily sustenance. Without masters of economy, these groups would be required to exchange the products of their economy on the basis of achieving the mutual interest of all parties.
Section III: A Historical Look at the Matter
I imagine that many of my readers will read the previous section with a great deal of skepticism. How is it, you may think, that just a simple change in management would be enough to increase our wages by sevenfold, possibly more? To this inquiry, I direct my reader back to the first chapter, when I was setting the foundation for a cooperative society. In such a society with cooperation (whether based on class antagonism or classlessness), work is completed much easier. As the reader ought to also understand, technology has come remarkably far in our age. What one hundred men could produce in one day in 1600, one single man today could produce in one hour.
In 1767, it was estimated that for every 21 shillings earned in England, 9 shillings were paid in rent to the landlord, leaving the worker with 12 shillings. [*8] In France, the farmer gave half his crop to the landlord. [*9] In 1815, landlords usually collected one half of the crop of their farmers, but on the coast of Genoa, in the republic of Lucca, in several provinces of the kingdom of Naples, many of them paid two thirds of the crop to their landlord. [*10] In England of 1815, in good years, land farmers earned a profit that was 500% their expense (if they invested £1, then they had a £5 return) but in bad years, profit was 125% their expense (if they invested £3, they had a £4 return). [*11] This leads me to believe that, on average, farmers earned a profit that was 300% their expense (if they invested £1, then they had a £3 return). In 1830, Irish farmers could subsist off of only half of their harvest, while the rest was exported. [*12] That would mean if workers were working at most 16 hours a day (a high number in fact), that they could work only 8 hours a day if they stopped exporting to England, their exploiter and slaver. In the 1880's, the United States Census showed that seven tenths of all wealth was owned by less than one tenth of the population. [*13] In 1902, miners worked only eight hours a day, earning $2.50 a day, enough to subsist on. [*14] Many factories in 1906 decided to change from the 10 hour work day to the 8 hour work day, without losing any income, profit, or productivity. [*15]
Two hundred years ago, when there was nothing but a plough and a horse, workers could subsist on only six hours probably. With the way technology has advanced, what is so difficult to feel that a single worker today can subsist on only one hour or a half hour, when under a Communist regime? There has been only increases in how many hours are worked per day since technology has taken over -- but if workers received wealth that they themselves produced, this would not be the case. Historically, the previous section is verifiable.
Resources1. "The Spirit of Youth and the City Streets," by Jane Addams, New York: Macmillan, 1909, chapter 1.
2. "The Organization of Labour," by Louis Blanc, 1840.
2. Table 6.2D. Compensation of Employees by Industry.
3. Table 1.1.5. Gross Domestic Product.
4. Table 6.2D. Compensation of Employees by Industry.
6. Utopia, by Thomas More, book 2, Section: "Of Their Trades, and Manner of Life."
7. "The New Theories of Economics," by Vilfredo Pareto, 1890.
8. Steuart, James, "An Inquiry into the Principles of Political Economy," London: Printed for A. Millar, and T. Cadell, in the Strand., 1767, book 1, chapter 8.
9. Steuart, James, "An Inquiry into the Principles of Political Economy," London: Printed for A. Millar, and T. Cadell, in the Strand., 1767, book 1, chapter 20.
10. Simonde de Sismondi, J. C. L., "Political Economy," 1815, chapter 3.
11. Simonde de Sismondi, J. C. L., "Political Economy," 1815, chapter 6.
12. Senior, Nassau William, "Three Lectures on the Rate of Wages," of Magdalen College, A.M.; delivered before the University of Oxford in Easter Term 1830, Late Professor of Political Economy, The Second Edition, London; John Murray, Albemarle Street, MDCCXXXI, LONDON: Printed by William Clowks, Stamford Street, lecture 1.
13. Lloyd, Henry Demarest, "Lords of Industry," 1910.
14. Robinson, Margaret Blake, Editor of the Herald Light, "Among the Coal-Miners," Missionary Review 1902, Vol. 25, pp. 835-39.
15. Van Kleeck, Mary, "Working Hours of Women in Factories," Charities and Commons 17 (1906-07), 13-21.