RevolutionZ

Ep 246 Who Earns What

September 10, 2023 Michael Albert Season 1 Episode 246
RevolutionZ
Ep 246 Who Earns What
Show Notes Transcript Chapter Markers

Episode 246 of RevolutionZ considers Income norms now and in a post capitalist participatory economy. What determines peoples' incomes, with what incentive affects, and what consequences. 

Support the show

Speaker 1:

Hello, my name is Michael Albert and I am the host of the podcast that's called Revolution Z. This episode continues a sequence that is presenting chapters from the book no Bosses written very carefully a couple of years ago, including, intermittently, spontaneously commenting on the material now, two years later. So we are up to chapter 5, titled who Earns what, which deals with what share of the social product each person should receive people's incomes. Like all the chapters of no Bosses, this one too begins with a couple of quotations. First we have Leonard Cohen singing. Everybody knows the dice are loaded. Everybody knows the fight was fixed. The poor stay poor, the rich get rich. And next we have John Lennon who, at a posh venue in Londontown, took a moment to address the audience. Will the people in the cheap seats clap? And the rest of you if you'll just rattle your jewelry? So then the chapter begins.

Speaker 1:

Imagine you were a student at a university. Custodians strike for higher wages. You support the strike. Or imagine you were a parent at a grade school. The teachers strike for better wages. You support the strike Either way.

Speaker 1:

A friend asks you okay, me too, but how much should they earn? How much should anyone earn, whether a custodian, a teacher or whatever, if the strike's aim is to win an immediate gain but also to prepare to win more games. So each limited gain paves a road toward winning a better economy and society. Your friend's question moves beyond curiosity to priority. I interject. It is worth your considering, I think, as I once did, whether you have ever wondered about this what should I and others earn if our economy worked, as an economy ought to work? And if you haven't wondered that, also with wondering why that is. The chapter continues Suppose we call the total goods and services that any society produces society's pie.

Speaker 1:

We feel that society's pie ought to be fairly divided among society's members. But what's fair? One way to distribute income in a new economy would say people ought to get more of the pie if they own property that contributes to the worth of the pie. If a deed stipulates that I own Amazon, then I should get profits back as part of my income. Even if Jeff Bezos of Amazon just sits in a chair waving his deed, he should get as much income each workday as someone packing and moving boxes for him earns in a thousand years. Yes, you read that right. If Bezos receives $12 billion in profits next year, which is not impossible and is only a fraction of what he accumulated in 2020, then he will earn about $50 million per workday. If Samantha, working for Jeff Bezos at a mid-level Amazon job, earns $50,000 a year, it will take her a thousand years to earn what Bezos earns in one day. As I calculate that and write it down, like you, I have trouble believing it, but that doesn't deny the obvious, it's true.

Speaker 1:

If there is one thing nearly all anti-capitalists agree on, it is that property-based income propels property owners to lord-like dominion over workplaces and over virtually all of social life. Property-based income causes ceaseless class conflict over property-induced differences in wealth and power. It demolishes diversity by homogenizing each contending class. It subverts sustainability by giving centralized power an interest in exploiting nature to ceaselessly accumulate profits. Property-based income also conveys to the rich power to direct national policies to favor their further enrichment, which in turn increases their power to further enlarge a perpetually expanding gap between themselves and the rest. Having passed the tipping point of insane inequality that leads to even more insane inequality, we now graphically see the doom that property-based income imposes, particularly in the US. It is an accelerating slip side to hell.

Speaker 1:

For all those reasons, to eliminate property-based income, a second income option we might opt for in a new economy is that people ought to get more income if they are strong enough to take more. They ought to get less income if they are sufficiently weak to be given less. If I can take more, great I will. If you can't take more, too bad you won't. Now it may seem like this thuggish approach to distributing income is too ethically and socially odious for anyone to advocate. In fact, however, this is how markets largely operate, and it happens day in and day out all around us With markets. If you have bargaining power based on property, based on a monopoly over information or skills, based on a bought-off government agency, based on a powerful professional organization, based on being male in a male-dominated society, based on being white in a white-dominated society or, for that matter, based on having a good union, then you can take more than those lacking your source of power. In contrast, if you have less bargaining power than others because, for example, your society is racist and you are in a racially subordinated constituency, or your society is misogynist and you are female, or because you are isolated and easily replaceable at work, then you get less income. I interject this is what we live with pervasively, literally. It is not just words, it really is a thuggish approach.

