Session 7
Session 7. Historical Critiques of Our Capitalism: (1) Marx on How the Wage Worker Is Alienated by Capitalism from Her Labor: She Is Not Given the Product of Her Work, and She Is in a Hierarchical Relationship with the Boss; (2) Mill on How the Principle of Private Property Is Misunderstood and Abused by Our Capitalism to Promote Vast Inequality. (3) Hayek (Yes, Hayek!) on How Laissez-faire capitalism Allows the Powerful to Pervert the Market, Thus Detracting from a Free and Fairly Functioning Market System.
Read first: Allen W. Wood, "Human Production," and "Alienation and Capitalism," Karl Marx, pp. 31-55.
Then read: John Stuart Mill, "The Same Subject Continued [Of Property]," "The Idea of Private Property not Fixed but Variable," Principles of Political Economy, pp. 24-45, 431-436.
Then: F. A. Hayek, " 'Free' Enterprise and Competitive Order," Individualism and Economic Order, pp. 107-118.
So you'd like to know more…
Karl Marx, "Alienated Labor," from Economic and Philosophical Manuscripts, in Selected Writings, pp. 58-68.
This is where Marx presents his account of alienated labor. [ClassesV2]
Gerald A. Cohen, "Bourgeois and Proletarians," Journal of the History of Ideas 29 (1968): 211-230
Explores and reconstructs Marx's account of how proletarians AND bourgeois-capitalists are alienated: the
worker from his labor by the machine, the wage, and corporate hierarchy; the capitalist from all things by his owning
and not making anything.
Jon Elster, "Social alienation," Making Sense of Marx, pp. 100-107. [At bottom of this page]
An influential and concise account of Marx's theory of workers' alienation.
Charles Fourier, "Work, Anxiety, and Freedom," The Utopian Vision of Charles Fourier (Boston: Beacon, 1971), pp. 139-149.
Presents Fourier’s theory of how workers in bourgeois capitalism hate their work, because it is organized in such a
way that it stifles their natural passions and creativity.
Ronald H. Coase, "The Nature of the Firm," The Firm, the Market, and the Law (University of Chicago Press, 1988), pp. 33-56.
[Available through JSTOR as R. H. Coase, "The Nature of the Firm," Economica 4 (1937): 386-405]
This enormously influential paper theorizes why hierarchical firms exist, rather than everybody’s acting as free exchangers in every act of production. Answers that they exist to lessen the costs of transactions in a world in which there is much uncertainty and people are not fully rational.
Stephen A. Marglin, "What Do Bosses Do? The Origins and Functions of Hierarchy in Capitalist Production," Review of Radical Political Economics 6 (1974): 60-112
[Available at: http://scholar.harvard.edu/marglin/publications/what-do-bosses-do]
This much-discussed paper argues that the change from guild workshops to the putting-out system, and from the
putting-out system to the capitalist hierarchical factory, was driven not by an alleged superiority in economic
efficiency, but by the capitalist’s desire to have more of the economic pie to himself, and by the hierarchical firm’s
ability to out-invest other models of work organization (on which, see Part II below).
Marglin, "What Do Bosses Do? Part II," Review of Radical Political Economics 7 (1975): 20-37
[Available at: http://scholar.harvard.edu/marglin/publications/what-do-bosses-do-part-ii]
This second part argues that hierarchical firms are the norm under capitalism (and were the norm under communism)
because the prevalence of such firms means the bosses have great control over total savings in the economy (non-
boss individuals do not save much), and this allows for much greater savings to be plowed back into investment and
plant and equipment, which in turn keeps wages high and increasing, and so keeps up the increasing abundance of
goods and services that is one of capitalism’s chief justifications. If hierarchical work were abolished, there would be
far less savings invested in plant and equipment.
Oliver E. Williamson, "The Organization of Work," The Economic Institutions of Capitalism (New York: Free Press, 1985), pp. 206-239. [ClassesV2]
Develops Coase's transaction-costs insight to argue that hierarchical work-organization does a better job of
lessening transaction costs than several other non-hierarchical modes of production. A highly influential defense of
hierarchy.
Harry Braverman, "Scientific Management," "The Primary Effects of Scientific Management," Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century (New York: Monthly Review Press, 1974), pp. 85-138.
[ClassesV2]
Argues that the introduction by capitalists of Frederick Taylor’s “scientific management” has devalued and deskilled labor, degrading what had once been a source of pride and dignity. This deskilling thesis has been much disputed.