Saturday, May 06, 2006

Productive people of the world, Unite!

by Berly

Worker and labour is the big things on May. After all May day just passed and all the fuss about Indonesian labour law still on the front-page.

And my history of economics class just has a session on Marx. The teacher is a ardent (albeit moderate) Marxist and currently writing a book with working title of “Marxism as Freedom.”

Don’t get me wrong, one of the reason (beside behavioural and institution approach) I applied to the PhD in Economics program at University of Siena is the left flavour in curricula and within faculty members, which is rare on mainstream program. I read the materialist interpretation of history and The Capital part I during my undergrad. I still feel that exploitation, imperfect mobility of labour and asymmetric bargaining power is under-addressed in current economic analysis.

But I have a problem with the Marxist rallying cry of “Worker of the world, Unite!”

In classic Marx analysis, there are two classes of people. There are capitalist who own capital/factory and there are worker who only has their labour to offer. I am not even going to talk about labour theory of value where different skill and effort of labour force is not acknowledged, just rambling about definition.

First, who are the labour & capitalist now?

We must admit that labour is such a wide ranging category now. An MBA from Harvard that work in Wall Street, PhD in economics that advise governments’ policy, surgeon on hospital, bankers in J.P Morgan/Citigroup, football star in Italian Serie A and IT engineer in Silicon Valley are all labour. Of course the sweatshop worker and farm labourer also in the category of not owning the mean of production. It’s safe to say even if they all equally labourer, some are more equal than other.

And the capitalist… there are still conglomerates like Salim group in Indonesia, Rupert Murdoch in media and McDonald/Coke in consumer product. But that definition also include owner of small tile factory, small shop/restaurant and artisans that could not be mistakenly taken as the previous groups.

Second. Are being a worker is certainly worse than being capitalist/factory owner?

Would you rather be Michael Jordan or Broto family in Losmen Sinetro? The first is a worker and the second are owner of mean of production. Just put people in those two category is no longer enough to explain (econspeak: degree of correlation) their welfare.

Third, how can someone become capitalist?

The classical Marx concept is sufficient to explain the society of Industrial revolution era where class membership is determined almost solely by birth. It is inevitable that those two come into conflict. But now the role of education (even if the richest person in the world is still a college drop-out) and market opportunity (J.K. Rowling is richer than Queen of England now) are big determinant of wealth. Welfare and social status is more merit-based today than it was two hundred years ago. (but I still prefer to be Michael Jordan).

So I prefer the unity of productive people for good cause (not a fan of rich heirs wasting their family's money). A rockstar teaming with software billionaire and Professor in Economics done more for Africa than all the class conflict and land seizure that could be done there. (btw, that is capitalist and worker working together).

Amartya Sen once asked “Equality of What?.” Do you want a world where everyone have equal wealth (but each person’s need maybe different), regardless of contribution (how to make people contribute according to full ability). Or do you prefera world where everyone start equally, no family and all brought up in a commune? Or do you would like to see a world where everyone has equal chance to success?

Call me a conservative but I like the arrangement of modern welfare state (especially in Europe). I find it a bit Rawlsian that basic need is within reach of everyone. Here they got health services where (almost) everyone is insured, education where quality and cost are not inversely related and rule of law. I’d say they put big stress on equality of process/opportunity and some application of equality of starting point (if you are very poor, state will provide income). You can be successful and rich, but that mean you pay more tax (worker and capitalist). Don't just take it from me, Jeffrey Sachs seem to think along similar line (to read click here).

Flaming rhetoric is still needed to shake people from completely accepting the world inequality. But it is the quiet and behind the screen policy that could make the real difference.