As I indicated in my post about general ideology, I am ultimately
pro capitalism from a functionalist perspective, but I sympathize with
the left from a more conflict theory based perspective. Capitalism is a
functional system, but it is one full of inherent flaws that must be
addressed in order for the system to work for everyone. Today, I am
going to discuss some of the major flaws of capitalism, especially
insofar as it impacts the labor market.
How capitalism works
I will first describe the system as you would learn about it in economics 101. Market based capitalism is a system in which buyers and sellers of products and services come together to transact with one another. Some people buy products and services, while others sell them, and and some people sell their labor while others buy it. The decision of what things cost and the balance of power of transactions is based on supply and demand, and each individual seeks to maximize their benefit while giving up the least that they can. With an increased supply of something, the prices go down. It becomes less scarce, customers have more options to choose from, and the relative bargaining power of the seller goes down. When a product or service is scarce relative to demand, the person selling that product or service can afford to ask for more. When demand for a product rises relative to supply, it becomes more scarce, and as such, more valuable. When demand decreases, the price drops as there is less competition over a set amount of resources. All parties in the market, when acting rationally, will seek to maximize their own gains. People want to get the most of something for the least amount of money for it. This is the profit motive, which is the driver behind capitalism. Rational self interesting people looking to maximize their own gains in a market system.
The labor market
The primary focus I will discuss on this article is the labor market, because this is where I see most problems with capitalism occur. As I mentioned above, people seek to maximize their gains. Employers will inevitably seek to get the most out of workers for the least amount of money. Workers should, in theory, seek to get the most pay for the least amount of work. In the labor market, you have people wanting to hire others, and people seeking work for pay.
Now, this sounds nice and good in theory, but let’s look at some other factors at play. First of all, we live in a system in which we believe that if people don’t work, they should not eat. Sure, we provide temporary assistance to those who are out of work, and sure we provide more permanent assistance to those who are disabled, but ultimately, unless someone is willing to supply all of your needs and wants at no charge, you will likely have to work at some point in your life. You technically don’t have to in the sense that no one is putting a gun to your head, but because you are a being with survival instincts, you are essentially compelled regardless. From a functionalist perspective, this is because no one would work if they were not compelled, so the argument is that we need to do this to motivate people, but from a more conflict based perspective like I will commonly employ here, this is a structural force that seeks to enslave people, and depresses their bargaining power. By not allowing workers the ability to say no, they are essentially guaranteed a complaint labor force that will be less able and willing to seek favorable terms of employment.
It gets even worse. The labor market is set up in a way where there is always unemployment. We have this requirement that everyone get a job, while have a system that inevitably cannot provide a job for everyone. As you know, the unemployment rate today is around 5%. During the recession, it got over 10%. During the great depression, it reached 25%. Generally speaking, looking at the booms and busts of capitalism, and the general economic cycle, the rate varies between 4 and 8%. Sometimes a little more, sometimes a little less. But there is always someone out of work. Functionally, it needs to be this way. I discussed the phillips curve in the political compass post. When you don’t have unemployment, you have a lot of inflation. The system spirals out of control. Employers cannot find the workers they need, which leads to economic stagnation. Workers become more valuable, excessively so, where it is prohibitively expensive to hire them. Employers raise their prices to compensate for their labor costs, and the workers pay more money, this cancelling out the raises they get. The currency gets devalued significantly in a short period of time, and in the worst scenarios, hyperinflation can occur, making the currency worthless. Capitalism cannot function with no unemployment. As such, the economic system will always be a system in which we require everyone to work, while inevitably consigning some people to a life of poverty if they do not. From a conflict perspective, this relationship serves to further minimize the workers’ bargaining power. Not only do they need resources to survive they can only get through an employer, but now the supply and demand system is set up in a way where workers are relatively common commodities to businesses, whereas jobs are relatively precious ones. Workers need a job more than employers need individual workers. As such, this depresses worker pay and conditions. Workers need to work extra hard and constantly out compete other workers in order to maintain their jobs, and they will do it at a very low pay. In the absence of safeguards, this will inevitably get to the point where we get gilded age or third world working conditions and pay. Work will inevitably consume a worker’s entire life where they spend their whole lives working and their pay will reflect the bare minimum to keep them alive and healthy enough to continue to work. Heck, they might not even be healthy to continue to work. Once a worker fails to keep up, or refuses to work, he will inevitably be replaced by someone else. This is why Marx referred to the unemployed as the “reserve army of labor.” Sure, getting more skills will allow workers to work their way into more valuable positions with better pay and/or conditions, but at the end of the day, the threat of poverty is there for them too, and their bargaining power is limited by various structural aspects of the system. In short, workers inevitably become de facto slaves under this system. They will spend their lives begging to sell their labor to an employer, willing to put in long hours for relatively low pay, because they need to eat.
