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How do Objectivists justify Class Division/Abuse of Labor?

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Hmmm I've been reading into Objectivism lately and I have to say I am fascinated by it all but just a quick question,

How does objectivism justify the class division in society

particularly the division that occurs in the workplace in society,

where we have a majority of people working at the bottom, lets say in a factory,

and we have a minority of people benefiting from thier work at the top.

Objectivism claims that all should be entitled to the products of thier labor,

how then does that reconcile with factory owners who take all the shoes

made by the factory workers and sell them and pay them a bare minimal wage?

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One has to question your definition of "class division."

A business owner, with great risk, builds a business, creates the jobs for the "workers at the bottom" and enables the production of a product. Supply and demand determine the wages for both those at the top at at the bottom.

Once the product is produced, why do the "workers" now have a right to the owner's profits? Would you venture to guess what would happen if you decided to let the Govt. dictate how much the "workers" can take by force from the owners?

Also note that most businesses provide benefits for the "workers" that they would not otherwise have. And if they don't incent the "workers" enough to produce, the workers can leave and/or request a wage increase.

In other words, the free market works when left alone and no one's rights are violated. Isn't that more fundamentally important?

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It doesnt justify the class division. Objectivism is a philosophy that advocates capitalism. Under a truly free market people who recieved a "bare minimal wage" would either deserve it, or attempt to seek employment elswhere thereby reducing the amount of available labor forcing the employer to raise wages or reduce the size of their operation.

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The economic theory that claims that entrepreneurs and factory owners are "expropriating" value from laborers is, quite simply, wrong. The division of labor between managers and employees is not fundamentally different from any other division of labor that occurs in the marketplace, and none of it needs "justification." So long as everyone's individual rights are respected, no one is being treated unjustly.

Factory owners do not "take all the shoes." This is an incredibly simplistic and wrong-headed way of looking at the situation. If I accept a job as a factory worker, I have agreed (ahead of time) to trade the products of my labor for a certain amount of money per hour. Thus, what I am entitled to after a day's work is exactly what I have agreed to: my wage. That is the ultimate "product of my labor." This makes a lot of sense for the individual worker; what exactly would I do with 100 pairs of shoes? Money is a lot more useful to me, so obviously it makes sense for me to agree to a certain amount of money for the shoes I make.

Now, as to the question of what services the factory owners are providing, it's obvious after a moment's thought. They own the machines that the workers use, obviously; these machines enable workers to be much more productive than they would be otherwise. Typically, a company will also have a previously-set-up distribution chain which makes the selling of the shoes easier and cheaper. In short, both the laborers and the owners are cooperating to produce value (shoes, in this case), and they are paid roughly according to the value they contribute. If one group of people were systematically being overpaid, they would be competed out of business by a different firm.

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I understand what you're saying. But wouldn't you agree that in capitalist society, certain individuals can really get empowered and their position in the status quo, reinforced and consolidated by the economic system and law at the disadvantage of others? How can that be vindicated?

Theres a difference between economic power and political power. Either, by itself is benign, combining them is when it gets dangerous. People (workers) have free will, if they feel theyre being oppressed they have options.

Edit: I should clarify, by dangerous, Im referring to "crony capitalism" and such. Im not envisioning a Socratic ideal of a group of stoic politicians locked away from society in a monastery or something.

Edited by JayR
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I understand what you're saying. But wouldn't you agree that in capitalist society, certain individuals can really get empowered and their position in the status quo, reinforced and consolidated by the economic system and law at the disadvantage of others? How can that be vindicated?

First, you should define what you mean by "empowered." Objectivists would certainly agree that if individuals are empowered to use the coercive power of the government against other individuals (by buying political favors, influencing the passage of laws, etc), this is wrong and should be corrected. This is not part of capitalism as we conceive it. Everyone should be equal under the law, with individual rights which are respected, including property rights. Now, it is certain that in this situation, some people will end up with more money and resources than others. Some people will end up as managers, and others as laborers. There is nothing improper about this, in the Objectivist view. This does not "empower" individuals in any fundamental sense, so long as they cannot violate the rights of others. If your definition of "empowerment" has anything to do with an unequal distribution of wealth, then I think we need to clarify some issues first.

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Wealth is not some sort of "social product," whereby it is society's job as to how to distribute it. Wealth is produced by individuals, and once produced, it belongs to the individuals who have produced it. In the case where people enter into contracts with one another to produce wealth together (for example, inside a firm), they agree ahead of time as to how to divide the resulting products. For example, in effect an employee agrees to trade anything he produces for the company in exchange for the salary he accepts. This makes the situation more complicated than simply a lone producer, but does not change anything fundamental. Unequal distribution of wealth is simply not a concern, so long as people are entitled to what they produce.

Edited by Dante
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Hmmm I've been reading into Objectivism lately and I have to say I am fascinated by it all but just a quick question,

How does objectivism justify the class division in society

particularly the division that occurs in the workplace in society,

where we have a majority of people working at the bottom, lets say in a factory,

and we have a minority of people benefiting from thier work at the top.

Objectivism claims that all should be entitled to the products of thier labor,

how then does that reconcile with factory owners who take all the shoes

made by the factory workers and sell them and pay them a bare minimal wage?

On the unequal “distribution” of wealth and “class division” in society:

The Marxist doctrine of class divisions confuses “classes” drawn by arbitrary categorizations versus caste membership. There is no class conflict in a society in which every man is equal before the law, and each man has recognized his right to life. It is nonsensical to classify the members of a capitalistic society according to their position in the framework of the social division of labor and then to identify these classes with the castes of a status society.

