A bit of cultural theory
In his brilliantly clear book, 23 Things They Don’t Tell You About Capitalism, Cambridge University economist Ha-Joon Chang urges us to be “active economic citizens.” Chang points out how easy it is for us to throw up our hands in frustration over the many complex, technical matters involved in economics. We believe that only experts can deal with such convoluted questions and concerns. But Chang wants us to think differently: “95 per cent of economics is common sense made complicated, and even for the remaining 5 per cent, the essential reasoning, if not all the technical details, can be explained in plain terms” (xviii). We don’t need to be auto mechanics to know that the oil needs changing in our cars. Chang assures us, “Making judgements about economics is no different: once you know the key principles and basic facts, you can make some robust judgements without knowing the technical details” (xvi).
I want to make clear that this is how I approach—and write about—economic issues. Not as a trained economist or thoroughgoing expert in the field, but, at best, as an enlightened amateur striving to understand the socio-economic realities that so fundamentally shape our everyday lives. In fact, I think it’s crucially important for all of us to be such informed laypersons when it comes to the economy and the political decisions that fashion it. As Chang warns:
we need to ask whether the decisions that the rich and the powerful take are based on sound reasoning and robust evidence. Only when we do that can we demand right actions from corporations, governments and international organizations. Without our active economic citizenship, we will always be the victims of people who have greater ability to make decisions, who tell us that things happen because they have to and therefore that there is nothing we can do to alter them, however unpleasant and unjust they may appear. (xvii)
In other words, ignorance in civil matters guarantees our inability to recognize and to defend our own economic interests. Such fiscal illiteracy likewise negates our ability to work for the greater social good. I think it no stretch to say that, as a rule, those at the top of the capitalistic heap, benefiting most from its functioning, are perfectly content with our collective lack of knowledge in the economic arena.
That is to say, the stupider the worker the better.
Well, screw that.
In this post, we’ll consider two basic concerns for Marx. One is who owns the Means of Production (MOP), that is, the economic process by which goods are made and sold. The other issue is maybe Marx’s most famous observation about 19th-century capitalism: the alienation of labor. This is the idea that if the worker is excluded from having any say in or control over the MOP, that worker becomes dehumanized—alienated from herself—and reduced to being a mere thing. Namely, a commodity to be bought or abandoned or used at the whim of the Capitalist.
Applying this bit of cultural theory
In my last post (“Let Marx Liven Up Your Thanksgiving Dinner!” 22 November 2023), I set out the basics of the capitalist MOP. The economic notation looks like this: M – C – M’. What this formula signifies is this:
Money invested – Commodities bought to make a product – Money earned by selling a product
I pointed out as well that where the magic happens in this process—meaning where the profit is made—is in the realm of Commodities. In order to produce a product to sell, a Capitalist must buy two kinds of commodity: materials (stuff) and labor (human work time).
Yes, you heard that right. In the system of capitalism, people become things. Workers are treated as commodities to be procured as necessary cogs in the manufacturing procedure. Demeaning labor is the norm.
Moreover, it is in the area of labor (worker pay and conditions) where the Capitalist finds the most leeway to maximize earnings by way of this simple fact about the capitalist MOP: the less you spend on labor, the greater your profit margin will be.
Therefore, along with being reduced to a cog without a say in the capitalist MOP, the worker, more often than not, becomes impoverished as well, hard-pressed to earn a living wage. A worker’s labor is thus doubly alienated from her: she has no control over what is made or how; the full value of her work—the profit—is stolen from her to go into the pocket of the Capitalist.
At this point, our discussion could go in any number of directions. Lots of problems and disputes and objections spring to mind from what I’ve just described. As Chang points out, many thorny issues of influence and power (and, frankly, greed) are embedded in economics. For this post, however, let’s simply broaden the horizons of our economic thinking a bit by considering an alternative MOP to the capitalist MOP. Then, after that consideration, we’ll take stock of where things stand.
Sound good? Here we go.
A different kind of production mode, distinct from the manufacturing process undertaken by the Capitalist, is carried out by what’s called a Direct Producer. Also referred to as cottage industry, this form of enterprise typically is a small manufacturing business that is owned and operated by an individual or a family. In European and American society, cottage industries run by Direct Producers were the norm and precursor of widespread industrial capitalism (that is, the factory system). Thus, Marx observed closely this earlier method of commerce, a trade practice that is still very much with us today.
