Dr. Dawg

Guest Post: People Before Profits?

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From constant reader and contributor ForgotToBuyTinfoil:

As the Covid-19 crisis of early 2020 unfolds, two major concerns have begun competing for attention: the health of citizens, and the health of the economy. On the face of it, these concerns seem mutually incompatible, calling to mind the old protest slogan, “People before profits.” It’s vitally important to save lives and prevent the health system from becoming disastrously overwhelmed; but at the same time, we run the risk of stalling an economic system that ensures the availability of goods and services, as well as the means for people to buy them. Without workers, there can be no harvesting of food, no manufacturing of masks or gloves, no shipping and distribution of supplies. But perhaps more significantly, there can also be no earned income to allow consumers to pay for these things.

Some governments, including those of Canada and the USA, have responded to the problem of income essentially by printing money and giving it away, either directly to individuals, or indirectly through subsidies to idled employers. This runs counter to two popular economic views: that governments should not run large debts, and that people should not get money for doing nothing. The former view has a basis in simple bookkeeping; the latter has a basis, not just in economics, but crucially in morality, and is related to what Max Weber called “the Protestant ethic.” But both views incorporate a belief at the core of much traditional economic thinking: new wealth must be justified by new value.

The applicability of this belief to certain modern investment instruments is moot. As Thomas Piketty’s critique of the relative rate of returns of investment income and earned income in the 20th century implies, modern capitalism makes it possible to generate significant wealth without creating any new value. This distortion of revered “free-market” principles is problematic for traditional conservative thinking, but for our present purposes it can be set aside. Whether or not leveraged investment is the real significant source of modern wealth, the expectation remains that people must work to earn money, so they can pay their own way.

This expectation was recently given an unusual twist by the President of the United States, Donald J. Trump, who at a press conference on April 4, 2020 made this peculiar comment about the government’s program to subsidize incomes: “We’re paying people to stay home. Think of it, we’re paying people not to go to work. How about that? How does that play? And they want to go to work by the way. They don’t want money.”

“They don’t want money.” This unreflective utterance from the President reveals something interesting about the transformation of Weber’s Protestant ethic over the centuries. According to Weber, the Calvinist Protestants of early America interpreted prosperity as a sign of God’s favour, effectively transforming industriousness into a virtue. In Trump’s inadvertently trenchant observation, we see how the virtue of work itself has become detached from the original impetus of prosperity as a sign of God’s favour. Industriousness alone is the way to earn God’s favour; money and wealth have nothing to do with it.

This curious detachment of the dignity of work from the dignity of food, clothing, and shelter, or more abstractly the dignity of human rights, has the potential to explain much about modern capitalist society: how, for example, a system that pays people as little as possible while extracting as much labour as possible can be considered not only acceptable, but virtuous. But it also illuminates a subtle point of Marxist thought, identified by Ellen Meikins Wood in her 1999 book The Origin of Capitalism: that capital is not just wealth or profit, but a social relation. This social relation manifests itself as an imperative, acting between all members of society, to compete with one another in industriousness and efficiency. The ever-ratcheting pressure to work as hard as possible, to extract as much value as possible, and to transform as many things as possible into commodities to support this relentless goal, is what drives capitalism. And underlying it is the ethic that work has intrinsic virtue.

Ultimately, this means that people themselves are transformed into commodities; this is not an economic equation, but a social relation. Thus, slogans such as “People before profits” miss the point. In the current system, people are profits. This is why, as the effort to save lives in the Covid-19 crisis threatens to bring the economy to a halt, we face a dilemma over how we can manage such a prospect without threatening lives in other ways. It’s also why the idea of universal basic income seems, to some, inconceivable.

If the crisis were short-lived, our economic system might be able to sustain the shock, right itself, and carry on as usual. But there are signs that the crisis will be prolonged, and the consequences for our economy extremely serious. This is the time to begin questioning our assumptions about the value of work and its relationship to wealth. Trump is right: people do want to work. They want to be active and productive as a means of self-fulfilment. At the same time, he is wrong: people do want money. They want it so that they can obtain what they need to support their quest for fulfilment. We have at last come to the point where we can separate these two strands, so inextricably tangled by the social relations of capitalism.

The Covid-19 crisis has the potential to force a radical shift in thinking, as traditional capitalist social relations are placed under threat of breakdown. We have an opportunity to forge new social relations, ones that value freedom over economic imperatives; ones where the slogan “People before profits” is at least a practical possibility.

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This page contains a single entry by Dr. Dawg published on April 12, 2020 12:09 PM.

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