Other forms of asymmetry in bargaining power come from social attitudes. We live in a system in which people are told they can’t expect something for nothing, and that they have to work for everything. They are primed from a young age to have good work ethics, and nothing is worse in American society than being lazy. On the other hand, employers are not expected to give anything. Workers are expected to be willing to give their labor, but if a worker expects higher pay or better working conditions, he is told he is “entitled”. I hate this word, fyi, I may write a rant some day just on this word itself. But generally, workers are told they have to work hard and freely give their labor to employers, but if they expect more in return, they are insulted by being called lazy or entitled. This puts intense social pressure on people to work harder while being less willing to ask for more from employers. These are cultural expectations that create asymmetry between workers and employers, and help serve to keep the working class under control.
That being said, let’s bring all of this together to paint a picture of the system. We have a system where everyone is expected to have a job, but not everyone can possibly have a job. Workers looking for jobs will inevitably outnumber those willing to hire people, and this skews the whole game in favor of the employers. It’s like playing a game of musical chairs mixed with the movie Speed, where the penalty to losing is poverty. Furthermore cultural norms and expectations demand workers freely give their labor under the stigma of being called “lazy”, but are not expected to demand more of employers, lest they be called “entitled.” If you ask me, this system is very messed up and barbaric. It may be functional, but it also leaves of lot of dysfunction in its wake.
Solutions to this mess
There are a lot of solutions to this mess.
Unions are one of the first solutions that people came up with. Workers unions are basically groups of workers that band together to collectively bargain for better pay and working conditions. By working in a group, they can leverage greater power than an individual employer can. If one employee leaves, the employer can easily replace them. If the entire staff goes on strike at once, and they cannot replace those workers, then the union has bargaining power to work for better wages and working conditions. The advantages of unions are better working conditions and pay. The downsides are that sometimes unions can be corrupt, employers can find ways around them, and it does not solve that pesky “I can’t say no” problem very well. It’s a step in the right direction, but not an end all solution.
Regulations are another possible solution. The minimum wage sets a price floor under which workers cannot fall. This is theoretically set at a level that workers can live decently on. There are also labor standards. We have the fair labor standard’s act, which regulates the hours and conditions in which workers can work. We have OSHA to ensure workplace safety, so workers don’t do crazy things that are patently unsafe. Other countries even have mandated vacation or maternity leave, because the market does not provide these things on its own. Employers will argue that these hurt the economy by creating more unemployment, putting small business owners out of business, and hurting profits and growth, but I think that the benefits outweigh the costs. Other potential costs include economic distortions as well as the fact that these regulations still don’t fix that pesky right to say no problem. It dresses up the relationship, but it does not provide freedom to workers.
A job guarantee would provide more jobs in time of high unemployment, but it cannot necessarily provide a job for everyone, since that would mean unemployment would be 0% and as such inflation would happen. I also question the wisdom in creating jobs. Don’t jobs exist because we need stuff done? Why should we make jobs for the sake of giving people an income? I guess a job guarantee can be a temporary solution in times of high unemployment when we need stuff done like infrastructure repairs, but they are far from an ideal solution. if anything, I think we need to get away from this endless call for more and more work, and more toward a society where we can all work less while still having a good standard of living while doing so.
