Review of Thier’s Book “A People’s Guide to Capitalism,” Part Three

I recently participated in a group called No One Is Illegal here in Toronto. The group decided to provide a zoom reading meeting every week to discuss the book A People’s Guide to Capitalism, by Hadas Thier, with many participants not belonging to the group but interested in understanding more about capitalism. We read the book in parts, with each participant taking turns to read out loud a section, with questions to be asked and discussed after each section or difficult part. The group did not finish the book–the number of participants dwindled; it is unlikely that there was much emotional attachment to understanding–despite the participants’ apparent interest in understanding the nature of capitalism.

I sent along some comments to the group (but not to the other partcipants) in order to provide the group with my understanding of the nature of capitalism–which does not always coincide with Thier’s view.

The following is what I wrote before the next session:

P. 73:

But in pre-capitalist formations, exchanges between communities or individuals were “simple” in the sense that the point of these exchanges was to trade commensurate items. Communities could trade any surpluses they had accumulated in order to obtain different goods of equal value. A tribe could, for instance, trade their surplus of kola nuts for another tribe’s iron rods for tool making.2 This type of direct barter could take place among individuals as well.

This idea of “equal value” fails to see how value is generally applicable only in a society dominated by a class of employers. From John Weeks, Capital, Exploitation and Economic Crisis (2010) , pages 14-17:

Private labor and social labor

Engels and others before and after him took the determination of the quantitative aspect of exchange as the central problem of value theory.2 Over 100 years later this approach continues, frequently in the form of the belief that “proving Marx right” requires proving that “labor time determines prices”. The important analytical problem is much broader: how to analyze a society characterized by the general production and circulation of the products of labor as commodities.

The central characteristic of the capitalist mode of production, from which all others follow, is that the private labor of individuals is not directly social. It must be rendered social by the exchange of products as commodities. Labor is directly social when the status of the worker, the product he/she produces and its subsequent distribution are determined prior to production and distribution. In all societies individuals labor, but within capitalist relations of production this labor is carried out in production units that are socially isolated.3 Producers discover through the exchange of their products whether their individual production decisions conform to the requirement that society as a whole be reproduced in a sustained manner. This reproduction occurs via the interaction of commodity producers, in which individual labor must be integrated into a social whole. The labor theory of value is the analysis of how individual labor becomes socialized and explains this process through an analysis of how concrete, specific labor is rendered abstract.

In capitalist society, the relations of production dictate specific laws of exchange. The direct producer, for example the worker on the shop floor, has been separated from the means of production and can only be reunited with them via exchange. This exchange which reunites workers and the means by which they can produce commodities occurs when the capitalist advances money to hire workers (labor power) and other ingredients of production (the means of production).

In all societies concrete labor is expended in a labor process to create products that feed, clothe and house the population. This concrete expenditure of labor power provides the material basis for the circulation of commodities. However, different commodity producers may expend different quantities of labor time in the production of the same product. Exchange itself does not imply a standard or normal expenditure of concrete labor time in production; on the contrary, the exchange can create a superficial equality that conceals differences in concrete labor.

Exchange itself renders commodities commensurate. Specifically, exchange renders the same commodity commensurate among its producers. The analytical task is to explain whether and how there should be a tendency for those producers of the same commodity to operate with similar efficiency. It should be obvious that by some mechanism the social interaction of commodity producers establishes a norm in efficiency to which all gravitate. One could immediately invoke the word “competition”, and assert “competition creates the tendency/ pressure for the equalization of efficiency among producers”. However, this assertion says no more than unequal things become equal by a process named “competition”. Competition itself requires explanation, and has no explanatory value without specification of the social relations within which it operates. Specification of these social relations implies specification of the class relations underlying competition.

Consider first the case of individual producers that own their means of production. For simplicity, assume that the inputs used in production are produced within a self-contained labor process without exchange. A credible example might be a subsistence farmer selling a portion of his product. In this case, only the final product of the labor process is a commodity. The means of production, both equipment and current inputs, are produced by each producer and do not directly face the discipline of competition. There is no social mechanism for bringing about a normal expenditure of labor time for the means of production. In such a case, the limited function of competition is to impose a uniform selling price in a market place. Price is a “merely formal moment for the exchange of use values”.

This hypothetical example is not commodity production. Exchange does not appear until the end of the process, when all aspects of the labor process have been determined independently of exchange. Because the means of production are not exchanged, the producer faces no direct necessity to expend any specific amount of labor time on them. The only objective necessity is that his or her total labor expenditure (and that of the family) on use values produced, exchanged and not exchanged, be sufficient to allow for the sustained survival of the household. Should some producers be able to deliver their commodities with less expenditure of effort than others, these producers will enjoy a higher standard of living. This higher standard of living of some exerts no pressure on the less efficient to raise efficiency. As envious as the less efficient producers may be, the differences in concrete labor time expended may be beyond the ability of producers to change, due to differences in soil fertility, size of family and other factors.

Comparing concrete labor times in this hypothetical case has little meaning even were the laboring activities identical. Because inputs are not exchanged, there is no objective distinction in the process of the reproduction of the household between labor performed for exchange and labor performed directly for household consumption. In the context of household production relations, where exchange is marginal, any division between labor that is economic (for exchange) and labor that is not, is arbitrary. The household unit in this hypothetical case is involved in production for use, a part of which is exchanged. However wily and avaricious the individual producers may be, they are constrained by their social relations of production in their ability to rationalize their production, because they have no monetary costs. Without monetary costs, there is no vehicle to provide the information to adjust production along economic lines. Certainly all producers, in all circumstances, seek to economize on time, to expend less effort rather than more. This applies to the entire process of household reproduction, not specifically to production for exchange.

A distinction can be drawn between the law of the economy of concrete labor time, applicable in all societies with or without exchange, and the law of the minimization of commercialized labor time. The exchange of products does not in and of itself impose a social standard in production, even if the family production unit specializes and produces a product that is exchanged in its entirety. As long as inputs are use values and not commodities, no mechanism exists to impose a standard through a market.

Consider the next logical case, in which the means of production are monetized. Once a portion of the means of production must be bought, cycle of production and exchange changes. It becomes an extended cycle of exchangeproduction- exchange. Because money has been advanced prior to production for the ingredients of production, those means of production must be replaced in money form before they can be replaced in material form. Production to exchange did not require this condition in the first hypothetical case, that the price of the production must cover at least the money advanced for inputs. As the producer buys more of the ingredients for production, that the sale price should cover money costs becomes an objective necessity. Costs do not reflect the subjective assessment of the producer of his or her expended effort, but an external necessity imposed by the interaction of many sellers. The use value emerging from the labor process becomes a commodity in its essence as well as its form. Above in the first case, exchange had a quantitative indeterminacy, because the part of the concrete labor of each producer appeared only as her or his own labor. In the second case, the means of production are presented to the producer as something separate from her or him, the product of social labor, the labor of others

commodities do not exchange at value before rents take money form, a relatively late historical development in his view; then they do so only as a rough approximation. As long as money costs are few and represent a small part of the means of production, the producer is under no compulsion to enter into monetary exchange. If exchange is quantitatively unfavorable, the producer can withdraw to subsistence production except for essential items that must be obtained through exchange. Further, as the means of production increasingly take the form of commodities, the product of the labor process must be exchanged. A commodity per se is a product that not only is exchangeable but must be exchanged (Marx 1970b: 105). The producer must consider the product’s exchangeability prior to production; i.e., must treat the product as a commodity from the outset.8


Note 8:

The division of a product into a useful thing and a value becomes practically important only when exchange has acquired such an extension that useful articles are produced for the purpose of being exchanged and their character as values has therefore to be taken into account, beforehand, during production. (Marx 1970b: 78)

p. 75:

As against this, the circulation of money as capital is an end in itself, for the valorization of value takes place only within this constantly renewed movement. The movement of capital is therefore limitless.

This statement is more important than it seems. Whether Thier links this up with the inadequacy of any movement to address ecological problems remains to be seen. What I wrote on my blog is relevant here. It comes from my critical comments on the 2019 British Labour Party Manifesto (and is applicable as well to the Canadian Leap Manifesto):

Can we continue to treat the Earth as unlimited and resolve the problem of climate change? The capitalist economy necessarily is a process that is infinite. Consider the money circuit of capital (see  The Money Circuit of Capital). [The money circuit of capital is found on page 76 of Thier’s book, by the way.] If we look at the beginning and the end of the process, there is a quantitative difference between the two. This quantitative difference is profit, and that is the goal of the whole process. Thus, if you invest $1,000,000 at the beginning of the year and receive $1,100,000 at the end of the year, you receive $100,000 profit. This difference has arisen from a process of exploiting workers (that is where the $100,000 comes from–the workers produce more value than what they themselves cost to produce). However, once the capitalist process has ended through the sale of commodities and the capitalist has $1,100,000, this money is no longer capital. Capital is a process, and once it is finished, it no longer is: its birth is simultaneously its death, so to speak. The capitalist who now has $1,100,000, to remain a capitalist, must invest the money again–but because of competition with other capitalists, he will have to invest more than $1,000,000. There is thus an in-built infinite process of continuous expansion (interrupted by economic crises due to the impossibility of obtaining an adequate profit rate). Such an infinite process in the context of a finite Earth hardly bodes well for efforts to eliminate the causes of climate change.

The so-called “Green solution” that sidesteps the contradiction between an infinite economic process and a finite Earth will not likely be able to address the problem of climate change. The Labour Manifesto does just that–it sidesteps the power of employers as a class and the associated economic, social and political structures needed to maintain that power.

If workers are unwilling to oppose the class of employers at present, why would climate change motivate them to engage in such opposition? But then again, the purpose of the Manifesto is not to really challenge the power of employers as a class.

Page 77: 

As soon as she punches the clock, the conditions of her labor and the products of her labor are no longer hers, but the boss’s.

This is not formulated well. Undoubtedly, the products of her labour are no longer hers when she produces them. However, the conditions of labour are the capitalist’s even without any connection to labour. On the other hand, the use of labour power only arises when labour power is bought—and for a limited time (a wage worker is not a slave). It is only during this limited time that the employer can use her. Although it is also true that the use of the conditions of labour as conditions of labour can only arise during the labour process, the employer can sell them to someone else—but not the purchased labour power.

Page 78:

In other words, the boss can get away with paying you for just half (or some other fraction) of the day for the “daily sustenance of labor-power” while reaping the full day of your labor. On top of it, he can proclaim it a fair day’s wage, and the secret to this claim is in the determination of exchange-value of labor-power.

What are the political implications of this call for a fair wage? On my blog, I point out how many unions refer to “fair contracts”–and never explain what they mean or how they justify such a claim. For example:

Dated May 15, 2019: at https://www.unifor.org/en/whats-new/press-room/unifor-energy-workers-sign-historic-pattern-deal:

May 15, 2019

MONTREAL— Unifor has achieved a new tentative agreement that establishes the pattern for 8,500 members of the National Energy Program.

The energy and chemical sector continues to be an important economic driver in Canada. By working together, our members have used their collective power to make much-deserved significant gains,” said Jerry Dias, Unifor National President. “Energy and chemical jobs continue to be good jobs in communities right across the country.”

The tentative agreement covers Unifor members working in the sector across Canada. Suncor was selected by Unifor as the chosen employer to set the pattern that will be rolled out to the remaining employers after ratification.

During this round of bargaining Unifor and Suncor bargained both local and national issues concurrently during one week, ensuring that no one union local was left behind.

Make no mistake: energy companies provide good jobs across this country and are critical to Canada’s economy,” said Renaud Gagné, Unifor’s Quebec Director. “Unifor members are instrumental in the success of energy and chemical companies and have earned a fair contract.” [my emphasis].

Unifor is the largest private-sector union in Canada. I also show similar ideology by CUPE (largest Canadian union) and NUPGE (National Union of Public and General Employees) as well as Warren “Smokey” Thomas, former president of OPSEU (Ontario Public Service Employees Union).

What is No One Is Illegal’s position on this? Should it criticize such ideology? What of the coupling of the campaign of “$15 and Fairness?” In the U.S., as far as I know, there was a movement for $15—but they did not link this to “fairness.” In Canada, by contrast, they did.

In addition, what does NOII think about the following conversation I had with a leftist here in Toronto some time ago, Tim Heffernan, member of Socialist Alternative:

Fred raises some interesting points. However, I think he’s confusing social-democratic/reformist demands with transitional demands. There’s a difference which I can elaborate on if needed but the practical contrast between them can be seen in Seattle itself where I would argue that Rosenblum encapsulated an honest and militant social democratic approach while Kshama Sawant & Socialist Alternative (also militant and honest) pushed the movement to its limits by raising the demand for 15/taxing the rich to the need for a socialist transformation of society. But I will concede that there are some in the US left who label SA as reformist too.

Also, we need to look at the concrete not the abstract. The “15 movement” in North America has seen different manifestations and the slogans/demands put forward have varied in time and place. So in Seattle in 2013-14, it was “15 Now”, in other parts of the US it became “15 and a union” and in Ontario it was ” 15 & Fairness”. Fred objects to the term “fairness” presumably because of its association with the old trade union demand of “a fair day’s work for a fair day’s pay”. Engels dealt with this demand back in 1881 where he recognized the usefulness of it in the early stages of developing class consciousness of the British working class, in the first half of the 19th Century, but saw it as an impediment at the time he was writing.

To today and “15 and Fairness”. I think the addition of “fairness” to the straight “15” demand was an excellent move. Fairness wasn’t understood as an airy fairy, feel good notion but came to be seen as shorthand for a series of extra and linked demands that could mobilise low paid and exploited workers:
– paid sick days
– equal pay for equal work (full time vs part time)
– the right to a union
– the fight against racism and discrimination
and more.                                                                                                                                                                                                                                                                                                                                                                           If the above be bullshit, so be it. I like to think that Engels, were he alive today, would have his criticisms of the limitations of 15 & Fairness but would be overwhelmingly positive about what it has achieved so far.

Tim

To which I responded:

Hello all,

Tim’s justification for “fairness” is that it is–somehow–a transitional demand. Let him elaborate on how it is in any way a “transitional” demand. I believe that that is simply bullshit.

He further argues the following:

“Fairness wasn’t understood as an airy fairy, feel good notion but came to be seen as shorthand for a series of extra and linked demands that could mobilise low paid and exploited workers:

– paid sick days
– equal pay for equal work (full time vs part time)
– the right to a union
– the fight against racism and discrimination
and more”

How does Tim draw such conclusions? It is a tautology (repetition of what is assumed to be true) to say that it is fair if “paid sick days, equal pay for equal work (full time vs part time), etc. is considered “fair.”

Why should these goals be tied to “fairness”? I had paid sick days at the brewery, I belonged to a union (there was, however, evident racism among some of the brewery workers and there was also a probationary six-month period before obtaining a full union-wage). Was that then a “fair” situation? I guess so–according to Tim’s logic. Why not then shut my mouth and not complain since I lived a “fair” life at the brewery? But, of course, I did not shut my mouth.

But does Tim believe that merely gaining “paid sick days, equal pay for equal work (full time vs part time), the right to a union, the fight against racism and discrimination and more” is fair? If he did, he would then presumably cease being a member of Socialist Alternative since he would have achieved his goals. However, he likely does not believe that it is fair. What he proposes, then, is to lie (bullshit) to workers by not revealing what he really believes as a “transitional” demand. He does not really believe that it is fair, but he believes that such rhetoric is a useful tool in developing a movement. Frankly, I believe that such a view is both dishonest and opportunistic. Workers deserve better–it is they who continue to be exploited despite “paid sick days,” etc. Receiving paid sick days is better than not receiving paid sick days, but all the demands obtained cannot constitute “fairness.” And yet workers who buy into the rhetoric (bullshit) of fairness may believe this fairy tale (it is, after all, a fairy tale presented by social democrats often enough, among others). Rather than enlightening the workers about their situation, such rhetoric serves to obscure it and to confuse workers–support for the Donald Trump’s of the world in the making.

Such low standards. Rather than calling into question the power of employers to direct their lives by control over the products of their own labour, it implicitly assumes the legitimacy of such power. Ask many of those who refer to the fight for $15 and Fairness–are they opposed in any way to the power of employers as a class? Not just verbally, but practically? Or do they believe that we need employers? That we need to have our work directed by them? That working for an employer is an inevitable part of daily life? That there is no alternative? That working for an employer is not really all that bad?

When working at the brewery, I took a course at the University of Calgary. The professor was interested in doing solidarity work for the Polish organization Solidarity at the time. I told him that I felt like I was being raped at the brewery. He looked at me with disgust–how could I equate being raped (sexually assaulted) with working for an employer? I find that radicals these days really do not seem to consider working for an employer to be all that bad. If they did, they probably would use the same logic as their opposition to sexual assault. Sexual assault in itself is bad, but there are, of course, different degrees of sexual assault. Those who sexually assault a person may do so more violently or less violently; in that sense, those who sexually assault a person less violently are “better” than those who are more violent. However, sexual assault is in itself bad, so any talk of “fairness” in sexually assaulting someone is absurd. Similarly, any talk of fairness in exploiting someone is absurd. But not for the “radical” left these days, it would seem.

Fred

Pages 78-79:

Yet even if we limit ourselves more narrowly to the paid labor that goes into producing your subsistence, if all things were fair and just, you would give over to your boss only the amount of time that it takes to reproduce the value of your labor-power. Say it takes four hours to produce $120 worth of goods, the equivalent of your daily wage, you could go home after four hours. But if your boss allowed that, his inputs and outputs would be equal. It truly would just be M-C-M.

This view that if the worker received an equivalent for her wage she would receive what was just typically anticipates the theory of surplus value and skips over the theory of surplus value. Merely because the worker receives an equivalent hardly makes the situation “fair and just.” Fairness and justness here is assumed to be entirely a quantitative question rather than also a qualitative question.

I tried to point out, in our last session, that Marx pointed out how the exchange process becomes independent of the participants in exchange. I wrote:

The whole process is what Marx calls simple circulation, and this process escapes the control of the participants in the exchange process.” Surprisingly, there was little discussion about the issue—as if control over our own working lives via the control over our own products were relatively unimportant.

As i wrote on my blog:

As I argued in the last post on this topic  (see  The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One), Christopher Arthur, in his The New Dialectic and Marx’s Capital, claims that there are two forms of exploitation (pages 55-56):

It is obvious here that this exploitation time to which I refer comprises the whole of the working day, not just the so-called ‘surplus labour time’. It is not the case in reality that the workers first supply themselves and then check into the factory to work the extra. On the contrary, the accounting of necessary and surplus labour time is the outcome of the struggle at the point of production over exploitation; and the unremitting pressure of capital’s representatives on the workforce is present the whole day from the first minute. Since capital ‘takes charge’ of production, the ‘pumping out’ of surplus labour cannot be distinguished on the ground from the pumping out of labour generally because during the whole working day its use value is exploited. So there is a conceptual distinction hidden here, between exploitation in this sense, and the sense in which exploitation is identified with only the extension of the working day beyond its necessary part.

I would be inclined to reverse Marx’s emphasis when he said: ‘Capital is not only command over labour, as Adam Smith thought. It is essentially command over unpaid labour.’48 Instead I would write: ‘Capital is not only command over unpaid labour, as Karl Marx thought. It is essentially command over labour, i.e. of the entire working day.’ (Of course Marx knew perfectly well that it is only because capital acquires ‘command over labour’ that this ‘coercive relation . . . compels the working class to do more work than would be required by the narrow circle of its own needs’.)

… My view allows for a ‘traditional’ measure of exploitation if we distinguish two kinds of exploitation. Exploitation in production is in effect not dissimilar  to alienation in that it involves the subjection of workers to alien purposes; it goes on throughout the day. Exploitation in distribution arises from
the discrepancy between the new wealth created and the return to those exploited in production.

Arthur has a point: too often those who refers to Marx’s theory of exploitation emphasize surplus production and surplus value while neglecting to note how workers experience the situation: they do not produce their wage first independently of the employer or her/his representatives (forewomen/men, supervisors and managers) and then produce a surplus. The time that they spend producing their wage or salary is subject to the power and will of the employer–and not just the surplus labour and surplus time that the workers provide for free. This fact is too often neglected.

Nonetheless, there is a good reason for distinguishing the time that workers require to produce  their own wage or salary an the surplus time that they devote free of charge to employers: this has to do with the accumulation of capital.”

Furthermore, even during the time when workers reproduce their wage, they are subject to the dictatorship of employers and their representatives. From my blog:

Elizabeth Anderson, in her book Private Government: How Employers Rule Our Lives (and Why We Don’t Talk About It) questions the assumption of the social-democratic or reformist left by pointing out how the power of employers resembles the power of communist dictators (pages 37-39):

Communist Dictatorships in Our Midst

Imagine a government that assigns almost everyone a superior whom they must obey. Although superiors give most inferiors a routine to follow, there is no rule of law. Orders may be arbitrary and can change at any time, without prior notice or opportunity to appeal. Superiors are unaccountable to those they order around. They are neither elected nor removable by their inferiors. Inferiors have no right to complain in court about how they are being treated, except in a few narrowly defined cases. They also have no right to be consulted about the orders they are given.

There are multiple ranks in the society ruled by this government. The content of the orders people receive varies, depending on their rank. Higher- ranked individuals may be granted considerable freedom in deciding how to carry out their orders, and may issue some orders to some inferiors. The most highly ranked individual takes no orders but issues many. The lowest-ranked may have their bodily movements and speech minutely regulated for most of the day.

This government does not recognize a personal or private sphere of autonomy free from sanction. It may prescribe a dress code and forbid certain hairstyles. Everyone lives under surveillance, to ensure that they are complying with orders. Superiors may snoop into inferiors’ e- mail and record their phone conversations.

Suspicionless searches of their bodies and personal effects may be routine. They can be ordered to submit to medical testing. The government may dictate the language spoken and forbid communication in any other language. It may forbid certain topics of discussion. People can be sanctioned for their consensual sexual activity or for their choice of spouse or life partner. They can be sanctioned for their political activity and required to engage in political activity they do not agree with.

The economic system of the society run by this government is communist. The government owns all the nonlabor means of production in the society it governs. It organizes production by means of central planning. The form of the government is a dictatorship. In some cases, the dictator is appointed by an oligarchy. In other cases, the dictator is self- appointed.

Although the control that this government exercises over its members is pervasive, its sanctioning powers are limited. It cannot execute or imprison anyone for violating orders. It can demote people to lower ranks. The most common sanction is exile. Individuals are also free to emigrate, although if they do, there is usually no going back. Exile or emigration can have severe collateral consequences. The vast majority have no realistic option but to try to immigrate to another communist dictatorship, although there are many to choose from. A few manage to escape into anarchic hinterlands, or set up their own dictatorships.

This government mostly secures compliance with carrots. Because it controls all the income in the society, it pays more to people who follow orders particularly well and promotes them to higher rank. Because it controls communication, it also has a propaganda apparatus that often persuades many to support the regime. This need not amount to brainwashing. In many cases, people willingly support the regime and comply with its orders because they identify with and profit from it. Others support the regime because, although they are subordinate to some superior, they get to exercise dominion over inferiors. It should not be surprising that support for the regime for these reasons tends to increase, the more highly ranked a person is.

Would people subject to such a government be free? I expect that most people in the United States would think not. Yet most work under just such a government: it is the modern workplace, as it exists for most establishments in the United States. The dictator is the chief executive officer (CEO), superiors are managers, subordinates are workers. The oligarchy that appoints the CEO exists for publicly owned corporations: it is the board of directors. The punishment of exile is being fired. The economic system of the modern workplace is communist, because the government— that is, the establishment— owns all the assets,1 and the top of the establishment hierarchy designs the production plan, which subordinates execute. There are no internal markets in the modern workplace. Indeed, the boundary of the firm is defined as the point at which markets end and authoritarian centralized planning and direction begin.

Most workers in the United States are governed by communist dictatorships in their work lives.

Or again, consider the (lack) of right to perform basic biological functions (at least in the United States) whether during the part of the working day when workers reproduce their wage or when they produce surplus value. From Void where Prohibited: Rest Breaks and the Right to Urinate on Company Time, by Ingrid Nygaard and Marc Linder (1998), pages 2-3:

The right to rest and void at work is not high on the list of social or political causes supported by professional or executive employees, who enjoy personal workplace liberties that millions of factory workers can only daydream about. White-collar employees who have the freedom to make personal telephone calls, leave the premises to run errands, or chat with colleagues almost at will can also excuse themselves whenever nature calls. Indeed, we ourselves had not focused on the restraints on other workers until patients and clients poignantly complained of them. While we were dismayed to discover that workers lacked an acknowledged legal right to void at work, the patients and clients were amazed by outsiders’ naive belief that their employers would permit them to perform this basic bodily function when necessary. Their plight crystallized for us in one afternoon when two women with very different kinds of jobs related how they dealt with their bladder’s call at work: a factory worker, not allowed a break for six-hour stretches, voided into pads worn inside her uniform (which, incidentally, cost her almost one-tenth of her weekly wages); and a kindergarten teacher in a school without aides had to take all twenty children with her to the bathroom and line them up outside the stall door while she voided.

That such examples are not extraordinary is borne out by many recent reports. In a startling account of harried workers in chicken processing plants— an industry in which it is not unheard-of for firms to enforce rules prohibiting employees from going to the bathroom more than once a week “on company time” 3 — the Wall Street Journal recorded the scene shortly before the end of the workday as a worker in vain sought permission to leave the line:

  • A foreman with a stopwatch around his neck rushes up. “Come on now,” he bellows. “Pump it up!” Down the chain, a worker named Jose yells and waves wildly, like a drowning man. Bathroom trips are discouraged and require approval. But the foreman can’t hear because of the din, and Jose is left grimacing and crossing his legs. Finally, half an hour later, a weary cheer ripples along the line. “The last birds coming!” someone shouts. Jose sprints toward the bathroom — and right into the path of a cleanup crew hosing offal the entrails and internal organs of an animal used as food [into floor drains. Jose slips and then flops onto a sodden bank of fat and skin. “Gotta go,” he says, struggling up from the mire. “Gotta go.”4”

Finally, if we take a look at the money circuit of capital (as I wrote on my blog):

The following will form the basis for many of the posts, or at least the initial ones since a basic understanding of how workers are treated as things or means for employers’ ends is essential for a critical understanding of our lives and experiences in this world.

Immanuel Kant, a German philosopher, argued that, in order to act ethically, it is necessary to treat people never as means only but as ends in themselves: “For, all rational beings stand under the law that each of them is to treat himself and all others never merely as means but always at the same time as ends in themselves” (Groundwork of the Metaphysics of Morals. New York: Cambridge University Press, page 41). Human beings need to be treated as ends and not as means. To treat human beings as ends in themselves, it is necessary to have those who engage in realizing the ends also engaged in participating in the formulation of the ends. John Dewey, one of the greatest philosophers of education of the twentieth century, flushes out what this means socially:

In a search for the conditions under which the inchoate public now extant may function democratically we may proceed from a statement of the nature of the democratic idea in its generic social sense. From the standpoint of the individual, it consists in having a responsible share according to capacity in forming and directing the activities of the groups to which one belongs and in participating according to need in the values which the groups sustain. From the standpoint of the groups, it demands liberation of the potentialities of members of a group in harmony with the interests and goods which are common. (The Public and its Problems. Denver: Swallow, 1927/1954, page 147).

Democracy as a way of life and not as formal government is what is required: the right to participate in forming and directing (realizing) the goals of the organizations to which individuals belong and for such organizations to use the potentialities of its members because of such participation in mutual goal-setting and directing activities. The use of potentialities, to be justified, requires that the individuals whose potentialities are being used have the right to participate in goal formulation, in their execution and in reaping the consequences (values) of their activities.

This view of agency is not what workers experience in a capitalist context. Consider the following description of the economic process of a typical employer in the private sector (which I used to organize a geography course I taught to grade ten French-immersion geography students). It is the money circuit of capital, and it is described by Karl Marx in chapter one of volume two of Capital: A Critique of Political Economy. The private sector will first be considered and then the public sector.

If we ignore the exchange process, we have the following: M1 … P … M2. Here, it is clearly seen that the production process is a means for obtaining more money. Since workers are part of the production process, they too are means for obtaining more money—even if they are organized collectively and act militantly. Being used as a means so that others can obtain more money is not an expression of a just and moral society, where human beings are free agents who control their own social structures and relations. Rather, it expresses a society that treats human beings as things to be used for the benefit of others who obtain more money. It expresses a kind of society where the results of the workers’ own work (expressed as money, as machines and so forth) dominates them rather than vice versa.

The Public Sector

Some may argue that the money capital process is accurate for the private sector but not for the public sector. However, the public sector should not be idealized either. The public sector has the advantage of not requiring consumers of services paying out money directly for such services. A teacher, for example, is not paid by the parents to teacher her/his child. In the public sector, the purpose or end of the work process is not directly more money. However, given the predominance of that goal in the total work process of society as a whole, such a goal is bound to have a major impact on the power of employers in the public sector (through, for example, the level of revenue in the form of taxes flowing to the government).

Purchase

Apart from this indirect influence, public sector workers are still employees, and they are hired on a market for workers, just like workers in the private sector. The first part of the money circuit of capital still applies to them: M-C1.

Production

The production process, though, is not capitalist. It is, however, a process that the workers not only do not control (nannies work as domestics for the personal consumption of the employer and are subject to the control of the employer, but for purposes of personal consumption) but is an impersonal process similar to the process characteristic of capitalist production (the owners of capital do not personally consume all that is produced). Public sector workers are collectively subject to the power of employers, and they do not formulate the goals of the organization to which they belong.

The Whole Process of Purchase, Production and Use or Consumption

The result or the consequence of the production or work process in the public sector does not result in a commodity (a product or service for sale) but is consumed. If U represents the use value produced (the service that is consumed), then we have: M-C …P…U. The consequence of their work is consumed without the intervention of exchange. On the other hand, since the beginning and the end process lack the same form, if that process is to continue, money must come from a process external to that process (from the capitalist economy or the private sector).

Public-Sector Workers as an Impersonal Means for Realizing the External Goals of Government Bureaucrats and Government Employers

Here P is not a capitalist production process but, nevertheless, it is an impersonal process the purpose of which the workers have no say. If we abstract from the initial exchange, we have: M…P…U. Production, or P, still functions as a means for ends external to the persons who constitute P. In other words, the people who work in the public sector still function as means for external goals; they cannot, democratically, participate in the formulation of those goals but have those goals imposed on them as employees.”

Workers, despite reproducing their wage, hardly experience just treatment. Being treated as a means to an end over which workers have little say, even if the worker receives an equivalent and does not produce a surplus, is hardly “fair and just.”

As Marx wrote, in Capital, volume 1, page 450:

If capitalist direction is thus twofold in content, owing to the twofold nature of the process of production which has to be directed- on the one hand a social labour process for the creation of a product, and on the other hand capital’s process of valorization- in form it is purely despotic.

Page 79:

Thus, if after you finish making $120 worth of coffee, instead of throwing down your apron and going home, you finish out your eight-hour shift, one hour will be necessary labor, and seven hours are surplus labor!

Yes, but even during the time that may be necessary time, you are still subject to “company time” and accusations of stealing company time. From Void where Prohibited: Rest Breaks and the Right to Urinate on Company Time, by Ingrid Nygaard and Marc Linder (1998), page 3:

Other firms still take this disciplinary regime with the same deadly seriousness with which early protagonists of the industrial revolution broke down workers’ impulses to work according to their preindustrial rhythms, forcing them to internalize the new structures of the economy of time. Consider, for example, so-called house rules attached to collective bargaining agreements that penalize with suspension workers who engage in “theft or attempted theft (property or time),” such as exceeding a break by one minute, thus “disenfranchising their Employer.

Page 84:

If a 400 percent rate of exploitation seems far fetched to you, consider this real-life example quoted in a 2018 Oxfam report. Oxfam interviewed Lan, a Vietnamese garment worker who explained:

When I got pregnant, they let me work in the warehouse. There were many boxes full of shoes, and my job was to put the stamp on. Those shoes would fit my son perfectly, they are very nice.

I’d like my son to have shoes like these, but he can’t. I think he’d want them, and I feel sorry for him. The shoes are very pretty. You know that one pair of shoes that we make is valued morethan our whole month’s salary.

This is debatable. The value of the shoes is determined by c+v+s. Only if the value of the commodity were equal to v+s could you more appropriately infer that (and even then it would be better to actually try to measure it, if the statistics are available, rather than merely assert it). Using such an example in this context is more sensationalist than accurate.

You cannot infer from the level of wages and the value of the commodities the rate of exploitation; you need more information than that.

Consider a hypothetical example that probably contradicts the “moral sensibilities” of many leftists. Assume that one worker works 16 hours a day, receives a wage of $1 an hour and produces $30 of value during those 16 hours; the rate of exploitation is s/v, and since v=16 and s=14, the rate of exploitation in this case is 14/16=88% Another worker works 8 hours a day, receives a wage of $20 an hour and produces a value of $320; the rate of exploitation is 160/160=100%. The worker in the second case is actually more exploited than the first worker.