Speaker 1:

Are you Godfather-level thug? Very big thug, big thug, little thug or, more likely, most likely, by far most likely looking up at thugs? The chapter continues. An interviewer once asked Al Capone, the famous American criminal, I should have written Big Thug. What do you think about America? Capone answered I love America. In America you get what you can take. Getting income for power was Al Capone's vision of bliss. I interject PS. He was only a big thug. You need to visit posh venues and corporate owners' lounges to see Godfather-level thugs. The chapter continues. The thuggish norm validates the aphorism that nice guys finish last, except for nice gals, who likely finish last-er. No doubt Capone, not known for being nice, had good reason to like the idea of a thug's economy, but presumably you agree that a power-based option to distributing income would obliterate our favored values and that we should therefore keep looking for something appropriate for what we want for a better economy.

Speaker 1:

Next comes an option that many who say they are socialists support People should receive back from society's pie a bundle of preferred items whose total value reflects the total value of what they contributed by their labor to society's pie. If you and I pick cotton and you pick more each day, you should get that much more income than I get each day. And likewise, if we tend patience, play music, wash dishes, play basketball or whatever else, if you contribute more to society's pie, you should get more income in that same proportion. After all, says the advocate of remuneration for personal output, if you get less than what your work generated, someone else will get some of the value that you generated, and that will be unfair. Likewise, if you get more than your work generated, you will get some value that someone else generated, and that too, will be unfair. To be fair, we should each get back for our labor's income equal in value to the amount that we, by our labor's, contributed to the total social project, not more or less than that. Okay, the advocate acknowledges that there is a caveat. Some of society's pie should go to investment, some should go to support free medical care, but after those and other similar allocations, what we get back should be proportionate to our personal contribution.

Speaker 1:

It seems valid, but is it really? Would remunerating personal output yield the fair distribution of burdens and benefits that we want in a good economy? To answer that, we have to ask what might enable you to produce more worth than I produce over the same period of time. You may be better equipped for the work. Maybe you are stronger, quicker or better able to reason. Or you may have a plow and I only have a hole. Or you may have a computer and I only have pencil and paper. Or maybe you have workmates who better enhance your ability to produce because they are more capable than my workmates are. Or, finally, maybe you surgically produce brain repairs whereas I manually produce car repairs. Maybe you make gourmet meals whereas I sling hash.

Speaker 1:

In each of these many cases, if we say people should get income in proportion to the value of what they contribute to society's pie, you would get more income than I would. But should you? Is it ethically warranted? Is it economically wise? Why should you have more productive inborn genetic characteristics, greater strength, beautiful singing voice, greater speed, amazing memory or better reflexes, or your more productive work tools, or more effective workmates, or even the fact that you produce a more valuable output ethically entitle you to more income? In none of these cases would give you extra income, reward some activity of yours, but instead it would reward only your luck in the genetic equipment workmate or assigned product lottery. In other words, suppose you were born with Adele's voice, Ronaldo's athleticism or Chomsky's mind. You have been fantastically lucky in the genetic lottery. Should we then shower you with wealth on top of that good fortune? Doing so calls itself meritocracy, but is it? I interject? Perhaps keep in mind that for many leftists, socialists, this norm is considered optimal.

Speaker 1:

The chapter continues I can't advocate a value on grounds that I can prove it is true. Likewise, I cannot reject a value on grounds I can prove it is false. No one can prove any such thing about a value. Instead, to choose among values and norms, the distinction has to be that I like what fulfilling one value leads to for society and I don't like what fulfilling another value leads to. This was true of our earlier choice to favor equity, self-management, solidarity, diversity, sustainability, internationalism and participation, all of which we found likable. As we proceed, we also need to find likable whatever refinements of those values we settle on, to further guide our approach to organizing particular aspects of social life and, in the case of this book, to organizing mainly economics.