Universal basic income is a solution I highly favor and champion, and I believe that it is the best solution we can consider. A universal basic income would be an income floor given to all citizens in the country it is given in, regardless of work effort or other factors. It should ideally be set at a level high enough to live on, while being low enough to still encourage work as per society’s need for it. This solves multiple problems. It provides an income floor for the “losers” of the musical chairs like economic system, thus reducing the suffering caused by those that cannot find work. It also gives people the right to say no, since workers now have the ultimate insurance against employer: freedom and independence from them. With survival taken off the table, workers can afford to be more choosey for employers, and when they don’t like the conditions, they can leave. This will put a significant pressure on employers for decent wages and working conditions. Obviously we don’t want too much pressure that will hurt economic growth and cause significant inflation, but I do believe a balance can be found to give people at least some ability to say no. Universal basic income could be paid for by taxes, and while it would be expensive, I believe it would be worth it. It would also help give us a framework to provide for people in the case of potential future technological employment. Downsides of the universal basic income are its costs, distortions associated with acquiring the funding for it, and, from some perspectives, weakening of work ethic (I consider this a feature, not a bug). Work disincentives are often overstated though because they are far weaker than you would think. We actually had some experiments with the guaranteed income in Canada and a sister policy in the US known as the negative income tax in the 1970s and they only found a reduction in work hours by 13%, and it was mostly among secondary earners like housewives and teenagers. This sounds like a lot, but it would be the equivalent of a month long vacation or a move to a 35 hour work week, two things that many Europeans already have. Here is a useful source that summarizes some of those findings, since I know people are going to be skeptical here. http://www.cpj.ca/files/docs/orking_Through_the_Work_Disincentive_-_Final.pdf
Socialism is another possible solution. Socialism is a very broad concept, and while it may bring the concept of poverty, oppression, and bread lines to peoples’ minds, there are many many kinds of socialism that can be implemented. Obviously, state run economies cannot work very well, as they destroy innovation and cause shortages, like I mentioned in previous posts. There’s also the whole state running everything thing that can cause them to wield too much power over people. We want some freedom for people to choose their own path obviously. But there’s also softer forms of socialism. Socialism is, at its core, at least in theory, economic democracy. Think of the differences between a dictatorship and a democracy. In a dictatorship, one person has control over a system and uses unilateral force over subjects, violating their rights, their freedom, and causing massive suffering. In a democracy, everyone has a say. We vote for leaders, which are responsible to us. Power is limited, and it is shared among multiple branches of government. Everything is more decentralized, and while the system is still powerful, the power is accountable to those who it governs. Socialists will say the problem with capitalism is the fact that the owners of the means of production have similar unilateral control over individuals that a dictator would have over its subjects. Most solutions here involve ways of solving the adversarial relationship between workers and employers. Unions even the playing field, regulations limit how employers can treat employees, and basic income gives people the freedom from work. Replacing workplace hierarchies with a democratic system in individual workplaces could remove the adversarial system altogether. Workers and employers are on the same side, and they are one. Workers can vote on how they are paid and treated, and all have a direct investment in the company itself. Workplaces like this are known as worker cooperatives. They are basically corporations with democracy power structures, and they compete in the market system. So you basically have socialism, in a larger capitalist framework. So bizarre, right? The most famous example of a worker coop that I know of would be the Mondragon Corporation in Spain. Feel free to google that. I’m personally skeptical that coops can work as a universal model. They rely on the fact that all workers are dedicated, and won’t put their own short term profits over the long term success of companies. However, considering how many businesses went under in 2008 with the higher ups leaving with “golden parachutes” (hefty retirement packages), maybe this is a solution worth looking into. Another potential issue with it is that it really doesn’t provide the right for people to say no to work, which I believe is essential to freedom in an economic system. So tyranny by bosses may still be replaced by tyranny of the majority. And then there’s the fact that unemployment will still, inevitably exist too. So it only solves some of the power differential, and not the whole musical chairs problem of economics.
Conclusion and final thoughts
In conclusion, our capitalistic system is inevitably flawed in providing economic justice for workers. There will never be enough jobs for everyone, and worker bargaining power will inevitably be suppressed by the system. It has to be this way to an extent, but employers also exploit the situation. If we wish to fix capitalism, we need progressive reforms to fix our system. We need to bring unions back to this country, we need to update our regulations like the FLSA, OSHA, and minimum wage regulations, and ideally, we need to consider concepts like the universal basic income, which will both solve structural poverty and increase bargaining power, and even the concept of workplace democracy. Capitalism can never work for the people in its raw forms. It must be refined and heavily regulated to work for the people. Instead of considering trickle down economics, we need to consider pinata economics, where the rich are basically hit with metaphorical sticks to make the benefits of the system trickle down.