I have in fact tried to calculate the rates of exploitation of various workers in different Canadian capitalist companies by using the annual reports of those companies. The calculations are undoubtedly imperfect, and I invite anyone to try to improve on them.

In my last post on the rate of exploitation of WestJet workers, I provided a comparison of different rates of exploitation of various companies as well as some theoretical questions about the tendency of rates of exploitation to equalize over the long term. It is provided below:

The rate of exploitation of WestJet workers is quite low relative to other workers. Below I organize the rates of exploitation that I have calculated so far, from lowest to highest: 

  1. WestJet workers: 23%
  2. Telus workers: 58% 
  3. Air Canada workers: 70%
  4. Magna International workers: 79% (2019); 43% (2020) 
  5. Bank of Montreal (BMO): 92% 
  6. Bell Canada Enterprises (BCE): 100% 
  7. Canadian Imperial Bank of Commerce (CIBC): 120%
  8. Toronto-Dominion Bank (TD Bank): 123% 
  9. Royal Bank of Canada (RBC): 124% 
  10. ScotiaBank (Bank of Nova Scotia): 147% 
  11. Suncor Energy workers: 148% 
  12. Rogers Communication: 209% 

The divergences in the rate of exploitation are substantial: the absolute percentage difference between the rate of exploitation of WestJet workers and the rate of exploitation of Rogers Communications workers is 186%. 

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

We have the following:

The rate of exploitation or the rate of surplus value=s/v=232,658.7/997,313.3=23%. 

That means that for every hour worked that produces her/his wage, a worker at WestJet works around an additional 14 minutes for free for WestJet. 

In a 5.2 hour work day, the worker produces her/his wage in 4 hours 14 minutes (254 minutes) and works 58 minutes for free for WestJet.

Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario  and   Employers as Dictators, Part One). The same applies to the following. 

In an 8-hour work day, the worker produces her/his wage in 6.5 hours and works for 1.5 hours free for WestJet.

In an 8.5-hour day, the worker produces her/his wage in  6 hours 55 minutes and works for free for 1 hour 35 minutes for WestJet.

In a 10-hour day, the worker produces her/his wage in 8 hours 8 minutes and works for free for 1 hour 42 minutes for WestJet. 

Given this rate of exploitation and oppression, what are we to make of the following management rights clause in the collective agreement between WestJet and the Canadian Union of Public Employees (CUPE) Local 4070 (or, in French, Syndicat canadien de la fonction publique (SCFP))? 

ARTICLE 3 – MANAGEMENT RIGHTS

3-1.01 Except to the extent expressly limited or modified by a specific provision of this Agreement, the Company reserves and retains, solely and exclusively, all of the inherent rights, powers and authority to manage the business and direct its workforce and all the matters relating thereto. These rights, powers and authority include, but are not limited to hiring, assigning, promoting, demoting, classifying, transferring, lay-off, recall, suspending, discharging or otherwise disciplining Cabin Personnel; establishing and enforcing rules of conduct; maintaining order and efficiency; requiring Cabin Personnel to observe reasonable rules and regulations which may be promulgated by the Company, introducing new equipment; determining the location(s) of the workforce, operations, and facilities; planning, scheduling, directing and controlling operations.

3-1.02 The Union shall be advised of any changes to policies governing Cabin Personnel at least five (5) Days before such policies become effective unless the Parties mutually agree to a shorter advance notification period. This five (5) Day requirement will not apply when the Company is required by law to make immediate changes or in the event of emergency circumstances that reasonably require immediate change.

Is this management rights clause an example of the nature of “fair contracts” according to the major Canadian unions (such as CUPE, Unifor and NUPGE)? See  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One: The Canadian Union of Public Employees (CUPE)Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada)  and Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Four: The National Union of Public and General Employees (NUPGE)(The Second Largest Union in Canada).      

Should not unions, even in the public sector, be teaching the limitations of collective agreements and collective bargaining? In the private sector, should they not also be teaching the workers that no collective agreement and no collective-bargaining process can abolish the exploitation of the workers–without driving the company out of business?

Or are unions silent on such limitations? Moreover, do they try to sell the idea to their members that the collective agreement is fair? 

What do you think? Given what you think, what should you be doing? Are you doing it? Why or why not? 

Factors That Determine the Rate of Exploitation in Relation to Divergences in the Rates of Exploitation 

The rate of surplus value has three main factors which determine its level: 

1. The real wage (basket of commodities consumed by workers at non-changing prices). In the short term, the real wage is undoubtedly influenced by the class struggle–the level of organization of workers, the aims of such organization, the extent of the elimination of competition among workers and so forth. Even in the long run, it may be influenced through the incorporation of more and qualitatively more diverse commodities (historical and moral influence)–but this should not be exaggerated since real wages ultimately are limited by the rate of accumulation.

2.  The absolute level of the production of surplus value, determined by such factors as

a. the length of the working day. For example, if workers work 7 hours a day, with a rate of exploitation of 100%, then the worker produces her/his wage in 3.5 hours and produces a surplus value of 3.5 hours. If the working day increases to 7.5 hours, then the rate of exploitation increases, from 100% to 114% (s=4; v=3.5; s/v=4/3.5=1.14=114%). 

b. the intensity of work (which itself can be a function of other factors, such as the level of managerial organization, the principles of managerial supervision and technological conditions that force workers to work at an intensified level). The same number of hours may contain, relative to before, more labour. With a constant real wage, more surplus value is produced and hence a higher rate of exploitation. 

3.  Relative surplus value, determined by changes in technology (which alter the value of the commodities consumed by workers, reducing the value of the commodities consumed by workers, thereby increasing the remaining value as surplus value. For example, at the brewery where I worked, when I first started to work there, we could produce a maximum of 550 bottles of beer per minute, and when I quit, we could produce a maximum of 1,400 bottles per minute. The value of the bottles of beer undoubtedly decreased (although the price did not reflect this proportionately–taxes form a substantial portion of price). With lower values–and prices–for commodities consumed by workers, the workers perform less time producing the equivalent value of their wage and hence more time producing a surplus value, which therefore raises the rate of exploitation, s/v. Thus, with the technological change in beer production, the value of beer decreased. With the same level of worker beer consumption as before (the same real wage), the value of the commodity the workers sell (labour power–the capacity to perform labour for a certain period of time) decreases, leading to more value remaining for the employer–hence more surplus value and a higher rate of exploitation.  

To explain the divergences in the rate of exploitation at this micro level according to the above three factors or variables would require much more empirical work (and probably theoretical work to make required connections). I lack the capacity for this. If others can in any way improve on the calculation of the rate of exploitation, feel free to do so.

In any case, other factors undoubtedly influence the perceived or empirical rate of exploitation (as calculated by me). Thus, one major factor that would need to be included is the difference between the surplus value initially produced (or received by commercial and banking institutions) and the final distribution of surplus value. The production of surplus value and its distribution are unlikely to be the same since the proportion of investment in constant capital (c) and variable capital (v) will vary according to the kind of industry and level of technological development. I explain this in a comment to the post The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in Canada.  

Static Versus Dynamic Considerations of the Rate of Exploitation

The above comparative analysis definitely has limitations since it provides only a snapshot picture of rates of exploitation for different employers. When we consider the mobility of workers within and between industries, however, there may be a tendency towards an equalization of the rate of exploitation. This would require further empirical research, of course, as well as further theoretical considerations.

One author argues that there is a tendency towards equal rates of exploitation via worker mobility (he sometimes calls it labour mobility). He refers to Adam Smith’s theory of worker mobility. Adam Smith was a political philosopher and political economist who published the book The Wealth of Nations in 1776.

From Jonathan Cogliano (2021), “Marx’s Equalized Rate of Exploitation,” Working Paper Series, University of Massachusetts, page 20: 

One implication of the view put forward in sections 4 and 5 is that Marx fully adopts [Adam] Smith’s theory of the turbulent equalization of the whole of the advantages and disadvantages and re-purposes it into a turbulently equalizing rate of exploitation is that workers then know the degree to which they are exploited and move between sectors accordingly. Marx discusses how workers understand that they are exploited in his discussion of the struggle over the length of the working day, but he does not state explicitly that workers know their rate of exploitation (Marx 1976, pp.342-344). However, the wholesale adoption of Smith’s balancing whole of the advantages and disadvantages of labor implies that workers do know the degree to which they are exploited and migrate across sectors in response to changes or differentials across sectors.

Workers making decisions of how to allocate their labor across industries in this way does not require that workers base the decision on magnitudes measured in labor values— i.e. basing the decision on surplus value and the value of labor power. Workers’ movement across sectors as informed by money prices still induces the EQRE. As Foley (2016, pp.378-380) discusses, surplus value captures overall surplus labor effort in the money form and if workers base their mobility decisions on the effort they expend and the wage they are paid then these movement decisions will tendentially induce the EQRE. This rests on some notion of a connection between labor effort and money value added

It would be necessary to consider both theoretically and empirically the dynamics of worker mobility in relation to the rate of exploitation to determine whether such a tendency in fact holds. Unfortunately, there is little research here in Toronto or indeed in Canada, as far as I can tell, concerning anything having to do with the rate of exploitation at the micro level and its interface with tendencies at the macro level.

Page 86:

But what about the labor necessary to prepare the food, wash the clothing, provide the childcare? This, essentially, is extra labor that is mostly produced outside of the sites of capitalist production.28 WhileMarx and Engels rightly located the reproduction of labor-power for the system within the nuclear family, they did not delve deeply into this topic. The concept of social reproduction has been theorized largely due to the important work of second-wave feminism (the women’s rights movement that, beginning in the 1960s, fought for equality beyond suffrage and legal rights) and Marxist feminists (who incorporated and elaborated on Marx’s ideas to explain the roots of women’s oppression). In fact, as most women know all too well, the bulk of day-to-day responsibilities for the reproduction of labor at home fall on wives, daughters, mothers, and sisters.

This unpaid labor does not directly create surplus value, yet it is critical to workers’ abilities to produce surplus, and therefore necessary to maintaining the profitability of the system.”

Do the activities at home produce value? If so, then they are not really social labour while they are being performed? If they do, then do they result in revolutions in the level of productivity due to a possible divergence between the amount of abstract labour at the micro level and the amount predominant at the macro level (thereby leading to surplus profits—which is what motivates capitalists to innovate)? Is there evidence that those who perform activities at home act in the same way as wage workers, on the one hand, and capitalists on the other?

Furthermore, the claim that “this unpaid labor does not directly create surplus value, yet it is critical to workers’ abilities to produce surplus, and therefore necessary to maintaining the profitability of the system” fails to distinguish activities that occur in the household that may be labour and activities that may be acts of consumption. My eating a hotdog at home “does not directly create surplus value, yet it is critical to workers’ abilities to produce surplus, and therefore necessary to maintaining the profitability of the system.” The act of consumption, in other words, can be treated as an “act of labour” based on Thier’s logic. This does not mean that labour does not occur at home; but it needs to be theorized and distinguished from consumption activities, and it also needs to be distinguished from abstract labour—unless abstract labour is performed at home (but, as I said, if so, then why are there no revolutions in technology emanating from home production?)

This does not mean that labour does not occur in households. It however, needs to be carefully theorized. Furthermore, there are many hidden assumptions in the following assertion (page 87):

But, Vogel argued, “he said little about the actual work involved in individual consumption. Here was a realm of economic activity essential to capitalist production yet missing from Marx’s exposition.”31 In fact, without this labor, individual consumption could not take place.

Being necessary is hardly the same as producing value let alone surplus value. State employees are necessary—and yet they do not produce surplus value (unless the output is sold). Commercial workers and bank workers are necessary—and yet they do not produce surplus value either (they transfer already produced surplus value). They may or may not perform surplus labour; surplus labour has been performed in the past without the result being surplus value. However, this needs to analyzed in detail rather than assumed. Any ideas how to do this?

The importance of identifying abstract labour as the sole source of value and surplus value is related to socialism; there is a contradictory tendency (but not some sort of automatic process) for capitalist relations to involve abstract labour as the ultimate measure of value whereas materially we depend less and less on such labour as machinery and more generally technology develop; in other words, capitalism has a tendency to undercut its own principle by eliminating the goose that lays the golden egg (but as long as capitalism exists, such a contradictory tendency leads to economic (and often, political) crises.

Cancer and viruses have similar tendencies. The rapid expansion of cancer cells (growth of cancer cells) may lead to the death of the living being as a whole—and simultaneously the lack of survival of the cancer cells. Viruses need a host to reproduce themselves. If, however, their reproduction kills their host (or hosts), then they negate their own conditions of reproduction (unless they either mutate or find another host).

Does labour performed at home have a similar tendency?

This is not to deny that women are, generally, burdened with labour at home when compared to men. However, we need to be clearer about the nature of such labour and whether it has different characteristics than the labour performed for private employers (and for state employers, for that matter).

In the section “Diverging Rates of Exploitation,” Thier outlines how gender and race discrimination lead to lower wages for substantial sections of the working class. However, again, low wages do not necessarily translate into increased exploitation. In the same industry, where wages for coloured or female workers are less than for white and male workers, we can generally safely assume that there is a higher rate of exploitation for such workers, but not necessarily across different industries; it would be necessary to determine the surplus value produced and compare it to the wage. After all, the rate of exploitation is a ratio (s/v) and not just v.

Page 90:

You can’t understand either the worker’s or the boss’s class position without understanding that the whole of the system is one in which labor is set to work on means of production, in order to produce a profit for someone else. Class, in other words, is a relationship of exploitation. This understanding of class as a social relationship is completely absent in mainstream analysis. If class is discussed at all in the mainstream, it is considered in terms of wealth and social stratification. Income levels, education, lifestyles, and patterns of consumption are used to divide people into a society that is mostly middle class, with some rich and poor people around the fringes.

This is important politically. Most social democrats rely predominantly on income level to differentiate the poor from the non-poor. The following is drawn from my blog:

From Geoffrey Kay, The Economic Theory of the Working Class. London: Palgrave Macmillan, 1979, pages 2-3:

The absolute poverty of the working class is visibly present in the conditions of work where everything the worker touches belongs to another. The means of production he uses, that is, the machines, buildings, materials, etc. all belong to the employer, who also owns the output. The only thing the worker owns is his capacity to work, and his economic welfare depends upon his being able to sell this at the best possible price. In the course of this [the twentieth) century, particularly during the period of the post-war boom, this price measured in terms of the commodities it can purchase, the real wage, has risen to unprecedented heights, at least in the advanced industrial countries of the west.

As a result of this and the maintenance of full or near full employment backed up by social welfare, the working class has enjoyed greater prosperity and security than at any time in history. In these circumstances it appears strange to talk of absolute poverty, and the old socialist claim that the working class has nothing to lose but its chains seems and archaic relic of the past when the working class did indeed live in dire poverty. Yet the fact remains that the working class today has no greater economic autonomy than its forbears a hundred years ago.

Consider the situation of a contemporary worker who loses his job. This has happened to several million workers in the industrialized world since the long boom faltered in 1973 not counting the other millions of young people who have never found jobs at all. Many of the workers who have recently suffered unemployment for the first time, earned wages that allowed them to enjoy all the trappings of ‘affluency’—decent housing, cars, television, refrigerators and so on. But the loss of the job puts the standard of living immediately in jeopardy, particularly if unemployment lasts for anything more than a few weeks. In the unlikely event of a working class family having a large private income, its initial response to unemployment is to cut back spending on marginal items, and attempt to maintain its lifestyle intact in the hope that new work will be found shortly. As the period of unemployment lengthens, it begins to eat into savings, but this does not hold out much hope.

Working class savings are notoriously low, and often take the form of insurance policies that can only be cashed in at a considerable loss. If the family decides to sell of its consumer durables, apart from reducing its standard of living immediately, it will invariably make further losses as second-hand prices are always far below prices for new articles. Moreover, many working class purchases are financial by hire purchase where the interest element makes the actual price higher than the market price, and the family that sells off relatively new times bought in this way often finds that, far from releasing cash, it lands itself in further debt. Working class affluence is entirely dependent upon wages: remove these—i.e., unemployment—and the absolute poverty of its social situation shows through very quickly. In the nineteenth century unemployment meant immediate destitution; the modern worker is clearly much better off than his forbears—for him and his family poverty is a few weeks, maybe even a few months away.

The social-reformist left, however, will probably not acknowledge the need for a redefinition of poverty that includes the economic coercion of the vast majority of workers. They prefer to deal in platitudes, such as calling the work characteristic of economic coercion “decent work,” or reforms in employment standards and increases in the minimum wages (all necessary, of course) “fair,” or claiming that they are fighting for “economic justice” (while not engaging in any activity that moves towards abolishing the economic coercion characteristic of the capitalist job market dominated by a class of employers).

Page 91:

We can see then that wealth is just one part of the picture, and one that is more symptomatic of class inequality than explanatory of its origin. In fact, power, control over working conditions, and financial decision-making are the bedrocks of exploitation.

Yes, but the lower echelons of state employees are subject to “power, control over working conditions, and financial decision-making.” Are they exploited or just oppressed? Hard to say. Not producing surplus value does not mean that a worker is not exploited. But a surplus of labour is necessary if there is to be exploitation. If there is no surplus labour, there can still be oppression. But I do not see much clarification or research that enlightens us about these issues.

Page 91:

Anyone who controls the means of production, has political power, dictates the terms of other’s working conditions, or owns capital that can be invested in production, is part of the CAPITALIST CLASS. And anyone who must sell their labor-power for a wage and has no access to the means of production themselves is part of the WORKING CLASS.

Although this can give a rough estimate of who belongs to the working class, should this not be qualified or refined? Managers in state bureaucracies are not part of the capitalist class, but they have similar power over workers. What of guards in prisons? There was a debate within the Ontario Public Services Employee Union (OPSEU) over the issue of whether prison guards should be part of the union because of their oppressive function. The same issue applies to the police. At what point does the function of the workers take precedence over their status as wage workers? What of foremen?

Pages 91-92:

Marx wasn’t saying that workers literally have nothing, although that is often and increasingly true. He meant that we are without any means to produce and reproduce our livelihoods, and therefore we are at the mercy of capitalist exploitation.

Yes, but surely we need to recognize the varying levels of house ownership among the working class and the possible impact that may have in dividing the workers since owners of houses may use them as equity and hope that their prices will continue to rise whereas others who do not own homes may hope that prices will drop.

Page 104:

Capitalism uses our ingenuity to further immiserate us. Socialism would use every advance to make more time for humans to rest, play, and thrive. This is why Russian Revolutionary Leon Trotsky was onto something when he lauded human laziness as a quality necessary for human progress:

“As a general rule, man strives to avoid labor. Love for work is not at all an inborn characteristic: it is created by economic pressure and social education. One may even say that man is a fairly lazy animal. It is on this quality, in reality, that is founded to a considerable extent all human progress; because if man did not strive to expend his energy economically, did not seek to receive the largest possible quantity of products in return for a small quantity of energy, there would have been no technical development or social culture.”

This is debatable. This links up to the nature of socialism—which was briefly discussed in the last session. I have argued on my blog that the concept of “leisure” that excludes any serious work is a fallacy—even under capitalism. Since, however, the issue of the nature of socialism deserves more extensive treatement, I will reserve that issue for a separate attachment, where I will simply string together several posts from my blog on the topic, including a critique of Sam Gindin’s views (Mr. Gindin was the research director for the Canadian Auto Workers union, now Unifor) on the nature of socialism.

The Rate of Exploitation of Workers at Stantec, One of the Largest Private Employers in Edmonton, Or: How Unionized Jobs Are Not Decent or Good Jobs

Introduction

In three others posts I presented a list of some of the largest employers in various cities (such as Toronto and Calgary) according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada),  and A Short List of the Largest Employers Based in Calgary, Alberta, Canada, Based on the Number of Employees). In Edmonton, one of the largest private employers according to the number of employees is Stantec (see  A Short List of the Largest Private Employers in Edmonton, Alberta, Based on the Number of Employees). 

What is Stantec? 

The nature of Stantec is set out in its Annual Report: 

Engineering and design are at the core of what we do. At any given time, we’re working on tens of thousands of projects for thousands of clients in hundreds of communities. While we provide integrated expertise and services across the entire project life cycle, design is at the heart of it all.

I have tried to calculate the rate of exploitation of workers in various companies, including  Magna International (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto. 

In this post, I calculate the rate of exploitation of Stantec workers. 

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies (if they are available) in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

Adjusted Variable Capital (Wages and Benefits) and Surplus Value (s) (Profit)

Adjusted total employee costs (variable capital, or v) 2704.9
Adjusted net income before taxes (surplus value or profit, s) 353.2 

The Rate of Exploitation of Stantec Workers

To calculate the rate of surplus value, we need to relate “Adjusted net income before taxes” to  “Adjusted total employee costs.” So, with the adjustments in place:, s=353.2, and  v=2004.9. The rate of exploitation or the rate of surplus value=s/v=353.2/2004.9=13.1 percent. 

That means that for every hour worked that produces her/his wage, a worker at Stantec works around an additional 8 minutes for free for Stantec. Alternatively expressed, for every hour worked, a worker at Stantec works 52 minutes that produces her/his wage and 8 mintues for free for Stantec. 

In a 7.5 hour working day (450 minutes), Stantec workers spend 398 minutes (6 hours 38 minutes) to obtain their wage for the day, and they spend 52 minutes  in obtaining a surplus value or profit for Stantec. 

In an 8 hour working day (480 minutes), Stantec workers spend  424 minutes (7 hours 4 minutes) to obtain their wage for the day, and they spend 56 minutes  in obtaining a surplus value or profit for Stantec. 

In a 12 hour working day (720 minutes), Stantec workers spend  637 minutes (10 hours 37 minutes) to obtain their wage for the day, and they spend 83 minutes (1 hour 23 minutes) in obtaining a surplus value or profit for Stantec. 

In a 16 hour working day (960 minutes), Stantec workers spend 849  minutes (14 hours 9 minutes) to obtain their wage for the day, and they spend 111 minutes (1 hour 51 minutes) in obtaining a surplus value or profit for Stantec. 

Of course, during the time that the Stantec worker works to obtain an equivalent of her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Do you think that these facts contradict the talk by the left and unionists of “”fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One and  Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for this rhetoric of the largest unions in Canada, the Canadian Union of Public Employees (CUPE) and  Unifor) , “fair wages” and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in workers’ lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? Do the left? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

COLLECTIVE AGREEMENT Between Stantec Consulting Ltd. and Labourers’ International Union of North America (LiUNA), Local 3000 Expires December 31, 2023, Page 5: 

ARTICLE 4 – MANAGEMENT RIGHTS

4.01 The Union acknowledges that the management of the Company’s operation and direction of the employees within this bargaining unit are fixed exclusively in the Company and without restricting the generality of the foregoing, the Union acknowledges that it is the exclusive right of the Company to:

a) make, enforce, and alter from time to time policies, procedures, regulations, and guidelines to be observed by employees.

b) maintain standards, order, discipline, and efficiency.

c) hire, assign, layoff, classify, direct, schedule, promote, demote, transfer, recall, suspend or otherwise discipline or terminate employees for just cause;

d) to manage the enterprises in which the Company is engaged, and without restricting the generality of the foregoing; to determine the kinds and locations of operations, equipment and material to be used; the work to be done; the methods and techniques of work; the schedules of work; number of employees to be employed; institute changes in jobs and job assignments; discontinue, reorganize, limit, combine, substitute any operation or part thereof; and, determine all other functions and prerogatives which shall remain solely with the Company save and except as specifically limited by the express provisions of this Agreement.

4.02 The Company’s exercise of these exclusive rights in one manner or another, or the non-exercise of such rights, in no way restricts the exercise of such rights in future.

4.03 It is agreed that the exercise of these rights in a manner which conflicts with the express provisions of this Collective Agreement may be subject to the grievance procedures contained herein.

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

I initially try to outline how the annual report calculates net income before taxes and then makes some adjustments according to Marxian theory and on the basis of certain quantitative assumptions. 

There are two different measures in the annual report: one according to the International Financial Reporting Standards (IFRS) and one according to adjusted revenue and expenses that are not according to IFRS; I chose the measures based on IFRS.     

Now, the calculation (in millions of Canadian dollars)       

Gross revenue 4,827.3   
Less subconsultant and other direct expenses 1,116.0 
Net revenue 3,711.3           [4,827.3-1,116.0=3,711.3] 
Direct payroll costs 1,702.9     
Gross margin 2,008.4               [3711.3-1702.9=2008.4]
Administrative and marketing expenses  1,433.6     
Other (1.2)                                 
EBITDA (Earnings before income tax, depreciation and amortization)  576.0 [2008.4-1433.6=574.8; 574.8+1.2=576] [Other (expenses), if in parentheses, needs to be added since it is actually a gain–that is what the parentheses mean]
Depreciation of property and equipment 58.2
Depreciation of lease assets 115.8
Amortization of intangible assets 66.9 1
Net interest expense 69.6
Net income before taxes  265.5  [58.2+115.8+66.9+69.6=310.5] [576-310.5=265.5]

Adjustments

Let us make adjustments according to the order of the categories listed above. 

Adjustments of Wages and Benefits: Variable Capital (v) and, Correspondingly, Surplus Value (s) (Profit) 

Variable capital (wages, benefits and other costs associated with exploiting workers) includes not only direct costs but what the annual report calls “indirect labour” costs. The following specifies in more detail such costs: 

Employee Costs 

Wages, salaries, and benefits 2,629.9 
Pension costs 75.0 
Share-based compensation  18.1 
Total employee costs 2,723.0 
Direct labor 1,702.9 
Indirect labor 1,020.1 
Total employee costs 2,723.0 [1,702.9+1,020.1=2723.0]

The annual report has this to say about direct and indirect labour: 

Direct labor costs include salaries, wages, and related fringe benefits (including pension costs) for labor hours directly associated with the completion of projects. Bonuses, share-based compensation, termination payments, and salaries, wages, and related fringe benefits (including pension costs) for labor hours not directly associated with the completion of projects are included in indirect labor costs. Indirect labor costs are included in administrative and marketing expenses in the consolidated statements of income. Included in pension costs is $73.0 related to defined contribution plans.

I will not make any distinction between direct and indirect labour–although, if there were more detailed information, such a distinction would then become relevant in relation at least to marketing (for details, see the appendix to the post The Rate of Exploitation of Workers of Suncor Energy, One of the Largest Private Employers in Canada).  However, the category “Share-based compensation” requires adjustment. This category involves three subcategories for 2019: restricted share units (RSUs), performance share units (PSUs) and deferred share units (DSUs). This income needs to be transferred to surplus value (profit) as I argued in another post (see   The Rate of Exploitation of Workers at Bombardier, 2018, One of the Largest Private Employers in Quebec and in Toronto, Ontario: Or: How Unionized Jobs are Not Decent or Good): 

It seems clear that the money allocated to the category is limited to select employees. … The reasoning for including some (if not all) of it as part of surplus value is that this compensation is not mainly for the coordination of the work of others but for the exploitation of others–it is pure surplus value. 

The general nature of these payments is as follows: 

Under the Company’s long-term incentive plan, certain members of the senior leadership teams are granted performance share units (PSUs) or restricted share units (RSUs) that vest and are settled after a three-year period. DSUs [deferred share units], PSUs, and RSUs are settled only in cash (cash-settled transactions).

The particular nature of RSU payments is as follows:

Restricted share units

During 2019, the Company granted  RSUs to officers and employees at a fair value of $5.3, based on the trading price of the Company’s common shares at the grant date. 

The particular nature of PSU payments is as follows: 

Performance share units

Under the Company’s long-term incentive program, certain members of the senior leadership team may be granted PSUs. PSUs vest upon completing a three-year service condition. The number of units that vest is subject to a percentage that can range from 0% to 200%, depending on achieving three-year performance and market objectives. During the year ended December 31, 2019, PSUs ( were granted at a fair value of $11.6. 

The particular nature of DSU payments is as follows: 

Deferred share units

The directors of the board receive DSUs and annually elect to receive an additional fixed value compensation in the form of either DSUs or cash payment, less withholding amounts, to purchase common shares. During the year ended December 31, 2019, DSUs  were granted at a fair value of $1.2  based on the closing market price of the Company’s common shares at the grant date. 

If we sum up RSU, RSU and DSU payments, we have: 5.3+11.6+1.2=18.1 million–the figure above for the category “Share-based compensation.” This sum must be subtracted from “Total employee costs.” 

Accordingly, this 18.1 million needs to be added to “Net income before taxes” and subtracted from “Total employee costs”:

Temporarily adjusted net income before taxes 283.6

Adjusted Variable Capital (Wages and Benefits) 

Total employee costs 2704.9

Adjustments of Surplus Value (s) (Profit) 

The category “Net interest expense” needs to be transferred from an expense to actual surplus value produced but paid out as interest. I explained the reasoning for this in another post: 

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

Accordingly, the $69.1 million paid out as interest needs to be added to “Net income before taxes.” 

Adjusted Variable Capital (Wages and Benefits) and Surplus Value (s) (Profit)

Adjusted total employee costs 2704.9
Adjusted net income before taxes 353.2 

The Rate of Exploitation of Stantec Workers

To calculate the rate of surplus value, we need to relate “Adjusted net income before taxes” to  “Adjusted total employee costs.” So, with the adjustments in place:, s=353.2, and  v=2004.9. The rate of exploitation or the rate of surplus value=s/v=353.2/2004.9=13.1 percent. 

That means that for every hour worked that produces her/his wage, a worker at Stantec works around an additional 8 minutes for free for Stantec. Alternatively expressed, for every hour worked that produces her/his wage, a worker at Stantec works 52 minutes that produces her/his wage and 8 mintues for free for Stantec. 

According to a few people who have worked at Stantec, the length of the working day is:

Depends on the team – core hours 8-4/9-5

Long in the summer construction months i.e 12 hours plus but this is typical of outdoor Alberta construction

37.50 hours per week

7.5 hours.

7.5 hours minumum to as much as 16

I will calculate the division of the working day from the shortest to the longest in the above quotes accordingly. I use minutes rather and not just hours.

  1. For a 7.5 hour working day (450 minutes), Stantec workers spend 398 minutes (6 hours 38 minutes) to obtain their wage for the day, and they spend 52 minutes  in obtaining a surplus value or profit for Stantec. 
  2. For an 8 hour working day (480 minutes), Stantec workers spend  424 minutes (7 hours 4 minutes) to obtain their wage for the day, and they spend 56 minutes  in obtaining a surplus value or profit for Stantec. 
  3. For a 12 hour working day (720 minutes), Stantec workers spend  637 minutes (10 hours 37 minutes) to obtain their wage for the day, and they spend 83 minutes (1 hour 23 minutes) in obtaining a surplus value or profit for Stantec. 
  4. For a 16 hour working day (960 minutes), Stantec workers spend 849  minutes (14 hours 9 minutes) to obtain their wage for the day, and they spend 111 minutes (1 hour 51 minutes) in obtaining a surplus value or profit for Stantec. 

Of course, during the time that the Stantec worker works to obtain an equivalent of her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Do you think that these facts contradict the talk by the left and unionists of “”fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One and  Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for this rhetoric of the largest unions in Canada, the Canadian Union of Public Employees (CUPE) and  Unifor) , “fair wages” and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in workers’ lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? Do the left? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

COLLECTIVE AGREEMENT Between Stantec Consulting Ltd. and Labourers’ International Union of North America (LiUNA), Local 3000 Expires December 31, 2023Page 5: 

ARTICLE 4 – MANAGEMENT RIGHTS

4.01 The Union acknowledges that the management of the Company’s operation and direction of the employees within this bargaining unit are fixed exclusively in the Company and without restricting the generality of the foregoing, the Union acknowledges that it is the exclusive right of the Company to:

a) make, enforce, and alter from time to time policies, procedures, regulations, and guidelines to be observed by employees.

b) maintain standards, order, discipline, and efficiency.

c) hire, assign, layoff, classify, direct, schedule, promote, demote, transfer, recall, suspend or otherwise discipline or terminate employees for just cause;

d) to manage the enterprises in which the Company is engaged, and without restricting the generality of the foregoing; to determine the kinds and locations of operations, equipment and material to be used; the work to be done; the methods and techniques of work; the schedules of work; number of employees to be employed; institute changes in jobs and job assignments; discontinue, reorganize, limit, combine, substitute any operation or part thereof; and, determine all other functions and prerogatives which shall remain solely with the Company save and except as specifically limited by the express provisions of this Agreement.

4.02 The Company’s exercise of these exclusive rights in one manner or another, or the non-exercise of such rights, in no way restricts the exercise of such rights in future.

4.03 It is agreed that the exercise of these rights in a manner which conflicts with the express provisions of this Collective Agreement may be subject to the grievance procedures contained herein.

What do you think? 

School Rhetoric: Ideological Use of the Concept of Social Justice, Part One

Social justice has now become a buzzword these days. There is social justice this and social justice that, here a social justice, there a social justice, everywhere a social justice. This buzzword forms the ideology of the social-democratic left, for example, as well as the conservative right. After all, who is against social justice?

