In spite of all this toil – perhaps, in a sense, because of it – work is a good thing for man…because through work man…achieves fulfilment as a human being.
- Pope John Paul II, Laborem exercens (1981), n.9
Labour becomes attractive work, the individual’s self-realisation, which in no way means that it becomes mere fun, mere amusement…
- Karl Marx, Grundrisse (trans. Martin Nicolaus), notebook VI (1858) (Penguin, London, 1973), page 611
Work is not always attractive, but the variety of human attitudes to work is endlessly fascinating. They range from St Benedict’s laborare est orare ("to work is to pray") to Oscar Wilde’s work is the curse of the drinking classes. We are, to put it mildly, ambivalent about work. We love it, hate it, admire it, despise it, overdo it, neglect it, search for it, contrive to avoid it…
The Judaeo-Christian tradition has always set a high value on work, indeed describing God himself as a worker: the firmament showeth his handywork (Ps 19:1); he rested on the seventh day from all his work (Gen 2:2); Jesus works at the carpenter’s bench. God put Adam to work in the garden, not as a punishment, but even in his state of innocence, when Adam’s work, as St Thomas tells us, was not laborious, but joyful, being the exercise of his natural powers.1 Seest thou how…by works was faith made perfect? asks St James (Jas 2:22). In the Proverbs, we read that the labour of the righteous tendeth to life (Pr 10:16); in the Talmud, that idleness leads to unchastity… [and] to idiocy.2 Work is thus seen in a very positive light, as an end as well as a means. It should not only earn money and generate things we desire; it should also contribute to the health, happiness and self-fulfilment of the person who does it.
Perverse though many of his theories were, Marx at least displayed a high respect for the human value of work, doubtless reflecting his Jewish background. Too many of his opponents have abandoned this respect, with lamentable consequences.
The Catholic doctrine of work
The Catechism (n.2427-8) affirms the honourable standing of work in Catholic theology: Human work proceeds directly from persons created in the image of God and called to prolong the work of creation…hence work is a duty… work honours the Creator’s gifts…everyone should be able to draw from work the means of providing for his life and that of his family, and of serving the human community.
In Laborem exercens (1981), John Paul II condemns (n.7) the nineteenth-century economists’ view of work as a merchandise that the worker… sells to the employer and notes with approval that this has given way to more human ways of thinking about work. But since he wrote that, we have largely reverted, under the influence of 'neoclassical' and 'Austrian' economists, to nineteenth-century attitudes. This is an inexcusably stupid neglect of the lessons of history. It was, after all, disgust with the treatment of labour as mere merchandise that spawned the communist and socialist philosophies that the above-mentioned economists loathe.
Labour treated as a commodity
Today, orthodox economic theory explicitly treats labour as a commodity that is bought and sold in the market. Rates of pay are simply prices determined by the interplay of supply and demand. Yet earlier ‘classical’ economic theory recognised a floor for wages: a basic subsistence level. Thus Adam Smith’s friend Turgot, finance minister to Louis XVI, wrote that in every kind of labour it must, and does indeed happen, that the worker’s wage is limited to that which is necessary to provide for his subsistence.3
More recently, economists of the 'Austrian school' broke through the floor. They reasoned that the market price of any commodity is normally the price that the cheapest buyer is able (or willing) to pay, and that wage levels (prices of labour) are no exception. Thus Carl Menger, founder of the Austrian school, tells us that neither the means of subsistence, nor the minimum subsistence level, can be the cause or the principal determinant of the price of labour.4 On this theory, there is no reason why market wage rates cannot fall below subsistence levels, as Menger notes on the very same page: a seamstress in Berlin, even if she works fifteen hours a day, cannot earn enough for her subsistence. As John Paul observes, the 'poor' appear… because a low value is put on work.5
Nevertheless, Menger shows no sympathy with those who argue for better wages; they, he says, are demanding nothing less than paying labour above its value.6 In the eyes of neoclassical and Austrian economists, market values are the only true values. For them, it makes no sense to pay labour more than its market value. Indeed, it is generally impossible to do so, since a firm that pays its workers more than they are 'worth' is heading for bankruptcy.
The failings of economic theory
We need to examine more closely this apparently plausible argument. The market value of labour relates to the market prices of what the labour produces. Free-market theory assumes that producers cannot influence market prices; they just have to accept whatever prices the market dictates. That doesn’t sound entirely convincing, does it? Never mind, it seems right to economists who live in ivory towers.
Accordingly, if a worker demands better wages, his boss replies: I cannot pay you any more. I am paying you what you are worth, based on what the goods you produce fetch in the market. I cannot put up my prices, they are imposed by the market and beyond my control.