Bonus: how this relates to the 2016 election
As I’ve already stated, I’m unhappy with the 2016 election. The republicans are extremely hostile toward the goals outlined in this post, whereas the democrats sometimes pay lipservice to them only to ignore them. First the republicans. Republicans, and even worse, libertarians, oppose these solutions, in part because they think it will cause economics disincentives, and in part because they believe in “freedom.” This freedom is the freedom to do what you want without government regulations. It sounds nice, until you look at the problems I explicitly outlined above. When republicans talk about “right to work” laws, they are talking about the right to work for less. They seek to undermine unions, and they believe that if you “want” to work 7 days a week, you should be able to, which basically would put competitive pressure on everyone to work 7 days a week. All in the name of “freedom.” I don’t see what’s free about it. I think more freedom comes from the state sometimes putting regulations on employers, which may also reduce worker “freedom” to work long hours for low money, but hey, it’s for the greater freedom of each individual to pursue their own happiness. I also don’t think taxes and redistribution hurt “freedom” because those being taxed are the most well off, and it’s to give those who otherwise would be de facto slaves more independence and freedom to pursue their own goals too. So as far as I’m concerned, the republicans can shove their concept of “freedom” up their you know where. It does little to help the average person, and is actually quite oppressive to them.
As for the democrats, I am also disappointed in them. At one time in history, they were champions of the working class. They were the ones who got us the FLSA and OSHA. The ones who got us social security and the war on poverty. They are largely responsible for the reigning in of capitalistic excesses in the 20th century, moving us to a more friendly form of capitalism. While this form was not perfect and had its own problems, we were making progress in the right direction. The democrats lost their way after Reagan destroyed the democratic party’s ideology in effect, and Bill Clinton turned the party into a bunch of republican lites, who also rail against welfare, and do little to nothing to help working class people. In this primary, we had a choice to either move back in the direction of being the champion of the average person again, or to continue to thumb our nose at the average person, tell them that we can’t solve their problems, and push “incremental change” that helps in minor ways, but relative to the extent of the problem are like putting a band aid on a gunshot wound. We are rejecting Bernie Sanders, a “democratic socialist” who could implement many reforms that I would be happy with, in favor of Hillary Clinton, who will do little to nothing. This is why I am disgusted with this election. Ugh. By the way, did you know Clinton used to be on the board of directors at Wal Mart? And we expect her to help the average joe working in these low wage jobs? Hahaha. Hahahaha. Actually, it’s not funny. It’s actually quite depressing.T he party that used to be the champion of the working class is just another tool to the 1% here. One that makes us think we have an illusion of choice, while basically dismissing the solutions that will fix these problems outright.
How capitalism works
I will first describe the system as you would learn about it in economics 101. Market based capitalism is a system in which buyers and sellers of products and services come together to transact with one another. Some people buy products and services, while others sell them, and and some people sell their labor while others buy it. The decision of what things cost and the balance of power of transactions is based on supply and demand, and each individual seeks to maximize their benefit while giving up the least that they can. With an increased supply of something, the prices go down. It becomes less scarce, customers have more options to choose from, and the relative bargaining power of the seller goes down. When a product or service is scarce relative to demand, the person selling that product or service can afford to ask for more. When demand for a product rises relative to supply, it becomes more scarce, and as such, more valuable. When demand decreases, the price drops as there is less competition over a set amount of resources. All parties in the market, when acting rationally, will seek to maximize their own gains. People want to get the most of something for the least amount of money for it. This is the profit motive, which is the driver behind capitalism. Rational self interesting people looking to maximize their own gains in a market system.
The labor market
The primary focus I will discuss on this article is the labor market, because this is where I see most problems with capitalism occur. As I mentioned above, people seek to maximize their gains. Employers will inevitably seek to get the most out of workers for the least amount of money. Workers should, in theory, seek to get the most pay for the least amount of work. In the labor market, you have people wanting to hire others, and people seeking work for pay.
Now, this sounds nice and good in theory, but let’s look at some other factors at play. First of all, we live in a system in which we believe that if people don’t work, they should not eat. Sure, we provide temporary assistance to those who are out of work, and sure we provide more permanent assistance to those who are disabled, but ultimately, unless someone is willing to supply all of your needs and wants at no charge, you will likely have to work at some point in your life. You technically don’t have to in the sense that no one is putting a gun to your head, but because you are a being with survival instincts, you are essentially compelled regardless. From a functionalist perspective, this is because no one would work if they were not compelled, so the argument is that we need to do this to motivate people, but from a more conflict based perspective like I will commonly employ here, this is a structural force that seeks to enslave people, and depresses their bargaining power. By not allowing workers the ability to say no, they are essentially guaranteed a complaint labor force that will be less able and willing to seek favorable terms of employment.