The winter 2015-2016 edition of Leaders & Learners (the official magazine of the Canadian Association of School Administrators, or CASS) has as its title “Social Justice and Social Responsibility.” The content of that particular journal expresses the limited definition (and views) of its middle-class authors.

Let us look at the most radical article in the publication: “The ‘Great (Un) Equalizer’: Using the Bourdieuian Lens to Understand ,the Paradox of Education,” Victor Brar uses Pierre Bourdieu’s concept of “cultural capital,” among others, to criticize schools. Brar argues that academic achievement is a function of the individual’s cultural capital, which is accumulated as a child experiences the world to form their habitus–the specific way of looking at the world and responding to it. This world, however, is not unitary but riveted by separation through the existence of social classes. Individuals belonging to different classes will have different kinds of cultural capital and different habituses.

In schools, some kinds of cultural capital and habitus will be treated as more valuable than others, forcing those who lack the characteristic cultural capital and habitus of the school system to conform to external requirements–which leads to symbolic violence.

Brar then uses more specific categories of class to criticize the school system. Those children who lack the cultural capital and habitus of schools are “from low SES [socio-economic statu] backgrounds” and will, in a vicious circle, fail to achieve relatively to those students who do possess the cultural capital and habitus of the school; the lower SES students will thus remain in the low SES.

Brar specifically uses the socio-economic status criterion for determining the nature of the lower and middle classes, page 35:

This achievement gap, if further compounded by the fact that because schools are unfairly oriented towards middle class dispositions, then the children from higher SES backgrounds perform comparatively better, thereby widening the achievement gap between themselves and their low SES peers.

Using levels of income (SES) to define class may be useful in some circumstances (for example, in deciding the likelihood of support for certain socialist policies related to housing), the use of levels of income is a social-democratic method of excluding most people from the working class.

The absurdity of classifying people as middle class on the basis of income can be seen from one article on distribution of income in some so-called Third World countries. This article refers to earning $2-$4 a day (presumably in American dollars) as the lower end of the middle class in Guatemala and $6-$10 a day to be the upper end in Guatemala. They justify such a classification in the following manner. From Abhijit Banerjee and Esther Duflo, “What is Middle Class about the Middle Classes around the World?,” Journal of Economic Perspectives—Volume 22, Number 2—Spring 2008, page 5:

In what sense should people living on between $2 and $10 per day be called “middle class”? These households are still very poor by developed country standards; the poverty line in the United States in 2006 for someone who lives in a family of five, for example, was $24,385, which when divided by five people in the family and 365 days in a year, works out to be about $13 per day.

On the other hand, the middle class in these countries are clearly much better off than the poor, who live on less than $1 or $2 a day.

This definition of middle class is purely in terms of relative level of income and takes no account of how this so-called middle class obtains its money. It is a definition based on a “standard of living” concept–a consumerist concept.

Consider the situation of my wife. She was born in Guatemala and earned around 2,800 Quetzales a month–around $373 US a month, or $12,44 US a day. How can anyone call her a member of the middle class? Her last job in Guatemala was a salesclerk in Guatemala City. Before that, she was a receptionist (earning about the same amount), but the company downsized and consolidated positions, throwing her out of work. She was unemployed for several months afterwards, with no income. In all her jobs, she had a boss who evaluated her performance and ultimately controlled her work and indeed whether she would work at all (power to fire). This is the situation of a member of the working class.

This does not mean that there is no such thing as the middle class. My sister-in-law’s husband is a doctor in Guatemala and has his own practice. He sets his own hours, fees and so forth. His work life is much more independent than was the work life of my wife. He can be considered part of the Guatemalan middle class.

Using levels of income or SES to define class implies that everyone can become middle class in a capitalist economy. Thus, if only everyone could achieve a level of income above the poverty line, then there would be no “poor” or working class.

Compare this view with the Marxian definition of class. In the Marxian definition of class, classes are mainly defined in an antagonistic fashion: one class emerges at the expense of another class through control over the conditions of work. One class gains what the other class loses, and the class that loses often tries to regain what it has lost, so there is a class struggle that only ends when either the two classes mutually ruin each other, or the lower class defeats the ruling class and creates a new form of society (with or without classes).

In the context of modern society, it is not the level of income but the fact that most workers have to work for an employer that characterizes class relations. Brar, by defining class in terms of levels of income, fails to develop an analysis that looks beyond the relationship of employer and employees; indeed, his definition of class according to levels of income actually hides the real class relations by excluding a concept of class that involves the exploitation of one class by another.

Even apart from the issue of exploitation, there is the additional issue of treating workers as things to be used by others. In a capitalist society, class power relations are linked to control over things–human beings are controlled through control over things that have social power (such as money, but also machines, buildings and so forth). Things gain human-like power, and human beings become thing-like (see The Money Circuit of Capital). Brar’s use of level of income as the basis for defining class not only fails to capture the need for class exploitation but also fails to capture the need for treating human beings as things and the need for things to gain human-like powers (what can be called commodity fetishism, money fetishism–treating things such as beer, money and means of production as possessing inherent social powers independently of human beings).

It is true that there are members of a middle class in modern society, but they should be seen as related to the two other antagonistic classes. Thus, just like my brother-in-law, doctors can usually be considered part of the middle class, but not just because of the level of income but because they control their own work, on the one hand, and they lack control over many workers lives on the other. Supervisors and lower-level managers could also be considered part of the middle class in that part of their function is to control the work of workers while, on the other hand, they themselves are hired workers who depend on a wage or salary to live. Superintendents undoubtedly can be considered part of the middle class.

Principals may also be considered part of the middle class, but approach perhaps more closely to the position of the working class since they are further down in the dictatorial hierarchy. On the other hand, the extent to which principals  function as oppressors of members of the working class also needs to be taken into account. On a practical level, whether a principal is a member of the working class or the middle class would have to be determined organizationally–whether in fact they oppose the working class or support them.

Despite these limitations, Brar’s characterization of lower SES and higher SES does have some usefulness in characterizing school experiences. Some parents who are members of the working class do see schooling (what they call education) as an investment in the future of their children and seek to ensure that their children have the wherewithal to be successful as defined by school authorities. Other parents of the working class do not. Similarly, some children of the working class do identify with such expenditures whereas others do not.

This view of schooling as investment is, however, characteristic not of the middle class per se but of what Hadas Weiss (We Have Never Been Middle Class) calls middle-class ideology. The ideology functions as a competitive belief in “investment,” whether it is in schooling, housing, pensions, stocks and bonds, etc., with the expectation that the sacrifice required for the expenditure will pay off in the future. The fact that those who make such sacrifices have to work for an employer is simply ignored. Such an ideology, another words, papers over the need for members of the working class to accept their subordination to the class of employers if they are to be “successful” in this social world.

This ideology has undoubtedly served to limit the class struggle of the working class since workers then are prepared to subordinate themselves to the power of employers in the present in hopes of reaping rewards in the future.

Since the level of sacrifice needed in neoliberal times has been increasing and the returns for the increasing levels of sacrifice have been diminishing, this middle-class ideology is being threatened.

Returning to Brar’s article, Brar, rather than exposing the limitation of middle-class ideology and criticizing it, relies on the distinction in order to criticize schools. He does not question whether those who have higher levels of income are in fact members of the middle class or not. He assumes that they are. His criticism of the school is therefore limited. His implicit concept of social justice remains entirely bound to the present social order of a class of employers, on the one side, a class of employees on the other, with another class–the middle class being neither one nor the other. The middle class, then, cannot be determined except in relation to the two dominant classes in a capitalist society.

If Brar’s article, which is the most radical article in the superintendents’ journal, forms an inadequate basis for criticizing schools, then all the articles referring to social justice are bound to form an even more inadequate basis for criticizing schools–as we shall see in future posts.

Review of Thier’s Book “A People’s Guide to Capitalism,” Part Two

I recently participated in a group called No One Is Illegal here in Toronto. The group decided to provide a zoom reading meeting every week to discuss the book A People’s Guide to Capitalism, by Hadas Thier, with many participants not belonging to the group but interested in understanding more about capitalism. We read the book in parts, with each participant taking turns to read out loud a section, with questions to be asked and discussed after each section or difficult part. The group did not finish the book–the number of participants dwindled; it is unlikely that there was much emotional attachment to understanding–despite the participants’ apparent interest in understanding the nature of capitalism.

I sent along some comments to the group (but not to the other partcipants) in order to provide the group with my understanding of the nature of capitalism–which does not always coincide with Thier’s view.

The following is what I wrote before the second session:

Page 56:

What Marx is saying is that the specifics of whether linen’s value is being measured against tea or sandals or coats doesn’t matter. What matters is the amount of abstract human labor objectified in each. These items lose their subjectivity as they become simple units of measurements of the value of linen. They can become equivalents only because they, like linen, embody human labor in the form of value.

In a sense, the specific commodity that becomes money does not matter, but once a specific commodity has become money, then it does matter since money becomes the exclusive form of the embodiment of immediate exchangeability or convertibility of one commodity into another.

Page 57:

Her reference to the universal equivalent: Same critique as in the previous post. She fails to link this up to the nature of abstract labour and value and the adequate expression of abstract labour. As abstract labour is not social labour as it is being performed, its social being must be located outside its own use value and outside all other use values—except one.

 Describing the anonymity and boundlessness of this circulation, he wrote

(she then quotes from Marx: Here is my interpretation of the quote, preceded by some preliminaries. From my blog:

The Escape of the Whole Process of Simple Circulation from the Control of the Participants with the Emergence of Money

In the external measure of the value of commodities via money as measure, there is, indeed, all commodities on one side and money on the other side, but in the actual exchange of commodities with money (money as a means of purchase or as a means of circulation) this is not the case; on the contrary, there is necessarily a separation in space and time between the act of sale (realization of the value of the commodity in money) and the realization of money in various use values (purchase).

The unity of value and use value, hidden in the commodity, is expressed as mutually exclusive and external forms of sale and purchase so that crisis becomes a possibility as the gap between the realization of the value of a commodity and the realization of use values of an equivalent value becomes intensified.

Page 79:

Thus, if after you finish making $120 worth of coffee, instead of throwing down your apron and going home, you finishout your eight-hour shift, one hour will be necessary labor, and seven hoursare surplus labor!

To make the following a little easier to follow, we can consider the following:

  1. The owner of linen wants to sell the linen in order to buy a Bible.
  2. The owner of money who buys the linen obtained the money by selling wheat.
  3. The owner of the Bible sells the Bible to the former linen owner in order to buy brandy (but the brandy does not directly figure in the total metamorphosis or total exchange of the linen for the Bible since we end with the Bible owner possessing money and the linen owner possessing the Bible.
  4. At the beginning of the total exchange process, the linen owners owns the linen (a use value for others) but does not want it.
  5. At the end of the total exchange process, the former linen owner now owns a use value useful to her (and the linen also is useful for the farmer, the former owner of wheat).
  6. The money stops circulating for the moment at the end of the process with the former owner of the Bible aiming to purchase some brandy (but not yet doing so).
  7. [linen owner, bible owner, wheat owner, brandy owner?] [wheat-linen; linen-bible; bible-brandy] [the wheat owner depends indirectly on the bible owner to purchase the
  8. linen owner sells linen to money owner, who sold the wheat to obtain the money
  9. linen owner buys bible, and owner of bible sells bible in order to buy brandy
  10. at end of one complete exchange process, two exchangers have use values and one exchanger has money: asymmetrical: two complete realizations of a commodity and one incomplete.

Pages 207- 209:

The circulation of commodities differs from the direct exchange of products not only in form, but in its essence. We have only to consider the course of events. The weaver has undoubtedly exchanged his linen for a Bible, his own commodity for someone else’s. But this phenomenon is only true for him. The Biblepusher, who prefers a warming drink to cold sheets, had no intention of exchanging linen for his Bible [the owner of a particular commodity intends to exchange what he owns for other commodities; but the owners of other commodities need not have any intention of exchanging their commodities for what the owner of the particular commodity owns]; the weaver did not know that wheat had been exchanged for his linen [and the owner of a particular commodity has no intention of exchanging his particular commodity for the commodity owned by another owner but not wanted by him] [the owner of linen may not want any wheat] . B’s commodity replaces that of A, but A and B do not mutually exchange their commodities. It may in fact happen that A and B buy from each other, but a particular relationship of this kind is by no means the necessary result of the general conditions of the circulation of commodities. We see here, on the one hand, how the exchange of commodities breaks through all the individual and local limitations of the direct exchange of products, and develops the metabolic process of human labour. On the other hand, there develops a whole network of social connections of natural origin, entirely beyond the control of the human agents. Only because the farmer has sold his wheat is the weaver able to sell his linen, [to sell a particular commodity, another person had to be able to sell their particular commodity and convert it into money] only because the weaver has sold his linen is our rash and intemperate friend able to sell his Bible, and only because the latter already has the water of everlasting life is the distiller able to sell his eau-de-vie. And so it goes on.

The process of circulation, therefore, unlike the direct exchange of products, does not disappear from view once the use-values have changed places and changed hands. The money does not vanish when it finally drops out of the series of metamorphoses undergone by a commodity. It always leaves behind a precipitate at a point in the arena of circulation vacated by the commodities. In the complete metamorphosis of the linen, for example, linen-money-Bible, the linen first falls out of circulation, and money steps into its place. Then the Bible falls out of circulation, and again money takes its place. When one commodity replaces another, the money commodity always sticks to the hands of some third person.  Circulation sweats money from every pore.

Circulation bursts through all the temporal, spatial and personal barriers imposed by the direct exchange of products, and it does this by splitting up the direct identity present in this case between the exchange of one’s own product and the acquisition of someone else’s into the two antithetical segments of sale and purchase. To say that these mutually independent and antithetical processes form an internal unity is to say also that their internal unity moves forward through external antitheses. These two processes lack internal independence because they complement each other. Hence, if the assertion of their external independence proceeds to a certain critical point, their unity violently makes itself felt by producing – a crisis. There is an antithesis, immanent in the commodity, between use-value and value, between private labour which must simultaneously manifest itself as directly social labour, and a particular concrete kind of labour which simultaneously counts as merely abstract universal labour, between the conversion of things into persons and the conversion of persons into things*; the antithetical phases of the metamorphosis of the commodity are the developed forms of motion of this immanent contradiction.

Page 65: She quotes Jim Stanford from his book Economics for Everyone: A Short Guide to the Economics of Capitalism. Stanford, however, lacks an adequate theory of money, and he seems to go out of his way to avoid relating money to labour. Thus, his only definition of money is “purchasing power.” He does not explain why one particular thing has this purchasing power, why other things (commodities) do not, and why such power is embodied in a thing rather than in the people who produce their lives. Stanford, by the way, was an economist for the former Canadian Auto Workers (CAW) and then for Unifor. He is a social democrat and social reformist.

Mr. Stanford seems to consciously avoid adopting a Marxian theory of capitalism. One possible explanation is the title of my critique of Stanford’s theory of money (among some of his other economic views) on my blog: Economics for Social Democrats but not for the Working Class.

More generally, Thier occasionally fails to engage critically with the material. Thus, in an earlier chapter, on page 10, we read:

Ideological shifts have been as dramatic as the protests on the streets. Even before the pandemic struck, polls consistently showed that the majority of millennials reject capitalism, and in some cases specifically prefer socialism.7 In the US, where the two-party system has a vice-like grip on the electoral process, Bernie Sanders, a self-proclaimed socialist, won the support of tens of millions of primary voters in 2016, who “felt the Bern” of his anti-corporate political revolution. By the 2020 election, the previously fringe candidate became a front-runner in the national elections and fundamentally shifted the national discussion on every major issue: from health care and climate change to racial justice and class inequality.

This is very problematic. In the first place, what does “reject capitalism” mean? And what does “prefer socialism” mean? When I was working at the brewery, there was a lab assistant who tested the beer for quality control. We talked in the lunch room occasionally, and he indicated that he was somewhat of a socialist. He later became a foreman–and oppressed us just as much as other foremen. He conceived of socialism in terms of welfare capitalism and not in terms of the elimination of the class power of employers.

In the second place, it should not be forgotten that, before the First World War, many members of the Social Democratic Party in Germany (some of whom undoubtedly also called themselves Marxist) voted for war.

In the third place, it has been my experience here in Toronto that most self-proclaimed socialists aim for enhanced welfare capitalism and not for the abolition of capitalism.

The issue is relevant, politically, since an overestimation of the support for the abolition of capitalism greatly underestimates the work needed to gain support for such abolition.

Thier, page 71:

Ultimately, the only way to change the value of the chair is through reducing or increasing the amount of labor-time that goes into making it.

It is true that Marx ultimately claims this to be the case. However, there are circumstances which seem to contradict this. Thus, on pages 130-31 of volume 1 of Capital, we read:

The same quantity of labour provides more metal in rich mines than in poor. Diamonds are of very rare occurrence on the earth’s surface, and hence their discovery costs, on an average, a great deal of labour-time. Consequently much labour is represented in a small volume. Jacob questions whether gold has ever been paid for at its full value.* This applies still more to diamonds. According to Eschwege, the total produce of the Brazilian diamond mines for the eighty years ending in 1823 still did not amount to the price of 1 years’ average produce of the sugar and coffee plantations of the same country,t although the diamonds represented much more labour, therefore more value. With richer mines, the same quantity of labour would be embodied in more diamonds, and their value would fall. If man succeeded, without much labour, in transforming carbon into diamonds, their value might fall below that of bricks. In general, the greater the productivity of labour, the less the labour-time required to produce an article, the less the mass of labour crystallized in that article, and the less its value. Inversely, the less the productivity of labour, the greater the labour-time necessary to produce an article, and the greater its value. The value of a commodity, therefore, varies directly as the quantity, and inversely as the productivity, of the labour which finds its realization within the commodity.

For substantial periods of time, especically in labour directed more directly to the earth (land), supply and demand can be in disequilibrium, or unbalanced. Ultimately, though, as capital moves from branches of production where profits are low relative to other spheres of production (and where supply tends to exceed demand) to branches of production where profits are high relative to other spheres of production (and where demand tends to exceed supply), there is a balancing of supply and demand (as a dynamic process that never is achieved except perhaps momentarily).

Land is a non-produced means of production and has no value, but it can have a price. This pertains to Marx’s theory of rent, which has two components: differential rent and absolute rent. However, I have not really studied this area to any great extent and cannot adequately comment on it. Marx further separates differential rent into differential rent I and differential rent II.

Differential rent I pertains to differences in land used to produce agricultural commodities, mined commodities, forest commodities and fish commodities. Some land will be, for example, more fertile than other land. If effective demand exists (backed up by money), then capitalists will invest in agriculture where there is more fertile land and less fertile land. With more fertile land, there is greater productivity of labour (more commodities can be produced). The capitalists will invest in agriculture, with different levels of fertility and hence different levels of commodity production per unit of labour. The least productive capital, with the worst land, will result in zero differential rent; all, more productive capitals that are due to the increased quality of fertility, will result in differential rent 1—a surplus beyond the regular level of profit. The capital invested in the least fertile land will determine the value of commodities.

Differential rent arises due to private property in land—and land is, ultimately, non-produced.

Differential rent 2, by contrast, has to do with the application of different techniques within agriculture, within mining, within forestry, etc. In other branches of capitalist commodity production, when techniques are used that enable workers to produce a greater amount of commodities in the same period of time, a surplus profit can arise(hence, there is an incentive to innovate). In agriculture, etc., the surplus profit can be captured by landowners rather than by the capitalists, reducing the incentive to invest intensively in this sector. The extent to which the surplus profit is divided between capitalist farmers and landowners will depend on their economic and political power.

This leads in to a further kind of rent: absolute rent, which has to do with, as Ben Fine and Alfredo Saad-Filho remark, with differences in productivity between different branches of production (such as differences in productivity between the production of hops and beer production) rather than within them (such as differences in productivity between the growing of grapes and the growing of wheat). This issue has to do with what Marx called the composition of capital, or the proportion of investment in means of production and labour power (c/v), or constant capital divided by variable capital) or, in some variations, the proportion between the value of the means of production, on the one hand, and labour power and surplus value, on the other (c/(v+s).

The basic idea is that, due to the existence of landed property (with land ultimately being a non-reproduced and non-reproducible means of production), there is a barrier to the entry of capital into agriculture, etc. This barrier results in a slower rate of development of innovation and substitution of v for c in agriculture, etc. However, since the sole source of surplus value is labour, the lower composition of capital in agriculture (a lower c/v), etc means that more surplus value is produced in this sector per unit of investment (c+v) than in branches of industry where there is a higher composition of capital (a higher c/v). But with different compositions of capital, the rate of profit, which is measured by the proportion s/(c+v) will differ. This difference in rates of profit, however, will spur capitalists to shift investment to the higher rates until there is an equal rate of profit (which is only temporary, given the dynamics of capitalist accumulation).

With an equal rate of profit in all capitalist industries, in agriculture, with a lower c/v than the average, what Marx called the production price of commodities would be lower than the value of the commodities. (In cases where c/v is higher than the average, the production price would be higher than value of the commodity). In essence, what this means is that the production of surplus value in a particular branch of the economy is not identical to its distribution; some capitalists will receive surplus value from other capitalists (those capitalists with a higher c/v than the average)), and other capitalists will see part of the surplus value produced in their branch (due to a lower c/v than the average) transferred to other capitalists; Marx sarcastically called this capitalist communism, since the principle is the distribution of the total surplus value produced by workers according to equal rates of profit.

In the case of agriculture, etc., because land is a non-produced commodity, since the price of production is lower than the value of commodities, the difference can be pocketed by the class of landowners as absolute rent when capitalist farmers invest in new land. This, again, depends on the relative power relations between the class of capitalists and the class of landowners.

The issue of urban rent is undoubtedly much more complicated. As Ira Katznelson wrote (Marxism and the City. Oxford: Clarendon Press, page 227):

As capitalism entered the industrial epoch, the concept of the land-rent gradient that pointed toward the highest economic use by introducing a profit motive into land use and housing was already established. With the explosion in the demand for land for factories as well as for working-class housing, this market logic accelerated the processes oi segregation of both uses and social classes.

Critical Education Articles Placed in the Teacher Staff Lounge While I Was a Teacher, Part Eighteen: The Hidden Curriculum of Learning to Develop a Positive Attitude Towards Being Exploited and Oppressed

This is a continuation of a series of posts on summaries of articles, mainly on education.

When I was a French teacher at Ashern Central School, in Ashern, Manitoba, Canada, I started to place critiques, mainly (although not entirely) of the current school system. At first, I merely printed off the articles, but then I started to provide a summary of the article along with the article. I placed the summaries along with the articles in a binder (and, eventually, binders), and I placed the binder in the staff lounge.

As chair of the Equity and Justice Committee for Lakeshore Teachers’ Association of the Manitoba Teachers’ Society (MTS), I also sent the articles and summary to the Ning of the MTS (a ning is “an online platform for people and organizations to create custom social networks”).

As I pointed out in a previous post, it is necessary for the radical left to use every opportunity to question the legitimacy of existing institutions.

The context of the following, if I remember correctly, was the March 8-10 Winnipeg (Manitoba, Canada) Women’s Symposium, entitled Living as an Ally: Individually and Collectively, where Dr. Kryzanowski presented the following on March 9, 2012 (from a brochure of the Conference):

Impacts of Poverty on Marginalized Groups: What Teachers Need to Know!
Dr. Julie Kryzanowski, Saskatoon Regional Health Authority

The significant and troubling health disparities between low-income neighbourhoods and the rest of the city in Saskatoon were a catalyst for action in Saskatoon Health Region. With local health and education partners, the Health Region pursued a program of research to explore the extent of students’ health disparities and address them with evidence-based interventions. Dr. Julie Kryzanowski tells their story and relates how events and experiences in childhood influence health outcomes across the life course –and explains what teachers need to know to make a difference.

I wrote the following for the Ning, and sent it to the executive of Lakeshore Teachers’ Association:

Dr. Kryzanowski, in her presentation to the Women’s Issues Symposium, focused in many ways on child poverty—something which constantly needs to be stressed. However, as part of her presentation, she refers to some things that teachers can do, including increasing “access to early childhood education and postsecondary education for all.”

Although I have argued in another post that child poverty should be a major focus for teachers in general and for those interested in equity and social justice in particular, I have also argued on several occasions that the present school system is hardly an adequate basis or standard for children and adolescents.

Dr. Kyrzanowski does not criticize the current school system but presupposes it.

Rather than reiterating what I have already posted, I will look at the situation from a slightly different angle by summarizing an article by Samule Bowles and Herbert Gintis, “Schools in Capitalist America Revisited.”

This article is itself a reference to the book by Bowles and Gintis, published in 1976, Schooling in Capitalist America. In that book, they argued that there was a correspondence principle between capitalist work practices and the practices that existed in schools.  Social interactions and the reward structure in the capitalist-worker relation are replicated in the social interactions and reward structure of schools.

They update their analysis in this article with econometric analysis (the use of regression equations in particular. Regression equations are formulated by using descriptive statistics to create, for instance, “best fit” equations that can then be used for prediction—inferential statistics).

A thesis of the article is that there is strong correlation between the economic status of one’s parents and one’s own economic status. Since the economic structure is characterized by inequality, schools generally function to reproduce that inequality. Thus, if you know the economic status of a child’s or adolescent’s parents, then you can use that knowledge to predict, fairly accurately, her/his success on the market for workers.

One study shows that a son born into the top decile has a 22 percent chance of attaining that decile whereas a son born in the bottom decile has a 1 percent chance. Furthermore, a son born in the bottom decile has a 19 percent chance of remaining in that decile; a son born in the top decile has no chance of moving to the lowest decile.

Bowles and Gintis do not deny that IQ, as an inheritable trait, has some impact on the probability of success in the market for workers. However, they find that, if IQ were the only determinant of success, then the probability that sons of the richest decile would attain the highest decile of income would only exceed the probability that sons of the poorest decile would attain the highest decile of income would only be 12 percent greater—whereas the statistics show a probability of 16-44 times .

The authors also call into question the view that schools primarily develop cognitive skills that are correlated highly with success in the market for workers. In a survey of 3,000 employers, it was found that the most important reason for hiring was attitude, followed by, in order, communication skills, industry-based skill credentials, years of schooling and academic performance.

In another survey, of those companies that reported a skill shortage, 43 percent indicated that there was a shortage of technical skills—but 62 percent indicated a shortage of employees who had a poor attitude, lacked appropriate personality characteristics and lacked motivation.

A third survey compares the earnings of high-school dropouts who obtained GED qualifications with those without the GED qualification. Despite GED holders generally having higher cognitive skills than high-school dropouts, the GED holders earned only slightly above high-school dropouts. Those who performed the survey hypothesized that the reason for little gains in earning power for GED holders is that the holders send mixed signals to employers; they have the cognitive ability but lack motivation to persevere.  Bowles and Gintis also point out that the conclusions from this survey indicate that “seat work,” or mere attendance, is more important for employers than the curriculum or learning per se. Employers probably tend to treat technical skills with the “wrong attitude” to be more trouble than they are worth to the employers. Socialization at school for subordination of workers’ wills and personalities to employers’ dictates constitutes part of the “hidden curriculum” in schools.

Bowles and Gintis argue that a test for determining whether cognitive skills are that important when compared to such variables as the “hidden curriculum” of socialized subordination to the dictates of employers is a variation in school years attended when cognitive skill is held constant. By comparing a regression equation in which cognitive skill is included and a regression equation in which it is excluded, the ratio of earning differences can be calculated, with variations in schooling with and without changes in cognitive skills. The authors found that variables other than cognitive skills (such as years of schooling and socio-economic status) explained a considerable level of variations in earnings, with cognitive skills accounting for much less of the variation.  Considerable variations in schooling correlated quite highly with years of schooling; substantial cognitive skills did not account for much of the variations in earnings.

On the other hand, personality traits, such as integrity, conscientiousness, industriousness, perseverance and leadership, have a substantial impact on wages and salaries. Curiously, such personality traits have a larger impact than family background.

Other behavioural traits having to do with motivation, such as the degree of trust and belief that a person’s efforts make a substantial difference, have a greater impact on wages and salaries than do cognitive skills.

Bowles and Gintis did find that the interaction of occupational status, gender and behavioural traits did affect wages and salaries. Thus, women in high-status occupations who were considered aggressive experienced a decrease in wages or salaries whereas men who were considered aggressive experienced a substantial increase in wages or salaries. On the other hand, women in low-status occupations who were not considered aggressive experienced a decrease in wages or salaries.

The authors argue, in general, that personality traits rewarded in schools correspond to those traits rewarded at work for an employer (and not simply work—to identify work with work for an employer is to treat capitalist relations at work to be characteristic of all of human relations throughout history). They do recognize, though, that the situation is more complicated than they had presented it in their 1976 book. The reward structure present in the employer-employee relation, they now recognize, competes with other reward structures, such as family membership and citizenship.

What relevance has all this to do with equity and social justice? The formation of the kind of  character or personality is hardly irrelevant to such issues. In the first place, if the hidden curriculum in schools, which moulds children and adolescents (with or without their resistance or cooperation) and accounts to a greater extent than cognitive skills for wages and salaries, then the emphasis on the importance of schooling indirectly (even if unconsciously–the hidden curriculum) in the formation of certain personality traits is justified. Character formation, however, is an ethical question, and ethical questions surely are relevant to equity and social justice issues.

What kind of personality do we want children and adolescents to develop? To develop personalities that enable them to be used by employers without resistance? To be used as instruments for the benefit of employers?

Or do we want children and adolescent to develop personalities that enable them to resist being used as instruments by employers?

In the second place, if children’s and adolescents’ prospects at work are also a function of the economic conditions of their parents, should we not be doing something concrete to negate that situation? Like trying to eliminate childhood poverty?

However, it should be noted that even if child poverty in terms of socio-economic differences were realized, the formation of the kind of character or personality required by employers would still be a problem—except for those who do not question the employer-employee relation.

Dr.  Kryzanowski does not address the fact that there is a market for workers, and the school system is intimately connected to the economic structure.

Those who are interested in equity and social justice, in such a situation, may be contributing to inequity and social justice by being blind to that situation and not taking it into account. The road to hell, after all, is paved with good intentions.

Management Rights in a Spanish Collective Agreement: An Expression of “Free Collective Bargaining” or the Dicatorship of Employers?

There are undoubtedly variations in the rights of workers from country to country, but the fundamental principle of the power of employers as a class is constant. This power is often implicit but also often is expressed more explicitly–even in collective agreements between employers and unions.

For example, the following is taken from the collective agreement for offices between the General Union of Workers (Unión General de Trabajadores (UGT)), the Workers’ Commissions (Comisiones Obreras (CCOO)), and the Madrid Business Confederation (la Confederación Empresarial de Madrid–CEOE) (CEIM)), dated January 1, 2019-December 31, 2021:

page 6 (my rough translation) (the original in Spanish is included afterwards):

Chapter 2–Organization of Work and Functions

Article 8: General Principles

  1. The practical organization of the work, subject to this collective agreement and the current social legislation in force, is the exclusive capacity of the management of the enterprise.

A further clause also expresses the power of the employer in relation to the employees (page 28):

Chapter 10–Code of Conduct

Article 44: Disciplinary Regime 

  1. The capacity to impose discipline corresponds to the management of the enterprise or to persons delegated for that purpose.

Is this an expression of a democratic society? If democracy is a way of life and not just formal voting for political representatives, do such clauses in collective agreements (which are normally superior to non-unionized implicit employment contracts in terms of provisions for workers) express democracy? Or do they express dictatorship–a dictatorial way of life? See, for example, The Money Circuit of Capital or Employers as Dictators, Part One.

Is this a good example of what union reps mean by “free collective bargaining?” “Good contracts?” “Fair contracts?” “Decent work?” What do you think?

Spanish Original

CAPITULO II – ORGANIZACIÓN DEL TRABAJO Y FUNCIONES

Art. 8º.- PRINCIPIOS GENERALES.

1. La organización práctica del trabajo, con sujeción a este Convenio Colectivo y a la
legislación social vigente, es facultad exclusiva de la Dirección de la Empresa.

CAPITULO X – CÓDIGO DE CONDUCTA

Art. 44º.- RÉGIMEN SANCIONADOR.

1. La facultad de imponer las sanciones corresponderá a la dirección de la empresa
o en las personas en quien delegue.

The Ontario Federation of Labour’s Workers-First Agenda: A Critique: Part Two

Introduction

The first part of this series focused on a critique of the phrase “good jobs and decent work” expressed in the Ontario Federation of Labour’s campaign titled “Building the Fight for a Workers-First Agenda” (https://ofl.ca/event/activist-assembly-2022/). This post will focus on a critique of the phrases “high quality affordable housing” and “health care.” I draw on earlier posts for such critiques.

The so-called radical left here in Toronto rarely engages in any detailed criticism of unions or groups of unions. Quite to the contrary. They either make vague assertions about “the trade-union elite” or the “trade-union bureaucracy” (union bureaucrats or business unions), or they remain silent when faced with the persistent rhetoric that unions use. It is hardly in the interests of the working-class to read merely vague criticisms of unions or to not read anything concerning the limitations of unions or groups of unions.