In a status society, a man inherits his class by heredity, and remains in it to the end of his life, with few exceptions of extreme luck. Otherwise, he is prevented from changing his status by the State, who has codified the caste system in law.

But the arbitrary classes of Marx are very different from those of caste membership. The Marxian classes are based on positive productive contribution, which benefits all, and the different castes of a status society are based on the initiation of physical force, which results in others' corresponding loss. Entry to different arbitrarily formed income groups under capitalism is open to all. Their membership is fluctuating, and changes by a vote of the public every day in their spending and buying, thus promote and demote who should own the means of production, and there are no legal barriers preventing anyone striving for any amount of wealth he can produce and earn. The virtuous are rewarded by the use of their reason in best producing those values which increase the survival and well-being of mankind. (Cf. Ludwig von Mises, Theory and History, Chapter 7.)

On Marxist exploitation theory:

The worker does not trade his labor services for the goods he has expended his labor to produce, but for money payment. The difference between the wages the worker receives and the profits the capitalist receives are a result of time-preference.

Present satisfaction always comes at a premium over future satisfaction. The worker hadn't saved by reducing his previous consumption sufficiently below his income to accumulate the capital necessary, he wanted money payment while he worked, he was not willing to wait, and he was unwilling to be saddled with the risk that the goods may not sell or may sell for less. The capitalist saves the laborers from the necessity of restricting their consumption and thus saving up the capital for themselves, for waiting for the pay until the product is finished, and from the risk that it might not sell or may sell at a loss. The capitalist thus makes possible payment in advance of the sale of the final product on his capital equipment. He has performed a vital service of advancing time to the workers. He has underconsumed, saved, and taken the risk himself. Under capitalism, no one is preventing the workers from themselves saving, purchasing or homesteading capital goods, and working on their own capital goods, finally selling the product and reaping the profits. The capitalists perform the function of saving money needed to obtain capital goods and pay laborers in advance of the sale for producing goods further.

It should be seen that we reject the “labor theory of value” and the “iron law of wages,” as wages are determined by the discounted marginal value product and the law of supply and demand. (Cf. Eugen von Böhm-Bawerk, “Karl Marx and the Close of His System.” and George Reisman, Capitalism.)

Edited by 2046
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what then about the unequal distribution of wealth?

People are different. Are you saying that theres a problem inherent in this unequal distribution that needs to be rectified somehow? What about the unequal distribution of inteligence, or motivation?

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Objectivism claims that all should be entitled to the products of thier labor,

how then does that reconcile with factory owners who take all the shoes

made by the factory workers and sell them and pay them a bare minimal wage?

The shoe is incidental to the worker, it is not the product of his labor. The wage he is able to make for his labor is the product.

The shoe is the product of the person who owns the factory, who then has to trade his goods as best he can.

The laborer gets paid even if the factory is losing money, for as long as the factory remains open. The laborer gets paid when the place is in the red for all the costs of opening, the owner does not. The owner may never get paid at all if the business fails before hitting the black.

When you look at it this way, where minimum wage is an act of force against the business owner who is providing both good to consumers and wages to employees with the chance that they may never see a return on their investment much less a profit, it could be said that it is the owner of the business being exploited, not the laborer :pimp:

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what then about the unequal distribution of wealth?

The distribution of wealth will always be unequal and anyone who feels otherwise is kidding themselves. An unequal distribution of wealth is not a bad thing in and of itself unless you are a believer in the zero-sum fallacy which is one of the most widespread of all economic fallacies (the chess-piece fallacy and the broken window fallacy along with zero-sum are the most widespread economic fallacies I believe). What is bad is if these accumulations of wealth have been achieved by improper means, namely the use of political pull, coercive force, and so on that are only further exacerbated (i.e. made easier to do) by a mixed economy.

Edited by CapitalistSwine
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I think John Galt says it best:

" If you worked as a blacksmith in the mystics’ Middle Ages, the whole of your earning capacity would consist of an iron bar produced by your hands in days and days of effort. How many tons of rail do you produce per day if you work for Hank Rearden? Would you dare to claim that the size of your pay cheek was created solely by your physical labor and that those rails were the product of your muscles? The standard of living of that blacksmith is all that your muscles are worth; the rest is a gift from Hank Rearden."

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Thanks for all the replies guys, this is all very fascinating and enlightening.

In spite of all that, what would the objectivists say about the beggar on the street and consumerism?

I would say that the two topics are on the face unrelated and that the question is presumably loaded with implied guilt which I refuse to accept.

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Thanks for all the replies guys, this is all very fascinating and enlightening.

In spite of all that, what would the objectivists say about the beggar on the street and consumerism?

Objectivism is based around the freedom of the individual. Hopefully you can connect the dots on what an O'ist view of consumerism would be.

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well trying not to be broad, does Objectivism view Consumerism as a good thing?

Objectivism views Capitalism as a good thing.

Capitalism is an economic system in which people exchange good and/or services with each other freely to their mutual benefit.

I don't know exactly what you mean by Consumerism. Can you define it?

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well trying not to be broad, does Objectivism view Consumerism as a good thing?

Can you try to elaborate more about the concept involved here? Clearly man is not a ghost or a floating wraith, he needs to consume material values for his survival and well-being. There's any number of things you could mean by "consumerism." What is "consumerism"?

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