The People’s Republic: The Forces At Work

CONTINUED FROM LAST WEEK

But it is this factor that fares worst of all in the struggle for an equitable remuneration. The reasons for this are not difficult to ascertain. As we have seen, the scarcer a commodity is, the higher its marginal utility to the consumer, and hence the higher its value or price. But the more plentiful it is, the lower its marginal utility and hence the lower its value or price. Now, to the entrepreneur or employer, labour-power – that is, the application of the energy of the labourer, or labour in action – is just a commodity in the same way that raw cotton is to the textile manufacturer or yam to the yam-flour maker. If at any given time it is scarce, it will fetch a high price; and if it is plentiful, it will attract a low price. The supply of labour, however – that is, of human beings – is inseparably tied up with the motive of procreation which is absolutely independent of, and has nothing to do with economic considerations. In support of this proposition, it has been established that the poorer people are, the more children they produce; but the higher the standards of their living, the fewer.

If at any time the supply of labour exceeds demand, the marginal utility of labour or labour-power to the employer, and hence its price, will fall. In this circumstance, some of the workers will be employed at a low wage, with consequently higher profits to the entrepreneur, whilst others will be unemployed. Conversely, if the supply of labour falls short of demand; its marginal utility and hence its price will rise. In this instance, all the workers will be employed at a high wage. We would like to mention in passing that both low wages and high wages do have, in a labour-intensive economy or projects, inevitable long-term repercussions for respectively stimulating or discouraging the demand for labour. We will refrain from examining these repercussions here. The point we wish to emphasize is that the price or reward which goes to labour, or to any other factor for that matter, depends, generally speaking, on the state of its supply relative to demand. In the case of labour, in particular, we have noted that its supply is absolutely independent of economic circumstances.

Now, there are certain other characteristics of labour which differentiate it from other commodities like yam or textile, and which make it inherently weak per se and vis-a-vis the other factors. The supply of labour is highly inelastic. Unlike yam and textile, it “ takes between 14 and 15 years to produce an able-bodied worker. Labour-power is a highly perishable commodity: it is dynamic, . productive, and expansive only when in use. When not in use it is merely latent and completely dormant. If a worker does not work for three days, he loses -three days’ labour-power, and hence three days’ output and wage. He cannot retrieve these losses unless he does extra hours in the succeeding days.

Apart from unskilled labour which may be regarded as the undifferentiated form of labour, there are different kinds of skilled labour. In modern economies, every worker specializes in a particular field only, in order that his efficiency and hence his earning capacity may increase. But this specialization has its serious disadvantages. Among them is the fact that, in the same locality, one kind of labour may be in short supply attracting a high wage, whilst another kina may be in excess supply attracting a low wage. And because of  specialization, the latter kind of labour cannot take advantage of the scarcity which exists in the former. Above all, since labour-power is a commodity which has to be delivered personally by the labourer himself it is extremely immobile. Because of sentiments, family connections, and plain inertia, many workers find it difficult to move from one place — especially their place of birth — to another. With the result that, from time to time, we have the strange spectacle of excess supply of labour in one locality with all the attendant hardships, while in another locality in the same country there is a short supply of labour of the same kind.

When labour is in short supply and all workers are gainfully employed, other things being equal, all is well. In these circumstances, the employers compete among themselves for labour, thus keeping up wages. But when there is excess supply of labour, the workers compete amongst themselves for employment and thereby depress wages. In order to ensure security of employment for themselves, workers do sometimes resort to self-injurious practices such as the ‘closed-shop’ policy, unduly prolonging the period of apprenticeship, and opposition to labour-saving devices. The competition, amongst employers and employees alike, does sometimes become very intense and fierce. So intense and so fierce that both the employers and employees get together, as separate interest-groups, to do something about it. The outcome is that the employers form themselves into Employers’ Associations, whilst the workers organize themselves into Trade Unions, in order to protect their respective interests in bargaining against each other in matters of wages and conditions of service. In moments of desperation in the course of the ever-recurrent conflicts between employers and employees, the employers may lock out workers from their places of work – a very rare incident indeed; while the employees may choose a most advantageous time from their point of view to go on strike, a very common occurrence indeed. Each incident, when it occurs, leads to waste in the economy, which is sometimes enormous. It is obvious, from what we have said before, that when workers are locked out, or go on strike, for any number of hours or days, the workers’ labour-power, for the period of enforced idleness, is completely wasted, and can only be retrieved by working overtime in the succeeding days. It is worth pointing out in this connection that working overtime is deleterious to the health of the worker.

Land, as we have defined it, has certain characteristics which are exclusively peculiar to it. It is the gift of nature, pure and simple; and it is incapable of reproduction. Its supply is limited from the beginning of creation and cannot be increased. The so-called reclamation of swampy or water-logged areas does not amount to an increase in the supply of land: it is merely a transformation of land from one potential use to another.

CONTINUES NEXT WEEK

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