The Ontario Federation of Labour (OFL)

What is the Ontario Federation of Labour (OFL)? On its website, we read the following:

WHO WE ARE

Just as workers unite in a union to protect their rights, unions also unite in federations of labour to fight for better working and living conditions. The Ontario Federation of Labour (OFL) serves as an umbrella group for working people and their unions.

From our inception in 1957, the OFL has grown to represent over one million Ontario workers belonging to more than 1,500 locals from 54 affiliated unions, making us Canada’s largest labour federation. Our strong membership and constant vigilance make us a formidable political voice.

WHAT WE DO

We push for legislative change in every area that affects people’s daily lives. Areas like health, education, workplace safety, minimum wage and other employment standards, human rights, women’s rights, workers’ compensation, and pensions.

We also make regular presentations and submissions to the Ontario government and mount internal and public awareness campaigns to mobilize the kind of political pressure that secures positive change for all workers – whether you belong to a union or not.

To accomplish these goals, we work with affiliated local unions and labour councils across the province. We also partner with other community and social justice organizations to build a fairer and more inclusive society that meets everyone’s needs.

The Ontario Federation of Labour’s Worker’s-First Agenda Campaign

On the above web page, we read:

That means good jobs and decent work for all workers; a $20 minimum wage; high quality affordable housing; accessible and well funded health care, long term care, education, and other public services; justice for Indigenous people and racialized communities; climate justice and a livable planet; and so much more!

These are winnable demands, but only if we fight for them. That’s why we need you to help build the fight for a workers first agenda in our province.

I certainly agree that workers need to fight to create a workers-first agenda. However, I seriously question that what the Ontario Federation of Labour calls a workers’ agenda expresses a full and complete workers’ agenda.

As is usual, I hardly oppose the fight for reforms that benefit workers. However, is what is proposed anything other than the fight for a more humanized form of capitalism? Let us see.

High Quality Affordable Housing

What would be required to actually provide high-quality affordable housing? We are not provided with any guidance over the issue. Admittedly, such high-quality affordable housing would be, in part, a function of the specific town or city for their provision. Generally, either such high quality affordable housing would be provided through private construction by capitalist firms, by the capitalist government, or a combination of the two.

High quality affordable housing also refers to different kinds of housing: rentals or outright buying (through mortgages).

If housing were provided mainly by private firms, then house and condos prices may well rise (as they have in Toronto, Vancouver and other Canadian cities).

But the document probably refers to such high-quality affordable housing being provided by–the capitalist state and rented by tenants (although government-subsidized purchases of houses and condos is also possible).

There is no indication otherwise how such high-quality affordable housing would be provided. The housing would become social housing, managed by the government, with its current oppressive structures. Social housing, even if relatively affordable (rent determined by level of income) hardly need be quality. Indeed, as I pointed out in another post (Exposing the Intolerance and Censorship of Social Democracy, Part One: The Working Class, Housing and the Police):

Immediate Incident as an Occasion for Grassroots Activism

On Good Friday, April 2, 2021, 23 police cruisers showed up at 33 Gabian Way, which is a 19-story building owned by Vila Gaspar Corte Real Inc., or Villa Gaspar Corte Real Non-Profit Housing Inc. (there is some inconsistency in spelling the company).

The building is a combination of rental and social housing, built in 1993. There are 248 residential units. Apparently, the building is linked to Project Esperance, which is a non-profit registered charity. It services 111 units of from one- to three-bedroom units. Rents are geared to income.

as the incident at 33 Gabian Way demonstrates, public housing can be quite oppressive. Evictions can occur in just as brutal fashion as in private housing. The left should not idealize the public sector—which they often do.

The issue of the oppression of tenants in “affordable housing” is not addressed in any way by the OFL. To be a tenant is to automatically be subject to precarious living since there is “an inherent imbalance of power” between tenants and landlords.

The OFL also does not address how the split in the working class between those who own houses and see them as vehicles for rising asset values and those who only rent (from other workers who own houses or condos) is to be addressed. As I wrote in the same post:

Housing, Police and the Working Class

The use of houses as equity among the working class has led to a split within the class in terms of immediate material interests. From Michael Berry, “Housing Provision and Class Relations under Capitalism: Some Implications of Recent Marxist Class Analysis,” in pages 109-121, Housing Studies, Volume 1, Issue 2, pages 115-116:

Income differences are, as has been argued, also internalised within classes. In the case of the working class, for example, higher paid workers in primary jobs are doubly advantaged; they enjoy both higher and more secure wages and a higher probability of: (a) gaining access to owner-occupation; and (b) securing high capital gains from domestic property ownership. Conversely, workers in the secondary job market and those relegated to the reserve army of unemployed are more likely to be denied access to home ownership, or, if allowed access, concentrated in housing submarkets where property values remain relatively stable. Tenancy therefore evolves as a residual tenure category in a dual sense; not only can land supporting rental housing often be converted to more profitable non-residential uses, it evolves as ‘housing of last resort’ for less privileged sections of the working and nonworking population whose low incomes place strict limits on the rental returns to landlords, both factors leading to a degree of underprovision and homelessness.

In summary, working class disunity, associated with unequal access to and benefits from home ownership, and its political expression through various forms of struggle, is part of a wider system of inequality and exploitation. Both forms of advantage to higher paid workers privileged position in the workplace, over and against the immediate interests of other workers. depend on their being able to maintain their privileged position in the workplace, over and against the immediate interests of other workers.

Accessible and Well-funded Health Care

I have already posted on the issue of health in the context of the class power of employers in a series of posts (see for example Working for an Employer May Be Dangerous to Your Health, Part One). I also have addressed the issue in other posts (such as  Health Care: Socialist versus Capitalist Nationalization). I will draw on already posted posts to question whether a well-funded health care system is really possible under an economic, political and social system characterized by the dominance of a class of employers. I will dispense with quotes when it comes to my own comments in previous posts.

The Issue of Public or Nationalized Health Care

Health care even in a nationalized context can easily be an expression of oppression and exploitation. The idealization of nationalization often goes hand in hand with an argument  that we need to extend public services in health and education (as Sam Gindin, former research director for the Canadian Auto Union (CAW, now Unifor, the largest Canadian private-sector union)  has argued). However, nationalized health care can easily become an oppressive experience for workers (as well as patients). From Barbara Briggs (1984), “Abolishing a Medical Hierarchy: The Struggle for Socialist Primary Health Care,” pages 83-88, in the journal Critical Social Policy, volume 4, issue #12, page 87:

GPs AND SOCIALISM

Socialists have traditionally argued for state control of key areas of the economy and of the provision of welfare services such as health and education. Socialist health workers have argued for general practitioners to become salaried employees of the Area Health Authorities, along with the ’ancillary workers’, instead of continuing to enjoy the independent self-employed status that they insisted on to protect their status when the NHS [National Health Service of the United Kingdom] was set up.

But the NHS, the largest employer in the country, has shared with nationalised industries the failure to demonstrate any evidence of ’belonging to the people’: because of the backing of the state it has proved a ruthless and powerful employer, keeping the wages of unskilled and many skilled workers also at uniquely low levels; time and again, union members seeking improvements in pay and amelioration of very poor working conditions have been defeated. Nor has the NHS shown any kind of effective accountability to its users. Public spending constraints have hit the NHS not only by causing a decline in working conditions and in the services provided, but also by imposing even more centralised planning priorities based on the need to save money whatever the cost.

This situation likely characterizes the Canadian public health-care system as well.

Health Care Versus Health Services

In the context of the class power of employers, health care is impossible. Rather, what is provided is health services. From Bob Brecher (1997), (pages 217-225), “What Would a Socialist Health Service Look Like?,” in the journal Health Care Analysis,  volume 5, issue #3, page 221:

Service’ implies server and served; consultant and client; provider and consumer. But none of these describes the sort of relationship between carer and person carefd for that the two principles outlined suggest. To take the example of the NHS again: despite the intentions of its founders, it was the connotations of service–by turn beneficently providing for patients and ‘servicing’ them as though they were objects–which helped provide amply justified dissatisfactions with the resultant shortcomings of the NHS treatment: and these have been used to undermine its founding principles. The combination of professional paternalism, especially in respect of senior doctors; an inability or unwillingness to treat people rather than their symptoms; and an attitude of ‘servicing’ and being ‘serviced’ all helped alienate people from what was supposed to be ‘our’ NHS, enabling successive conservative governments to turn what was at its inception at least a ‘social’ health service into an expliictly anti-socialist one. … these are not accidents of the British context: such terms and the attitudes and mores they describe are inimical to a socialist structure, based as that must be on considerations of equity and respect.

It is important to emphasize, as Brecher points out, that the assumption that nationalization is somehow socialist without further ado itself contributes to the Conservative backlash and the emergence of neoliberalism. By indulging the social-democratic or social-reformist left, with their talk of “decent work,” “fair contracts,” “fair share of taxes,” “$15 Minimum Wage and Fairness,” and the like, the so-called radicals have in reality contributed to the neoliberal backlash. What is needed is not indulgence of such talk, but continuous critique of such talk. What is needed is a critical attitude towards the so-called “left” and its associated idealized institutions.

Does the OFL provide such a critical attitude? Not at all. It assumes that health care (rather than health service) is possible in the context of the domination of a class of employers. On the other hand, its standard is really health service rather than health care; its standards in this area, like in so many other areas, is quite low. But that applies in general to social democracy or social reformism.

Health Services Provided Fail to Meet Health-Care Needs

The OFL fails to address the issue of the relation between health care and prevention of sickness, injury and disease. In a socialist society, health care would still be important. From  Calum Paton (1997),  (pages 205-216), “Necessary Condtions For A Socialist Health Service,” in Health Care Anal., volume 5, page 209:

A socialist health service in a non-socialist society may be forced to stress care and rescue rather than prevention, health maintenance or the promotion of better health and more equal health status. Nevertheless this may be an important role. Even in a utopian society of perfect health promotion and prevention, people are more likely to die of more complex comorbidities at a later stage in the life cycle. The concept of substitute mortality and morbidity is useful here. 5 As a result simplistic trade-offs which suggest that ‘the more primary care there is, the less secondary care will be necessary’, are unlikely to be true either in the here and now or in the perfect society.

To be cared for with dignity, and to suffer with dignity and to die with dignity–these would all be important aspects of socialist health care.

The OFL also excludes a major issue dealing with health: its prevention. It ignores entirely the need to consider the prevention of disease, injury and sickness in the first place. What are the social conditions that increase the likelihood that a person would become a patient in the first place? Undoubtedly, as we become old, we will likely become patients at some stage in our lives–there is no getting around this fact. However, there are social determinants of health as well, and consequently becoming a patient is also often a function of social conditions.

In a socialist society, prevention would be a major focus of social policy and would deal with addressing the social determinants of health problems, ranging from health problems linked to the workplace to health problems linked to other environmental conditions, including food processing.

Today, though, many social determinants are largely ignored in favour of focusing on servicing those already sick. Consider breast cancer. It arises in many instances from environmental conditions, and yet most money is allocated to servicing those already inflicted with the disease rather than with preventing it from arising in the first place. From Faye Wachs (2007), (pages 929-931), “Review. Pink Ribbons, Inc.: Breast Cancer and the Politics of Philanthropy. By Samantha King,” in Gender & Society, volume 21, number 6 (December), pages 930-931:

Recent studies reveal that simply removing known carcinogens from products and our environment could prevent thousands of cases annually (Brody et al. 2007). However, funding for such research is limited, while the monies for identifying and curing existing cases is the focus of most efforts. Indeed, many of the companies that fund survivorship continue to use known carcinogens in their products. King points to the fact that despite increased awareness, rates of breast cancer have increased from 1 in 22 in the 1940s to 1 in 7 in 2004. Even if one considers women’s increasing longevity, this still indicates an increase in the prevalence of breast cancer. Moreover, structural factors that affect risk and survivorship, such as socioeconomic status, remain woefully understudied.

Personally, the issue of cancer research funding versus caring for cancer patients hits home. In March 2009, I was diagnosed with invasive bladder cancer, and in June 2010 I was informed that I had a 60 percent chance of dying in the next five years (it never happened, of course). The extent of “inquiry” into why I had cancer was a sheet of paper when I was admitted into the hospital for surgery. Two questions related to the causes of the cancer were: Did I smoke? And did I or had I worked in areas that might contribute to cancer. Nothing more. Of course, scientific research is much more extensive and hardly limited to inquiry into specific personal cases. I did find, however, that no qualitative inquiry into possible causes of cancer indicated a lack of a certain kind of cancer research in the area.

Even worse, in December 2015, I was diagnosed with rectal cancer. In 2016, I asked the doctor why I had cancer again. His answer was: “Bad luck.”

Like the doctor, I suspect that the OFL neglects the wider picture of a society dominated by a class of employers.

The Division of Labour and the Silence of the OFL Social-Reformist or Social-Democratic Left

Related to the issue of a lack of perception of the wider picture is the OFL’s lack of reference to the hiearchical division of labour within the health field. Such a division itself has health implications:

One highly useful example from the empirical literature that illustrates the effects of process alienation is that of Whitehall I and Whitehall II studies of Whitehall civil servants (Marmot et al., 1997, 1999). Forbes and Wainwright (2001, p. 810) have commented, but do not develop further, that the evidence and results from the studies appear ‘to be directly related to the Marxian concepts of alienation and exploitation’. The research has identified that among civil servants of differing ranks there are decidedly different experiences of health that appear to relate to how much control a worker has in their workplace. Looking more squarely at the studies a picture of how process alienation is at play can be established. In both studies, there is a clear social gradient in mortality (Marmot et al., 1984) and morbidity (Marmot et al., 1991). In these studies we see how a worker’s health is affected by the extent of their control (examples being, choosing what to do at work, in planning, or in deciding work speed) within their working environment (Bosma et al., 1997), and how on a variety of measures the health, whether physical (for men and women) or mental (mainly for men), is influenced by the position or rank that they hold within the organization (Martikainen et al., 1999). This chimes very much with the alienation that arises out of the labour process where ‘[i]nstead of developing the potential inherent in man’s powers, capitalist labour consumes these powers without replenishing them, burns them up as if they were a fuel, and leaves the individual worker that much poorer’ (Ollman, 1976, p. 137).

It is unlikely that the OFL has ever inquired into reasons why a hierarchy of skilled and less skilled workers arises in the first place; such a hierarchy has advantages from the point of view of the class of employers. Charles Babbage (a pioneer in developing some principles of computer construction in the nineteenth century), published a book in 1832 titled On the Economy of Machinery and Manufactures, where he pointed out a major advantage for such a hierarchy. From Harry Braverman, Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century, pages 79-80:

In “On the Division of Labour,” Chapter XIX of his On the Economy of Machinery and Manufactures, the first edition of which was published in 1832, Babbage noted that “the most important and influential cause [of savings from the division of labor] has been altogether unnoticed.” He recapitulates the classic arguments of William Petty, Adam Smith, and the other political economists, quotes from Smith the passage reproduced above about the “three different circumstances” of the division of labor which add to the productivity of labor, and continues:

Now, although all these are important causes, and each has its influence on the result; yet it appears to me, that any explanation of the cheapness of manufactured articles, as consequent upon the division of labour, would be incomplete if the following principle were omitted to be stated.

That the master manufacturer, by dividing the work to be executed into different processes, each requiring different degrees ef skill or ef farce, can purchase exactly that precise quantity ef both which is necessary for each process; whereas, if the whole work were executed by one workman, that person must possess sufficient skill to perform the most difficult, and sufficient strength to execute the most laborious, ef the operations into which the art is divided. 13

Of course, there may be other explanations of a hierarchical division of labour than the allocation of diverse skills to different individuals for the purpose of cheapening the total wage bill, but this process undoubtedly forms part of the reason why there exists a hierarchical division of labour.

Some workers in that hierarchical division of labour may, on the other hand, be more autonomous than others. Doctors may, for example, be formally employees at hospitals, but their monopoly of certain skills may give them much more autonomy than other employees. Some or even many may form part of the middle class, but other employees in the hierarchy at work have less autonomy–such as nurses, nurses’ aids, food workers and custodians. Greater autonomy at one pole often entails less autonomy (greater oppression) at the other pole. The OFL says nothing about this situation.

Social democrats in various spheres of society (such as the economy, education, health and unions) generally assume the legitimacy of the hierarchical division of labour in society; the OFL likely does so as well. They seek reforms within such hierarchy–rather than challenging such a hierarchy in the first place.

Conclusion

The OFL, like many social-democratic or social-reformist organizations, likely engages in rhetoric when it uses such phrases as “high quality affordable housing” or “accessible and well-funded health care.” Its reference to housing likely refers to public housing in one form or another–which can be just as oppressive as housing funded through mortgages or the paying of rent. Its reference to health care likely refers to health services rather than health care, and it neglects the need to shift some health-care priorities to prevention rather than care. Furthermore, it is silent over the hierarchical (dictatorial) division of labour, which itself has health implications.

Is there any surprise that the right has gained support from some sections of the working class when the social-democratic or social-reformist left fail to address the oppressive nature of public services, or when it fails to criticize the inadequate nature of the current form of public services?

What do you think?

Socialism, What It May Look Like: The Series

I have written a number of posts as series rather than just one long post. This is due to a number of reasons. To work out a view requires elaboration and time, and posting as a series permits such elaboration over a longer period of time. Also, I have many interests (which correspond in part to my own experiences as an oppressed and exploited worker, oppressed father and so forth).

However, I thought it may be useful to some readers to string series that I may not expand further into one long post in order to present more content on the same theme. I will not edit the series to make it more like one long essay; readers can pick and choose the posts that interest them.

I will probably do this with various other series on this blog.

Socialism, Part One: What It May Look Like

“My wife asked me what other kind of society could we live than the one we are living now. I suspect that most people have the same kind of question. It is difficult to imagine another kind of life than the life that we have experienced all our lives.

There are, of course, no magic answers. The answers will be experimental, with some failures and some successes, and not in ideal circumstances, of course.

However, some ideas can still be provided about some possible ways of living that provide an alternative vision–a vision so obviously lacking among the so-called left these days.

Tony Smith, in his book Globalisation: A Systematic Marxian Account (2006. Boston: Brill), provides a description of some aspects of a possible future kind of society. He borrows his model largely from David Schweichart’s model of economic democracy in After Capitalism (2002) (which I have not read). He adds three modifications of his own.

I will cut and paste short pieces from this work. He paints various aspects of a socialist society that need to be incorporated into a socialist society. There are undoubtedly other aspects, and his own account may have to be modified.

I will not pursue the topic week after week after week until the topic is exhausted since there are other topics which I consider relevant–above all a critique of the power of the class of employers, but also a critique of the social-reformist left and the so-called radical left that do not question the power of employers as a class.

From Smith’s book, page 303:

The model Schweickart defends has the following essential elements:

(i) Production and distribution are primarily undertaken within worker
collectives. Workers are not hired as wage-labourers by capital; they instead
join worker collectives as fellow members. There is a basic right to employment,
with state enterprises providing jobs for those unable to find positions in
collectives.

This condition is to initiate a reduction in economic coercion as an essential move towards an increase in economic and individual freedom.

There is, of course, a possible problem of increased inefficiency, but Smith addresses this issue in further democratic socialist measures.

 Socialism, Part Two: What It May Look Like

The following is a continuation of an earlier post (Socialism, Part One: What It May Look Like) about the nature of socialism–which is a solution to problems that capitalism, characterized by the domination of a class of employers, cannot solve. Socialism is not something that emerges from a utopian view independently of the nature of capitalism but requires a critical approach to capitalism.

In the following, Tony Smith elaborates on the democratic nature of the workplace, which is subject to control not only by the workers at the particular workplace electing managers but also by certain community organizations that represent specific community interests. From  Globalisation: A Systematic Marxian Account (2006. Boston: Brill), page 303:

(ii) Managers of worker collectives are democratically accountable to those
over whom they exercise authority, either through direct elections or through
appointment by a workers’ council that is itself directly elected. These
enterprises are required to have representatives from a range of social
movements (environmental groups, consumer groups, feminist groups, and
so on) on their boards of directors, accountable to those movements.

What do you think of such proposals? How do they relate to democracy? To the lack of democracy in your life? Do you think that such proposals are worth fighting for?

Socialism, Part Three: What It May Look Like, or Visions of a Better Kind of Society Without Employers

The following is a continuation of an earlier post (Socialism, Part Two: What It May Look Like) about the nature of socialism–which is a solution to problems that capitalism, characterized by the domination of a class of employers, cannot solve. Socialism is not something that emerges from a utopian view independently of the nature of capitalism but requires a critical approach to capitalism.

In the following, Michael Perelman contrasts what many people experience in their lives: their own contrast between an activity which they enjoy doing and their experience working for an employer, which they often enough find to be draining.

From Michael Perelman, The Invisible Handcuffs of Capitalism: How Market Tyranny Stifles the Economy by Stunting Workers (New York: Monthly Review Press, 2011),

Just What Is Work?

To understand the potential for transforming the economy, consider a simple example that does not require much of a stretch of the imagination. Just think of the enormous contrast between farm work for wages and gardening as a hobby. Farm work is considered to be so abhorrent in the United States that we regularly hear that only foreign-born workers are willing to perform it. Supposedly, upstanding citizens of the United States would never subject themselves to the life of a farm worker for poverty wages.

While farm labor may be among the hardest, most dangerous work in our society, many people regard gardening as a pleasant diversion. While the United Farm Workers Union represents mostly downtrodden workers, a good number of wealthy people are proud affiliates of their blue-blood garden clubs. Over and above the time they spend in their gardens, many gardeners enthusiastically devote considerable leisure time to conversing or reading in order to become better gardeners. In addition, many gardeners also willingly spend substantial sums for equipment and supplies to use in their gardens.

What, then, is the underlying difference between farm work and gardening? Farm work typically entails hard physical labor, but many gardeners also exert themselves in their gardens. The difference lies in the context of gardening. Gardeners, unlike farm workers, freely choose to be gardeners. During the time they work in their gardens, they want to be gardening. Nobody tells them what to do. Gardeners are producing for themselves rather than for someone else who will benefit from their work.

As the psychologist John Neulinger says: “Everyone knows the difference between doing something because one has to and doing something because one wants to.”43 We should also keep in mind that society respects gardeners. Our newspapers regularly print features of interest to gardeners. Some even have special sections to appeal to their affluent gardening readers. All the while, the lives of farm workers pass virtually unnoticed. In our society, farm work is never “respectable” work; well-to-do families would not approve of their children becoming farm workers.

Of course, gardeners are not entirely free to follow their whims. The rhythms of the seasons and the sudden shifts in the weather dictate some of what the gardeners do, but gardeners generally accept these demands beforehand. …

As suggested earlier, the key to the Procrustean trap is not the threat of physical force but rather the inability to imagine anything outside of the constrained present circumstances. The willingness to take seriously Margaret Thatcher’s preposterous claim—“There is no alternative”—perfectly sums up this state of mind.

A writer for Bloomberg.com reminisced about Thatcher’s Procrustean destructive success:

Of course, it’s possible to change a society and to drag it into the global economic monoculture. Mrs. Thatcher showed how: Break up collectives and make people feel a little bit more alone in the world. Cut a few holes in the social safety net. Raise the status of money-making, and lower the status of every other activity. Stop giving knighthoods to artists and start giving them to department-store moguls. Stop listening to intellectuals and start listening to entrepreneurs and financiers.
Stick to the plan long enough and the people who are good at making money acquire huge sums and, along with them, power. In time, they become the culture’s dominant voice. And they love you for it.46

Thatcher’s scheme actually worked. Her acolytes were so convinced that the mere utterance of Thatcher’s acronym TINA seemed sufficient to cut off any debate with skeptics.

The social-democratic or social-reformist left in Toronto certainly has reinforced the TINA principle. The so-called radical left, by keeping silent out of fear of becoming isolated, themselves becomes part of the social-democratic left. They, like the social-reformist left, provide no real alternative vision to the oppressive and exploitative nature of work characteristic of the power of employers as a class.

In fact, through their silence and their lack of criticism, they contribute to the perpetuation of class rule. They are, practically, social reformists who will never go beyond the existing class system despite their rhetoric of class struggle and struggle from below.

Socialism, Part Four: What It May Look Like, or Visions of a Better Kind of Society Without Employers


The following is a continuation of previous posts on the possible nature of socialism that excludes the power of employers as a class.

In the following, Tony Smith elaborates on the democratic nature of the workplace, which is subject to control not only by the workers at the particular workplace electing managers but also by certain community organizations that represent specific community interests. From Globalisation: A Systematic Marxian Account (2006. Boston: Brill), page 303:

(iii) Worker collectives produce public goods, inputs into the production process, or final consumption goods. Funds for the first are directly allocated to collectives by the relevant planning agencies (see below). The latter two categories of products are offered for sale in producer and consumer markets. In Schweickart’s view, attempts to centrally plan all inputs and outputs in a top-down fashion are simply not feasible, at least not in a complex and dynamic economy. But it does not follow that capitalist market societies are the only acceptable forms of economic organisation. It is possible to imagine a feasible and normatively attractive society combining markets with the socialisation of the means of production, that is, a society making use of producer and consumer markets after abolishing both capital markets and
labour markets.

In addition to the elimination of a market for workers and management of work enterprises being accountable to work councils and community councils, capital markets in the sense of an investment process owned by a minority would no longer exist. There would, nonetheless, be markets that produced means of production and markets that produced consumption goods. For example, at the brewery where I worked, the workers who produced the soaker or the filler that the brewery workers used would be subject to competition from other workers who produce soakers or fillers. Workers in the brewery would be subject to competition from workers in other breweries.

Unfortunately, Smith does not elaborate much on what he means by the abolition of capital markets. His reference to David Schweickart’s work Against Capitalism, however, gives a clue to what he means. Schweikart has the following to say (page 172):

First, we issue a decree abolishing all enterprise obligations to pay interest or stock dividends to private individuals or private institutions.

This decree will need no enforcement, since enterprises are not going to insist on paying what they are no longer legally obligated to pay.

But Schweickart sees a flaw in the abolition of all capital markets, at least immediately (page 173):

6.3.2 Once More, This Time with Feeling (for the Stockholders)

Too Simple? Of course. The above is not meant to be a realistic scenario. Above all, it fails to take into account the fact that millions of ordinary citizens (not only capitalists) have resources tied up in the financial markets. People with savings accounts or holdings in stocks and bonds have been counting on their dividend and interest checks. (Nearly half of all American households have direct or indirect holdings in the stock market, mostly in pension plans.) Eliminating all dividend and interest income-which is what Radical Quick does-will not strike these fellow citizens as a welcome reform. Let us run through our story again, this time complicating it to take into account their legitimate concerns.

Schweickart, realistically, recognizes that workers have investments in capital markets and hence are in some ways tied to such markets. His solution is to imagine a situation where at least the key corporations, due to the circumstances of a crisis, would be subject to elimination from capital markets (pages 173-174):

Let me first set the stage a little more fully than I did with Radical Quick. Let us suppose that a genuine counterproject to capitalism has developed, and that, gradually gaining in strength, it has been able to elect a leftist government that has put most of the reforms outlined earlier in this chapter on the table and has secured the passage of some of them. Suppose investors decide they’ve had enough and begin cashing in their stock holdings. A stock-market crash ensues. In reaction, the citizenry decide that they too have had enough-and give their leftist government an even stronger mandate to take full responsibility for an economy now tumbling into crisis.

Our new government declares a bank holiday, pending reorganization (as Roosevelt did following his election in 1932). All publicly traded corporations are declared to be worker-controlled. Note: This control extends only to corporations, not to small businesses or even to privately held capitalist firms. It is decided that it will be sufficient  to redefine property rights only in those firms for which ownership has already been largely separated from management. (With the “commanding heights” of the economy now democratized, most other firms can be expected to come under increased pressure from their own workers, over time, to follow suit.)

The exact way in which capital markets would be reduced and eventually abolished would vary across time and place, depending on circumstances.

As I have emphasized throughout this blog, though, it is much less likely that workers will be receptive to a call for the elimination of capital markets and markets for workers unless they find the situation to be unfair. The ideology of the social-reformist left consistently makes reference to fairness within the limits of the employer-employee relation. We need to break with such ideology if we are to initiate such a process without having to respond erratically when a crisis hits.

Or are there alternatives? What do you think?

Socialism, Part Five: What It May Look Like, or Visions of a Better Kind of Society Without Employers


The following is a continuation of previous posts on the possible nature of socialism that excludes the power of employers as a class.

In the following, Tony Smith elaborates on the right of use by workers of the places, machinery and so forth where they work, but with the local community being the owner of local resources (and regional and national communities being the owners of regional and national enterprises of regional or national scope). From Globalisation: A Systematic Marxian Account (2006. Boston: Brill), page 304:

(iv) Workers in enterprises are granted use rights to facilities and other
means of production. But ultimate ownership rights remain with the local
community. Workers cannot use their enterprise as a cash cow and then walk
away; they have a legal duty to maintain the value of the community’s
investments. If sufficient depreciation funds cannot be appropriated from
revenues to maintain the value of these investments, it is the responsibility
of community banks to shut down an enterprise. Once depreciated funds
have been deducted, the remainder of the revenues from public allocations
or sales in consumer/producer markets (apart from the taxes to be considered
below) are then distributed among the members of the collective according
to formulae set by the democratically accountable management

Since the workers are the trustees of the workplaces and not their owners, each year, the workers in the sector that produces either consumer goods for the market or the raw material, machines and so forth required to produce both themselves and consumer goods, have to set aside a certain amount of the proceeds from sales to purchase worn out means of production. The workers must also include in that depreciation fund a fund for repairs.

Workers have a responsibility to the present community and to future communities to maintain the general conditions for the continued livelihood of the community. This means that any cooperative that fails to maintain the value of the means of production must be closed down, and workers in such cooperatives must find work in another, more viable cooperative.

The sales revenue will be distributed generally into three parts: (1) the depreciation fund, (2) a tax on capital assets (which will be explained in another post), and a residual of what is called profits, to be distributed to the members of the cooperative as their personal income according to distribution rules created by themselves. (There also may be income tax and consumption tax, but I will not address that).


Socialism, Part Six: What It May Look Like, or Visions of a Better Kind of Society Without Employers

The following is a continuation of previous posts on the possible nature of socialism that excludes the power of employers as a class.

In the following, Tony Smith elaborates on the capital-assets tax, which is the basis for the generation of new investment and the supply of public goods. From Globalisation: A Systematic Marxian Account (2006. Boston: Brill), pages 304-305:



(v) The origin of funds for new investment and public goods is a flat tax
on the non-labour assets of all enterprises.16 In Schweickart’s proposal, the
rate of this tax is initially set by a democratically elected legislature, operating
on the national level. This legislature also decides on the appropriate division
of revenues between funding for national public goods and funds that are
allocated to democratically elected regional and local legislative bodies. Each
of these assemblies, in turn, must also decide upon the level of funding for
public goods to be supplied in the relevant geographical area vis-à-vis the
level of funds set aside for distribution to the level below it. These legislative
bodies can also set aside a percentage of funds for investment in areas of
pressing social needs.


(vi) After all decisions have been made regarding the general level of new
investment and the order of social priorities, and after funds required for
public goods on the national, regional, and local levels have been allocated, the remaining revenues are distributed to local communities on a per capita
basis (at least this should be the presumption in the absence of compelling
reasons to do otherwise, such as the need to temporarily favour historically
disadvantaged regions). Community banks would then undertake the actual
allocation of new investment funds to worker collectives. The boards of
directors of these banks would include representatives of a broad range of
social groups affected by the banks’ decisions. New enterprises would be
formed, and existing ones expanded, through allocations by community banks
rather than private capital markets.


The capital-assets tax assumes that the workers have right of use of most of the means of production of our lives (there may be some room for independent businesses, but they do not form the bulk of economic activity). If they do, then instead of new investment being derived from the private decisions of boards of directors of corporations, it is derived from a democratically-elected national legislature which sets the rate of the capital-assets tax.

There are two general aspects to the tax (like any tax): the flow from a source to the government and the flow of the tax to institutions. The source is the capital assets used by democratic worker cooperatives. It is a flat-rate tax based on the value of the means of production that is applied to capital assets used by workers.

The flow of the revenue generated by the tax to people only arises after deductions from revenue required for investment in projects at the national level. Once this has been deducted, then the revenue is distributed to the regional communities on a perc capita (per person) basis; the regional democratic bodies which in turn allocate investment funds for investment in projects at the regional level. The remainder is then allocated to the local community via public banks, likewise on a per capita (per person) basis.

This principle of distribution of the revenue generated from the capital-assets tax on a per capita basis means that, in areas where there is a concentration of means of production relative to the number of people who live in the area, the outflow of taxes paid will be relatively greater than the inflow of revenue from taxes when compared to areas where the concentration of means of production is relatively smaller.