For Marx, the model of the Direct Producer presented a stark contrast to the exploitation and brutality he saw in unregulated early capitalism (sadly, trade practices that also are still very much with us today). Marx’s views on the key issues of Ownership and Alienation originate in these differences. Although both parties are in the business of producing and selling a product, how a Capitalist does business is, in important ways, contrary to how a Direct Producer does business. The vital distinctions are evident in their two different Means of Production.
The MOP of the Direct Producer in effect inverts the MOP of the Capitalist. To represent the formula in economic notation, it is this: C – M – C’. What this means is:
Commodities bought to make a product – Money earned by selling a product – Commodities obtained with those earnings both to live and to continue the business
Where the Capitalist has enough money available to her to invest—in effect, excess money separate from money necessary to live—the Direct Producer lives on a tight margin that combines living expenses with business expenses. “Capitalism,” after all, means “money-ism.” If you don’t possess the considerable amounts of excess money-capital needed to invest in the capitalist MOP, you simply are never going to be a real Capitalist.
Let me emphasize this point.
If you are not a moneybags buying the Commodities of materials and labor in order to mass produce some kind of product, well, you are not a bona fide Capitalist. Even though the great majority of Americans will identify themselves as Capitalists, we’re not. Not really. We live within a capitalistic economic order, sure. But within that order, we’re far more likely to be cogs than Capitalists—that is, salaried workers of some sort.
In fact, within our current system, our choices are pretty much being some manner of salaried worker, some manner of Direct Producer, or, perhaps, some manner of pirate sailing the economic high seas (e.g., a member of a criminal organization or a derivatives broker on Wall Street...Yar!).
But let’s move on to an example of a Direct Producer: Duke’s Service.
Duke’s Service was the Auto Repair Shop owned and operated by my grandparents, Bud and Faye Carter, in Pocatello, Idaho from roughly the 1950s to the 1980s. My grandfather’s given name was Clayton, but his family called him Bud growing up, and in the world of Pocatello auto repair he acquired the nickname “Duke” because he was so damn good at fixing cars—a kind of Mechanic Royalty, it seems. He embodied a rare combination of gifted and honest.
Bud and Faye had dropped out of high school to marry in their teens. During the Great Depression and World War II, Bud worked in the mechanics pool at the local Ford Dealership while Faye worked as a seamstress and dressmaker at the downtown Woolworth department store—where she was every bit as gifted at her craft as Bud was at his. After many years of scraping by as poorly paid workers within a shaky capitalist environment, they took a leap—meaning a bank loan—to open their own business.
And here is where we start our consideration of the Direct Producer MOP.
Bud and Faye had to buy Commodities in order to make their product—in this case, car and truck repairs. Their start-up buy of Materials was considerable: a physical and fully outfitted repair shop (they decided to purchase and refit a small cinderblock warehouse on the busy northeast corner of Yellowstone Avenue and East Elm Street), the many tools of the mechanic’s trade, a truck for making service calls, the utilities to keep the shop running, and so on. The Labor, needless to say, was provided by themselves—Bud doing the repairs and Faye doing the books. My grandmother was far more mathematically adept (she could also play the piano by ear) and business-minded than my grandfather. Like a hawk, Faye kept a sharp eye on the pennies going out and the pennies coming in.
And, before long, the pennies started coming in in copious amounts.
Duke’s Service did extremely well. In particular, all the big trucking fleets around Pocatello—Rowland Brothers Dairy, Meadow Gold Dairy, Coca-Cola Bottling, Garrett Freightlines—wouldn’t let anyone else touch their semis but Duke. Wooters Cabs also brought their vehicles exclusively to Duke’s. The product was top-notch and the price was fair. On top of all this fleet work were the many, many individual loyal customers Bud and Faye acquired over the years. They had so much work coming at them that Duke could even exercise some of his personal automotive preferences. He flat-out refused to work on any foreign-made cars (and was known to chase Volkswagens off his lot with a raised wrench). Being a dedicated Ford man, on occasion he would tell Chevrolet owners to go find themselves another shop.
But here’s the real point.
As Direct Producers, all of this work was their work to be done in their way and at their pace—and all for their reward. No Capitalist was breathing down their necks or reaping the benefits of their hard work.
