Are the workers cheated?
The short answer to this question is “No”. We are not discussing the “clip-joints” of Soho who cater for visiting football fans on a Saturday evening. Nor the usurious second mortgage and hire-purchase rates charged to some workers. There are instances where individual workers are overcharged, particularly when they are on holiday or in a holiday mood. These, and similar instances, are not typical of the experience of the majority of workers and the working class as a whole.
During the last century, cheating of workers was common—they received most of their wages in the form of tokens which could only be exchanged at certain shops owned by their masters—the Tommy-shops as they were nicknamed. They had no choice but to purchase the low-quality food, usually at exorbitant prices. As a result, many workers starved; it became a national scandal, so much so that the government acting in the interests of all capitalists, introduced the Truck Acts, 1831, which forbade the payment of wages in token or kind.
From time to time, and certainly during a general election, the subject of high prices becomes a major issue. This is good election stuff, and both Tory and Labour Parties fought the last election on it. Some MPs parade themselves as public watchdogs, making sure that the housewife is not overcharged in the High Street while her husband is exploited in the factory.
It is not because the capitalists have a moral objection to cheating the worker, or for that matter, to cheating each other. It is simply that they cannot get away with it. When Sir Denys Lowson, former Lord Mayor of London, performed a series of share transactions involving the National Group of Unit Trusts Ltd, which effectively made him £5 million better off, there was an uproar in the City because he hadn’t played the game according to the rules. He later offered to repay the £5 m., saying that he had made an error of judgement. (Daily Telegraph, 12/7/73). No doubt the City and Stock Exchange will derive much amusement discussing this “error of judgement”.
Prices and Exploitation
Support for campaigns to lower or stabilize prices is a waste of time. One, because they are reformist and distract the workers’ attention from the issue of Socialism, and two, because lower prices make no difference to the position of the working class. Such campaigns to lower prices invariably have had the effect of lowering wages also. High prices or low prices cannot materially alter the position of the worker under capitalism. Since 1939 the price level in this country has increased by about 400 per cent.; wages have increased slightly beyond this. The reason why the capitalist cannot exploit the worker twice is due to the economic nature of capitalism over which he has a very limited control.
All workers are exploited under capitalism by their immediate employers: some directly at the point of production and distribution — factories, agriculture, mines, transport, etc. — others indirectly during the process of circulation and administration — banking, insurance, civil servants, advertizing and commerce generally, the “white-collar” workers. The productive workers are engaged directly in the production of wealth, and broadly speaking, the white-collar workers are concerned in appropriating a certain part of that wealth for those capitalists, or capitalist institutions, which employ them. Exploitation means that the workers produce, or realize, more value than they receive back in the form of wages. Surplus-value (the source of profit), is socially produced by all workers for the benefit of all capitalists. Wages or salaries are not determined by the amount a worker produces, but by what he sells —his commodity labour-power, his capacity to work. The value of that labour-power, whether the worker works with his hands or his brain, is determined by the amount the worker requires from time to time, to sustain himself and his family. The rent or mortgage interest he pays, the food he buys, clothes, holidays, bringing up and educating his children. These are the major elements of the worker’s existence, and not unnaturally they dominate his entire thinking.
Capitalists Divided
There is no automatic right of any group of workers to receive the value of their labour-power. In times of boom, where there is a demand for labour-power, the workers will be able to take advantage of this by pressing wage demands, mainly through trade-union action. During a slump, when there is unemployment, and the supply of labour-power is greater than the demand, employers can force wage levels below the value of labour-power (though this cannot go beyond a certain limit).
Increases in the cost of living will compel workers to seek higher wages: in most cases to compensate themselves for the loss in purchasing power, but in other cases, to go further and gain an increase in the standard of living. One thing is clear, high wages mean lower profits.
For this reason the capitalist employer looks very carefully at any increases in the cost of the goods or services supplied to the worker by other sections of the capitalist class, e.g. landlords, clothing manufacturers. The capitalists are not one happy band of brothers, in a class society they themselves are divided. Much of their time and energy, outside of exploiting their own workers, is taken up with trying to take the money from each others’ pockets. They do not respect the right of each to his profit; the State has to arbitrate on endless disputes between them. The Law Courts exist principally to deal with property questions. Any section of the capitalist class will always try and gain an advantage at the others’ expense, and of course, at the expense of the worker, provided they can get away with it.
For example, were landlords, during the present housing shortage, able to raise rents or evict tenants they would do so without regard to any national capitalist interest. The dominant section of the capitalist class are alive to this, and introduced the Rent Acts to protect their own interests first and the workers’ second. No government can afford to relinquish control over certain prices. They seek it either by a direct price freeze, as at present, by a system of subsidies, as in Agriculture and Fisheries, or by legislation and selective taxation.
Two Kinds of Struggle
There is no doubt that were the food manufacturers and clothing manufacturers, together with other suppliers, able to form monopolies in order to increase prices then their profits would increase, but the worker, who would have to pay higher prices for their goods, would immediately press for higher wages. Those higher wages would have to be paid by the industrial and other sections of the capitalist class—in effect they would suffer lower profits. In essence therefore the gains of the food and clothing monopolies, landlord and retailer, would be the losses of the industrial capitalist. He would have to bear the real cost of higher food prices, rents, etc. The industrial capitalist obviously would not met the workers’ demands, however justified, without a struggle, but this is a class struggle in which he has nothing to gain and stands to lose either profit or production, or both. We can well understand the industrial capitalist’s lack of enthusiasm for such a struggle when the prize goes to the food monopolist or the landlord, and not to him.
In any case, if the workers have successfully managed once to demand a certain standard of living, they will continue to do this in similar circumstances. The dominant section of the capitalist class, who have political power, will then have to concentrate their energy against food profiteers, and others who try to overcharge the workers. Legislation is introduced forbidding price increases and wage increases above a certain level: anti-monopoly laws and laws restricting the activities of hire-purchase companies are introduced, with subsidies for keeping down mortgage rates, etc. These, incidentally, instead of being a hand-out to the workers, are really a money-saver to the capitalists. They have found from experience that it is sometimes better to give a subsidy to a minority of workers rather than allow a general increase in wages which would benefit all workers.
The theory that the workers are exploited twice — once at the point of production, and a second time in the market — is fallacious. It is also fallacious to imagine that the workers can have high wages and low prices. Wages are prices — if one is high the other is high, and vice versa. The worker must earn enough on average to live and re-produce his labour-power; below this his labouring capacity would be impaired. Cheating the worker would have this effect, and this would be detrimental to the interests of the capitalist class as a whole. The struggle against higher prices is not an aspect of the class struggle. This is a reformist struggle, which can only be resolved, if it can be resolved at all, on the political field by governmental action. The struggle for higher wages against the capitalist class, involving the proper use of the strike weapon, is a class struggle. Higher wages are the only answer to higher prices within capitalism. Workers should not dissipate their time and energy by supporting or initiating campaigns to establish lower prices. The much more simple proposition which would finally resolve this perpetual controversy over wages and prices is the abolition of the wages system. That is what Socialism is all about.
J.D.