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Work as capital

March 1, 2012

I have been thinking about the nature of work a great deal lately. Perhaps because I am not doing any. It seems to me that one of the primary problems capitalist ideology has at the moment is a deep misunderstanding of the nature of work. Generally labor is seen as a business expense: the largest single expense that any company faces. This is simply incorrect. In exchanging labor for money the laborer more correctly gives the “capitalist” capital and receives a monetary settlement. By definition the laborer gives more capital than they receive. Labor productivity creates the extra value that is the actual basis of all business. You can have all the capital and product ideas you need, but nothing happens without labor. Or at least nothing truly productive. Finance is a world of its own. Certainly this is not restricted to the labor part of a business but extends throughout the “human capital” of the organization. Only raw materials are free of this type of capital, and strictly speaking this is also false since it has to be brought to a factory and can be done so only through human developed means. It is all about people!

Now the truly remarkable thing about this exchange of labor for money is that it also represents the basis of the other side of market economics: customers. Without labor exchange for cash there would be no customers for products. Thus labor dynamically creates value on both sides of the economic equation. Capitalism doesn’t work when labor is limited. Hmmmm Could this have anything to do with the economic realities of the moment. In response to to the housing bubble crash, businesses immediately started laying off labor–and the recession began. You get what you wish for. By treating labor as an expense, business sheds itself of its most dynamic capital and declines.

Economics is called the dismal science because it is insanely misdirected. It is not a science. It cannot be a science. It is only about people. It is only about psychology, and psychology is in worse shape than economics. This is of course overstated. They are only extremely spotty subjects marred by their deep misunderstanding of humanity. There are exceptions. Do you know whom they are??

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