Speaker 1:

So do we think an economy will be better if it rewards a person for their luck in inheriting traits like strengths, speed and smarts? Should exceptional ballplayer singers, calculators and what have you earn high income for special abilities? If you think the answer is yes, as any advocate of giving people income for the value of their contribution to society's pie has to think, then be aware that top athletes who now sign contracts for as much as $40 million a season are actually getting less than the value that they add to the enjoyment of people watching them. They get less, yes, because much is taken by team owners, tv stations, shoe manufacturers and the like who have sufficient bargaining power to do so. But let's consider a less extreme example. Two farm workers grow out in the field and work under the same sun for the same duration using the same tools. One is 6'4 and really strong, the other is 5'9 and of average strength. They both produce valuable output, but the bigger, stronger farm hand produces twice as much. Do we then feel it is morally desirable to play the stronger farm hand twice what we pay the weaker one? Might it be better if the workers get income according to a different norm? Is piling wealth on top of lucky genetic endowment ethically sound? Likewise, should we reward people for luck in the equipment lottery? I have better tools at my disposal than you. Should my hourly income be more in the same proportion that my tools let me produce more. Is society better if we reward luck in being with a more talented team of coworkers or in being assigned to produce objects of greater value?

Speaker 1:

Socialists of virtually every denomination don't like rewarding property or bargaining power, but many socialists do favor rewarding personal output, at least until someone points out the full implication of doing so In any event. We propose instead that a worthy economic vision should give income for how long one works, for how hard one works and for the onerousness of the conditions under which one works, as long as one is producing something that is socially valued. With this approach, an average income would roughly equal payment for a workload of average duration, intensity and onerousness. If I want more leisure than average, I should arrange to work less hours and get commensurately less income, and the same goes for the intensity of my work or its onerousness. Where this onerousness, however, is limited in how much it might vary by the fact that we all have balanced job complexes, as indicated last chapter.

Speaker 1:

People claim capitalism is a meritocracy. They mean people earn its rewards fairly, but what that means depends on how we define fair. If fair means based on duration, intensity and onerousness of socially valued work, then anything one gets for some other reason, for example for having property, for being powerful or for having innate talents, is not fair. A meritocracy in that case would be an economy that rewards people for our proposed reasons and not for property, power or output. It may help to look at this another way.

Speaker 1:

Imagine we live in the Old West and there is a lot of land to distribute. Los Bonanza has everyone line up at some starting point and race to lay claim to parcels of land. Those who move fastest will get the best parcels. Those who arrive last will get the worst. Fast horse, better parcel. Better route, better parcel. Is that a meritocracy? Too much luck, you might reply. Too much horse. Okay, suppose we handicap the race. We somehow make all the horses the same speed. Everyone has to travel the same path. People take off. Is that a meritocracy? What is interesting to note is that in the first case, and also in the handicapped case, there are much better parcels, average parcels and much worse parcels. The parcels wind up in the hands of different folks according to their time of arrival, but depending on the parcels, the difference in reward can be huge, even from minor differences in speed getting to the parcels. It turns out, even if you make the race itself fair, you will still get inequality, perhaps horribly vicious inequality, if rewards are excessively unequal.

Speaker 1:

We conclude that a worthy meritocracy should have two aspects Everyone should race fairly, but also outcomes should be sensibly equitable. It turns out what we propose and not what people endure in a market system is a worthy meritocracy. With our proposals you get more income if you merit it, based on your outlay of effort. Fair race. But in our approach the extra income you get matches the sacrifice of time, intensity or circumstances that you suffer. Fair outcomes. Still, another way to look at our equity proposal is that each worker gets a work assignment plus an accompanying income. Equity says we should ensure that the sum of the debits and the benefits of one's work and of one's income taken together are comparable for everyone. If I work harder or I work longer or I work under more onerous conditions, the greater loss that I endure due to my particular efforts should be offset by my getting more income from my particular efforts.

