QUORA: ‘Why should capitalists be allowed to continually reap the benefits of others' labor?’
I posted this answer:
The question implies that the capitalist—a label under which I include investors, businessmen, entrepreneurs—can profit only by permission, which the government should have the power to rescind, and thus outlaw and/or confiscate his profits at any time.
The question ignores the fact that the employees accept and remain in the jobs created by the capitalist/businessman/entrepreneur by voluntary mutual consent, and that consumers willingly buy the businessman’s products. Therefore, the profits are legitimately earned; meaning that the profits belong to the capitalist not by any authority’s permission but by moral right. It follows that there is only one moral way to “disallow” a capitalist’s profit—by consumers refusing to buy his product. Any other method, including governmental coercion, is criminal.
That said, the creation of a product that is marketable at a price that is more than the total cost of production is not an easy task. It doesn’t just happen “somehow.” Yet the delusion persists that the labor of the individual workers, each performing a specific delimited task, magically integrates and coordinates into a final product.
It does not.
Capitalists reap the benefits of their own capital, ideas, managerial skills, production planning, market analysis, and the general work of running the enterprise and coordinating all of the myriad factors of production, including labor, when and if that work results in successfully creating a marketable product. The direct benefits labor contributes to the capitalist's goals goes to the workers in the form of wages, salaries, and fringe benefits. Certainly capitalists are not “reaping the benefits of others’ labor” if by “reaping” one means taking advantage of workers in the nature of Karl Marx’s absurd exploitation theory of capitalism. Capitalists benefit through their work as the Prime Movers of the business.
The benefits the capitalist receives results from his ability to plan and coordinate the productive contributions of different divisions of labor (and other factors of production) in a way that successfully culminates in the final marketable product, which the capitalist is solely responsible for making possible. It is the capitalist who gives value to the workers. A worker’s job has no value outside of the context as a contributor to the plans of the capitalist regarding the finished product. In this sense, it is actually labor that is reaping benefits—from the capitalists.
Related:
Jeff Bezos’s Beautiful Defense of American Entrepreneurialism
Good Answer to this question by Saulius Muliolis
My answers to . . .
Quora: ‘Is capitalism based on the exploitation of others?’
QUORA: 'How is becoming a billionaire even possible, chronologically?'
Related Reading:
Marx and His Exploitation Theory BY GEORGE REISMAN
Atlas Shrugged—Ayn Rand
To Whom Does the American Worker Owe His Prowess?
Did Unions Create the Middle Class?
The Myth of the Entrepreneurial State by Deirdre McCloskey and Alberto Mingardi, especially Chapter 24, The Enchaining of Human Action Reverts to a Labor Theory of Value.
George Reisman on Ludwig von Mises, Ayn Rand, and Capitalism, interview with Jim Brown for The Objective Standard
On this Labor Day, Celebrate Intellectual Labor
The Moral Injustice of the Assault on the Space Billionaires
A NJ Letter-Writer’s Comic Book Economics
QUORA: 'How is becoming a billionaire even possible, chronologically?'
Capitalism by George Reisman
The Capitalist Manifesto by Andrew Bernstein
What is Capitalism? by Ayn Rand
[Compare: What is Socialism?--Robert Heilbroner, 1982]
1 comment:
My "off the top of my head" answer is, others continuously reap the benefits of capitalists' labor. If it's a trade by mutual free agreement, it's a right for both sides, not an allowance or a permission.
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