The capital-assets tax is to replace interest and dividend payments. As noted in the previous post on this topic, since many workers in the more industrialized capitalist countries have at least some investments in the stock market or hold bonds, GICs, and so forth and, furthermore, pension funds are generally linked to investment, a policy that at one sweep sought to abolish interest and dividend payments may well be opposed by the working class, initially. Consequently, some form of transitional program may be necessary, one where interest and dividend payments are gradually phased out, or one where compensation for nationalization occurs. In any case, the ultimate goal is to abolish interest and dividend payments and replace them with a flat capital-assets tax.

Socialism, Part Seven: What It May Look Like, or Visions of a Better Kind of Society Without Employers

The following is a continuation of previous posts on the possible nature of socialism that excludes the power of employers as a class.

In the following, Tony Smith elaborates on the criteria to be used in the distribution of the flat-rate capital-assets tax, which is the basis for the generation of new investment (and which was outlined in the last post on this topic). From Globalisation: A Systematic Marxian Account (2006. Boston: Brill), page 305:

(vii) When allocating investment funds for new worker collectives and the
expansion of existing ones, community banks must take three main questions
into account. Is there likely to be sufficient demand for the output of the given
enterprise for it to maintain the value of the community’s investment and
provide adequate income for its members? Will the investment provide stable
employment? And is the investment consistent with the set of social priorities
democratically affirmed on the national, regional and local levels? Extensive
external financial and social audits can be regularly imposed on all enterprises
and community banks to assess their performances in terms of these criteria.
These independent social audits are a crucial component of the socialist version
of the principle of transparency, institutionalising a level of accountability
and transparency far beyond the limited neoliberal version of the principle.17
Community banks can then be ranked on the basis of the results of these
audits. The level of income of the staff of a particular bank, and the amount
of funds allocated to this bank for distribution in the future, are determined
by the bank’s place in this ranking.

The distribution of investment funds to existing and new worker collectives through community banks would be controlled by taking into account:

  1. Whether the level of demand would likely be sufficient to not only maintain the value of the means of production (machinery, buildings and so forth) but to ensure a reasonable income for the working members of the cooperative.
  2. Whether the investment would result in unemployment of the members, or would there be sufficient work for all members (without jeopardizing efficiency, presumably).
  3. Whether the investment would result in effects that contribute to the realization of plans democratically decided on at the local, regional and national levels.

To ensure that these criteria for lending to worker cooperatives via public banks were satisfied, social audits could be carried out systematically and transparently. Since the revenue of workers in public banks would be a function of their success in extending loans based on the three criteria (and subject to social audits), workers in public banks would be motivated to more likely extend loans to worker cooperatives that were most likely to meet these three criteria.

Socialism, Part Eight: What It May Look Like, or Visions of a Better Kind of Society Without Employers

This is a continuation of earlier posts on the subject of the nature of socialism–a society that aims at the abolition of the power of employers as a class and the initial appropriation of the necessary requirements for us to control our lives as a collectivity and as individuals.

In the following, Tony Smith elaborates on some kinds of relations that may emerge between a nation that is socialist and other nations (whether socialist or not). From Globalisation: A Systematic Marxian Account (2006. Boston: Brill), pages 305-306:

(viii) In Schweickart’s model, there are no markets for capital assets, and
so there will be no capital flight in the form of cross-border investments in
capital assets. There will also be little foreign direct investment, since worker
collectives are unlikely to outsource their own jobs, and community banks
are assessed according to the extent they create employment in their own
communities. But there will still be trade across borders. For a period of time,
this may include trade with regions that have not institutionalised a version of economic democracy. In such circumstances, regions committed to socialist
globalisation should follow the principle of fair trade rather than ‘free’ trade.
To ensure that this occurs, Schweickart calls for a ‘social tariff’.18 If oppressive
labour practices hold down wage levels in a given region, the prices of imports
from that region will be raised to what they would have been had worker
income been comparable to the level prevailing in the importing country. A
social tariff will also be imposed to compensate for a lack of adequate spending
on the environment, worker health and safety, or social welfare in the exporting
nation. The revenues collected by this tariff will then be distributed to the
groups in the exporting country with the best record of effectively implementing
anti-poverty programmes, whether or not they are agencies of the government

There will little if any flow of capital investment beyond the borders of the socialist nation (hence little or no capital flight); workers are unlikely to invest abroad rather than locally since this would result in loss of employment. Furthermore, community banks would prevent such investment through its enforcement of the criteria of employment creation (see previous post).

It is possible that trade between socialist and non-socialist nations would still occur. In trade between a socialist nation and a capitalist nation, the socialist nation would create a social tariff, imposing it to prevent unfair competition on the basis of capitalist ways of producing wealth (such as reduced wages or lack of health and safety measures).

This social tariff, rather than being used for the benefit of the socialist workers and community members, would flow back to workers in the non-socialist world as an expression of solidarity with them via agencies or organizations of the exporting non-capitalist country that have proven to be effective enforcers of anti-poverty measures in the non-capitalist country.

Smith adds three other measures that have an international focus: (1) the creation of international monetary clearing units, which would serve as world money that would function, among other things, to ensure that excessive trade imbalances would not arise, especially for the more vulnerable parts of the world economy; (2) a global representative assembly that would legislate and oversee issues between nations in a much more democratic manner than the current United Nations model; and, finally, (3) a democratically accountable international planning agency that would ensure equitable investment funding for the provision of international public goods, distributed according to the number of people (per capita), with provisions for exceptions on the basis of past historical biases of economic development.

All these measures refer to what has come to be known as “market socialism.” Such a system, if democratically organized, would likely not only be more efficient than a capitalist economy but definitely superior in terms of ethics. However, before addressing that issue in further posts, I will, in a future post, consider whether the idea of market socialism is an adequate model for a future society without capitalism, or whether it leaves out of consideration some essential aspects that need to be considered if we are to resolve our social problems on this planet.

Socialism, Part Nine: An Inadequate Conception of the Nature of Freedom and Necessity, or Free Time and Necessary Time, Part One

The class formal principle of employers–that workers receive from society what they contribute (contradicted at a practical level through systematic exploitation of workers necessarily in a capitalist context–that is why it is a formal principle that contradicts reality–see  for example The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One) would be realized in a socialist society on average since exploitation of one class by another would be eliminated. However, the principle of relating individual life to labour is still a bourgeois or capitalist principle that needs to targeted because it still reduces human beings to merely one criterion–labour. From  Karl Marx, Critique of the Gotha Programme, pages 86-87 of Marx-Engels Collected Works, volume 24):

Hence, equal right here is still in principle bourgeois right, although principle and practice are no longer at loggerheads, while the exchange of equivalents in commodity exchange only exists on the average and not in the individual case.

In spite of this advance, this equal right is still constantly encumbered by a bourgeois limitation. The right of the producers is proportional to the labour they supply; the equality consists in the fact that measurement is made with an equal standard, labour. But one man is superior to another physically or mentally and so supplies more labour in the same time, or can work for a longer time; and labour, to serve as a measure, must be defined by its duration or intensity, otherwise it ceases to be a standard of measurement. This equal right is an unequal right for unequal  abour. It recognises no class distinctions, because everyone is only a worker like everyone else; but it tacitly recognises the unequal individual endowment and thus productive capacity of the workers as natural privileges. It is, therefore, a right of inequality, in its content, like every right. Right by its nature can exist only as the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) are measurable by an equal standard only insofar as they are made subject to an equal criterion, are taken from a certain side only, for instance, in the present case, are regarded only as workers and nothing more is seen in them, everything else being ignored. Besides, one worker is married, another not; one has more children than another, etc., etc. Thus, given an equal amount of work done, and hence an equal share in the social consumption fund, one will in fact receive more than another, one will be richer than another, etc. To avoid all these defects, right would have to be unequal rather than equal.

But these defects are inevitable in the first phase of communist society as it is when it has just emerged after prolonged birthpangs from capitalist society. Right can never be higher than the economic structure of society and its cultural development which this determines.

Neither Tony Smith nor Schweickart, both advocates of market socialism, refer to this. For Schweickart at least, any elimination of the market economy will lead to various negative effects, such as authoritarian conditions. Sam Gindin, similarly, does not take into consideration the inadequacy of markets as an expression of human freedom.

This model so far is a market-socialist model. Rather than conceiving it as a definitive model of how future society will work, however, we should consider it as a transition society that may last for longer than Marx thought but, nonetheless, is itself inadequate.

This inadequacy can be seen in the omission by Smith and Schweickart of any consideration of the need to transform the division of labour. In Schweickart’s book, for example, there is no discussion at all of the division of labour. If we are to live in a full life, though, we need to reduce or eliminate the gap between labour that is predominantly physical and labour that is predominantly intellectual.

Another aspect over which both Smith and Schweickart are silent is the implication for human beings if prices are to continue to exist. Schweickart does not directly address the question, but his assumption that prices will always exist fails to address the problem of the continued valuation of objects ultimately in terms of labour. Marx’s theory of exploitation is not just a critique of exploitation but a critique of the form of exploitation–through the mediation of relations between objects instead of a conscious connection with other human beings. Human beings, via ultimately money, are related to each other via objectified labour measured externally as money.

Market socialism may well be needed for some time, but it is inadequate as a form of society for human beings. At first, it is necessary to create a society where the reality of labour time being the measure of human wealth corresponds to the principle of determination by labour time: what workers contribute to society and what they receive from it do not differ quantitatively (workers are not exploited).

However, the principle of the life process is still based on one principle–labour and its measure, time. The human life process, however, is much more than this process, and the need for human beings will be to surpass this principle and to break the link between contribution and the flow of goods and services based on that contribution.

Now, let us listen to a person who claims to aim at realistic socialism–Sam Gindin, head of the Toronto Labour Committee (and former research director for the Canadian Auto Workers (CAW) (now Unifor). Mr. Gindin implies that, due to what he calls scarcity, we will always need a market form of socialism:

Scarcity — the need to make choices between alternative uses of labor time and resources — is unlikely to end outside of utopian fantasies because popular demands, even when transformed into collective/socialist demands, are remarkably elastic: they can continue to grow. Think especially of better health care, more and richer education, greater care for the aged, the expansion of art and of cultural spaces — all of which require labor time and generally also complementary material goods. That is, they demand choices.

Furthermore, the calculation of scarcity can in particular not ignore leisure, with leisure representing the “realm of freedom.” Even if we produced enough of what we wanted, as long as some of that labor isn’t completely voluntary but instrumental, then effective scarcity of either labor time or the good/service remains. Workers may even like their jobs and see them as a source of creative expression and satisfaction, but as long as they’d periodically prefer to not show up or leave early, some further inducement is needed to offset the sacrifice of providing those labor hours. That inducement is a measure of the persistence of effective scarcity. And once scarcity is acknowledged as an inherent and essentially permanent frame in the restructuring of society, the question of structured incentives becomes paramount. This is not just a matter of motivating adequate hours of work, but of affecting its intensity and quality, and influencing where that work is best applied (i.e., determining society’s overall division of labor).

Mr. Gindin, it is clear, identifies the need to make choices of “labour time and resources” with scarcity. There is an identity between the need to make choices in the realm of labour and the continued existence of scarcity. 

The counterpart of this is the implicit denial of the need to make choices in “leisure,” which is identified with the “realm of freedom.” Mr. Gindin, of course, fails to justify this identity and fails as well to explore the nature of “leisure.” 

Mr. Gindin follows neoclassical economics (which justifies capitalism in various ways) by arguing that “scarcity” in the abstract (eternally or forever, without qualification) characterizes human life. Consider the following quotation from a typical textbook on neoclassical (or capitalist) economics (Steven A. Greenlaw, Timothy Taylor, Principles of Microeconomics, page 8:

Economics is the study of how humans make decisions in the face of scarcity. These can be individual decisions, family decisions, business decisions or societal decisions. If you look around carefully, you will see that scarcity is a fact of life. Scarcity means that human wants for goods, services and resources exceed what is available. Resources, such as labor, tools, land, and raw materials are necessary to produce the goods and services we want but they exist in limited supply. Of course, the ultimate scarce resource is time- everyone, rich or poor, has just 24 hours in the day to try to acquire the goods they want. At any point in time, there is only a finite amount of resources available.

People live in a world of scarcity: that is, they can’t have all the time, money, possessions, and experiences they wish.

Mr. Gindin argues, then, that scarcity arises objectively when there are alternative possibilities that exist for the use of resources and labour time. Choices must be made, and the choices necessarily involve the realization of some projects and the exclusion of others. We can never have our cake and eat it simultaneously.

This idea seems valid, and yet it is really superficial. Mr. Gindin practically wants to ridicule those who believe that work can be itself a realm of freedom–despite the need to make choices and despite the need to engage in the production of food, shelter, clothing, health care, education and so forth. To be realistic for Mr. Gindin is to believe in the necessity of drudgery throughout human history. What else does he mean when he writes “And once scarcity is acknowledged as an inherent and essentially permanent frame in the restructuring of society, the question of incentives becomes paramount.”

Mr. Gindin’s implicit assumption is that all incentives are external or instrumental in nature. There is, for this social democrat, no such thing as an intrinsic incentive (or motivation). Such an assumption needs to be questioned.

Rather than addressing the issue of scarcity (pure necessity for Mr. Gindin) directly, let us look at the so-called opposite realm of leisure (pure freedom for Mr. Gindin).

He claims that leisure is somehow the “realm of freedom.” What leisure is that? Leisure is a concept that is purely non-instrumental, it would seem, for Mr. Gindin. All leisure.

As an aside: Mr. Gindin borrows his concepts from current experiences and then generalizes them throughout history. Thus, leisure in the current context of work life characterized by the power of employers using people as things for their own ends is often a compensation for the drudgery of such daily life. Such an uncritical use of the concept of leisure will be addressed in another post.

Thus, Mr. Gindin separates completely labour and leisure. Leisure is purely non-instrumental, and labour can be to a certain extent enjoyable but, ultimately, is tainted with instrumentality by its very nature. Since leisure is identified with the “realm of freedom” and non-instrumentality, and labour is tainted with instrumentality by its very nature, scarcity must arise by necessity since workers by their very nature would prefer leisure (freedom) over work (necessity and instrumentality). To engage in work, workers must be externally motivated to do so (since their default mode is to prefer leisure (pure freedom) over work (pure necessity).

Mr. Gindin’s assumption concerning the so-called identity of leisure with the realm of freedom and a lack of instrumentality is questionable. Many so-called leisure activities have an instrumental aspect to them. For example, I “leisurely” drove my daughter, Francesca, to the Royal Tyrrell Museum summer camp in Alberta some time ago, from Winnipeg, Manitoba, Canada (about a distance of 1,300 kilometers). It took a “leisurely” time of around 18 hours (stopping along the way for lunch and supper). For me, the activity was stressful though enjoyable (when compared to working for an employer) since Francesca was with me. The leisure activity of driving, though, was instrumental since it was a means to the end of developing my daughter’s capacities–that was the real end.

I had a choice to make in whether I was going to ask Francesca whether she wanted to go to the camp at all and, given that choice, what means I would use to achieve that goal. 

It cannot be said that the act of driving the car was secondary to the end of developing her capacities in a certain direction since she could not do so without attending the camp. The act of driving the car, though instrumental, was an essential condition for achieving that end (of course, it was not the only means by which to achieve that end–taking a plane, bus or train were possible alternatives). Furthermore, the end of developing Francesca’s capacities motivated me to drive for long periods of time in the first place, so the end itself formed an instrumental aspect of my activity of driving the car–it formed an ideal or motivating aspect of the physical aspect of driving the car.

My drive to Drumheller was thus instrumental for Francesca, my daughter, despite being a leisure activity. I had to make choices, of course. I could have taken a bus with her. We could have flown. The goal of the trip, for me, though constrained by certain means, was non-instrumental as an ultimately intrinsic end and yet was instrumental, ideally, in guiding my own activity in the present (driving the car towards Drumheller, Alberta, where the Royal Tyrrell Museum is located). I had an internal incentive or intrinsic incentive.

Of course, human life is finite, but who would deny that? However, Mr. Gindin draws false conclusions from that fact not only in relation to leisure but also to “education” and “art.” These issues will be dealt with in another post or posts.

Mr. Gindin’s assumption, then, that leisure is the pure realm of freedom is simple nonsense. Mr. Gindin’s hidden assumption of the mutual exclusion of instrumentality and intrinsic ends–that they are separate–remains an unproven assumption.

But some may say that this is an example from the realm of leisure (which does not exclude the realm of necessity despite Mr. Gindin’s implicit assertion to the contrary). What of the realm of work? Does it need external incentives because alternatives arise and choices must be made?

In a follow-up post, I will shift to Mr. Gindin’s opposite view concerning work. Since leisure is supposedly the pure realm of freedom that lacks instrumentality, work, according to Mr. Gindin, if in any way instrumental (which it must be for Mr. Gindin), involves a lack of freedom, which is expressed in the concept of scarcity and thus requires external or extrinsic motivation. Just as leisure is supposed to be the pure realm of freedom, so too the realm of work is supposed to be always tainted by the realm of necessity. 

This issue has to do with the two main divisions of labour: academic or intellectual and practical (or manual or physical). I referred briefly to such a division when I provided a critique of such a division in schools and the school curriculum (see Critical Education Articles Placed in the Teacher Staff Lounge While I Was a Teacher, Part Three). 

(As an aside: Mr. Gindin probably follows his colleague, Leo Panitch (they wrote a book together), in rejecting (without understanding) Marx’s so-called labour theory of value (really a theory of commodities and capital). (I attended Mr. Panitch’s class on globalization in the winter of 2014. Mr. Panitch explicitly stated that he considered Marx to have taken a wrong turn in Capital, especially Marx’s use of some of the dialectic of the German philosopher, G.W.F. Hegel, who, among other things, argued for the need to reconcile opposite relations, such as freedom and necessity)


Socialism, Part Nine: Inadequate Conception of the Nature of Freedom and Necessity, or Free Time and Necessary Time, Part Two

This is a continuation of a previous post.

In a previous post, I criticized Mr. Gindin’s view that leisure is the pure realm of freedom. (Sam Gindin is (or was) head of the Toronto Labour Committee and former research director for the Canadian Auto Workers (CAW) (now Unifor)). In this post, I will criticize his view that work, being a world of necessity, requires external incentives.

Let us look at part of a previous quote from Mr. Gindin’s writing on socialism:

Furthermore, the calculation of scarcity can in particular not ignore leisure, with leisure representing the “realm of freedom.” Even if we produced enough of what we wanted, as long as some of that labor isn’t completely voluntary but instrumental, then effective scarcity of either labor time or the good/service remains. Workers may even like their jobs and see them as a source of creative expression and satisfaction, but as long as they’d periodically prefer to not show up or leave early, some further inducement is needed to offset the sacrifice of providing those labor hours. That inducement is a measure of the persistence of effective scarcity. And once scarcity is acknowledged as an inherent and essentially permanent frame in the restructuring of society, the question of structured incentives becomes paramount. This is not just a matter of motivating adequate hours of work, but of affecting its intensity and quality, and influencing where that work is best applied (i.e., determining society’s overall division of labor).

Mr. Gindin’s superficial imagination leads him to apply the current poverty of work relations, implicitly, as the standard for determining the so-called “realm of necessity.” Like leisure, which is supposed to be the pure realm of freedom, he separates freedom and necessity at work.

Consider my work at the brewery in Calgary, Alberta, Canada. When I worked at the brewery, we were obliged to work to produce not only beer, but beer for the market, and not only for the market but for the ultimate goal of more profit. We were things to be used by the employer (see https://theabolitionary.ca/the-money-circuit-of-capital/).

The riveting of material production to the goal of profit as the ultimate goal prevents workers who produce beer from reorganizing their lives both inside and outside the brewery in such a way that they can integrate their working lives with other aspects of the process of producing beer. For example, at the brewery in Calgary, there was a chemist who probably, among other things, tested the quality and properties of the beer being produced (being “only a bottling worker,” I really did not understand what the chemist did when I worked at the brewery).

Mr. Gindin tips his hand by referring to “scarcity” as somehow requiring incentives. He fails to explore what is meant by “incentives,” but implicitly assumes that all incentives are external and cannot be internal to the process which produces beer–a mechanical materialist point of view.

Under a socialist way of life, initially, workers would produce beer for others via the market. Even at this stage, here is no reason why workers could not begin to integrate a study of chemistry with the production of beer. The same could be said of the mechanics, physics and mathematics of beer production. For example, the filler–a machine for the filling of beer bottles rotated in a circular motion, with spouts attached to the machine. The velocity of rotation, the speed of the incoming bottles and so forth could be calculated and adjusted to attain certain specific rates of output and qualities of beer production (rather than being externally specified by managers as the representatives of employers).

John Dewey, an American philosopher of education, pointed out somewhere that there is no such thing as a purely biological human experience, a purely mathematical human experience, a purely physical human experience and so forth. Human experience is all those aspects and more. The apparently most mundane human act or experience contains a rich variety of potentially worthwhile pursuits that can be analyzed and pursued in ever greater depth and breadth. The production of beer can be integrated into the study of chemistry, physics, mechanics, biology, mathematics, history, geography and other sciences. Despite beer production being instrumental for the production of beer as a consumer good, it could be the point of departure for the infinite expansion of the capacities of workers who produce beer–with the only limit being their own capacities for the pursuit of such sciences and the finite period of time in which they live on this planet before dying. Workers could thus freely expand their intellectual and physical horizons even when they produce beer.

Mr. Gindin’s superficial separation of freedom and necessity at work, like his superficial separation of freedom and necessity during leisure hours (as pointed out in the previous post), leads him to false conclusions concerning the nature of work in a socialist society. This should not surprise anyone.

Mr. Gindin’s false conclusions concerning the nature of the relationship of freedom and necessity under socialism go beyond the issue of leisure and work. He claims the following in relation to education and art, among other areas of human life:

Scarcity — the need to make choices between alternative uses of labor time and resources — is unlikely to end outside of utopian fantasies because popular demands, even when transformed into collective/socialist demands, are remarkably elastic: they can continue to grow. Think especially of better health care, more and richer education, greater care for the aged, the expansion of art and of cultural spaces — all of which require labor time and generally also complementary material goods. That is, they demand choices.

In another post, I will show that Mr. Gindin’s reference to “more and richer education” can integrate–contrary to Mr. Gindin’s mechancial separation of the two–both elements of necessity and freedom. I may also address in a future post his claim that the demand for the expansion of art somehow involves the separation of necessity and freedom.


Socialism, Part Nine: Inadequate Conception of the Nature of Freedom and Necessity, or Free Time and Necessary Time, Part Three: Education

This is a continuation of a previous post.

In a previous post, I pointed out that Mr. Gindin claimed that the expansion of educational services would involve scarcity and therefore would require external or extrinsic motivation of some sort. (Mr,. Gindin is head of the Toronto Labour Committee and former research director for the Canadian Auto Workers (CAW) (now Unifor) union.

Let us look at part of a previous quote from Mr. Gindin’s writing on socialism:

Furthermore, the calculation of scarcity can in particular not ignore leisure, with leisure representing the “realm of freedom.” Even if we produced enough of what we wanted, as long as some of that labor isn’t completely voluntary but instrumental, then effective scarcity of either labor time or the good/service remains. Workers may even like their jobs and see them as a source of creative expression and satisfaction, but as long as they’d periodically prefer to not show up or leave early, some further inducement is needed to offset the sacrifice of providing those labor hours. That inducement is a measure of the persistence of effective scarcity. And once scarcity is acknowledged as an inherent and essentially permanent frame in the restructuring of society, the question of structured incentives becomes paramount. This is not just a matter of motivating adequate hours of work, but of affecting its intensity and quality, and influencing where that work is best applied (i.e., determining society’s overall division of labor).

Mr. Gindin’s use of “scarcity” is meant to show that he is being realistic. He claims the following:

Scarcity — the need to make choices between alternative uses of labor time and resources — is unlikely to end outside of utopian fantasies because popular demands, even when transformed into collective/socialist demands, are remarkably elastic: they can continue to grow. Think especially of better health care, more and richer education,

Mr. Gindin prides himself on being realistic (his reference to “utopian fantasies” is meant to show this). In reality, he is a most conservative “socialist” (really a social democrat) who operates in terms of the capitalist economy and its social institutions.

He converts the relation between necessity and freedom in a socialist society into a false relation of mutual exclusivity. Thus, for him in the educational sphere an expansion of educational services necessarily leads to a diminution of resources in other areas. If, however, freedom and necessity are united and reinforce each other in the educational sphere and in other spheres (an internal relation of freedom to necessity), there need not arise such a diminution since human activity in other areas will, in turn, be enriched.

Mr. Gindin does not explore how educational institutions may change under a socialist system and how this might effect the relationship between necessity and freedom both in work and outside work.

John Dewey, an American philosopher of education, certainly did not believe that education excluded either necessity or freedom. Operating between 1896 and 1904 in Chicago, the University Laboratory School (commonly known as the Dewey School) used the common needs or common necessities of most of humanity for food, clothing and shelter as the point of development for children’s physical, intellectual, emotional, ethical and aesthetic development. By having children try to produce food, clothing and shelter in various historical epochs through the occupations associated with these needs, Dewey hoped to bridge the gap between intellectual and physical life that deeply divided American capitalist society.

Children started with purposes that they understood (the need or necessity for food, clothing and shelter) and were to come to understand the natural and social roots of varying the means for satisfying such common needs or common necessities.

Of course, the need for food and shelter (and, in most environments, the need for clothing), are given by the natural conditions of humans as living beings. They did not choose these conditions. However, through varying the means used by diverse historical societies, children can gradually come to learn about the potentialities of the natural world in diverse geographical areas and the diverse means by which human beings have come to produce their own lives. They learn increasingly how to control their own basic lives by experiencing diverse environments and diverse means by which to address problems associated with the satisfaction of the basic needs or necessities.

What of the learning of science? Does learning how to produce our basic necessities exclude the learning of science? Is there some sort of opposition between learning how to produce such basic necessities and the need to make choices about the learning of science? Does learning how to produce basic necessities in various environments involve a waste of time since the time could be spent learning about science? Mr. Gindin, with his false dichotomy of identifying the need to make choices with scarcity, would probably consider it necessary to choose between the learning how to produce the basic necessities and learning science.

Dewey, however, did not believe that learning how to produce the basic necessities and learning science were mutually exclusive. Human beings naturally focus on ends since they are living beings; means are secondary to the ends of life. Dewey repeats in a number of works his contention that human beings naturally are more concerned with ends than with means: “For men are customarily more concerned with the consequences, the “ends” or fruits of activity, than with the operations by means of which they are instituted” (Logic: The Theory of Inquiry, 1938/1986, page 253). However, consideration of means is just as essential to the life process.

If intelligent action (which is what education needs to develop) involves the coordination and means and ends, then education needs to have children learn to shift from their concern or interest or natural proclivity towards ends to a concern with the conditions for the creation of those  ends and the coordination of the two.

Through engagement with the occupations linked to basic needs or necessities, the child gradually becomes conscious of the steps  required a as well as the material means necessary for the basic ends to be achieved. A shift in attitude gradually emerges, as means and their perfection become more important—but always-in relation to the end to be achieved.

The shifts from ends to means and their eventual coordinate relation can lead to the habit of ensuring that the ends desired are placed in the broader context of the means required to achieve them, and the choice of means to achieve ends be placed in the wider context of the total process of their impact on oneself and others.

A shift from concern from ends to means as a temporary end in itself can thus form the basis for the development of science.

Analytic categories characteristic of the diverse sciences are to emerge gradually. For
instance, the study of chemistry emerged from the process of cooking as well as from the metallurgical processes associated with the basic occupations. Similarly, physics emerged from the processes of production and use of tools.

The basic occupations  provide a bridge between common-sense inquiry and scientific inquiry. Without such a bridge, science would remain vague and would likely be resisted. Moreover, hose who do tend towards an interest in scientific work as such would likely become remote from the concerns of the common person, and would fail to understand how science is, ultimately, instrumental to-the human life process.

On the other hand-, the common, person could fail to appreciate how science can enrich her life and how it does affect her life in the modern epoch. For instance, Dewey mentions how metallurgical operations performed by human beings to transform metals into something useful resulted in the identification of about half a dozen metals (Logic: The Theory of Inquiry). By abstracting from the immediate relation between human beings and substances of the Earth, science has enabled human beings to identify over 60 metals. Through scientific inquiry, differentiation of metals and their diverse uses have expanded substantially in a relatively short period of time. The common person needs to understand the, need, (or scientific inquiry in relation to the limitations of common-sense inquiry as the scientist needs to understand that scientific inquiry may be an end for her but instrumental for many people.

The point of this is to show that the allocation of resources to the expansion of educational services need not entail some sort of “scarcity” merely because the allocation of resources to schools entails the non-allocation of resources in other areas. The allocation of resources in one area can result in the transformation of individuals into individuals with expanded horizons. The expansion of horizon can, in turn, lead to enhancement of experiences in other areas in a qualitative feedback loop that enhances the totality of live experiences.

As long as the resources allocated to schools involve the enrichment of both the living and social nature of human beings in a coherent fashion (taking into account both their nature as living beings and as social beings), the allocation of resources need not involve some sort of limit to other social activities; the necessity of producing food, clothing and shelter can lead to an expanded horizon and thereby to enhanced freedom.

Schools, if they contribute to the growth of children, would form one of many institutions that would contribute to the qualitative enhancement of our lives as individuals and as social individuals in a unique way.

An analogy may help. Look at your own body. You need your own kidneys in order to clean your blood of impurities and excrete them in the form of urine.  The energy allocated to this function limits the energy that can be allocated to your other organs. However, your other organs should not have all your energy allocated to them; there must be a balance between the allocation of your total energy to the diverse organs and their functions, with some organs requiring more energy, others less, depending on a number of circumstances (level of current activity, age, gender and so forth). Merely because each organ has a limited amount of energy and resources allocated to it does not mean that there is some sort of “scarcity” of energy and resources. Your freedom to move about in an effective–and graceful–manner depends on the varying allocation of resources and energy to diverse parts of the body.

If schools develop individuals who can appreciate the continuity (and difference) between their common-sense experiences and scientific experience, the resources allocated to it will feed back into other institutions in a coherent fashion.

Furthermore, individual children will gradually discover what unique contributions they can make to others, and they will come to appreciate the unique contributions of others to their lives.

This process of receiving something unique from others and contributing something unique to others defines the nature of true individuality. True individuality means the impossibility of substitution of function. Individuality is not only unique existentially—all existences are unique–but also functionally; structure and function meld into each other. Means and ends become one unique event that persists as unique in its actualization.

Modern human relations need to “capture” individual variations since modern human nature can advance only through such variations. These variations are unique. From John Dewey, Democracy and Education (1916/2004, page 96):

… he [Plato) had no perception of’ the uniqueness of individuals. … There being no recognition that each individual constitutes his own class, there could be no recognition of the infinite diversity of active tendencies and combinations of tendencies of which an individual is capable.

Plato also did not recognize that stability or harmony could arise through unique changes. From Democracy and Education, page 97:

But it is true that lacking the perception of the uniqueness of every individual, his incommensurability with others, and consequently not recognizing that a society might change and yet be stable, his [Plato’s] doctrine of limited powers and classes came in net effect to the idea of the subordination of individuality.

The emergence of distinct .or unique individuals arises from the process of acting
within a social environment; individuality is an achievement and not a presupposition. From John Dewey (1922), Human Nature and Conduct: An Introduction to Social Psychology, page 84:

This fact is accentuated and made fundamental by the fact of infancy— the fact
that each human being begins life completely dependent upon others. The net outcome accordingly is that what can be called distinctively individual in behavior
and mind is not, contrary to traditional theory, an original datum.

The development of a unique function and the reception of unique functions from others constitutes an essential element of freedom, and the development of such unique functions can only arise in conjunction with the realm of necessity and not apart from it. From Jan Kandiyali (2017), pages 833-839, “Marx on the Compatibility of Freedom and Necessity: A Reply to David James,”  European Journal of Philosophy, volume 25, page 837:

The key point is that Marx is describing a communist society as one in which individuals achieve self‐realization through labour—by helping others to satisfy their needs. Thus, … Marx claims that in non‐alienated production, I would enjoy an individual expression of life during production and in knowing my personality to be manifest in the product I create. However, … Marx emphasizes how my production satisfies another’s need, and how that production for another contributes to my own, as well as the other’s, self‐realization. Thus, when you consume my product, I experience the enjoyment of knowing that my activity has satisfied your need. Because I have satisfied your need, you recognize me as the ‘completion’ of your essential nature. And finally, because I recognize that you appreciate my production for you, my cognizance of your appreciation completes my self‐realization.

What I want to emphasize is that this account of self‐realization through labour that meets the needs of others, labour that characterizes production in a communist society, involves a distinctive conception of the relationship between freedom and necessity. According to this conception, freedom is not merely compatible with necessity. Rather, the necessity of labour is part of the explanation for why labour is a free and self‐realizing activity. For it is only in labour that ‘I would have the direct enjoyment both of being conscious of having satisfied a human need’, and it is only when I have satisfied another’s need that I can be recognized as completing another’s ‘essential nature’.

