A Paradigm Shift Away from Laissez Faire Economic Ideas 5 1 2021
There is an idea that had gained traction in the 80’s in particular, that was if capitalists made large profits, and used the money as revenue, the workers would benefit. This idea was called”laissez faire “. There were also fantasies about not having to use the state to prop up capitalist industry.
The presence of this large group of people who are mostly service workers, producing mostly luxuries, restaurant workers, for instance, is part of capitalist industry. Every increase in productivity displaces workers in industry; the machinery becomes more advanced, the labour less skilled, or redundant with the advances in machinery.
This creates a constant industrial reserve army of workers, what Marx called attention to, who are lucky to find employment, and it is often unskilled if they do, as the job the worker used to do has been eliminated. It is replaced with a machine, and an unskilled worker.
These workers who have been shed by modern industry are often forced into luxury production, or used as some form of menial servant. The service industry is basically this. This is supposed to be a consolation for a displaced worker, that the wealth will trickle down somehow when the bourgeois create capital through the exploitation of the worker, and the worker can become a low wage service worker now that he is no longer producing necessary commodities.
They spend their revenue on these luxury goods, which do not increase profits. Luxury production is not goods for the workers to consume. This form of production is for the bourgeoisie, and is for them an expenditure, rather than an investment.
The jobs this supports are not much different from menial servants, which are what Malthus suggested the workers should be thankful for; a large number of workers displaced by industrial progress harnessed by capitalists who are reduced to menial servants. We see this in the number of service occupations that are not far removed from Mathus’s menial servants.
There is more profit to be made as industry progresses, and machinery that displaces workers increases surplus value when productivity increases. It creates the industrial reserve army of workers, a capitalist phenomenon. The work is unskilled, and throttling the capitalist mechanism forward creates these workers.
Perhaps they could content themselves as being porters, barmaids, massage workers, etc. The surplus value has to go somewhere, its production can only be reinvested to a certain degree. The population rising justifies the surplus; it is for more workers to be able to labour.
But what happens to the surplus when the workers can only consume so much of it, as they are paid wages that are not able to consume all they are producing? If they were paid the value of their labour by the capitalist, there would no longer be a capitalist. The whole system is based on producing a surplus, and it has to be consumed somehow.
This provided Malthus and the bourgeois a way out, namely increasing the number of servants and menial labourers. This would seem to be a root of the laissez faire economic ideas which were popular in the 80’s.
Advancement of machinery lowers the value of the product. It is not the fault of machinery the capitalist relationship of exploitation exists. It is a social order, a historical condition. It is the way it is used, that more expensive machinery reduces the workers control of the means of production.
The presence of large numbers of people who are in menial labour indicates a surplus is coming from somewhere, supporting the unproductive classes. Trickle down ideas justified the increased number of these people.
But the question of if it really did is being rejected. It may have created more capital, but it increased the proportion of the working class, and left about 1,000 families in control of most of the joint stock companies shares. They control the surplus value, and laissez faire was a theory that supported them. The idea of the state money being somehow separate from profit was just plain silly, every crisis bailouts of trillions of dollars occurs with the state money.
This is because taxes come from profit, and it is claimed by those who pay into the pot, so to speak, of state money. It is used in times of crisis to keep the business making a profit.
Clearly all capitalists do this. Yet they suggest the state should have less role in capitalist industry, which is a contradiction.
But the question of where the surplus goes that cannot be reinvested seems to be answered by expenditure of revenue by our capitalist. The unproductive expenditure would seem to be at odds with abstinence, which is often preached as justification for a bourgeois to have gotten control of business and made a profit, allowing for them to exploit the working class.
On one hand you have the capitalist wanting more consumption of his commodity, on the other hand his workers are paid minimum wage, and expected to be spendthrifty.
The consumption of luxury items and menial servants, the basis of the restaurant industry, is from the surplus value created in production for capitalist enjoyment. It doesn’t matter to them the dishwasher or busboy is an unskilled worker getting minimum wage, working 12 hours a day. This is supposed to be right, the wealth is trickling down. But from the perspective of the worker the condition is considerably different. On one hand you have massive wealth, accumulating capital, on the other an industrial reserve army of workers, who have to labour in luxury production or as service workers for the minimum of wages. Trickle down economics not only justifies their position, it perpetuates the exploitation of a class who is destined to labour.
Nicholas Jay Boyes
Milwaukee Wisconsin
American Democratic Republic
5 1 2021
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