To be sure, Bud and Faye hired additional mechanics to meet the demand for repairs. But they never employed more than one or two people at any given time, and never as Capitalists buying a labor commodity to work on an assembly line. Instead, as Direct Producers, they hired what were, in essence, collaborators in the trade. These mechanics had their own stalls and kept the lion’s share of the earnings made from the repair jobs they performed.
Moreover, usually these employees were younger mechanics just starting out—novices who wanted to work with and learn from Duke. In other words, far from the capitalist exploitation of labor, actually taking place was an apprenticeship system. I remember two mechanics in particular, Smitty and Doc (the world of Pocatello auto repair was big on nicknames), who both worked for a number of years at Duke’s before going out to open shops of their own.
Make no mistake, my grandparents worked long, hard hours at their business with no safety nets in place. There was no guarantee that Duke’s Service was going to be a success, and it easily could have failed as do so many small business ventures in America. Being a Direct Producer is no cakewalk. (I worked in the shop for a couple of summers during high school—as a very unskilled helper—and came home exhausted each day.) But here’s the thing.
If Grandpa wanted to go fishing, well, he damn well went fishing. If Grandma just had to have a lavender Lincoln Continental, well, by God, one showed up in her driveway.
Bud and Faye owned the Means of Production. And, because they did, they did not suffer the alienation of labor. They weren’t estranged from their own working lives. Unlike their employment at Ford and at Woolworth, at Duke’s Service my grandparents were not reduced to commodities hired and fired at the necessity—or whim—of a Capitalist owner. In the end, ownership of the MOP is everything. Without it, labor is alienated. With it, workers retain their dignity, their initiative, their financial security, their individual humanity.
So what?
Control of the Means of Production and the alienation of labor are crucial matters of social justice for Marx as he surveys and critiques the landscape of European capitalist society after about a century of its development. The remedies he proposes for the societal problems he sees arising out of these two issues are both straightforward and commonsensical.
With regard to the MOP, Marx proposes the elimination of private ownership of the Means of Production. That is to say, the government—not private individuals—must own all industries and control the economic production of a country in a way that both ensures fair treatment to all citizens and prevents the oppression of the worker at the hands of rich and powerful Capitalists.
[Sidebar: Marx isn’t against anyone owning private property—a nice tea set or a horse-and-buggy or a house. Such a belief is a widespread misunderstanding—or, really, lack of understanding—of Marx’s basic theories. Marx is only opposed to the private ownership of the MOP by extravagantly wealthy individuals who, let’s be honest, very much tend to be greedy, single-minded, and cruel in their pursuit of profit. That is, in our terms nowadays: billionaires.]
With regard to labor, Marx proposes fair pay as a necessary step in preventing alienation. Instead of using the term “profit” for the earnings made at the end of the MOP, Marx calls it “surplus value.” Instead of all those earnings going into the pocket of the Capitalist, Marx calls for that money to be shared equally by everyone involved in the MOP—that is, by workers and investors alike.
To our 21st-century ears—ears that have had capitalistic practice thoroughly normalized to us as some kind of Law of Nature—these proposals likely sound radical, controversial, all but unworkable. And maybe they are. Without a doubt, to all you diehard capitalists out there, these ideas of Marx will be regarded as heresy, fightin’ words, commie-pinko subversion, the end of civilization as we know it! And maybe they are.
But, let’s be real, these ideas are by no means un-Natural or utterly outside the realm of human possibility.
God did not ordain “Let there be Capitalism!” and set that economic formation in motion upon the earth. (Eve and Adam were Direct Producers, after all.) Humans invented the technologies that eventually gave rise to a capitalistic system only about three or four centuries ago. And since its invention capitalism has shifted and evolved and become far more complex than anything Adam Smith envisioned or, subsequently, Karl Marx scrutinized. But, to me, these two things—Ownership and Alienation—are at the heart of all our modern economic debates.
Should the MOP be completely under the control of only those cash-enabled individuals who can afford to invest in it? And exactly how do these individuals get so fortuitously endowed in the first place?
Should the MOP be completely under the control of government in order to prevent abuses of the system? And exactly what form of government is best able to monitor fairly the economy?
If neither of these extremes, just where in between the polar opposites of private versus public ownership should the control of the MOP lie? Hmm? In what private-public combination?
How and, more important, who determines what a living wage is for workers? How and, more important, who determines what degree of participation workers have in the entire process of production?
All perplexing questions to ponder in future posts...