It gets even worse. The labor market is set up in a way where there is always unemployment. We have this requirement that everyone get a job, while have a system that inevitably cannot provide a job for everyone. As you know, the unemployment rate today is around 5%. During the recession, it got over 10%. During the great depression, it reached 25%. Generally speaking, looking at the booms and busts of capitalism, and the general economic cycle, the rate varies between 4 and 8%. Sometimes a little more, sometimes a little less. But there is always someone out of work. Functionally, it needs to be this way. I discussed the phillips curve in the political compass post. When you don’t have unemployment, you have a lot of inflation. The system spirals out of control. Employers cannot find the workers they need, which leads to economic stagnation. Workers become more valuable, excessively so, where it is prohibitively expensive to hire them. Employers raise their prices to compensate for their labor costs, and the workers pay more money, this cancelling out the raises they get. The currency gets devalued significantly in a short period of time, and in the worst scenarios, hyperinflation can occur, making the currency worthless. Capitalism cannot function with no unemployment. As such, the economic system will always be a system in which we require everyone to work, while inevitably consigning some people to a life of poverty if they do not. From a conflict perspective, this relationship serves to further minimize the workers’ bargaining power. Not only do they need resources to survive they can only get through an employer, but now the supply and demand system is set up in a way where workers are relatively common commodities to businesses, whereas jobs are relatively precious ones. Workers need a job more than employers need individual workers. As such, this depresses worker pay and conditions. Workers need to work extra hard and constantly out compete other workers in order to maintain their jobs, and they will do it at a very low pay. In the absence of safeguards, this will inevitably get to the point where we get gilded age or third world working conditions and pay. Work will inevitably consume a worker’s entire life where they spend their whole lives working and their pay will reflect the bare minimum to keep them alive and healthy enough to continue to work. Heck, they might not even be healthy to continue to work. Once a worker fails to keep up, or refuses to work, he will inevitably be replaced by someone else. This is why Marx referred to the unemployed as the “reserve army of labor.” Sure, getting more skills will allow workers to work their way into more valuable positions with better pay and/or conditions, but at the end of the day, the threat of poverty is there for them too, and their bargaining power is limited by various structural aspects of the system. In short, workers inevitably become de facto slaves under this system. They will spend their lives begging to sell their labor to an employer, willing to put in long hours for relatively low pay, because they need to eat.
Other forms of asymmetry in bargaining power come from social attitudes. We live in a system in which people are told they can’t expect something for nothing, and that they have to work for everything. They are primed from a young age to have good work ethics, and nothing is worse in American society than being lazy. On the other hand, employers are not expected to give anything. Workers are expected to be willing to give their labor, but if a worker expects higher pay or better working conditions, he is told he is “entitled”. I hate this word, fyi, I may write a rant some day just on this word itself. But generally, workers are told they have to work hard and freely give their labor to employers, but if they expect more in return, they are insulted by being called lazy or entitled. This puts intense social pressure on people to work harder while being less willing to ask for more from employers. These are cultural expectations that create asymmetry between workers and employers, and help serve to keep the working class under control.
That being said, let’s bring all of this together to paint a picture of the system. We have a system where everyone is expected to have a job, but not everyone can possibly have a job. Workers looking for jobs will inevitably outnumber those willing to hire people, and this skews the whole game in favor of the employers. It’s like playing a game of musical chairs mixed with the movie Speed, where the penalty to losing is poverty. Furthermore cultural norms and expectations demand workers freely give their labor under the stigma of being called “lazy”, but are not expected to demand more of employers, lest they be called “entitled.” If you ask me, this system is very messed up and barbaric. It may be functional, but it also leaves of lot of dysfunction in its wake.
Solutions to this mess
There are a lot of solutions to this mess.
Unions are one of the first solutions that people came up with. Workers unions are basically groups of workers that band together to collectively bargain for better pay and working conditions. By working in a group, they can leverage greater power than an individual employer can. If one employee leaves, the employer can easily replace them. If the entire staff goes on strike at once, and they cannot replace those workers, then the union has bargaining power to work for better wages and working conditions. The advantages of unions are better working conditions and pay. The downsides are that sometimes unions can be corrupt, employers can find ways around them, and it does not solve that pesky “I can’t say no” problem very well. It’s a step in the right direction, but not an end all solution.