Mr. Gindin, with his talk of scarcity, has a mechanical conception of human nature and of human relations. It is a conception which splits human beings into beings of necessity (beings of nature) and beings of freedom (social beings).

This mechanical conception if human nature and human relations is shared by his colleague, Herman Rosenfeld (see Reform Versus Abolition of the Police, Part Five: More Philosophical Considerations). There seems to be a pattern emerging here: social democrats or social reformers view other people and human relations as external to each other–like ping pong balls rather than living and breathing beings with the capacity to engage in conscious and organized self-change.

Mr. Gindin also has a mechanical view of the relation of art in a socialist society since it, too, is restricted by “scarcity.” A critical analysis of such a view will be posted in the future.

Socialism, Part Nine: Inadequate Conception of the Nature of Freedom and Necessity, or Free Time and Necessary Time, Part Four: Art

This is the conclusion of a series of previous posts on the subject.

In a previous post, I criticized Mr. Gindin’s claim that the expansion of educational services would involve scarcity and therefore would require external or extrinsic motivation of some sort. (Mr,. Gindin is (or was) head of the Toronto Labour Committee and former research director for the Canadian Auto Workers (CAW) (now Unifor) union. See Socialism, Part Ten: Inadequate Conception of the Nature of Freedom and Necessity, or Free Time and Necessary Time, Part Three: Education.

Let us look at part of a previous quote from Mr. Gindin’s writing on socialism:

Furthermore, the calculation of scarcity can in particular not ignore leisure, with leisure representing the “realm of freedom.” Even if we produced enough of what we wanted, as long as some of that labor isn’t completely voluntary but instrumental, then effective scarcity of either labor time or the good/service remains. Workers may even like their jobs and see them as a source of creative expression and satisfaction, but as long as they’d periodically prefer to not show up or leave early, some further inducement is needed to offset the sacrifice of providing those labor hours. That inducement is a measure of the persistence of effective scarcity. And once scarcity is acknowledged as an inherent and essentially permanent frame in the restructuring of society, the question of structured incentives becomes paramount. This is not just a matter of motivating adequate hours of work, but of affecting its intensity and quality, and influencing where that work is best applied (i.e., determining society’s overall division of labor).

Mr. Gindin’s use of “scarcity” is meant to show that he is being realistic. However, just as Mr. Gindin does not criticize the particular form of education in modern society, he does not consider the limitations of the particular form of art in modern society. He writes the following:

Scarcity — the need to make choices between alternative uses of labor time and resources — is unlikely to end outside of utopian fantasies because popular demands, even when transformed into collective/socialist demands, are remarkably elastic: they can continue to grow. Think especially of … the expansion of art and of cultural spaces — all of which require labor time and generally also complementary material goods. That is, they demand choices.

Mr. Gindin seems to consider the “expansion of art and cultural spaces” in purely quantitative terms. The existing “art and cultural spaces” are supposed to be “expanded” rather than qualitatively transformed. Given the specific class nature of modern society dominated by a class of employers and the general class nature of human history after the agricultural revolution, the view that art and culture needs mere expansion rather than qualitative transformation reflects an impoverished view of the nature of socialist society. If socialist society is characterized by the abolition of classes, and classes involve exploitation and oppression, then the nature and development of art and culture should accordingly change qualitatively.

The issue can be approached from different angles. One issue is the question of the form of art (something which Mr. Gindin does not even adddress). John Dewey’s philosophy of art can aid us in understanding the limitations of Mr. Gindin’s characterization of “scarcity” and art in a socialist society.
Dewey points out that the form of modern art is isolated from common human experience. It is this isolated form itself that prevents a proper understanding of the nature of art as a refined development of common-sense human experience. From John Dewey (1934), Art as Experience , pages 3-4:

BY ONE of the ironic perversities that often attend the course of affairs, the existence of the works of art upon which formation of an esthetic theory depends has become an obstruction to theory about them. For one reason, these works are products that exist externally and physically. In common conception, the work of art is often identified with the building, book, painting, or statue in its existence apart from human experience. Since the actual work of art is what the product does with and in experience, the result is not favorable to understanding. In addition, the very perfection of some of these products, the prestige they possess because of a long history of unquestioned admiration, creates conventions that get in the way of fresh insight. When an art product once attains classic status, it somehow becomes isolated from the human conditions under which it was brought into being and from the human consequences it engenders in actual life experience.

When artistic objects are separated from both conditions of origin and operation in experience, a wall is built around them that renders almost opaque their general significance, with which esthetic theory deals. Art is remitted to a separate realm, where it is cut off from that association with the materials and aims of every other form of human effort, undergoing, and achievement. A primary task is thus imposed upon one who undertakes to write upon the philosophy of the fine arts. This task is to restore continuity between the refined and intensified forms of experience that are works of art and the everyday events, doings, and sufferings that are universally recognized to constitute experience. Mountain peaks do not float unsupported; they do not even just rest upon the earth. They are the earth in one of its manifest operations. It is the business of those who are concerned with the theory of the earth, geographers and geologists, to make this fact evident in its various implications., The theorist who would deal philosophically with fine art has a like task to accomplish.

If one is willing to grant this position, even if only by way of temporary experiment, he will see that there follows a conclusion at first sight surprising. In order to understand the meaning of artistic products, we have to forget them for a time, to turn aside from them and have recourse to the ordinary forces and conditions of experience that we do not usually regard as esthetic. We must arrive at the theory of art by means of a detour. For theory is concerned with understanding, insight, not without exclamations of admiration, and stimulation of that emotional out burst often called appreciation. It is quite possible to enjoy flowers in their colored form and delicate fragrance without knowing any thing about plants theoretically. But if one sets out to understand the flowering of plants, he is committed to finding out something about the interactions of soil, air, water and sunlight that condition the growth of plants.

The isolation of art from ordinary human experience distorts an understanding of the nature of art. Such a distortion is like a mirror, in which we only see the reflection offered to us and not the background material (and social) conditions for the mirror to function as a mirror. From Thomas Nail (2020), Marx in Motion: A New Materialist Marxism, page 149-150:

A mirror is something that reflects almost all the light that it receives within a certain limited frame. A mirror, however, also actively changes the light it receives and limits the range of light returned based on the limits of its frame. The danger of the mirror, as the myth of Narcissus reminds us, is mistaking the mirror for nothing other than the image it reflects. The mirror is thus a tricky kind of object because it so easily conceals its own quality, use- value, or sensuous materiality: the frame, the tain (silver backing), as well as the agency of light itself. Narcissus dies because he mistakes the sensuous agency of nature (water, light, air) as nothing other than himself.

The isolation of art in a socialist society from the rest of human experience would proceed to break down as the power of the class of employers was superseded and as the objectified power of workers is abolished and the human life process comes under the workers’ and the diverse communities’ control.

Mr. Gindin simply ignores any qualitative transformation of art and culture and refers to the (quantitative) expansion of arts and culture–as if the integration of the domain of art with other domains of life would not in itself involve “an expansion of art and culture.” Mr. Gindin fails to see that the modern art form itself expresses oppressive conditions, where art is relegated to an isolated activity by a relative minority. He succumbs to the ideology of the mirror, seeing only the reflected form of the alienated art form as a permanent form that merely requires–“mechanical” elements rather than organic elements that grow from the common source of human daily life experience.

Art in modern capitalist society would undergo a qualitative change–it would be freed of the exploitative and oppressive conditions that give rise to it as something separate and divorced from everyday living and working. From Piotr Hoffmann (1982), The Anatomy of Idealism: Passivity and Activity in Kant, Hegel and Marx, page 98:

In effect, since human labor is guided by conception and imagination, the Marxian “architect” from Capital is always capable of embodying in the material an original vision of things; he can tear the veil of banality and commonplace which stifles the potential of our sensibility. Needless to say, according to Marx this aesthetic potential of human senses must be stifled and repressed under the prevailing conditions of commodity production and of alienation of labor in general. 54 But it is the same conditions – the increasing sophistication of the labor-process – which both create the new potential of human senses and needs and repress its emerging claims and requirements. Indeed the whole process of labor, such as we know it in its past and present form, has that double, paradoxical function: at the same time that it creates those new and higher qualities of human life it also represses them by creating a mode of human intercourse which prevents their realization. “Certainly, labor obtains its measure from outside, through the aim to be attained and the obstacles to be overcome in attaining it. But [ …] this overcoming of obstacles is in itself a liberating activity [ …] the external aims become stripped of the semblance of merely external natural urgencies, and become posited as aims which the individual himself posits – hence as self-realization, objectification of the subject, hence real freedom, whose action is, precisely, labor. ” It is in Grundrisse, not in Paris Manuscripts, that Marx writes these words. His intention couldn’t be clearer: labor is not only a response to need and dependency upon external objects, but a truly creative and (as Marx put it) “liberating” process through which man gives a higher form to his life-activity, a form where his senses, needs and tastes become refined and stripped of their crude utilitarian functions.

In societies before the emergence of capitalism, art was not as divorced from daily life as it is now. Art forms were closely related to utility and daily living, with art expressing more, initially, an assumed magical function related to survival than some sort of separate form expressing emotion and aesthetic refinement. From Arnold Hauser (1951), The Social History of Art, Volume 1: From Prehistoric Times to the Middle Ages, page 3:

When the Palaeolithic artist painted an animal on the rock, he produced a real animal. For him the world of fiction and pictures, the sphere of art and mere imitation, was not yet a special province of its own, different and separate from empirical reality; he did not as yet confront the two different spheres, but saw in one the direct, undifferentiated continuation of the other. He will have had the same attitude to art as Lévy- Bruhl’s Sioux Red Indian, who said of a research worker whom he saw preparing sketches: ‘I know that this man has put many of our bisons into his book. I was there when he did it, and since then we have had no bisons.’ The conception of this sphere of art as a direct continuation of ordinary reality never disappears completely despite the later predominance of a conception of art as something opposed to reality.

Later on, emotional expression and aesthetic concerns emerged with the development of agriculture. Here art and aesthetics (the appreciation of art from the side of consumption) now became somewhat divorced from daily life–with the emergence of class society. Religious rite took the place of magic. However, even then the degree of separation of art from daily life characteristic of modern capitalist society, with art appearing to be a separate realm from the realm of human life and its self-reproduction, was much less. In feudal society, for example, production and consumption were not as separated since they were still closely linked to daily life and utility. Page 93:

‘Urban economy’ in the sense of Buecher’s theory of economic stages signifies, in contrast to the earlier production for own use, a production for the customer, that is, of goods that are not consumed in, the economic unit in which they are produced. It is distinguished from the following stage of ‘national economy’ in that exchange of goods still takes the ‘direct’ form—i.e. the goods go direct from the producing to the consuming unit, production as a rule not being for stock or the free market, but to the direct order of definite customers personally acquainted with the producer. We are thus at the first stage of the separation of production from consumption, but still far removed from the completely abstract method of modern production by which goods have to pass through a whole series of hands before they reach the consumer. This difference of principle between the medieval ‘town economy’ and the modern ‘national economy’ still remains, even when we pass from Buecher’s ‘ideal type’ of town economy to the actual historical facts; for although pure production to order never existed by itself, the relationship between the tradesman and consumer in the Middle Ages was far closer than nowadays; the producer was not yet faced with a completely unknown and indefinite market as he was later. These characteristics of the ‘urban’ way of production showed themselves in medieval art in a greater independence of the artist, on the one hand, as compared with the artist of Romanesque times, but, on the other hand, in a complete absence of that modern phenomenon, the unappreciated artist working in a total vacuum of estrangement from the public and remoteness from actuality.

The abolition of classes in a socialist society, undoubtedly, would revolutionize the relation between art and daily life–just as the agricultural revolution and the emergence of class societies also revolutionized the relation between art and daily life. The abolition of classes would mean that even in work relations there would be the possibility of expressing ourselves without exploitation and oppression preventing us from doing so. The relation between freedom and necessity would change accordingly. There would be a qualitative change in the nature of art as it became integrated into the daily lives of individuals–but this time on a higher, more refined plane than earlier.

Mr. Gindin, though, just sees “an expansion of art”–undoubtedly in purely quantitative terms. He has an impoverished view of the nature of a socialist society and the relation between freedom and necessity in a socialist society.

The Rate of Exploitation of Workers at Bombardier, 2018, One of the Largest Private Employers in Quebec and in Toronto, Ontario: Or: How Unionized Jobs are Not Decent or Good

Introduction

In two others posts I presented a list of some of the largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada)  and Quebec (see  A Short List of the Largest Employers in Quebec According to the Number of Employees). 

I have tried to calculate the rate of exploitation of workers in various companies for these two areas, including  Air Canada  (The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in Canada) and the Royal Bank of Canada (Banque Royale du Canada)  (The Rate of Exploitation of the Workers of the Royal Bank of Canada (RBC), One of the Largest Private Employers in Toronto and in Canada). 

Bombardier, the aircraft manufacturer, is also on both lists for Toronto and Quebec. I will calculate the rate of exploitation for this capitalist company not only for this reason. In the documentary Company Town, one worke Jennifer Akkermanr, who was going to lose her job at the General Motors (GM) plant in Oshawa when it was to close on December 18, 2019) indicated that she liked her job when working for GM but that she was going to work for Bombardier. I calculated, using fairly rough data, the rate of exploitation of GM workers in order to show that workers who claim that they enjoy their jobs at GM, in effect (even if they are unconscious of it) are claiming that they enjoy their exploitative jobs at GM. 

I thought it appropriate to calculate the rate of exploitation of Bombardier workers to see to what extent the rates of exploitation of workers at GM and at Bombardier differed, if at all. 

I used data from 2018 rather than 2019 to calculate the rate of exploitation of Bombardier workers because, in 2019, there seemed to be no calculable rate of exploitation since in 2019 there was an actual profit loss. Unless there are specific reasons for including abnormal years, it is better to calculate the rate of exploitation using more normal data. Besides, any company that operates at a constant loss by failing to exploit workers will cease to exist after a certain period of time.

Of course, if the rate of exploitation is calculated for a number of years, then losses need to be included. I have not found any books or articles that deal with how to handle such losses in calculating the rate of exploitation for such a year. It is, in any case, probably better to include such years in a multi-year calculation of the rate of exploitation in order to gain a more accurate view of the rate of exploitation in the medium- and long-term. Perhaps some readers can provide suggestions on how to do so. 

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

Surplus value (s) or Adjusted EBIT $969 million
Variable capital (v) or Adjusted Employee benefit costs $5,432 billion

To calculate the rate of surplus value, we need to divide “Surplus value (s) or Adjusted EBIT” by “Variable capital (v) or Adjusted Employee benefit costs.” 

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=969/5,432=18%. 

That means that for every hour worked that produces her/his wage, a worker at Bombardier works around an additional 11 minutes for free for Bombardier.

In an 8-hour (480 minutes) work day, the worker produces her/his wage in 6 hours 47 minutes (407 minutes) and works 1 hour 13 minutes (73 minutes) for free for Bombardier. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario and Employers as Dictators, Part One).

In an 8.67 hour or 8-hour 40 minutes (520 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 19minutes (79 minutes) for free for Bombardier.

In a 9-hour (540 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 22 minutes (82 minutes) for free for Bombardier.

In an 10-hour (600 minutes) work day, the worker produces her/his wage in 8 hours 28 minutes (508 minutes) and works 1 hour 32 minutes (92  minutes) for free for Bombardier.

In a 10.67 -hour or 10-hour 40 minutes (640 minutes) work day, the worker produces her/his wage in 9 hours 2 minutes (542 minutes) and works 1 hour 38 minutes (98  minutes) for free for Bombardier.

In a 12-hour (720 minutes) work day, the worker produces her/his wage in 7 hours 21 minutes (610 minutes) and works 1 hour 50  minutes (110 minutes) for free for Bombardier.

Again, the rate of exploitation measures the extent to which workers work for free, producing all the surplus value and hence all the profit for employers. However, even during the time when they work to produce their own wage, they are hardly free. They are subject to the power and dictates of their employer during that time as well. 

Do you think that these facts contradict the talk by the left and unionists of “”fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One and  Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for this rhetoric of the largest unions in Canada, the Canadian Union of Public Employees (CUPE) and  Unifor) , “fair wages” and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in workers’ lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? Do the left? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

COLLECTIVE AGREEMENT (2019-2022) BETWEEN Bombardier Inc. hereinafter referred to as “the Employer” AND Unifor

ARTICLE 3 MANAGEMENT RIGHTS

3.01 No provision of the Collective Agreement shall be interpreted as limiting the Employer in any way in the exercise of its management functions. These functions are performed in a manner consistent with all the provisions of this Agreement. It is the function of the Employer to administer and manage the company and lead the workforce. Without restricting the generality of the foregoing, its rights and functions include:

a) The responsibility for the management, operation, extension and curtailment of business and operations; the authority to direct, transfer, promote, demote, discipline and discharge employees for proper cause; the right to organize and supervise the work to be performed by the employees, to direct them in the course of their work, to maintain discipline, order and efficiency, to determine the products to be manufactured and their design, the methods, processes and means of manufacturing and operating, the type and location of machines and tools to be used, to determine production standards and the type and quality of materials to be used in manufacturing. Notwithstanding the above, these rights and functions do not prevent any employee who considers himself to have been unfairly treated to lodge a grievance in accordance with the provisions stated in this Agreement

Should workers not be discussing why management has these rights? Should workers not be discussing whether an unelected management should have such rights? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing any union rep who claims that a collective agreement somehow expresses a “fair contract?” A “good contract?” A “decent job?” A “good job?” All other such platitudes? 

Comparison of the Rate of Exploitation of Bombardier Workers to the Rate of Exploitation of Other Workers

The rate of exploitation of Bombardier workers is quite low relative to other workers (see the comparison of the rate of exploitaiton of various sets of workers in The Rate of Exploitation of Workers at WestJet Airlines Ltd.). Although there are other factors or determinants in establishing whether a private-sector employer is viable or not, a relatively low rate of exploitation is certainly one possible indication of its possible bankruptcy; there is little wonder that in 2019 Bombardier faced a loss of profit. Its efforts to restructure itself as a consequence undoubtedly involved possible attempts to increase the rate of exploitation. Perhaps a comparison of the 2018 rate and the 2022 or 2023 rate of exploitation would be appropriate at some point to see if such restructuring is reflected in an increased rate of exploitation. 

In relation to the rate of exploitation of General Motors (GM) workers, Bombardier workers are exploited less since the rate of exploitation of GM workers is 40 percent. Does that mean that Bombardier workers experience substantially more freedom than GM workers? Hardly. From the point of view of the continued existence of the workers at a certain standard of living (it does not mean that the standard of living that they receive is adequate). Higher rates of exploitation mean, among other things, that the need to work for a certain relative proportion of the working day is relatively unnecessary when compared to another set of workers in order to produce the value of the workers’ consumer goods (means of consumption). 

A low rate of exploitation means that the particular employer may be threatened with bankruptcy–and hence the workers may be threatened with unemployment. From Nick Potts (2009), “Trying to Help Rescue Value for Everyone,” in pages 177-199, Critique: Journal of
Socialist Theory, Volume 37, Issue Number 2, 177-19  page 192: 

Clearly if exploitation were to drop too low a crisis of profitability would occur.

This is hardly in their own immediate or short-term interests since they, in general need to work for an employer if they are to continue to live at a certain standard of living, This is a dilemma which private-sector workers and unions face (and, indirectly, public-sector workers and their unions) since attempts to change working conditions (such as the level of intensity or the length of the working day)  and pay may well have negative effects on the rate of exploitaiton and the rate of profit, leading to bankruptcy. Workers cannot resolve such dilemmas without challenging the class power of employers–and unions cannot either, despite all the chatter of “fair contracts,” “decent wages,” “good jobs,” “decent work,” and other such cliches. 

On the other hand, a high rate of exploitation does not mean that workers’s immediate interests are somehow met. In addition to having a greater proportion of labour or work going to the employer relative to the worker, the higher rate of exploitation may imply greater unemployment for workers since the issue of how this high rate of exploitation is achieved arises. If it arises due to massive increases in investment in constant capital relative to variable capital (and thereby increased in the productivity of labour), it may well occur that workers may become unemployed as the proportion of relative investment in c crowds out investment in v. 

Nonetheless, in the short term, a higher rate of exploitation in a particular company may initially result in somewhat stable employment as the company may be able to compete more effectively against other capitalist companies. To that extent, Jennifer Akkerman’s reference to ‘loving her job’ may contain a grain of truth–short-term employment stability. 

Alternatively, if the higher rate of exploitation occurs more or less throughout the economy, the workers who produce consumer goods (such as cars and trucks, as do GM workers), may find themselves unemployed as the commodities they produce remain unsold. 

It is ironic that it may be in the workers’ short-term interests to want a high rate of exploitation in order to achieve some form of employment stability; that this may clash with their long-term interests does not change the situation. The dilemma of not being exploited at all and being unemployed, of being highly exploited with some employment stabiity and being little exploited (but still oppressed) with the threat of unemployment hanging over workers’ heads hardly makes for a “good job” or “fair contracts.” 

It is time to challenge unions that persistently present, unconsciously if not concsiously, claims that they can somehow achieve any fair settlement, whether wages or working conditions, and whether through legislation or through collective bargaining and the resulting collective agreement. Thus, should not leftists persistently criticize such views as the following (

https://www.newswire.ca/news-releases/unifor-reaches-tentative-agreement-with-bombardier-aviation-851709617.html):

TORONTOJuly 30, 2021 /CNW/ – Unifor Local 112 and 673 have reached a tentative agreement with Bombardier Aviation. “I would like to congratulate the Local 112 and 673 bargaining teams for their hard work and dedication throughout these negotiations,” said Jerry Dias, Unifor National President. “Reaching a settlement with Bombardier brings us one step closer to resolving the labour dispute at Downsview. Our union can now focus all of its efforts on reaching an agreement with De Havilland.”

The three-year agreements cover approximately 1,500 union members employed by Bombardier Aviation at the Downsview plant.

“We could not have reached a fair settlement that addresses the union’s key priorities at Bombardier without the support and solidarity of our members throughout the bargaining process and on the picket lines,” said Scott McIlmoyle, Unifor Local 112 President. [my emphasis]

Have you ever read any justification by union reps for such terms as a “fair settlement,” “fair contract,” “fair collective agreement,” ‘fair wages,” and so forth? If not, why not? 

Should not union reps be obliged to answer such questions? 

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

In the case of Bombardier, I have had some difficulty in reconciling numbers related to interest. I will show this below. 

But first, let us look at the general calculation: 

Surplus Value (Profit)

EBIT: Earnings before interest and taxes (or: Profitability: Revenues-Costs or Expenses) 
Revenues$ 16,236
Cost of sales 13,958
Gross margin 2,278 [16,236-13,958]
SG&A (Selling, General and Administrative Expenses) 1,156
R&D (Research and Development) 217
Share of income of joint ventures and associates (66)
Other expense (income)  (58)
EBIT before Special Items (Earnings before Interest and taxes) (2) 1,029 [2,278-1156-217+66+58=1029]
Special items 28
EBIT 1001 (1029-28=1001) 

Non-adjustment of EBT by Excluding Special Items from the Calculation

Clarification of the nature of the category “Special Items” in the Annual Report is as follows: 

Special items

Special items comprise items which do not reflect our core performance or where their separate presentation will assist users in understanding our results for the period. Such items include, among others, the impact of restructuring charges and significant impairment charges and reversals.

There exists several items in this category. To go over each item and decide whether it should be excluded or included (without further information) seems an exercise for those with accounting skills–I invite them to provide a rational for including any or all of the items; I exclude the category in its entirety from the calculation. 

Consequently, so far the EBIT is 1,001. Now, particular employers treat the need to pay interest as an expense–which it is from the point of view of the particular employer. Accordingly, there is an additional category: EBT, or Earnings Before Taxes: 

EBT (Earnings before taxes)
Interest
Financing expense 712
Financing income (106) [This is actual income received and hence is in parentheses since it is not really an expense but the opposite and must be subtracted from “Financing expense”.)
Net financing expense 606 (712-106=606)
EBT (Earnings before taxes) (EBIT (1001)-Net financing expense (606)) 395

Adjustments

I will treat, theoretically, the two categories “Financing expense” and “Financing income” separately, and only then will I make the necessary adjustements. 

Financing Expense

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest). When they are expenses at the macro level of the class of employers and not just at the micro level of the particular employer, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

For example, interest is such a category. 

As I wrote in another post: 

As explained in another post, interest in many instances can be treated as part of the surplus value produced and therefore added to net income since, although from the point of view of the individual capitalist it is an expense, from the capitalist economy as a whole it is derived from the production of surplus value. 

Accordingly, it is EBIT and not EBT that should form the basis for determining the surplus value produced since interest is derived from surplus value–although it is an expense from the point of view of the particular employer. 

Financing Income 

The category “Financing Income” is income that is a result of, among other things, investment in securities. Since, as I explained in the post on the rate of exploitation of General Motors workers,

Since the idea of calculating the rate of exploitation of particular employers is to determine the extent to which the particular employer exploits its workers, income derived from the exploitation of workers other than its workers should be excluded.

Accordingly, the amount included in this category does indeed need to be subtracted from EBIT since it is surplus value arising from the exploitation of workers other than Bombardier workers. 

Temporary Adjusted Earnings Before Income Taxes 895 (1001-106)

Further adjustments of EBIT must await the calculation of variable capital, or the total cost of producing the commodity labour power, or the capacity of labour power.

Variable Capital

Presumably, the following data form part of the category “Cost of Sales.” 

EMPLOYEE BENEFIT COSTS
Wages, salaries and other employee benefits $ 4,919 
Retirement benefits 464 
Share-based expense 74
Restructuring, severance and other involuntary termination costs 46 
Total $ 5,503

To explain the nature of the category “Share-based expenses.” it is first necessary to indicate the word form of the acronyms PSU, RSU and DSU:

PSU Performance share unit
RSU Restricted share unit
DSU Deferred share unit

The annual report indicates the nature of these: 

SHARE-BASED PLANS

PSU, DSU and RSU plans
The Board of Directors of the Corporation approved a PSU and a RSU plan under which PSUs and RSUs may be granted to executives and other designated employees. The PSUs and the RSUs give recipients the right, upon vesting, to receive a certain number of the Corporation’s Class B Shares (subordinate voting). The RSUs also give certain recipients the right to receive a cash payment equal to the value of the RSUs. The Board of Directors of the Corporation has also approved a DSU plan under which DSUs may be granted to senior officers. The DSU plan is similar to the PSU plan, except that their exercise can only occur upon retirement or termination of employment. 

It seems clear that the money allocated to the category is limited to select employees–unlike some annual reports, where it was unclear whether regular workers had access to share-based programs or not (see for example The Rate of Exploitation of Workers at WestJet Airlines Ltd.). The reasoning for including some (if not all) of it as part of surplus value is that this compensation is not mainly for the coordination of the work of others but for the exploitation of others–it is pure surplus value. 

If it was unclear whether the category was limited to those who exploit other workers, I merely calculated 10 percent of the total as forming surplus value, leaving 90 percent to form part of variable capital. In the case of Bombardier, though, the total amount of 74 million seems to be earmarked exclusively for key employees who exploit other workers. 

Accordingly, it is necessary to subtract 74 from “Employee benefit costs” and add it to EBIT: 

Adjusted EBIT or Surplus Value (Profit) 969 (895+74)
Temporarily Adjusted Employee benefit costs (variable capital, v) 5,429 (5,503-74)

Further Adjustment of Variable Capital (Wages and Benefits)

There is a list of items in the category “Other expense (income).” One of the items needs to be shifted to be included in the calculation of variable capital:

“Severance and other involuntary termination costs (including changes in estimates)” 3.

Since the shift is within the general category of “Expenses,” it does not affect the calculation of surplus value and hence profit; the category “Cost of sales” would increase by 3, from 13,958 to 13,961, and the category “Other expense (income)  (58)” would decrease by 3, from (58) to 55, with the result that the EBIT would not change. 

However, it does affect the calculation of variable capital and hence the rate of surplus value or the rate of exploitation. We now have sufficient information to calculate the rate of exploitation or the rate of surplus value.

Final Calculation (Based on Adjustments) of Surplus Value, Variable Capital (Salaries or Wages and Benefits) and the Rate of Surplus Value 

The result of all of these adjustments is: 

Surplus value (s) or Adjusted EBIT $969 million
Variable capital (v) or Adjusted Employee benefit costs $5,432 billion

To calculate the rate of surplus value, we need to divide “Surplus value (s) or Adjusted EBIT” by “Variable capital (v) or Adjusted Employee benefit costs.” 

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=969/5,432=18%. 

That means that for every hour worked that produces her/his wage, a worker at Bombardier works around an additional 11 minutes for free for Bombardier.

In an 8-hour (480 minutes) work day, the worker produces her/his wage in 6 hours 47 minutes (407 minutes) and works 1 hour 13 minutes (73 minutes) for free for Bombardier. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario  and   Employers as Dictators, Part One).

In an 8.67 hour or 8-hour 40 minutes (520 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 19minutes (79 minutes) for free for Bombardier.

In a 9-hour (540 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 22 minutes (82 minutes) for free for Bombardier.

In an 10-hour (600 minutes) work day, the worker produces her/his wage in 8 hours 28 minutes (508 minutes) and works 1 hour 32 minutes (92  minutes) for free for Bombardier.

In a 10.67 -hour or 10-hour 40 minutes (640 minutes) work day, the worker produces her/his wage in 9 hours 2 minutes (542 minutes) and works 1 hour 38 minutes (98  minutes) for free for Bombardier
In a 12-hour (720 minutes) work day, the worker produces her/his wage in 7 hours 21 minutes (610 minutes) and works 1 hour 50  minutes (110 minutes) for free for Bombardier.

I have used the lengths of the working day as 8, 8.67, 9, 10, 10.67 and 12  because the length of the working day varies. According to different sources:

Working hours are 8:00am – 4:40pm

12hr shifts

The hours that I worked were from 7:00 am to 7:00 pm Friday Saturday & Sunday and possibly coming in 2 hours early on Saturday & Sunday and or possibly staying late Friday thru Sunday depending whether or not we had a customer who had to leave early or late in the evening.

8-9 hours per day.

8 to 10 hours a day

I worked eight hours a day

The 2019-2022 collective agreement between Bombardier and Unifor Local 62 states:

ARTICLE 14 WORK SCHEDULES

14.01 The Employer determines the use of the different work schedules provided in article 14.08 according to the operational needs.

14.02 Unless otherwise stipulated in this Agreement, the normal work week is forty (40) hours.

14.03 The work week for employees on the first (1st) shift (schedule 1-A and 1-B) is of forty (40) hours distributed on five (5) consecutive days of eight (8) hours from Monday to Friday

The work week for employees on the first (1st) shift (schedule 1-C and D) is of forty (40) hours distributed over four (4) consecutive days of ten (10) hours from Monday to Thursday or Tuesday to Friday

… 

14.05 The work week for employees on the third (3rd) shift (schedule 3) is of thirty-six (36) hours, distributed on four (4) consecutive nights of nine (9) hours from Monday night to Friday morning, paid as forty (40) hours.

… 

14.06 The work week for employees on the weekend day shift (schedule 4-A et 4-B) is of thirty-six (36) hours, distributed on three (3) consecutive days of twelve (12) hours, as follows: Saturday, Sunday and Friday Saturday, Sunday and Monday, paid for forty-two (42) hours.

… 

14.07 The work week for employees on the weekend night shift (schedule 5) if of thirty-two (32) hours, distributed on three (3) consecutive evenings as follows: twelve (12) hours on Saturday and Sunday, and eight (8) hours on Friday [32 hours divided by 3=10.67 hours or 10 hours 40 minutes]. The employees are paid for forty (40) hours including the night premium.

Political Considerations and Conclusion 

Again, the rate of exploitation measures the extent to which workers work for free, producing all the surplus value and hence all the profit for employers. However, even during the time when they work to produce their own wage, they are hardly free. They are subject to the power and dictates of their employer during that time as well. 

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One for the rhetoric of the largest union in Canada, the Canadian Union of Public Employees (CUPE)) and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

COLLECTIVE AGREEMENT (2019-2022) BETWEEN Bombardier Inc. hereinafter referred to as “the Employer” AND Unifor

ARTICLE 3 MANAGEMENT RIGHTS

3.01 No provision of the Collective Agreement shall be interpreted as limiting the Employer in any way in the exercise of its management functions. These functions are performed in a manner consistent with all the provisions of this Agreement. It is the function of the Employer to administer and manage the company and lead the workforce. Without restricting the generality of the foregoing, its rights and functions include:

a) The responsibility for the management, operation, extension and curtailment of business and operations; the authority to direct, transfer, promote, demote, discipline and discharge employees for proper cause; the right to organize and supervise the work to be performed by the employees, to direct them in the course of their work, to maintain discipline, order and efficiency, to determine the products to be manufactured and their design, the methods, processes and means of manufacturing and operating, the type and location of machines and tools to be used, to determine production standards and the type and quality of materials to be used in manufacturing. Notwithstanding the above, these rights and functions do not prevent any employee who considers himself to have been unfairly treated to lodge a grievance in accordance with the provisions stated in this Agreement

Should workers not be discussing why management has these rights? Should workers not be discussing whether an unelected management should have such rights? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing any union rep who claims that a collective agreement somehow expresses a “fair contract?” A “good contract?” A “decent job?” A “good job?” All other such platitudes? 

