Monday 24 September 2012

Waged and Salaried Slavery

A.R. Orage, editor of The New Age, was one of a number of writers in the early twentieth century who portrayed the truth about the employment system. Better to put oneself into the position of the owner of land and capital, and thereby work on one’s own terms, than to place oneself in a position of waged or salaried slavery to an employer. No matter what the perks, total dependence upon a wage or salary from an employer or employing body is wage (or salary) slavery. The capitalist can be an individual entrepreneur, but today is more likely to be an employing body, a private or state corporation. Either way, the employee serves the capitalist in a position of servility. As Orage explained in An Alphabet of Economics (1917), published during the First World War:
“The capitalist owns one or other or both of the two only tools employed in the production of wealth: elemental tools—part of the land, water, or air; or secondary tools—the implements of production: ships, machines, houses, etc., or legal promises of them. Now as, without access to the elemental tools or the use of the secondary tools, labourers, however skilled, can produce nothing, it follows that for permission to use them they must be prepared to pay, unless the permission is given them. But it is of the essence of the character of the Capitalist that he will not give permission to workmen to use the tools he possesses. He will only sell permission to them. And again, he will not even sell to them, if he can help it, but he will only lend to them. And, still again, he will not lend to them if he can help it, but he prefers that the labourers should lend themselves to him. This lending by labourers of their energy and skill to the capitalists who own the main tools of production is called working for wages; and in England four men out of five belong to this class. They are slaves of the tool-owner, since without his permission—who has, be it remembered, both classes of tool in his possession—they can produce absolutely nothing. This lending by men of their energy and skill to the owners of the tools of production is disguised in the case of the clerical, managerial, and professional classes in various ways—by calling a job an appointment, or a wage a salary, or by being permitted to wear a bowler and a white collar on work-days. In fact, however, all men who do not possess one or other of the tools of production are proletariat, depending upon the sale of their energy and skill for a living.”
Easier said than done? Watch this space! And see The New Home Economics Study Guide, published in The Social Crediter (Autumn 2012), available on

Wednesday 19 September 2012

What is Capital?

Since the onset of the Industrial Revolution, industry has been governed by the profit motive, that is, by production for the sake of profit. Throughout the twentieth century the most profitable form of production has been the manufacture of armaments for export. There has been a constant development of weapons, fighter aircraft, rockets and other delivery systems, as salesmen equip both sides in an actual or potential conflict. Good wages and salaries are paid to the workers who design, make, market and use weapons. All this is registered as positive economic growth by the tenured orthodox economist.

In 1917, during the First World War about a century ago, A.R. Orage, Guild Socialist editor of The New Age, wrote his An Alphabet of Economics. He sought to clarify how capitalism works through the wages system. This is what he had to say about “capital”.

capital.—If Land can be said to be the elemental tool by the proper use of which Man can produce articles of utility (for his own consumption or for exchange or as means to further production), Capital may be said to consist of man-made tools or, as we should prefer to say, of implements. A plough is an implement of production, while the land through which it is driven is an instrument of production. A plough thus belongs to the class of Capital tools, while the land is an elemental tool. A fishing-boat, again, is a man-made implement for the production of fish from the sea. It is therefore a Capital tool, while the sea itself is an elemental tool. But these simple man-made tools are only elementary forms of Capital. Man is the tool-making as well as the tool-using creature. He has made many elaborate tools for the production of wealth. Not only a plough is a tool, but the road that leads to the field in which it is used, the granary in which the corn is stored, the factory in which the plough is made, and, finally, the whole created system by means of which the plough is brought to the field and the corn to the factory, are tools. The sum total of man-made devices for pro­ducing wealth from the elemental tools—the sum total, let us say, of secondary tools, if we call Land the primary tool—constitutes the first form of Capital or what is usually called Fixed Capital. Even this, however, does not exhaust the forms of Capital. For Capital consists not only of tools visible and tangible; but, since it is man-made, it may equally well consist of whatever man can count upon as certain to become visible. Thus a plough is a tool visible and tangible, but it is obviously of no use unless it is believed that men can and will use it and that access to the land can be found for it. But for this belief or Credit the plough would be useless. Capital thus consists not only of the actual tools, but of the Credit men can establish for themselves that the tools will be usable and will be used. Most capitalists deal mainly in this credit rather than in the actual tools concerning which the credit exists. This form of Capital is an I.O.U., backed by all the existing tools and endorsed by the tool-users. It is their credited promise to produce what they undertake to produce: and it may be strictly defined as the latent usability of the existing implements of production, given the will of the labourers to use them. (A.R. Orage, An Alphabet of Economics, 1917, p7-9.)

Tuesday 11 September 2012

How the Division of Labour Creates Labour

Consider buying a packet of apple sauce mix in a supermarket. The packet is weighed and priced, giving the two items of information most central to the decision to make an ‘economic’ purchase. The packet may also contain some information on the source of the apples, perhaps the country of origin, South Africa, France or New Zealand. The packet may show the name of the store selling the sauce, but is unlikely to give much more information about the fruit.

Somewhere, a plot of land has produced an apple tree. The tree has been tended by people whose subsistence needs have been met from the environment. The apples have been harvested, sorted, crated, processed, packeted, transported and documented through a complex administrative process, passing through a series of complex social relations which lie outside the weight/price axis. As an economic commodity, the apples can be considered from different viewpoints:

To the purchaser in the money economy, the sauce is uniform in quality. From the cash economy view, the commodity has weight and price.

The product can also be viewed as part of the reward for the waged labour of the purchaser. The commodity draws the purchaser into the social relations of exchange.

To the person eating the product it assumes use value. The natural world viewpoint links the social world with the body. It is also possible to trace the apple from hand to hand, from the original growers through the processes bringing it to the hand of the eater. The integrated view establishes a direct relationship between the lives of each person in the growing, processing, transport, wholesale and retail chain.

The process can be reversed, or started at any point in the chain linking producer to consumer. Once the process of purchase and sale is taken out of its purely monetised context, new theoretical vistas emerge. Notions of service and social responsibility can enter into consideration. For example, in the UK parents are advised never to allow a child to eat an apple without first removing the peel because of its toxicity. To what extent should the grower/producer ensure that poisonous pesticides should be avoided due to their ill effects on the health of consumers? To what extent should the consumer insist that the use of toxic substances in the production and processing not only of apples but of all food, fuel, fibres and so on, does not adversely affect the health of those supplying the labour along the chain of production, and those living under the shadow of the pollution left in its wake? To what extent can the waged labourer or the consumer materially affect outcomes?

These questions cannot be grafted artificially onto mainstream economic theory. The New Home Economics initiates a whole new ball game by asking an entirely different set of totally relevant questions. A packet of apple sauce mix may provide plenty of employment all along the line, increasing the economic value of the product and hence registering as growth in the economy. But what is the real value of the product purchased, in comparison with the taking of a fresh apple (from a known local source) and popping it in the oven to bake in its skin, resulting in a totally delicious experience?