All this relates to what happens in the economists’ paradise of fully competitive markets, with no trade unions, guilds, producers’ associations, or cartels, nor any firms powerful enough to influence prices. There is, of course, an alternative in practice. Workers can combine to demand more adequate wages. If they are sufficiently united and make a firm enough stand, employers will have to pay them more. To recoup this extra cost, they will have to sell their products at higher prices. To achieve these, they will doubtless need some agreement among themselves to refrain from ruthlessly undercutting each other. Like the workers themselves, they will have to find a way to influence the market, rather than meekly submitting to its diktats. This means committing what free-marketeers consider the mortal sin of cooperation.
Solidarity
Briefly, then, the key to better rewards for labour is solidarity, both among workers and among employers. Just as Leo XIII tells us in Rerum Novarum, and as John Paul II in Laborem exercens (n. 20) commends unions of industrial, agricultural and white-collar workers, and also employers’ associations. But solidarity is among the things that free-marketeers most detest. They cannot stomach its interference with their sacrosanct 'negative freedom'.
It is not uncommon for economists to denounce the Vatican for pronouncing on economic matters, which (so say the economists) it does not understand. And, from time to time, the Vatican gets its own back by castigating the economists.7 We have good reason to be confident that the Catholic view is right, and thus to refuse to be intimidated by pretentious, overweening free-market dogmatists.
Economists reject solidarity
You may well ask, why do economists call so insistently for a free-market world uncontaminated by unions, trade associations and suchlike solidarities, if this arrangement gives such low priority to workers’ interests? After all, we spend much of our lives working for our living, whether as employees or as self-employed entrepreneurs. Why then should we favour an economic system that cares little for the interests of ourselves in our capacity as workers?
One can answer that question in various ways. Firstly, free-market economists hold that untrammelled markets provide maximum 'freedom' for individuals. This means negative freedom, ie absence of constraint by the decisions of other people, or by cooperative agreements with them. I have argued in a previous article8 the case against the exclusive pursuit of this kind of freedom.
Secondly, free-marketeers argue that cooperative action by workers or firms, aiming to prop up wages or prices, tends to cause inflation; and that is their bête noire. They also argue that government policies aimed at full employment are inflationary. Such policies often foster abundant money supply and credit, thus boosting demand and pushing up prices. Moreover, with low unemployment, workers are able to bid up wage rates, increasing producers’ costs and forcing them to raise prices.
Thirdly, free-market economists insist on giving absolute priority to the interests of consumers over those of producers (entrepreneurs and employees). This attitude goes back to Adam Smith: Consumption is the sole end and purpose of all production, and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumers.9
More recently, we find a memorable description by the influential Austrian academic economist Ludwig von Mises of his own ideal of the ‘sovereignty of the consumers’ in a free-market economy. His style is somewhat reminiscent of that of Marx in the purple passages of Das Kapital:
The captain is the consumer…the consumers determine precisely what should be produced, in what quality, and in what quantities…They are merciless egoistic bosses, full of whims and fancies, changeable and unpredictable. For them nothing counts other than their own satisfaction…In their capacity as buyers and consumers they are hard-hearted and callous, without consideration for other people…Capitalists…can only preserve and increase their wealth by filling best the orders of the consumers… In the conduct of their business affairs they must be unfeeling and stony-hearted because the consumers, their bosses, are themselves unfeeling and stony-hearted.10
Nothing in the context of this paragraph suggests that Mises, a fierce opponent of Marxism, disapproved of the unpleasant situation he describes here. On the contrary, it is clear that he is painting the free-market economy as he believes that it naturally is and should be.
To be sure, his words give a pretty accurate description of how we generally behave ‘in our capacity as buyers and consumers’. We tend not to give very much thought to the interests of the people who produce what we buy. All the more reason, one might think, why the economy should not be run solely in the interests of consumers. But free-marketeers care little about the amenity or considerateness of society. In the approving words of another leading Austrian economist, Friedrich von Hayek:
in a free-market society we gain from not treating one another as neighbours.1
Seeing labour as a burden
Many economists take the view that work is a disutility: an undesirable thing that we all want to avoid so far as we can, a burden that we bear solely for the sake of its output. As Mises observes, labour is a means, not an end in itself.12 This theory flatly denies all that Catholic doctrine, not to mention other philosophies, has to tell us about the intrinsic moral value of work.
The disutility theory supports the Austrian argument that it is wrong to pay benefits to people who are (or claim to be) unable to work; for, according to the theory, they will jump at any chance to avoid the tiresome necessity of working. Mises fulminated against compulsory sickness insurance, condemning it as weakening or completely destroying the will to be well and able to work.13 Likewise, assistance granted to the unemployed…makes it easier for the unemployed to remain idle…it is a means of making unemployment last rather than of making it disappear.14 For Mises, it seems, the 'working class' was a race of incorrigibly lazy scroungers.
Another objection to the disutility theory is that it encourages the replacement, wherever possible, of human work by machinery. This has two bad consequences: it tends to increase unemployment, and it increases our consumption of electricity or other forms of energy.
In the past, the unemployment argument was easily refuted. Mechanisation enhances productivity – it enables more output per man-hour of human effort. Accordingly, it was argued, so long as rising productivity stimulates enough growth, it need not entail higher unemployment. Productivity was (and still is by many people) considered the 'holy grail' of economic policy, since it allows us to produce more and more consumer goods without additional human toil.