The collective agreement fosters the illusion that the workers are paid for the whole working day. Workers may indeed receive more wages under certain circumstances, but that means that the cost of production of their capacity for working for an employer increases (perhaps due to an accelerated use of their labour power). This consideration, however, is irrelevant here since the total wages, salaries and benefits is what matters, and any increase in v due to such considerations are included in the data.

Comparison of Rates of Exploitation 

The rate of exploitation of Bombardier workers is quite low relative to other workers (see the comparison of the rate of exploitaiton of various sets of workers in The Rate of Exploitation of Workers at WestJet Airlines Ltd.). Although there are other factors or determinants in establishing whether a private-sector employer is viable or not, a relatively low rate of exploitation is certainly one possible indication of its possible bankruptcy; there is little wonder that in 2019 Bombardier faced a loss of profit. Its efforts to restructure itself as a consequence undoubtedly involved possible attempts to increase the rate of exploitation. Perhaps a comparison of the 2018 rate and the 2022 or 2023 rate of exploitation would be appropriate at some point to see if such restructuring is reflected in an increased rate of exploitation. 

In relation to the rate of exploitation of General Motors (GM) workers, Bombardier workers are exploited less since the rate of exploitation of GM workers is 40 percent. Does that mean that Bombardier workers experience substantially more freedom than GM workers? Hardly. Higher rates of exploitation mean that the need to work for a certain length of the working day is relatively unnecessary when compared to another set of workers from the point of view of the continued existence of the workers at a certain standard of living (it does not mean that the standard of living that they receive is adequate). 

A low rate of exploitation means that the particular employer may be threatened with bankruptcy–and hence the workers may be threatened with unemployment. From Nick Potts (2009), “Trying to Help Rescue Value for Everyone,” in pages 177-199, Critique: Journal of Socialist Theory, Volume 37, Issue Number 2, page 192: 

Clearly if exploitation were to drop too low a crisis of profitability would occur.

This is hardly in their own immediate or short-term interests since they, in general need to work for an employer if they are to continue to live at a certain standard of living, This is a dilemma which private-sector workers and unions face (and, indirectly, public-sector workers and their unions) since attempts to change working conditions (such as the level of intensity or the length of the working day)  and pay may well have negative effects on the rate of exploitaiton and the rate of profit, leading to bankruptcy. Workers cannot resolve such dilemmas without challenging the class power of employers–and unions cannot either, despite all the chatter of “fair contracts,” “decent wages,” “good jobs,” “decent work,” and other such cliches. 

On the other hand, a high rate of exploitation does not mean that workers’s immediate interests are somehow met. In addition to having a greater proportion of labour or work going to the employer relative to the worker, the higher rate of exploitation may imply greater unemployment for workers since the issue of how this high rate of exploitation is achieved arises. If it arises due to massive increases in investment in constant capital relative to variable capital (and thereby increased in the productivity of labour), it may well occur that workers may become unemployed as the proportion of relative investment in c crowds out investment in v. 

Nonetheless, in the short term, a higher rate of exploitation in a particular company may initially result in somewhat stable employment as the company may be able to compete more effectively against other capitalist companies. To that extent, Jennifer Akkerman’s reference to ‘loving her job’ may contain a grain of truth–short-term employment stability. 

Alternatively, if the higher rate of exploitation occurs more or less throughout the economy, the workers who produce consumer goods (such as cars and trucks, as do GM workers), may find themselves unemployed as the commodities they produce remain unsold.

From Guglielmo Carchedi and Michael Roberts, “The Long Roots of the Present Crisis: Keynesians, Austerians, and Marx’s Law,” in World in Crisis: A Global Analysis of Marx’s Law of Profitability. Edited by Carchedit and Roberts: 

The question is whether an increase in the rate of profit due to a sufficiently high rate of exploitation is a step toward recovery.

A recovery presupposes the rise in the new value generated within the context of a rising ARP [average rate of profit]. A pro-capital distribution of value within the context of a falling ARP can revive the ARP, but this does not denote a recovery. This higher profitability hides the decreasing production of value and surplus value—that is, it hides the deterioration of the economy.

A more detailed way to approach this is is by considering the two basic sectors of the economy. Sector 1 produces means of production [Bombardier primarily belongs to this sector since it produces jets] , and sector 2 produces means of consumption [GM primarly produces in this sector–although a smaller proporition of vehicle production undoubtedly serves as means of production as well]. If one or both sectors innovate, usually the OCC rises and the ARP falls. All sectors realize tendentially the same, but lower, rate of profit. The capitalists might react to the lower ARP by lowering the level of wages, that is, by increasing the rate of exploitation across the board. This upsets the initial tendential equalization of the profit rates. But this equalization presupposes full realization [full sale of the commodities produced], which is impossible if stopping or reversing the fall in the ARP is to be achieved by raising the rate of exploitation.

Suppose wages are reduced by the same percentage, Δ symbol for a change in something], both in sector 1 and in sector 2, represented by the equation –Δv1 = –Δv2 [the percentage change decrease in variable capital is the same in both sectors 1 and 2]. Then, sector 1 gains Δs1 (corresponding to the fall in wages, –Δs1 [sic–which means that the quoter quotes exactly as written despite a possible error in the original: this should be the negative percentage change in v1]) [the percentage change increase in surplus value in sector 1 . Sector 2 on the one hand gains Δs2 (corresponding to the fall in wages, –Δv2) but on the other loses –(Δs1 + Δs2), the loss due to the unsold means of consumption to the workers both of sector 1 and of sector 2 [sector 2 loses because the levels of v1 and v2 have decreased with the result that they cannot purchase means of consumption equal to their loss]. On balance, sector 2 loses –Δs1, which is sector 1’s gain. Means of consumption for a value of Δs1 are unsold. This is overproduction in sector 2.

The ARP is unchanged (what is lost by one sector is gained by the other), but the two rates of profit differ: that in sector 1 has risen by Δs1, while that in sector 2 has fallen by the same quantity. The greater the fall in wages, the greater the fall of profitability in sector 2. This spells crisis in sector 2. Sector 1’s rate of profit rises. But this is not a sign of recovery in that sector. Sector 1’s rate of profit rises not because more value and surplus value is produced in it, but because surplus value is appropriated from sector 2 within the context of a hidden fall in the ARP. Wage cuts can, at most, postpone the crisis.

(I have some doubts about the theoretical accuracy of the above quote. The assumption of equal percentage increases in s and equal percentage decreases in v seems to assume a 100 percent rate of exploitation; if, however, the rate of exploitation is, say, 400 percent, s:v=4:1, so if s is 100, v is 25. If s increases in percentage terms by 25% to 125, a decrease in percentage terms of v by 25 percent is 6.25 (25 percent of 25 is 6.25). I will leave the issue to those who are better equipped in mathematics to determine its accuracy. Perhaps others can enlighten us by providing critical commentary.)

It is ironic that it may be in the workers’ short-term interests to want a high rate of exploitation in order to achieve some form of employment stability; that this may clash with their long-term interests does not change the situation. The dilemma of not being exploited at all and being unemployed, of being highly exploited with some employment stabiity and being little exploited (but still oppressed) with the threat of unemployment hanging over workers’ heads hardly makes for a “good job” or “fair contracts.” 

Conclusion

It is time to challenge unions that persistently present, unconsciously if not concsiously, claims that they can somehow achieve any fair settlement, whether wages or working conditions, and whether through legislation or through collective bargaining and the resulting collective agreement. Thus, should not leftists persistently criticize such views as the following (

https://www.newswire.ca/news-releases/unifor-reaches-tentative-agreement-with-bombardier-aviation-851709617.html):

TORONTOJuly 30, 2021 /CNW/ – Unifor Local 112 and 673 have reached a tentative agreement with Bombardier Aviation. “I would like to congratulate the Local 112 and 673 bargaining teams for their hard work and dedication throughout these negotiations,” said Jerry Dias, Unifor National President. “Reaching a settlement with Bombardier brings us one step closer to resolving the labour dispute at Downsview. Our union can now focus all of its efforts on reaching an agreement with De Havilland.”

The three-year agreements cover approximately 1,500 union members employed by Bombardier Aviation at the Downsview plant.

“We could not have reached a fair settlement that addresses the union’s key priorities at Bombardier without the support and solidarity of our members throughout the bargaining process and on the picket lines,” said Scott McIlmoyle, Unifor Local 112 President. [my emphasis]

Have you ever read any justification by union reps for such terms as a “fair settlement,” “fair contract,” “fair collective agreement,” ‘fair wages,” and so forth? If not, why not? 

Should not union reps be obliged to answer such questions? 


The Rate of Exploitation of General Motors Workers

I thought it would be politically relevant to try to estimate the rate of exploitation of General Motors (GM) workers for 2019 (since annual reports starting in 2020 would distort the picture because of the pandemic). I say politically relevant because of the closure of the GM Oshawa plant on December 18, 2019 and the subsequent making of the document Company Town, which dealt with the coming closure, the attitude of Jerry Dias, president of Unifor (the union that represents the workers at Oshawa) and the consequences of the closing of the factory.

However, GM annual reports (like many annual reports based in the United States), provide insufficient information to calculate the rate of exploitation. For example, there are no data on wages and salaries paid out (although there are for benefits).

Nonetheless, I searched for substitutes for the data. Undoubtedly, such calculations will be even more imperfect than the rates of exploitation I calculated for various large employers in Canada. It will undoubtedly only include bare statistics, without much refinement and with few adjustments. Still, such estimates may provide a ballpark figure of the extent of exploitation.

I invite others to criticize the data used and the manner of determining the rate of exploitation–by providing more accurate data and a more accurate manner of determining the rate of exploitation.

Where possible, I provide the website addresses where I found the information if the information is not drawn from the Annual Report.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies (if they are available) in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

We now have sufficient information to calculate the rate of exploitation of GM workers.

Adjusted Income before income taxes: $7.383 billion=s
Total wages and benefits $18.597 billion=v

To calculate the rate of surplus value or the rate of exploitaiton (they are the same thing), we need to divide “Adjusted Income before income taxes” (s) by “Total wages and benefits” (v).

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=7.383/18.5976=40%.

That means that for every hour worked that produces her/his wage, a worker at GM works around an additional 24 minutes for free for GM.

In a 7-hour (420-minute) work day , the GM worker produces her/his wage in about 300 (5 hours) and works 120 minutes (2 hours) for free for GM. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario  and   Employers as Dictators, Part One).

In an 8-hour (480 minute-work day), a GM worker produces her/his wage in 343 minutes (5 hours 43 minutes) and works for 137 minutes (2 hours 17 minutes) free for GM.

In an 9-hour (540-minute) day, a GM worker produces her/his wage in 386 minutes (6 hours 26 minutes) and works for free for 154 minutes (2 hours 34 minutes) for GM.

In a 10-hour (600-minute) day, a GM worker produces her/his wage in 429 minutes (7 hours 9 minutes and works for free for 171 minutes (2 hours 51 minutes) for GM.

In a 11-hour (660-minute) day, a GM worker produces her/his wage in 471 minutes (7 hours 51 minutes) and works for free for 189 minutes (3 hours 9 minutes) for GM.

In a 12-hour (720-minute) day, a GM worker produces her/his wage in 514 minutes (8 hours 34 minutes) and works for free for 206 minutes (3 hours 26 minutes) for GM.

Of course, during these times that the worker works to obtain an equivalent of her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Many GM workers in the United States (and in Canada) belong to a union. The Annual Report states:

At December 31, 2019 approximately 48,000 (50%) of our U.S. employees were represented by unions, a majority of which were represented by the International Union, United Automobile, Aerospace and Agriculture Implement Workers of America (UAW).

Despite belonging to a union, the GM workers are exploited–but to a relatively low extent–much lower than many other union workers. The highest calculated rate of exploitation so far has been Rogers Communications’ workers, at 209 percent (see the comparative rates in the post The Rate of Exploitation of Workers at WestJet Airlines Ltd.). Why that is would be a good area for research.

Political Questions

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for the rhetoric of the largest Unifor as the largest private-sector union in Canada, and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized?

What of the following, drawn from the November 5, 2020 collective agrement between General Motors of Canada Company and Unifor Local No 199 St. Catharines, Local No. 222 Oshawa and Local No. 636 Woodstock? Page 7:

Section IV

Management

(4) The Union recognizes the right of the Company to hire, promote, transfer, demote and lay off and to suspend, discharge or otherwise discipline employees for just cause subject to the right of any employee to lodge a grievance in the manner and to the extent as herein provided.

The Union further recognizes the right of the Company to operate and manage its business in all respects, to maintain order and efficiency in its plants, and to determine the location of its plants, the products to be manufactured, the scheduling of its production and its methods, processes, and means of manufacturing. The Union further acknowledges that the Company has the right to make and alter, from time to time, rules and regulations to be observed by employees, which rules and regulations shall not be inconsistent with the provisions of this Agreement.

This power of management is not mentioned at all in the National Unifor Bargaining Report. Like most union bargaining reports, it omits all negative aspects of working for General Motors (including being exploited and oppressed):

HIGHLIGHTS
• $1.1B to $1.4B in investments
• General wage increases
• $7,250 Productivity and Quality Bonus
• Inflation Protection Bonuses
• Improved New Hire Program
• Skilled Trades Adjustment
• Benefit improvements
• Three-year term
• Lump sum payment for pre-1994 retirees

A written summary also omits the continued power of GM management to exploit and oppress workers (page 1):

JOINT MESSAGE TO ALL GENERAL MOTORS MEMBERS

SECURING A MADE IN CANADA FUTURE

If there is a lesson learned from 2020 Auto Talks, it is that the future of Canada’s auto sector is bright and on a clear forward path.

Thanks to the hard work and determination of the Unifor-GM Master Bargaining Committee, we are proud to present a new collective agreement that follows the economic pattern negotiated at both Ford and FCA. This agreement includes a 5 per cent increase to hourly wages, a 4 per cent lump sum payment in 2021, along with $11,250 in bonuses.

The deal makes major improvements to the New Hire Program, including an accelerated path to full rate, and returns key benefits like the Legal Services Plan and the afternoon (5%) and midnight (10%) shift premium.

Skilled trades workers will see their 20% wage differential restored, new apprentices hired, and the pre-apprenticeship program re-instated for future hires. The new agreement also includes significant improvements to the benefits plan, modest (but still important) pension improvements, along with health and safety gains, retirement allowances and equity gains including 10 days of paid domestic violence leave and a new Racial Justice Advocate.

Along with these contractual improvements are commitments by the company to maintain and expand work at current Unifor facilities. GM will continue V6 engine and 6-speed transmission production over the life of the contract, and forecasted beyond.

Also, in a stand-alone letter GM has committed to explore new potential product programs and investment opportunities for St. Catharines, with input from them union[my emphasis. When I formed part of a negotiating team for Operating Engineers Local 858, in Prince George, British Columbia, the management team were able to shuffle off many items on the negotiating table by referring to a “consultation process” between the union and management–in effect eliminating such items for negotiations. The verb “explore” and the noun “input” are euphemisms for the right of management to simply do what it wants, with the proviso that it “consults” the union.] 

St. Catharines is well regarded as a leader in the GM powertrain division and will receive $109 million to in-source new transmission work for the Corvette, adding jobs, and make
upgrades to the small block V8 engine program. GM will continue V6 engine and 6-speed transmission production over the life of the contract, and further commits to seek out new
programs that sustain the facility over the long term.

The Woodstock PDC will receive $500,000 in additional upgrades. Aftermarket parts work at Oshawa will also continue, maintaining hundreds of jobs.

In addition, and pending ratification, GM has committed to invest up to $1.3 billion to restart pickup truck assembly at the Oshawa Assembly Complex, with an expected two-shift operation in the first half of 2022 (and the potential for a third).

These “highlights” teach the workers nothing about the limitations of collective bargaining and  collective agreements. They are designed to hide the concentration of major decision-making power in the hands of General Motors (such as the “right of the Company to determine the location of its plants” and the lack of such power by unionized workers.

The same could be said of the Local 222 Bargaining Report, which recommended voting for the collective agreement without any explicit indications of its limitation as indicated in the management rights clause of the collective agreement. Thus, the Report indicates among other things, the following (page 3):

Commitment to settling the 2020 GM/Unifor Master Agreement and Oshawa Local Agreement
•The production allocation is for the current life cycle. Currently, there is no future product commitment but the Company has expressed that the life cycle will be a minimum of three (3) years and that is well into the new Collective Agreement 2023.

•There will be no retirement incentives offered at the Oshawa Assembly Plant during the current life cycle of the product. In the event of a permanent reduction in force, the new hires at the Oshawa Assembly Plant will be laid off. Any employees hired prior to the 2020 Collective Agreement will flow back into the Oshawa OEM Stamped Products and Service Operation based upon Seniority.

Of course, workers have to subordinate their will to the will of employers in a society dominated by a class of employers, and so no union representatives can overcome this limitation; such a limitation is a class limitation, and it is at this level that such limitations need to be addressed. However, the class level is hardly a level that excludes the particular sections of the working class. Those particular sections are included in that general level, so at the local, regional or national level, the class issue can certainly be indicated and not simply ignored–which is what union reps do often enough these days. At the least, they could explicitly indicate the limitations of the collective-bargaining process and the collective agreements that result from that process.  Better yet, they could not only include such limitations, but they could point to ways in which such limitations might be overcome through regional, national and international tactics and stragegies. Most modern union reps, however, have no intention of doing so; indeed, they are likely unaware of the need to do so.

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies. (in millions of U.S. dollars)

Total net sales and revenue  137,237

Total costs and expenses 131,756

Operating income 5,481 [137,237-131,756=5481]

Adjustments of Surplus Value (Profit)

It is necessary to make some adjustments to this since the annual report also refers to the following additional categories:

Automotive interest expense 782
Interest income and other non-operating income, net  1,469
Equity income (Note 8) 1,268

Starting with the category “Automotive interest expense,” it is necessary to make an adjustment.  It is necessary to add 782 (Automotive interest expense) to “Operating income” since (as I explained in another post):

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

Accordingly:

Temporarily adjusted income before taxes 5,481+782=6,263

Moving to the next category, “Interest income and other non-operating income, net,” since the idea of calculating the rate of exploitation of particular employers is to determine the extent to which the particular employer exploits its workers, income derived from the exploitation of workers other than its workers should be excluded. I did not think this through or consider this when I calculated the rate of exploitation of some other employers (such as Air Canada); I may or may not recalculate the rate of exploitation of such employers in the future–that depends on how much time I have to dedicate to writing other posts and engaging in my own research as well as my own personal commitments to my daughter and wife.

In the particular case of General Motors, I will exclude such income from the calculation since the income is derived from workers other than the workers of GM.

The last category, “Equity income,” seems to reflect net surplus value after expenses are subtracted from revenue. Note 8 elaborates:

Note 8. Equity in Net Assets of Nonconsolidated Affiliates

Nonconsolidated affiliates are entities in which we maintain an equity ownership interest and for which we use the equity method of accounting due to our ability to exert significant influence over decisions relating to their operating and fmancial affairs. Revenue and expenses of our joint ventures are not consolidated into our financial statements; rather, our proportionate share of the earnings of each joint venture is reflected as Equity income.

Since “Equity income” reflects the “proportionate share of the earnings of each joint venture,” it constitutes the net result of GM exploiting workers in joint ventures. Accordingly, it is necessary to make an adjustment. It is necessary to add 1,268 to Income before income taxes. The final adjustment is:

Adjusted income before taxes 7,531

Wages and Salaries (v)

Although there are statistics in the annual report for employee benefits, there are no statistics in it for wages or salaries.

I failed to find any direct information of total salaries, wages and benefits on the Net. The best that I could do was to find data about the total number of employees and then try to find data on the average wage/salary as well as average benefits and multiply the sum of the average wage/salary and benefits by the total number of employees.
To improve such calculations, I invite Sam Gindin, former research director to the Canadian Auto Workers (now Unifor) or Jim Stanford, former economist for the same union, to provide more accurate data (perhaps insider data?).
In 2019, there were 164,000 employees:
Employees At December 31, 2019 we employed approximately 95,000 (58%) hourly employees and approximately 69,000(42%) salaried employees.
This is consistent with the following:
This number, as I argued above, needs to be multiplied by the average cost of a GM worker, including benefits.  According to some, the average cost to use a GM worker in 2019 was about $63 US an hour. From   https://www.spglobal.com/marketintelligence/en/news-insights/trending/Fic7Dwvvxuh14hs9rmjwJw2, dated January 15, 2020:
GM’s average hourly labor costs are estimated to be … $63 in 2019.
I assume that this includes benefits. This amount is less than the amount estimated in 2006 (or perhaps 2009–it is unclear). From
Average Hourly Compensation 2006 (US Wages and Benefits)
Last updated on: 1/21/2009 6:47:00 AM PST
“The calculations show, accurately enough, that for every hour a unionized worker puts in, one of the Big Three really does spend about $73 on compensation. So the number isn’t made up. But it is the combination of three very different categories.

The first category is simply cash payments, which is what many people imagine when they hear the word ‘compensation.’ It includes wages, overtime and vacation pay, and comes to about $40 an hour. (The numbers vary a bit by company and year. That’s why $73 is sometimes $70 or $77.)

The second category is fringe benefits, like health insurance and pensions. These benefits have real value, even if they don’t show up on a weekly paycheck. At the Big Three, the benefits amount to $15 an hour or so.

Add the two together, and you get the true hourly compensation of Detroit’s unionized work force: roughly $55 an hour. It’s a little more than twice as much as the typical American worker makes, benefits included. The more relevant comparison, though, is probably to Honda;s or Toyota’s (nonunionized) workers. They make in the neighborhood of $45 an hour, and most of the gap stems from their less generous benefits.

The third category is the cost of benefits for retirees. These are essentially fixed costs that have no relation to how many vehicles the companies make. But they are a real cost, so the companies add them into the mix — dividing those costs by the total hours of the current work force, to get a figure of $15 or so — and end up at roughly $70 an hour.”

As to be expected, the estimated $63 an hour ($US) is certainly much higher than the estimated hourly wage of American auto workers. From Automotive Industry Labour Market Analysis: Wage Report (Canadian Skills Training and Employment Coalition, Prism Economics and Analysis, and the Automotive Policy Research Centre, October 2019), page 30:
Research done by the Center for Automotive Research (CAR) found that nominal wages for U.S. workers in the auto manufacturing sector increased by just over 6% from $28.49 in 2002 to $30.20 in 2018 but real wages fell by 23.5% (as cited in Haglund, 2019).

Think tank says UAW deals increased automakers’ labor costs

New contracts between the United Auto Workers union and Detroit’s three automakers substantially increased the cost gap between Detroit and foreign automakers with U.S. factories

ByThe Associated Press
January 15, 2020, 3:40 PM

Total labor costs include wages, health care, pensions and other expenses.

Center Vice President Kristin Dziczek calculated that GM’s labor costs would rise from $63 per hour before the new contract to $71.

GM’s average hourly labor costs are estimated to be $71 in 2023, up 12.7% from $63 in 2019 and up 29.1% from $55 in 2015, Dziczek said during a Jan. 15 webcast. Ford’s hourly labor costs would be $69 in 2023, up 13.1% from $61 in 2019 and up 21.1% from $57 in 2015. Fiat Chrysler’s costs would go up to $66 in 2023, up 20% from $55 in 2019 and up 40.4% from $47 in 2015.
Given the above, $63 an hour seems to be the average cost of a GM employee whereever s/he works. There will be no adjustments for this category despite the above calculated reduction of 173.5 from “Tranformation activities” due to some of that category involving separation benefits received by workers since, presumably, the $63 an hour includes such separation benefits.

Jim Stanford’s Disagreement with the Estimate of $63 an Hour Cost of Variable Capital V)

However, Jim Stanford would dispute such an hourly cost since he disputes the hourly cost of $75 (see How Much do Autoworkers REALLY Make? Surprise: It’s NOT $75 Per Hour!  http://unifor584retirees.ca/caw_retirees/pdf/hourly_labour_costs_09.pdf). He argues that workers receive between $43 and $44 hour.
Before I delve into this issue, let me preface it with the purpose of calculating the rate of exploitation. It is supposed to determine the proportion of hours worked that produce the value of the wage received by the workers in relation to the hours worked for no compensation and thus free for the employer. The wage is a composite of the actual wage rate and benefits and cannot be limited to the given wage rate.
Generally, the rate of exploitation is a class phenomenon, and the value of labour power or variable capital (v) and surplus value as its components are also class phenomenon. As Ben Fine states, in relation to the value of labour power, pages 104-105:
… for Marx the value of labour power is the consequence of an exchange between capital and labour, confronting each other as the two major economic classes. It is not simply the wage earned on the labour-market by one individual as opposed to another. …
the value of labour power is a more complex concept than the wage rate or earnings
of the typical worker.
Some of the costs of variable capital for employers are class costs, or the costs to the class of employers and apply across the board to all employers (or at least to a section of employers in a particular industry). Workers may not individually receive them, but some workers do; which workers depends on various conditions, such as the level of unemployment, the age of the workers, their health and so on. They need to be included in the value of labour power or variable capital even if no specific set of workers receive them as a benefit since they are costs for the employer being an employer of any set of workers whatsoever.
Stanford, however, excludes several categories which is included in the above $63 an hour–a category called “All-in Active Hourly Labour Cost.” The subcategories of this category and the corresponding amounts are: 
Overtime and shift premiums $3
Cost per hour worked of paid time off $8-9
Impact on hourly cost of layoffs & downtime $1-3
Cost per hour worked of SUB $1-3
Statutory taxes $3-4
Overtime and shfit premiums
Stanford excludes this subcategory from his calculation on the basis of the following:
Occasionally companies will require their workers to stay overtime, beyond normal working hours. Overtime is worked ins response to surges in consumer demand, to make up for production problems or bottlenecks, or in some cases because employers have decided it’s cheaper to work its existing staff extra hours than to hire new workers. In every case, it is the employer’s choice when overtime is worked.
Workers required to work overtime are paid a wage premium (usually 50%) for those hours. To a large extent (depending on the specific hours involved), overtime pay is mandated by labour law (although a labour contract can require overtime to be paid in some circumstances when it is not legally required).

In addition, in the auto industry and other manufacturing settings, it is standard practice to pay a shift premium for workers who staff evening and night shifts. (In CAW-represented auto plants, there is a 5% premium paid for evening shifts, and a 10% premium for overnight shifts, to reflect the added stress on family life of those working hours.)

Is the overtime premium part of one’s “hourly wage”? Few Canadians would conceive it that way – although those working overtime certainly appreciate the extra money. And remember: overtime is
something that occurs because employers desire it. 
According to Statistics Canada, in 2007 (most recent data), auto assembly workers in Canada worked an average of about 3.5 hours of overtime per week. This increased total average wage payments (weighted across all hours worked in the year) by around $2. Shift premiums added, on average, about another dollar per hour.
This argument is unconvincing. Overtime is supposed to not constitute compensation, he implies,  because it is not voluntary. Being voluntary or involuntary has nothing directly to do with the cost of workers. How workers conceive overtime also hardly determines whether it is a cost. As for shift premiums, the same logic applies; they too are costs. Stanford never indicates what overtime payments and shift premiums objectively are.
We can, however, get some idea of what they are by referring to the value of labour power as subject to a normal working day under average conditions. Since overtime work in effect extends the working day beyond the norm, it involves abnormal consumption of the labour power of workers. As Marc Linder (2000) argues ( “Moments are the elements of profit”: overtime and the deregulation of working hours under the Fair Labor Standards Act, pages 5-6):
Marx also furnished a general framework for understanding struggles over the length of the workday or workweek. On the surface, this struggle centers on the conflict between the buyer and the seller of a commodity which generates special problems because, unlike the situation with a general run-of-the-mill commodity, the body and mind of the human seller of labor power cannot be separated from its daily use by the buyer. Since the law of exchange of commodities, however, does not recognize any special rules for this particular exchange, the capitalist buyer tries to extract the greatest possible profit from the use of the worker’s labor power for the day’s or week’s worth he has bought. The question then becomes: how long is a workday or workweek? Since the human seller lives beyond the day, he must make sure that he sells his only commodity for a price high enough to enable him to reappear at work the next day with his labor power in a condition of strength and health that meets the standards set by his competitors. But the worker as a rational labor market participant must also exercise sufficient foresight to husband his only economic asset for a lifetime—or at least the standard working life of his type of labor. If the daily value of his commodity equals its lifetime value divided by 30 years or approximately 10,000 workdays, then he must make sure that overlong workdays and workweeks do not force him to expend so much additional energy that he uses up 1/5,000 or 1/3,333
of his lifetime supply for only 1/10,000 of its lifetime value. For this reason socialist unions regarded eight-hour laws as “life lengthening” acts.The worker therefore regards such overwork as crossing the line from the capitalist’s rightful use to plundering of his labor power and, as such, a breach of their contract and of the law of the exchange of commodities. His demand for a workday or workweek of normal length—defined by its compatibility with a healthy 30-year worklife—is as rightful as the capitalist’s demand that the worker work as long as possible each day and week. Because the capitalist is not a slaveholder, he has no (capital-) invested interest in the length of the worklife of his individual employees: “A quick succession of unhealthy and short-lived generations will keep the labour market as well supplied as a series of vigorous and long-lived generations.” Thus as long as the employer can find equivalent replacements in the labor market when he needs them, this private contractual dispute cannot be resolved between individual buyer and seller. The resulting “antinomy” of right against right27 must, Marx argued, be decided by “the respective powers of the combatants.” But since “in its merely economic action capital is the stronger side,” a class-wide settlement of the hours issue was possible only through “general political action,” which meant “legislative interference” under pressure from the working class.2* Consequently, the normalization of the workday and workweek appears historically as a struggle between the “aggregate capitalist, i.e., the class of capitalists, and the aggregate worker, or the working class.”
Overtime and shift work can be conceived as compensatory costs for abnormal consumption of workers–but they are costs of hiring workers, exploiting them and oppressing them.
Cost per hour worked of paid time off 
Stanford has the following to say on the matter in order to justify excluding this subcategory:
Now here is where it starts to get more complicated. “All-in hourly labour cost,” in the auto industry, is not calculated by dividing total compensation by the number of normal working hours in a year (as we have done above: 40 hours per week
times 52 weeks in a year equals 2080 working hours in a year).
Let us pause here. What Stanford calls “normal working hours” is not the statistic that can be used to calculate the rate of exploitation since it is not the number of actual hours worked. It is the actual hours worked that produces the equivalent of the total compensation received by workers that is relevant–and not some “normal working hours” that no workers actually work.
From Anwar Shaikh and E. Ahmet Tonak (1994), From Measuring the wealth of nations: The political economy of national accounts, page 178: 

By definition, Marxian labor value added is simply the number of hours worked by productive workers
Let us continue with Stanford’s views.
Instead, all-in hourly labour costs are calculated over a much smaller base of hours. Total
compensation costs are divided by the numbers of hours actually worked in a year. Actual hours worked, the denominator of this fraction, differs from the number of standard working hours in a year (2080) for several reasons:
  • Paid time off (for vacation and holidays)
  • Sick leave (CAW autoworkers do not receive any pay during the first days of
    an illness, after which they are compensated under a sickness and accident
    insurance scheme)
  • Time not worked due to layoffs or downtimeIt is simple mathematics that the lower is the number of hours actually worked,
    the higher is the apparent “all-in hourly labour cost.”

    The CAW has placed great emphasis over the years on negotiating more paid time off, as a deliberate strategy to try to protect employment levels against the effects of technological change and productivity growth, and to provide for needed time away from the physical and mental stresses of assembly line work. However, in recent contracts the amount of paid time off has been reduced by 80 hours per year (in the face of intense cost-cutting pressure from the employers). Today a CAW production worker with maximum seniority (over 20 years) qualifies for 6 weeks of paid time off (for vacation, scheduled mandatory vacation or “SPA,” and personal leave). A new hire qualifies for 2 weeks (the legal minimum). A worker with 5 or more years seniority qualifies for 4 weeks.

    Holidays (including regular statutory holidays and a week-long Christmas shutdown) reduce working time by another 15 days per year.

    Paid time off can be considered a form of compensation. It can also be considered a basic human and labour right – one that workers have fought for over the centuries, and that is essential to the quality of life of working people and their families. Of the paid time off received by CAW autoworkers, about half is required by law. The rest reflects additional time negotiated by the union. I doubt, however, that many Canadians consider their paid time off as part of their hourly wage. They conceptualize it separately, as time. Someone who earns $15 per hour, but is allowed to take a total of five weeks off per year (3 weeks vacation, and 10 days of statutory holidays), actually earns $16.60 for each hour they work (assuming they had no other time off the job for illness or layoff). But I have never heard someone adjust their hourly pay in that manner to reflect their entitlement (legal and otherwise) to paid time off.