Regulations are another possible solution. The minimum wage sets a price floor under which workers cannot fall. This is theoretically set at a level that workers can live decently on. There are also labor standards. We have the fair labor standard’s act, which regulates the hours and conditions in which workers can work. We have OSHA to ensure workplace safety, so workers don’t do crazy things that are patently unsafe. Other countries even have mandated vacation or maternity leave, because the market does not provide these things on its own. Employers will argue that these hurt the economy by creating more unemployment, putting small business owners out of business, and hurting profits and growth, but I think that the benefits outweigh the costs. Other potential costs include economic distortions as well as the fact that these regulations still don’t fix that pesky right to say no problem. It dresses up the relationship, but it does not provide freedom to workers.
A job guarantee would provide more jobs in time of high unemployment, but it cannot necessarily provide a job for everyone, since that would mean unemployment would be 0% and as such inflation would happen. I also question the wisdom in creating jobs. Don’t jobs exist because we need stuff done? Why should we make jobs for the sake of giving people an income? I guess a job guarantee can be a temporary solution in times of high unemployment when we need stuff done like infrastructure repairs, but they are far from an ideal solution. if anything, I think we need to get away from this endless call for more and more work, and more toward a society where we can all work less while still having a good standard of living while doing so.
Universal basic income is a solution I highly favor and champion, and I believe that it is the best solution we can consider. A universal basic income would be an income floor given to all citizens in the country it is given in, regardless of work effort or other factors. It should ideally be set at a level high enough to live on, while being low enough to still encourage work as per society’s need for it. This solves multiple problems. It provides an income floor for the “losers” of the musical chairs like economic system, thus reducing the suffering caused by those that cannot find work. It also gives people the right to say no, since workers now have the ultimate insurance against employer: freedom and independence from them. With survival taken off the table, workers can afford to be more choosey for employers, and when they don’t like the conditions, they can leave. This will put a significant pressure on employers for decent wages and working conditions. Obviously we don’t want too much pressure that will hurt economic growth and cause significant inflation, but I do believe a balance can be found to give people at least some ability to say no. Universal basic income could be paid for by taxes, and while it would be expensive, I believe it would be worth it. It would also help give us a framework to provide for people in the case of potential future technological employment. Downsides of the universal basic income are its costs, distortions associated with acquiring the funding for it, and, from some perspectives, weakening of work ethic (I consider this a feature, not a bug). Work disincentives are often overstated though because they are far weaker than you would think. We actually had some experiments with the guaranteed income in Canada and a sister policy in the US known as the negative income tax in the 1970s and they only found a reduction in work hours by 13%, and it was mostly among secondary earners like housewives and teenagers. This sounds like a lot, but it would be the equivalent of a month long vacation or a move to a 35 hour work week, two things that many Europeans already have. Here is a useful source that summarizes some of those findings, since I know people are going to be skeptical here. http://www.cpj.ca/files/docs/orking_Through_the_Work_Disincentive_-_Final.pdf
Socialism is another possible solution. Socialism is a very broad concept, and while it may bring the concept of poverty, oppression, and bread lines to peoples’ minds, there are many many kinds of socialism that can be implemented. Obviously, state run economies cannot work very well, as they destroy innovation and cause shortages, like I mentioned in previous posts. There’s also the whole state running everything thing that can cause them to wield too much power over people. We want some freedom for people to choose their own path obviously. But there’s also softer forms of socialism. Socialism is, at its core, at least in theory, economic democracy. Think of the differences between a dictatorship and a democracy. In a dictatorship, one person has control over a system and uses unilateral force over subjects, violating their rights, their freedom, and causing massive suffering. In a democracy, everyone has a say. We vote for leaders, which are responsible to us. Power is limited, and it is shared among multiple branches of government. Everything is more decentralized, and while the system is still powerful, the power is accountable to those who it governs. Socialists will say the problem with capitalism is the fact that the owners of the means of production have similar unilateral control over individuals that a dictator would have over its subjects. Most solutions here involve ways of solving the adversarial relationship between workers and employers. Unions even the playing field, regulations limit how employers can treat employees, and basic income gives people the freedom from work. Replacing workplace hierarchies with a democratic system in individual workplaces could remove the adversarial system altogether. Workers and employers are on the same side, and they are one. Workers can vote on how they are paid and treated, and all have a direct investment in the company itself. Workplaces like this are known as worker cooperatives. They are basically corporations with democracy power structures, and they compete in the market system. So you basically have socialism, in a larger capitalist framework. So bizarre, right? The most famous example of a worker coop that I know of would be the Mondragon Corporation in Spain. Feel free to google that. I’m personally skeptical that coops can work as a universal model. They rely on the fact that all workers are dedicated, and won’t put their own short term profits over the long term success of companies. However, considering how many businesses went under in 2008 with the higher ups leaving with “golden parachutes” (hefty retirement packages), maybe this is a solution worth looking into. Another potential issue with it is that it really doesn’t provide the right for people to say no to work, which I believe is essential to freedom in an economic system. So tyranny by bosses may still be replaced by tyranny of the majority. And then there’s the fact that unemployment will still, inevitably exist too. So it only solves some of the power differential, and not the whole musical chairs problem of economics.