Discard the throwaway economy
But today we know that ever-increasing production of consumer goods is, globally speaking, a strategy that has hit the buffers. For it is causing intolerable pollution, climate change, and depletion of natural resources. Moreover, since there are still large numbers of poor people in the poorer countries, and increasingly in the richer ones too, who should be able to consume more, it is clearly necessary for the richer among us to consume less wastefully. We need to discard the throw-away economy and revert to the good old custom of making things that last donkey’s years, repaired or modified when necessary.
It seems, then, that the strategy of striving for ever higher labour productivity is obsolete. But this strategy is not based only on the theory that we all want to do less work. There is a more compelling motive: it is generally cheaper to do things mechanically, or electronically, than by hand. So, market forces oblige us to automate. How can we redirect these forces?
If it is usually cheaper to use non-human energy rather than human effort, even though the latter is often underpaid, this suggests that energy is underpriced. And indeed it is; for energy prices reflect the costs of producing of oil, gas, electricity etc, but not the costs of social and environmental damage related to the production and use of energy.
Existing tax structures are unhelpful. The former French prime minister Michel Rocard complains that 38% of our charges levied at source are today based on payroll (social security contributions, income taxes, training levies etc…) and only 3.5% on energy from fossil fuels.15 This is a widespread, not merely French, problem. Suppose we reversed Rocard’s percentages; surely we would see less effort to replace people with machines!
Trade Union membership
The perverse economic doctrines I have described have led us into a deplorable situation concerning work. It is not simply that unemployment is, and has long been, far too high in most places. We see also persistent degradation in the general conditions of work and treatment of workers. Yet, despite the growing need for it, solidarity among workers has been diminishing for many years. Membership of TUC unions has halved from 12.2 million in 1979 to 6.2 million in 2009.16 In France, the percentage of employees who are members of unions has fallen from around 22% in the early 1970s to around 8% today.17 Even in Ireland, where membership has been swollen by exceptional economic growth, the percentage has slipped from 45.8% in 1994 to 32.2% in 2006.18
In politics, we recognise the need for 'checks and balances' to prevent politicians, or organs of the state, from acquiring and abusing excessive powers. But many economists are unwilling to recognise a similar need in the capitalist economy. In the absence of adequate countervailing forces, capitalists – who, unlike politicians, do not have to seek the general public’s votes every few years – become overpowerful and behave badly. Thus they provoke public reaction against the capitalist system.
Although I am a retired stockbroker, I am also a trade unionist – a member of the London-based National Union of Journalists, which has many Irish members and a thriving branch in Paris. I see no anomaly in my position. Capitalism needs worker solidarity for its own good, as well as for that of its employees.
Angus Sibley is a Paris-based analyst who writes at Equilibrium-Economicum.net. This essay first appeared in the monthly "Doctrine and Life" (Dominican Publications, Dublin, April 2010); see www.dominicanpublications.com.
References
1 St Thomas Aquinas, Summa Theologica, part I, question 102, article 3
2 Kethuboth (Babylonian Talmud), chap. V, folio 59b
3 Anne-Robert-Jacques Turgot, Réflexions sur la Formation et la Distribution des Richesses (1769), para. 6
4 Carl Menger, Principles of Economics [Grundsatz der Volkswirtschaftslehre, 1871], trans. Dingwall & Hoselitz (New York University Press, 1976), chap. 3, #3E
5 Laborem exercens, n. 8
6 Menger, loc. cit. supra
7 For an outstanding example, see Pius XI, Quadragesimo Anno (1931)
8 Angus Sibley, The Misconceptions of Libertarian ‘Freedom’ in Doctrine and Life (Dublin, September 2009)
9 Adam Smith, The Wealth of Nations (1776), book IV, chap. 8
10 Ludwig von Mises (1881 – 1973), Human Action (William Hodge, London, 1949), chap. 15, #4. Mises spent much of his career in America, where he is still has a huge and near-idolatrous following; see www.mises.org.
11 Friedrich von Hayek, The Fatal Conceit (Routledge, London, 1988), chap. 1
12 Mises, Human Action, chap. 7, #3
13 Mises, Socialism [Die Gemeinwirtschaft, 1922], trans. J Kahane (Yale University Press, New Haven, 1954), part V, chap. 2, #3
14 Mises, Human Action, chap. 30, #3
15 Michel Rocard and Yves Martin, Pour une fiscalité verte in Le Monde (Paris), 9 January 2010
16 Figures from the TUC website (www.tuc.org.uk)
17 Dominique Andolfatto and Dominic Labbé, Histoire des syndicats (Editions du Seuil, Paris, 2006), chap. 7
18 Frank Walsh and Eric Strobl, Recent Trends in trade union membership in The Economic & Social Review (Dublin), vol. 40, no. 1 (spring 2009)
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