David: First, one must make the case that a class is an actual thing.
FOTH : I think Adam Smith gave a good concise formulation of class conflict: What are the common wages of labour, depends everywhere upon the contract usually made between those two parties [workers and capitalists], whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.
Both “classes” are in fact engaging in the same behavior, getting more and giving up less. They are not different behaviors. The exchange of labor for money is an exchange. Both parties are getting something they value more for something they value less. This is not the distinction between the “classes”. If this was true, then every exchange of labor for any good or service would make a person a worker, and any exchange of money for labor of any type would make him a capitalist. There’s not enough in that definition to clearly delineate a line that divides mankind into classes.
FOTH : I think even Austrians would agree that workers should try to bargain for the highest wage possible and that capitalists should seek the highest profits possible. As Mises’s calculation argument implies, the quantifiable monetary calculus is what defines the relationship between capitalist and laborer. Economic calculation only makes sense if we assume that people are trying to maximize their money. Thus, the relationship between capitalist and laborer is a competitive one, one where each’s goals is mutually exclusive, a zero sum game. Every increase in wages for the worker signifies a loss of profits for the capitalist. This is clearly class conflict. The fact that this behavior wouldn’t occur without class should be evident because this behavior is what constitutes the classes.
Austrian Economics never argues about what should happen. They explain what does happen. What Austrian Economics explains is that in the market economy wages will rise, and profits will fall. Any large profit, is a reward to the producer that enables him to invest in new productive efforts. The large profit is also a signal to other market actors that there’s money to be made producing the same (or similar) goods and services. This drives the prices of hte products down, and drives his labor costs up, as the new producers enter the market and compete for workers.
If the relationship is competitive and not cooperative, then every exchange is in fact competitive and not cooperative. This can only be true if as you’ve stated elsewhere exchange is viewed as a zero-sum game. More on that later, due to your use of the phrase in this response.
FOTH : I don’t think class conflict is a good solution to the problem of scarcity. There’s nothing in the concept of scarcity that suggests that competition and conflict would be a good solution. I think the prisoner’s dilemma shows that when we approach our relations with others as a zero sum game, we all lose.
You misunderstand, scarcity produces conflict. The socially peaceful response to the conflict generated by scarcity is to seek social means to reduce the costs incurred by actively fighting, and thus reap better rewards in aggregate to the members of the social group. Please note that you have described exchange as a zero-sum game. “When we approach our relations with others as a zero-sum game, we all lose.” Then I think you ought to take this admonition to heart. If one views exchange in this way any explanations of the economic and political life of man forces him into conflict, and as you say we all lose. If on the other hand you view exchange (a peaceful interaction) as a win-win, then one can in fact imagine that in free and fair exchange the state of man in reality is continually raised. Doesn’t history bear out that explanation of what happens in reality? Please find a way to make the argument that the advances in science, economics, production aren’t directly responsible for the rise in man’s condition from his hunter-gatherer initial conditions, to the point where the average poor person in a first world country is obese and has a cell phone.
FOTH : I don’t see how law can eliminate class. Who is imposing these laws? What if some people disagree with them? Wouldn’t they constitute a different class? And if no one disagreed with the laws, then why would they be necessary in the first place?
You misunderstand me, you are asserting different conditions that men find themselves in, whether as a result of circumstances out of their control (birth, different raw capabilities), or circumstances that they choose (whether to save or to consume the fruits of their labor), are the source of the classes, and that these classes cause conflict. I’m saying you completely misunderstand the nature of man, action, scarcity, and social interaction.
Scarcity forces man to choose which of many possible avenues of production and consumption to take, which actions to engage in and when. Scarcity forces men to resolve between themselves which ends to put a scarce means to. Property (and the laws/norms that enforce and define it) are a social construct that provides certainty, such that man is able to focus not on simply fighting with his fellow man for food and shelter, but instead allows him to cooperatively engage in much more circuitous productive efforts. The energy and time spent in fighting his fellows can instead be spent in producing goods and services that improve thier lives and raise that social group above simple subsistence in a harsh deadly world.
David : If instead you argue that property itself is the issue, I’ll demonstrate that property is a necessary outcome of action. And that property laws (rules that define the boundaries of legitimate use of matter) always exist in every society, and will under this hypothetical classless society. If laws about the use of matter exist, they will either produce the same capitalist social interaction we see today, or produce some stratified hierarchical structure of unequal access to property (before the law, not in distribution), OR society will degenerate to subsistence level hunter/gatherer lifestyle.
FOTH : Well, as David Graeber and others have argued, a lot of the social interactions in today’s capitalist society actually could already be described as “communist.” Workers within a company, for example, don’t perform monetary calculation with each other in order to complete tasks. The internet and open source community contains many successful examples of non-market production. Wikipedia, Firefox, and Linux rival the equivalents produced by capital.
That doesn’t mean economic exchange isn’t a viable means to engage in social cooperation. It simply means that in some places and at some times, it’s not efficient or worth it to the actors involved. That there can be sufficiently valued returns to bring action into existence without it being the exchange of money.. Awesome, that explains my wife not charging me for certain favors I get from her.
I’m very familiar with open source software, I’m a software developer, and have played in a few communities. I understand the economics of it very well. It’s not communistic, in the sense you imagine. Read this paper http://www.catb.org/~esr/writings/cathedral-bazaar/cathedral-bazaar/
If you look closely at these communities there’s are multiple specific tradeoffs for participation. The primary one is in the value returned to the participant. Most open source software is developed by people who get value from the use of the software directly. Or as my company does, people hired to participate, due to the value the ocompany can get from solutions built using such software. The community is a direct backlash against misappropriation of design (as opposed to instance of design) as a commodity.
Copyright and Patent laws create false scarcity where it does not exist. New ideas are scarce, existing ideas are not. Copying an idea is cheap. Copying software, data, any digital information is cheap. Open Source software is a specific backlash against the devastation of the software market by corporate copyrights and patents. As developers we value the content we generate, and when we go to solve problems that we constantly encounter over again, not being able to use a solution we’ve created in the past, when there is no real scarcity issue is obviously ludicrous.
The mistake of interpretation of these projects is in thinking that what happens to produce those products isn’t a production effort that involves investments of capital. The labor spent is capital. Human action tells us that the people who worked on the software got value from the work. Look at Red Hat, they generate and sell products based on Linux. They are able (so far to make a profit) they invest a fair amount of their profits in continuing to work on the core Linux kernel. They generate a lot of software content that they contribute back into the open source community. The gain also the effort of lots of other developers they aren’t paying directly.
I’m sure you understand that the please for donations on Wikipedia, demonstrate the harsh realities of any productive effort. Wikipedia is not a counter-example. Millions of people around the world run private websites at a loss because it serves another end to them. Wikipedia is no less that, however, it’s become part of the internet ecosystem, currently it relies on the donations of those who are willing to donate to the site to keep it up. That’s a version of payment for service.
I’m also very familiar with the history of Firefox from it’s origins in Netscape, and the transition to the Mozilla project, and the eventual rise of the Lightweight Firefox which ended up essentially killing the heavyweight Mozilla browser suite. It was a competitive response to the takeover by Microsoft.
I’d continue to look at the internet and profit models in that domain. They are constrained by the facts of that specific continuum, but the behaviors of people are still consistent with the underlying principles of human action. In particular notice that scarcity is not quite the same in the internet domain. The scarce resources are 1)Processing power, 2) Memory, 3) Bandwidth, 4) Unique specific content.
But once content is generated, it’s simply a matter of creating interest, at that point the content can command the other 3 scarce resources and get itself replicated (in a viral fashion) anywhere in the world.