Wages versus [Austrian Economics and] Wage Slavery

Wages versus Wage Slavery

One of the ongoing roadblocks to left and libertarian reconciliation, one which deserves more of our attention, is the matter of conflation of context with causality, an intellectual error committed by most on both sides.

Leftists typically blame markets for state-caused injustice that takes place in markets.

Free-market libertarians often apply a shallow analysis that causes them to defend state-caused injustice merely because its visible manifestation is in the marketplace.

Both fail to recognize that the market is the context, the cause is the state.

Let’s look at the topic of wage slavery, for example.

Every marginalized worker viscerally knows wage slavery to be a very real phenomenon — yet libertarians typically bury their heads in the sand and leftists typically fundamentally misunderstand the problem.

Most libertarians deny the existence of wage slavery, seeing only the voluntaristic nature of the concept of wages in principle rather than the real world of state-tainted injustice in practice.

Most radical leftists attack the voluntaristic nature of the concept of wages, assuming there is something inherently evil about wages for reasons that are mirror images of the intellectual errors commonly committed by libertarians.

They’re both right and both wrong.

deeper libertarian analysis, a left libertarian analysis, points to the role of the state in artificially concentrating capital in the hands of state-allied big business — giving statist plutocrats far more bargaining power in the labor market than is their natural due. Injustice happens to play out in the marketplace, but the cause is the state.

I urge, and challenge, free-market libertarians to show their solidarity with labor by supporting radical unions such as the Industrial Workers of the World (IWW), rather than establishment unions in league with big business and the state. Click here to join the IWW.

Austrian Economics and Wage Slavery

Since the post on wage slavery generated a bit of a stir, perhaps it’s time to introduce a $10 word for the fifty cent concept of “screw the workers“.

That word is oligopsony. Just as the word “oligopoly” is a more dispersed form of the concept of “monopoly”, so to oligopsony complements monopsonyMonopsony, in turn, is a mirror image of monopoly. Where a monopoly indicates only one seller, monopsony indicates one buyer.

The essence of what I had to say about the concept of wage slavery is that the government-induced cartelization of industry creates oligopsony conditions in the labor market. It does this by artificially reducing the number of buyers of labor (businesses), thereby granting the existing ones an unnatural degree of bargaining power.

Austrian economics is quite clear on the cartelizing effects in the business world of statism. By pointing to statism as the cause of resulting oligopsony conditions in the labor market, a compelling case can be made that the completely free market (i.e. anarchy) truly is the proletarian revolution.

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4 thoughts on “Wages versus [Austrian Economics and] Wage Slavery

  1. The bargaining power argument is totally fallacious. No matter how much capital – justly acquired or not – an employer has, they must still pay the laborers according to their discounted marginal revenue product in a market where labor can be "bought out" by other employers in the same (or different) industries. Actually, capital accumulation, by increasing the marginal revenue product of labor and generally decreasing time preference rates (due to a lower marginal utility of additional money in the present) actually raises wages most of the time.

    The oligopspony argument is marginally more plausible, but it fails when one recognizes the sheer number of employers that exist despite the state intervention. As these employers are not "cartellized", and cannot be with explicit state intervention as in the New Deal, no such "oligopsony" of a small number of colluding employers exists.

    Wages would be higher without state intervention – of that there is no doubt. Various interferences like sales and income taxes eat away at the earnings of both worker and capitalist alike. Coercive rules backing unions lower non-union wages by preventing them from competing with union workers. Regulations increase the cost of doing business, which lowers the marginal revenue product of labor over time, as increased capital and labor investment is prevented. But "wage slavery" does not exist because of this – the concept is not a useful one at all, in any sense, as it only removes the focus from the interference of the state that hurts *all* productive factors of the economy: laborer, capitalist, and landowner alike.

    And no voluntarist should support the IWW and its attacks on the free association (or not) of employers with employees (like this: http://www.iww.org/en/content/iww-member-isnt-toy… either. There is no right to organize while remaining employed, no right to a job. Not under any system of true anarchy.

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  2. As a voluntaryist, I REALLY don't understand why peeps have to adopt this left versus right paradigm nonsense. Furthermore, I think we ought to drop the 'libertarian' label as well. Voluntaryism is a much more apt label and isn't prone to being so manipulated as the other labels as it is strictly tied to the non-aggression principle and thus is pro free market and antithetical to the state.

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    1. We are "left" because we, for collaborative, strategic and orientation reasons, favor the incremental to maximal decentralization of power in all spheres of life (Karl Hess) and to show our open opposition to exclusion, submission, deprivation and war (Gary Chartier).

      We see no good reason to drop the "libertarian" label, because we regard libertarianism as the direct opposite of and in open opposition to authoritarianism.

      "Voluntaryism" can just as easily be manipulated as any other symbol. There are, at least, two used and potentially exclusive definitions of "voluntary" and one terrifying conclusion "admissible" under the strictly or synoptically "voluntary".

      1. (def) voluntary, those actions which one does not require anyone's consent or permission to do.
      2. (def) voluntary, a condition where one is presented with and able to make a meaningful choice between substantive options.
      3. (conclusion) the ability to enter into contracts that are socially and institutionally mandated or upheld that would be the ostensible or operational equivalents to slavery.

      So depending on which definition you use or whether slavery can be contracted and socially upheld, I remain skeptical of "Voluntaryism" free market (re definition) and anti-state (the conclusion) credentials.

      Otoh, in definitional discussions, such as "left v right paradigm nonsense", I perceive an undercurrent of articulation or communicative frustration. As if one is "tired of talking" or "sees no point in talking" and other similar exclamations.

      If one's goal is to, some how, get to a frictionless conversational "place" – where we no longer need to regard and react to one another as weird and novel individuals and, instead, allow comprehensive symbolic ideological systems to represent or proxy us in such a way that they have the power or authority to speak for or around us – then I feel your goal is only possible within very tight and naturally, though not intentionally, insular groups and, politically, only conducive to atomistic hermits or totalitarian-paternalistic states.

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  3. Money (bankers) and wealthy individuals organize their power in multi-national corporations to escape the political power of democratic national governments to force them to not be amoral and to place importance on the human, social and spiritual values (morality) of their workers and community, the community in which they do business and humanity generally.. These corporate elites only consider one value before decision or action – dollars. Since no human, social or spiritual value can be expressed in terms of dollars, and considering the only value considered by corporations is dollars, and considering the fact that the wealthiest 1% own/control 80% of all corporate shares, the "capitalists" now "corporatists" are unalterably amoral. In an amoral organization individuals – specially workers – are only valuable in how they contribute to the dollar denominated benefit which is delivered to the top 1%. It is better that we return real democracy to our national and other governments because it is only through the power of this collective of the majority expressed democratically that corporate control of all people can be avoided. Although I am an individualist, I must recognize that it would be a flight of unimaginable arrogance to believe that I as an individual could protect myself from total exploitation without the organizing power of national democratic government – not a totalitarian-paternalistic state – which has the power to control corporations (which are nationally chartered by governments); I am powerless to achieve human rights, social harmony, dignity,security, and opportunity for myself or anyone else.
    The top 1% are not busy riding the world of effective democratic national government because they have embraced some altruistic goal of individualism. They are corrupting and destroying national governments so that the only force capable of forcing morality on them is neutered.

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