    According to the methodology of all-in hourly labour cost, paid time off (since it reduces the denominator over which all-in labour costs are calculated) directly increases all-in hourly labour costs. Each week of paid time off (including the two weeks of vacation required per year under Canadian law, and the roughly two weeks of statutory holidays also required by Canadian law) translates into a roughly 2% increase in hourly labour cost.

Again, his argument is unconvincing. Although undoubtedly, for example, workers who receive a minimum wage, unionized workers and other workers are unlikely to conceive of paid holidays as part of their compensation, this hardly means that the paid holidays and vacaction do not form part of their compensation. Stanford himself admits this: “Paid time off can be considered a form of compensation.” Actual hours worked and the total amount of compensation received by workers are the relevant statistics for determining variable capital costs and not imputed hours worked during holidays and vacation (when workers are not subject to the direct power of employers).
Furthermore, even some union reps in the auto industry conceived vacation pay and other fringe benefits as part of the compensation package. From Frank Lovell (May-June 1968), “The Reuther-Meany Split,” in pages 36-58, International Socialist Review, page 51:
Reuther accurately reported the new wage scales as follows:”The average production worker will receive a 20-cents-an-hour wage increase upon his return to work plus a three per cent annual wage increase in the second and third years of the contract. These wage increases, together with the impact of the ‘roll up’ factor, will amount to an average of 58 cents an hour over the three-year period of the contract.”The average skilled trades worker will receive a 50-cent-an-hour wage increase upon his return to work plus a three per cent annual wage incrase in the second and third years of the contract. These wage increases, together with the impact of the ‘roll up’ factor, will amount to an average of $1.02 an hour over the three-year period of the contract.” (“Roll up” consists of increases in wage-related fringe benefits such as holiday pay, vacation pay, shift premiums, etc.[my emphasis]

Let us look at vacation pay and holiday pay. Essentially, it means that workers receive payment without having to work for their employer during that specific time. The amount of labour performed is thereby reduced to that extent than otherwise would be the case, with a flow of money (and indirectly commodities) going to the workers. The wage is not reproduced during that time, and no surplus value is produced either since no labour is performed.
Holiday pay and vacation pay are tied to work performed because those who do not work for the particular employer simply do not receive such holiday pay and (more obviously) vacation pay– but this condition seems too often to be overlooked. The payment of holiday pay and vacation pay is tied to the need for the worker to have actually worked for the particular employer.
The payment is tied to labour having been  performed, but not from any labour performed during the holiday or vacation. Since the workers receive the money and not the employer, the money represents the equivalent of higher wages and less surplus value available for the employer.
There is no logical reason why, when calculating the rate of exploitation, vacation pay, sick leave pay and holiday pay should not be included in the calculation.
The issue is not clear cut, but some Marxian works also include vacation pay, etc. as forms of compensation. From Edward Wolff (1987), Growth, accumulation, and unproductive activity: An analysis of the postwar U.S. economy, pages 61-62: 

Mean real labor compensation seems the most direct measure of the costs of reproducing labor power. Employee compensation is the sum of wages, salaries, and tips; fringe benefits such as health insurance, pension contributions, vacation pay, and the like;
Shaikh and Tonak also consider them to form part of compensation. From page 304: 
We use employee compensation (EC) because it includes wages and salaries of employees as well as employer contributions to social security. This is the appropriate base for estimates of variable capital, since it represents the total cost of labor power to the capitalist.
They reiterate their view on page 322:
Employee compensation being the sum of supplements and wages and salaries.
Impact on hourly cost of layoffs & downtime
Stanford reasons as follows in order to exclude this subcategory from the determination of the costs of employing workers:
The Impact of Downtime and Layoffs Even more far-fetched is the notion that time away from work resulting from illness, layoff, or plant shutdown should also be reflected in your “hourly wage.” Time off due to illness or layoff is not a contractual benefit; it is clearly beyond the control of both workers and their union. Suppose that workers are laid off for 8 weeks in a year because of slow sales. This reduces annual hours worked by 320 hours. That’s a reduction of as much as 20% in hours worked (after adjusting for paid time off) – causing a corresponding increase in the apparent hourly cost of fixed annual benefits (like the pensions, health premiums, and other benefits listed above). Based on the level of benefits described earlier, this amount of downtime (not unusual given recent experience) would add $3 per hour to all-in costs. A longer six-month layoff would add over $10 to the all-in hourly cost!
This seems like a double penalty: first workers experience the income loss and insecurity of being laid off for significant amounts of time. And then they are “charged,” in the form of a higher apparent “wage,” for the fact that they didn’t work for the complete year.
Differences in the number of hours worked account for a significant portion of differences in the all-in hourly labour costs between different companies. Chrysler Canada’s all-in labour cost calculation for 2008 (which has been widely debated in the course of current restructuring discussions) was based on a very low average level of hours worked per worker that year (just 1550 hours). That was significantly lower than the number of hours worked per worker at GM and Ford that year – and far, far lower than average hours worked at Toyota and Honda plants (which until recently have been running flat out). This difference in assumed hours worked accounts for about $2 per hour in all-in labour cost differences between Chrysler and the other two North American producers in Canada. And it accounts for $4 or more per hour of the all-in hourly labour cost differences between Chrysler and the non-union Canadian facilities.
Is a worker really “more expensive” because he or she didn’t work the full year, due to downtime associated with slow sales? Not really. This is not an issue of compensation. This is an issue of capacity utilization – a variable which is clearly a responsibility of management to optimize, and is beyond the control of workers and their union.
The hours not worked do not involve exploitation, and the hours not worked do involve payment without being under the direct control of the employer due to fixed costs, such as health insurance premiums. They are like vacation pay, holiday pay and sick-leave pay.
As for the decrease in hours worked, of course, if the number of hours decreases, with fixed benefit costs, the cost per hour employed will increase for the capitalists in general. This was seen indirectly when I calculated the rate of exploitation of Magna Internaitonal workers for 2020, during the pandemic (The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part Three, Updated, 2020). As I wrote in that post:
The substantial decrease in the rate of exploitation is likely due to the treatment of workers as “fixed costs” as the pandemic forced employers to retain workers despite the relatively extra costs associated with it (partly offset by federal, provincial and municipal supports).
The substantial decrease in the rate of exploitation for Magna International workers was likely largely due to a decrease in the production of surplus value, although there was also a decrease in the costs of workers for Magna International:
2020: So, with the adjustments in place: s=1081; v=2,509. The rate of exploitation or the rate of surplus value=s/v=1081/2,509=43%.2019: So, with the adjustments in place: s=2,258; v=2,862. The rate of exploitation or the rate of surplus value=s/v=2,258/2,862=79%.

Surplus value decreased by 1,177, or 52 percent ((1081-2258)/2258×100); variable capital decreased by 353, or ((2509-2862)/2862×100)=12 percent.
The substantial decrease in the rate of exploitation for Magna International workers is likely due to the fixed costs associated with keeping them on payroll while not exploiting them (because they did not work or perform labour).
Stanford’s justification or logic for discounting the increased costs of workers per hour worked seems to be: because the relation of payments to workers and hours actually worked is independent of the workers and their unions, these increased costs should not be calculated that way, he reasons:
Time off due to illness or layoff is not a contractual benefit; it is clearly beyond the control of both workers and their union.
The rate of exploitation is hardly to be calculated on the basis of what workers and their unions are able to control. The issue is: What does it cost for the workers to produce the value of the labour power or the capacity of workers to perform work relative to the value they produce for free?
I reject Stanford’s reason for excluding this subcategory.
Cost per hour worked of SUB $1-3
Standord reasons as follows for rejecting this subcategory:
Over the years auto unions have negotiated a range of income security programs to protect against the effects of the layoffs (which are regularly incurred in the auto industry due to market swings, new model launches, and other factors inherent to the auto industry). These are called supplementary unemployment benefits (SUB), and they top up the benefits received from public unemployment insurance programs.SUB costs are incorporated into all-in labour cost by attributing them to the hours which were actually worked (by those workers who were not laid off). Are SUB benefits a form of compensation? Yes, in a form. But it is not compensation received by the workers who are still working. SUB benefits are received by the workers who are laid-off (as a partial compensation for the cost they incur as a result of the lay-off). And by far the best way to reduce labour costs, in this context, is to put autoworkers back to work: they enjoy more income and security, the company pays out less SUB costs, and the cost per hour worked of all other benefits declines by several dollars.
Because of the extensive downtime experienced in most auto plants in recent years, SUB and related programs can add $3 or more to all-in hourly labour costs in CAW facilities.
The Canadian government website reads:

Supplemental Unemployment Benefit Program

Overview

Employers can use a Supplemental Unemployment Benefit (SUB) plan to increase their employees’ weekly earnings when they are unemployed due to a temporary stoppage of work, training, illness, injury or quarantine.

It is certainly true that those who continue to be exploited directly by GM do not receive the benefits of SUB-but exploitation is hardly just an affair of temporary changes in the distribution of work such that only those workers who happen to have seniority are exploited throughout the year. Layoffs in the auto industry have occurred often enough for unions to attempt to address the issue. From Robert Albritton (2022), A Japanese Approach to Stages of Capitalist Development: What Comes Next?:
For this reason, the continuation of even the partial commodification of labour-power, requires that the labour market be supported by all sorts of protections, guarantees, and stabilizing mechanisms. The auto industry in general took the lead in this respect with “productivity deals” that ensured wage increases in line with productivity increases and with “supplementary unemployment benefits” (SUBS) that protected worker’s income during the annual lay-offs in the auto industry, and with pension plans, early retirement, medical benefits, etc.
Unions obliged GM to pay laid off GM workers (not fired GM workers) a top-up to unemployment benefits. This is a condition for GM to exploit the collective labour of the particular bargaining unit and forms part of the cost of employing GM workers. To exclude this cost from variable capital would exclude the flow of additional money (and commodities) that temporarily unemployed workers receive from GM. Since variable capital is supposed to measure the amount of labour required to produce the equivalent of labour power as a commodity available on the market, and SUB is a condition for such availability in this situation, it should be included as part of variable capital that GM pays.
One historian has interpreted SUB as resulting in a “greater share of the pie” going to workers. From David Noble (1984), Forces of Production: A Social History of Industrial Automation, page 253:
Reuther embraced wholeheartedly the tempo of technology and the gospel of growth, and sought to halt job erosion through industrial expansion which would presumably raise the level of aggregate demand for labor. At the same time, he strove to secure for workers a larger share of the expanding pie, through guaranteed wage agreements and so-called progress-sharing agreements (as with American Motors), and to ease the plight of displaced workers, through supplementary unemployment benefits, advance notification clauses, and company-financed retraining programs (as with General Motors). [my emphasis]
I also reject Stanford’s reason for excluding this subcategory; SUB forms part of the costs of production of GM workers.
Statutory taxes $3-4
Stanford notes the following:

The all-in hourly labour cost methodology also considers various employmentrelated
taxes paid by employers to governments. In Canada, these statutory
costs include four major items:

  • Employer CPP premiums (up to a maximum of about $2050 per year
  • Employer EI premiums (up to a maximum of about $1000 per year)
  • Employer Health Tax (equal to about 2% of earnings)
  • WSIB premiums (variable rates, usually about 3% of earnings)These government payments amount to around $3-4 per normal working hour in
    Canadian auto plants.
He makes the following comment to justify excluding them from the cost of workers to GM:
These tax payments, while they fund important public programs, obviously do not
constitute compensation for workers.
If by compensation is meant “not received in the current year,” then it is true. However, costs in the present for employers can be deferred revenue for workers; in the case of the Canadian Pension Plan (CPP), Canadian employers must pay the same amount paid by employees, up to a maximum of contributions per year. I fail to see why this should not be included in the cost of variable capital to GM. Furthermore, if pension benefits paid out by GM or deferred government pension benefits are excluded from the current year, when would they ever be included in the calculation of the value of labour power?
Unemployment insurance is a little more difficult to assess (in Canada, the Canadian government euphemestically calls it employment insurance). Some if not the majority of GM workers may not access unemployment insurance benefits at all during their life. It may not ever therefore be a deferred form of revenue for them. However, it should be remembered that GM workers can access unemployment insurance if they are laid off (and they also can receive SUB) and thus the same logic applies as the subcategory for SUB.
(By the way, the unemployment insurance that workers receive should also be included in the calculation of variable capital, but this would require more detailed information about the absolute amounts, the number of GM workers laid off, the average period of time laid off and other data which I doubt is readily available. Perhaps those with more skill or with better access to data could provide details.)
Furthermore, the nature of insurance in general is such that payments or costs may not result in any flow back in the form of services rendered. How many reading this post have purchased insurance of one form or another (such as car insurance or travel insurance) only not to use it? It is a cost that may never be recouped and is grounded in the nature of the capitalist society–which is subject to unemployment in various sectors at different times. Costs paid by employers associated with unemployment insurance is a charge on the class of employers for funding former workers who have had their relationship to any particular employer severed (or who severed it themselves by quitting–although here in Canada workers must prove “just cause” for quitting in order to be eligible and must not have been fired for “just cause”).
For GM workers who are never laid off, unemployment insurance is obviously not a form of compensation for any GM worker–but it is still a cost of reproducing the value of labour power as a commodity (if not the particular set of workers called GM employees). It is part of the cost for GM of being able to exploit this particular set of workers.
The Employer Health Tax, according to the Ontario government website, is:

The Employer Health Tax (EHT) is a payroll tax on remuneration (for example, salaries, wages, bonuses, taxable benefits, stock options etc.) that employers in Ontario provide to current and former employees.

The purpose of this tax is to assist in providing the government with revenue to fund health care in Ontario.

The provision of certain services by the government without workers having to pay for them constitute part of the “social wage” of workers. In this particular case, sufficiently large employers are forced to pay for part of those services (smaller capitalist firms are exempt). These costs for the employer are necessary to ensure a certain level of health services and health of workers. I fail to see why they should not be considered part of the necessary costs that Ontario employers must pay if they are to exploit Ontario employees.
An indirect argument for including the EHT in the calculation of variable capital is provided by Wolff (cited above), page 78:
One further refinement should be added. Not only private consumption but also publicly provided consumption is required to reproduce the labor force. In particular, part of the government’s expenditures on education, health, fire protection, roads, and the like
contributes directly to the welfare of workers. Thus, in order to correctly estimate the necessary consumption of workers, government expenditures on productive goods and services, Gp, must be distributed among the beneficiaries of the expenditures.
As for Workers’ Compensation premiums paid by GM, although Shaikh and Tonak (1994) do not directly address this specific category, they do generally include “employer contributions to social security” in their calculation of the value of labour power. Page 108:
for wages we use “employee compensation” (EC), which includes wages and salaries of employees as well as employer contributions to social security. Employee compensation is the appropriate measure upon which to base our estimates of variable capital, since it represents the total cost of labor power to the capitalist.
Rodrigo Finkelstein (2015) more specifically argues that workers’ compensation premiums constitute the exchange value of workers’ injuries,”The Commodity Form of Safety Information,” in pages 610-623, triple C, Volume 13, Number 2, page 622:
Through injuries, diseases and deaths, workers transfer to the premium the value they themselves lose during the labour process by the destruction of their own use-value. Workers’ use-value—i.e. labour-power—uure [sic–this term indicates that something is quoted exactly as written despite it likely being an error]-appears in the value of every commodity as the premium.
Like shift premiums and overtime, workers’ compensation premiums can be conceived as compensation for accelerated use of workers’ labour power; unlike shift premiums and overtime, the money is not appropriated directly by individual workers but is mediated through a bureuacratic appropriation and distribution process that pools the accelerated use of  workers’ labour power at the provincial level in Canada.
(These premiums should not, however, be considered the accurate costs of accelerated use of the labour power of workers. Premiums are based on claimed employer-dictated work-related diseases, injuries and deaths, but actual employer-dictated work-related diseases, injuries and deaths is much higher (see Working and Living in a Society Dominated by a Class of Employers May Be Dangerous to Your Health).
It should come as no surprise that Stanford ignores workers’ compensation as a cost. Firstly, he considers the view that what is healthy for “the economy” is somehow also healthy for workers. This correspondence may to a certain extent arise because capitalists, ultimately, must rely on human bodies if they are to exploit them, and unhealthy bodies may be detrimental to their exploitation.
On the other hand, there obviously is a counter-tendency for employers to create working conditions that are dangerous for workers in one way or another (see my critique of Stanford’s attempt to treat the capitalist economy as if it were an economy primarily based on the production of products that workers, citizens, immigrants and migrants need–rather than a capitalist economy designed to obtain as much surplus value as possible–at the expense of workers in the posts Economics for Social Democrats–but not for the Working Class, Part Three: The Health and Safety of Workers and an Economy Dominated by a Class of Employers Are at Loggerheads and Economics for Social Democrats–but not for the Working Class, Part Four: Is There Such a Thing as a Responsible Employer in Relation to the Health of Workers?).
Stanford’s analysis of the real cost of the value of labour power matches his economics for social democrats. His economics of capitalism for “everyone” (the main title of a book he wrote) is really an economics for social reformists–and is hardly expressive of the interests of the working class.
Stanford’s dismissal of workers’ compensation premiums as part of the cost of the value of labour power reflects his social-democratic views.  Workers’ compensation premiums are linked to the determination of the value of the loss of various parts of the body, for example–equating money and the loss of human body parts. As Nate Holdren (2020),in Injury Impoverished: Workplace Accidents, Capitalism, and the Law in the Progressive Era remarks, page 5:
I remarked that it felt a little creepy that my hand had a dollar value. The lawyer laughed and agreed that it was creepy. He told me that there were tables that listed the value of all the different body parts. …  I repeated that it was a creepy idea that my body parts in particular had a dollar value, and that in general there were tables written down with the value of body parts calculated in advance. The lawyer replied that a lot of people got hurt at work and that the injuries and the payments for them were all a regular process.That meeting with the lawyer is where I first encountered what I now think of as the “tyranny of the table,” but it is both more and less than  tyranny. What I mean by the tyranny of the table is that within compensation laws human lives and human suffering have the fixed monetary values ascribed – no more than that, and not subject to discussion. What doesn’t fit into the values of the table? Nearly everything. All of the elements of a human being other than our paychecks.
Behind the numbers lie real human beings, with histories linked to other human beings in various ways. Workers’ compensation itself hides this reality behind the numbers, and Stanford’s cavalier dismissal of the payment of premiums by employers as part of the cost of the value of labour power reflects his own dismissal of the real and necessary experiences of many workers working for employers–and the diseases and injuries they experience that they suffer–and the deaths (the ending of any possibility of further human experience or any possibility of further human progress).
In Stanford’s haste at being a “progressive economist,” (he is the founder of the Progressive Economic Forum), he dismisses too hastily various costs that are relevant for characterizing the experience of workers in a capitalist society (such as the premiums paid to the Workers’ Compensation Board).
Although this post is about the rate of exploitation, it should never be forgotten that this rate of exploitation is linked to real people being used as things for the benefit of employers, with real negative consequences for members of the working class. Holdren points out how workers who work for an employer are often under the threat of being injured in one way or another, and if they are, their lives are often changed forever, page 1:
Nettie Blom worked in the laundry of a hotel in Yellowstone Park. On June 30, 1900, Blom was operating a machine called a mangle, which used steam-heated and steam-powered metal rollers to iron flat linens. The wet cloth stuck to her hand for a moment too long, and she was pulled into the machine. Blom’s hand was crushed and burnt. When a co-worker managed to free her from the machine, Blom’s hand looked like “boiled meat.” Three of her co-workers fainted at the sight. Blom suffered terrible pain and lost the use of her hand due to her injuries.
Stanford’s dismissal of workers’ compensation premiums as part of the value of labour power also hides the shift from what Holdren calls the tyranny of the trial to the tyrranny of the tables. The (unlikely) possibility of workers suing and winning a case against their employer constituted part of the tyranny of the trial historically, but gradually governments shifted the issue of health and safety compensation from the courts to government bureaucracies–Worker’s Compensaiton Boards. This shift from the workers’ financial point of view had the advantage that compensation would be forthcoming for proven injuries, disease or death–but it had the major disadvantage of eliminating any exposure of the real human damage and suffering that is so often connected to workplace injuries, diseases and death–an exposure that was at least minimally possible during a trial. In its place arose what Holdren calls the “tyranny of the table,” which depersonalized human injury and suffering at work. This is an important issue that the social-democratic left simply ignore or sidestep through the use of such euphemisms as “decent work,” “decent jobs,” “fair contracts” and the like. It is appropriate here to quote Holdren here more extensively about some of the implications of what the paying of premiums has involved for silencing workers’ grievances. Pages 115-118:
MORAL THINNING AND IMPOVERISHED INJURYIn order to standardize payments and thus create predictability for employers, compensation laws removed from the law arguments about injustice and narration of the individual effects of injury. This loss of deliberation changed the ethical grammar of the law, so to speak, deepening the eclipse of recognition, further impoverishing injury. The human meaning of injury had no place in the law. I call this phenomenon moral thinning: from murder to statistics. Non-financial harms also had no place under compensation laws. Pain and loss became newly worthless as the law provided no more space for people to narrate what it meant to lose a limb or a family member in an industrial accident. Injured wage earners became conceptually disembedded from their social and interpersonal contexts.

There is an element of moral thinning involved whenever the commodification of persons begins to occur, because commodification must ignore differences and particularities, setting aside whatever is unique or nonequivalent about them. Commodification tramples on singularity. This makes no difference when singularity makes no difference: the uniqueness of my morning cup of coffee does not matter; what matters is its instrumental use in my struggle toward wakefulness. The uniqueness of human beings, however, does matter: the reduction of human beings to abstract instrumental objects should trouble us. Recognition and commodification co-exist at best uneasily.

The moral thinning of injury under the tyranny of the table is more apparent when juxtaposed to the tyranny of the trial. Despite the many limits of the court-based system of employee injury law, that system did allow some space for fragments of the experiential truths of injury, which made possible elements of justice as recognition. As historian Kimberly Welch has put it, “[s]torytelling is omnipresent in human discourse.. . . Telling stories in court is an attempt to organize, interpret, and direct the world in which one lives, and the stories told in adversarial processes signal the narrator’s interpretation of how the world ought to operate.” The contending oughts embedded in legal stories made courts into places of normative deliberation, places where the contest of stories had explicitly moral and political stakes.

Access to that site of deliberation, and the recognition that came through that access, is likely part of what working-class people wanted from the court-based system of employee injury law. As historian James Schmidt has put it, injured plaintiffs and their families “came to court with a desire to talk about the miseries that had befallen them.” That telling intersected with other actors in court to produce what Schmidt calls “judicial morality plays.” Going to court was one kind of ritual through which people processed and, in important respects, produced the meaning of what Schmidt rightly calls industrial violence. There was, then, some space for this ritual use of law under the tyranny of the trial. With compensation laws, employee injury law was deritualized, no longer made available to working-class people in the same way.

To be clear, compensation laws never said that no other framework for valuing human beings existed in society, but these laws did not allow any other such framework to touch the legal response to employee injury. In the court system multiple systems of valuation could intersect, while under compensation laws non-pecuniary valuations of people, their experiences, their relationships, and their bodies had no legal space. The point is absolutely not to celebrate the tyranny of the trial, but to use the courts’ narrative and value plurality to highlight the moral thinning of injury under the tyranny of the table. In the court-based system of injury law at least it was possible to pose the questions of whether or not an injury was a wrong, and what it meant in the lives of the persons affected. There was no more space for these questions or for the answering stories of injury and its effects under the tyranny of the table.

Workers’ compensation premiums serve in part to hide the viciousness of a society dominated by a class of employers–a viciousness hidden by such social-democratic phrases as “decent jobs,” “decent work,” “fair contracts” and other euphemisms accepted by many on the so-called left these days. After all, they imply, working for an employer is not really all that bad; such is the moral thinning of social democrats these days. This is a class cost–Stanford’s dismissal of it notwithstadning.
Returning to the issue of the cost of workers, this cost of $63, of course, is probably less since GM workers in other parts of the world (such as in Mexico) would receive substantially less. However, without access to such detailed statistics, I will assume that the $63 per hour is still the average hourly wage for GM workers; perhaps Mr. Stanford (and Mr. Gindin) could provide more detailed statistics. Such statistics would be most welcome. 
Given a wage of $63 U.S. an hour, and given an estimated 1,800 hours of actual work per employee (see page 2 of Stanford’s article), and given 164,000 employees, the result is:

Total wages and benefits: $18.5976 billion

Calculation of the Rate of Exploitation

We now have sufficient information to calculate the rate of exploitation of GM workers (in billions of U.S. dollars)

Adjusted Income before income taxes: $7.383 billion=s
Total wages and benefits $18.5976 billion=v

To calculate the rate of surplus value or the rate of exploitaiton (they are the same thing), we need to divide “Adjusted Income before income taxes” (s) by “Total wages and benefits” (v).

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=7.383/18.5976=40%.

That means that for every hour worked that produces her/his wage, a worker at GM works around an additional 24 minutes for free for GM.

In a 7-hour (420-minute) work day , the GM worker produces her/his wage in about 300 (5 hours) and works 120 minutes (2 hours) for free for GM. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario  and   Employers as Dictators, Part One).

In an 8-hour (480 minute-work day), a GM worker produces her/his wage in 343 minutes (5 hours 43 minutes) and works for 137 minutes (2 hours 17 minutes) free for GM.

In an 9-hour (540-minute) day, a GM worker produces her/his wage in 386 minutes (6 hours 26 minutes) and works for free for 154 minutes (2 hours 34 minutes) for GM.

In a 10-hour (600-minute) day, a GM worker produces her/his wage in 429 minutes (7 hours 9 minutes and works for free for 171 minutes (2 hours 51 minutes) for GM.

In a 11-hour (660-minute) day, a GM worker produces her/his wage in 471 minutes (7 hours 51 minutes) and works for free for 189 minutes (3 hours 9 minutes) for GM.

In a 12-hour (720-minute) day, a GM worker produces her/his wage in 514 minutes (8 hours 34 minutes) and works for free for 206 minutes (3 hours 26 minutes) for GM.

I calculated the division between v and s according to the following:

I have used the lengths of the working day (and the corresponding division between v and s) as 7, 8, 9, 10, 11 and 12 and because the length of the working day varies. According to one source:

8 hours is normal. Many will average 7 or 9 per day.

8 hours per, except for the new models introduction period.The working hours varies depending upon the targeted productions orders.

Salaried, so come in between 6 and 9, leave within 8 or 10 hours.

Typical from 7:00am to 6:00 pm M-F with weekend work typical.
One week work over 70 hours

The hours where long 10-12 sometimes

I organized the division of the working day into v and s from the shortest working day to the longest.

Of course, during these times that the worker works to obtain an equivalent of her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Many GM workers in the United States (and in Canada) belong to a union. The Annual Report states:

At December 31, 2019 approximately 48,000 (50%) of our U.S. employees were represented by unions, a majority of which were represented by the International Union, United Automobile, Aerospace and Agriculture Implement Workers of America (UAW).

Despite belonging to a union, the GM workers are exploited–but to a relatively low extent–much lower than many other union workers. The highest calculated rate of exploitation so far has been Rogers Communications’ workers, at 209 percent (see the comparative rates in the post The Rate of Exploitation of Workers at WestJet Airlines Ltd.). Why that is would be a good area for research.

Political Questions

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for the rhetoric of the largest Unifor as the largest private-sector union in Canada, and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized?

What of the following, drawn from the November 5, 2020 collective agrement between General Motors of Canada Company and Unifor Local No 199 St. Catharines, Local No. 222 Oshawa and Local No. 636 Woodstock? Page 7:

Section IV

Management

(4) The Union recognizes the right of the Company to hire, promote, transfer, demote and lay off and to suspend, discharge or otherwise discipline employees for just cause subject to the right of any employee to lodge a grievance in the manner and to the extent as herein provided.

The Union further recognizes the right of the Company to operate and manage its business in all respects, to maintain order and efficiency in its plants, and to determine the location of its plants, the products to be manufactured, the scheduling of its production and its methods, processes, and means of manufacturing. The Union further acknowledges that the Company has the right to make and alter, from time to time, rules and regulations to be observed by employees, which rules and regulations shall not be inconsistent with the provisions of this Agreement.

This power of management is not mentioned at all in the National Unifor Bargaining Report. Like most union bargaining reports, it omits all negative aspects of working for General Motors (including being exploited and oppressed):

HIGHLIGHTS
• $1.1B to $1.4B in investments
• General wage increases
• $7,250 Productivity and Quality Bonus
• Inflation Protection Bonuses
• Improved New Hire Program
• Skilled Trades Adjustment
• Benefit improvements
• Three-year term
• Lump sum payment for pre-1994 retirees

A written summary also omits the continued power of GM management to exploit and oppress workers (page 1):

JOINT MESSAGE TO ALL GENERAL MOTORS MEMBERS

SECURING A MADE IN CANADA FUTURE

If there is a lesson learned from 2020 Auto Talks, it is that the future of Canada’s auto sector is bright and on a clear forward path.

Thanks to the hard work and determination of the Unifor-GM Master Bargaining Committee, we are proud to present a new collective agreement that follows the economic pattern negotiated at both Ford and FCA. This agreement includes a 5 per cent increase to hourly wages, a 4 per cent lump sum payment in 2021, along with $11,250 in bonuses.

The deal makes major improvements to the New Hire Program, including an accelerated path to full rate, and returns key benefits like the Legal Services Plan and the afternoon (5%) and midnight (10%) shift premium.

Skilled trades workers will see their 20% wage differential restored, new apprentices hired, and the pre-apprenticeship program re-instated for future hires. The new agreement also includes significant improvements to the benefits plan, modest (but still important) pension improvements, along with health and safety gains, retirement allowances and equity gains including 10 days of paid domestic violence leave and a new Racial Justice Advocate.

Along with these contractual improvements are commitments by the company to maintain and expand work at current Unifor facilities. GM will continue V6 engine and 6-speed transmission production over the life of the contract, and forecasted beyond.

Also, in a stand-alone letter GM has committed to explore new potential product programs and investment opportunities for St. Catharines, with input from them union[my emphasis. When I formed part of a negotiating team for Operating Engineers Local 858, in Prince George, British Columbia, the management team were able to shuffle off many items on the negotiating table by referring to a “consultation process” between the union and management–in effect eliminating such items for negotiations. The verb “explore” and the noun “input” are euphemisms for the right of management to simply do what it wants, with the proviso that it “consult” the union.] 

St. Catharines is well regarded as a leader in the GM powertrain division and will receive $109 million to in-source new transmission work for the Corvette, adding jobs, and make
upgrades to the small block V8 engine program. GM will continue V6 engine and 6-speed transmission production over the life of the contract, and further commits to seek out new
programs that sustain the facility over the long term.

The Woodstock PDC will receive $500,000 in additional upgrades. Aftermarket parts work at Oshawa will also continue, maintaining hundreds of jobs.

In addition, and pending ratification, GM has committed to invest up to $1.3 billion to restart pickup truck assembly at the Oshawa Assembly Complex, with an expected two-shift operation in the first half of 2022 (and the potential for a third).

These “highlights” teach the workers nothing about the limitations of collective bargaining and  collective agreements. They are designed to hide the concentration of major decision-making power in the hands of General Motors (such as the “and the lack of such power (such as the “right of the Company to determine the location of its plants.”

The same could be said of the Local 222 Bargaining Report, which recommended voting for the collective agreement without any explicit indications of its limitation as indicated in the management rights clause of the collective agreement. Thus, the Report indicates among other things, the following (page 3):

Commitment to settling the 2020 GM/Unifor Master Agreement and Oshawa Local Agreement

•The production allocation is for the current life cycle. Currently, there is no future product commitment but the Company has expressed that the life cycle will be a minimum of three (3) years and that is well into the new Collective Agreement 2023.

•There will be no retirement incentives offered at the Oshawa Assembly Plant during the current life cycle of the product. In the event of a permanent reduction in force, the new hires at the Oshawa Assembly Plant will be laid off. Any employees hired prior to the 2020 Collective Agreement will flow back into the Oshawa OEM Stamped Products and Service Operation based upon Seniority.

Of course, workers have to subordinate their will to the will of employers in a society dominated by a class of employers, and so no union representatives can overcome this limitation; such a limitation is a class limitation, and it is at this level that such limitations need to be addressed. However, the class level is hardly some level that excludes the particular sections of the working class. Those particular sections are included in that general level, so at the local, regional or national level, the class issue can certainly be indicated and not simply ignored–which is what union reps do often enough these days. At the least, they could explicitly indicate the limitations of the collective-bargaining process and the collective agreements that result from that process.  Better yet, they could not only include such limitations, but they could point to ways in which such limitations might be overcome through regional, national and international tactics and stragegies. Most modern union reps, however, have no intention of doing so; indeed, they are likely unaware of the need to do so.

What do you think? Are union reps looking after the needs of the working class? If not, what can be done about it?