Conclusion and final thoughts
In conclusion, our capitalistic system is inevitably flawed in providing economic justice for workers. There will never be enough jobs for everyone, and worker bargaining power will inevitably be suppressed by the system. It has to be this way to an extent, but employers also exploit the situation. If we wish to fix capitalism, we need progressive reforms to fix our system. We need to bring unions back to this country, we need to update our regulations like the FLSA, OSHA, and minimum wage regulations, and ideally, we need to consider concepts like the universal basic income, which will both solve structural poverty and increase bargaining power, and even the concept of workplace democracy. Capitalism can never work for the people in its raw forms. It must be refined and heavily regulated to work for the people. Instead of considering trickle down economics, we need to consider pinata economics, where the rich are basically hit with metaphorical sticks to make the benefits of the system trickle down.
Bonus: how this relates to the 2016 election
As I’ve already stated, I’m unhappy with the 2016 election. The republicans are extremely hostile toward the goals outlined in this post, whereas the democrats sometimes pay lipservice to them only to ignore them. First the republicans. Republicans, and even worse, libertarians, oppose these solutions, in part because they think it will cause economics disincentives, and in part because they believe in “freedom.” This freedom is the freedom to do what you want without government regulations. It sounds nice, until you look at the problems I explicitly outlined above. When republicans talk about “right to work” laws, they are talking about the right to work for less. They seek to undermine unions, and they believe that if you “want” to work 7 days a week, you should be able to, which basically would put competitive pressure on everyone to work 7 days a week. All in the name of “freedom.” I don’t see what’s free about it. I think more freedom comes from the state sometimes putting regulations on employers, which may also reduce worker “freedom” to work long hours for low money, but hey, it’s for the greater freedom of each individual to pursue their own happiness. I also don’t think taxes and redistribution hurt “freedom” because those being taxed are the most well off, and it’s to give those who otherwise would be de facto slaves more independence and freedom to pursue their own goals too. So as far as I’m concerned, the republicans can shove their concept of “freedom” up their you know where. It does little to help the average person, and is actually quite oppressive to them.
As for the democrats, I am also disappointed in them. At one time in history, they were champions of the working class. They were the ones who got us the FLSA and OSHA. The ones who got us social security and the war on poverty. They are largely responsible for the reigning in of capitalistic excesses in the 20th century, moving us to a more friendly form of capitalism. While this form was not perfect and had its own problems, we were making progress in the right direction. The democrats lost their way after Reagan destroyed the democratic party’s ideology in effect, and Bill Clinton turned the party into a bunch of republican lites, who also rail against welfare, and do little to nothing to help working class people. In this primary, we had a choice to either move back in the direction of being the champion of the average person again, or to continue to thumb our nose at the average person, tell them that we can’t solve their problems, and push “incremental change” that helps in minor ways, but relative to the extent of the problem are like putting a band aid on a gunshot wound. We are rejecting Bernie Sanders, a “democratic socialist” who could implement many reforms that I would be happy with, in favor of Hillary Clinton, who will do little to nothing. This is why I am disgusted with this election. Ugh. By the way, did you know Clinton used to be on the board of directors at Wal Mart? And we expect her to help the average joe working in these low wage jobs? Hahaha. Hahahaha. Actually, it’s not funny. It’s actually quite depressing.T he party that used to be the champion of the working class is just another tool to the 1% here. One that makes us think we have an illusion of choice, while basically dismissing the solutions that will fix these problems outright.
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