Speaker 1:

But we still have a problem. Consider Donald. He gets that working longer, harder and under more onerous conditions is reason for him to receive higher pay. So Donald goes into his backyard, turns on a hose aimed at himself and furiously digs holes and then fills them. Donald does this for hours on end. He endures a long workday, high intensity labor and onerous conditions. He expects high pay. Or consider him Margaret. She gets that working longer, harder and under more onerous conditions is cause for receiving more pay. So she decides to play tennis, many hours, with great energy and under a hot sun. She's not very good at tennis, but she is intent at it. She expects high pay.

Speaker 1:

It seems our norm has a loophole. Yes, it does Dump. The whole vision now screams a detractor. But no, we have simply not taken into account the full norm. Donald and Margaret have ignored the phrase at the end that remuneration is not just for working longer, harder and under more onerous conditions, but that remuneration is for doing so to create socially valued labor. Donald can't get paid to dig and fill holes. Margaret can't get paid for work. She cannot do well enough for her effort to be socially valued.

Speaker 1:

I interject the way the chapter unfolds. The argument here is I think I remember the way way back that Robin Hennell and I worked through it before its first presentation. We arrived at the first part of the norm and then we noticed the problem and added the second part. But the second part isn't just to prevent there being lots of Donalds. I hope the chapter episode will soon reveal. The process, however, is common to many things Work your way partway through, check what you've got, improve it with additions or refinements. The chapter continues.

Speaker 1:

This actually harks back to the idea of the commons offered when talking about productive assets. There is a natural, a produced and also what we might call a human commons in society, that is, there are resources given by natural history, there are technologies and infrastructure given by past human production and there is also an accumulation of skills, knowledge and talents held by humans. When such factors are employed intelligently and effectively in production and are not squandered on useless undertakings or used in a manner that is less beneficial than other ways they could be used or literally squashed out of existence, are society benefits. Working to produce something no one benefits from, or using resources, tools and skills in ways inferior to how they could be used, is wasteful. It does not contribute appropriately to the social pie. It is not, or perhaps more accurately, it should not be socially valued, and less obviously, but for the same reasons, working at something ineffectually also fails to produce what people value for some of your duration of work time. So the full advisory or norm is that the economy should remunerate for the duration, intensity and onerousness of socially valued work.

Speaker 1:

Notice to answer what determines what counts as socially valued work has to wait, as the answer depends on the economy's method of allocation, a subject taken up in our next two chapters. What we know, however, is that the answer needs to be true to the values and other features of our emerging economic vision. The participatory equity claim is that if workplaces and allocation beyond workplaces can enact this approach to income distribution, then remuneration will be economically fair as well as highly consistent with the other values we favor. However, even if we agree that this would be true, it would do no good to propose a formally fair approach that would be either unimplementable or, if implemented, would leave everyone impoverished due to generating insufficient production. So we must ask can equitable remuneration of what we might call a workplace's overall payroll among all its workers even be arranged? And if it can be, what institutional steps would it require? And if we were to organize an economy to remunerate in the proposed fashion, would there be negative implications so severe that they would offset the ethical and other gains of the approach I interject. You may notice this is the same set of questions we had about the new division of labor proposal last chapter. No accident, the thought processes repeat over and over. But I want to add something else just for a bit.

Speaker 1:

The idea of efficiency, efficiency in the sort of popular usage, is just doing things. Well, what it really means, if it's a sensible concept, is attaining what you desire without wasting things you value. And that makes perfectly good sense. Who would want to not attain what they desire and who would want to waste things that they value? The problem is that the word efficiency used that way is a perfectly reasonable concept and an important one to have in mind. But efficiency as it's often used in our society is actually quite different. Efficiency in our society ignores that. It's efficiency for those in control, the person who owns the workplace and who earns income in the form of profit. Well, for them, efficiency is attaining what they desire, their own profit, without wasting things. They value Resources and inputs that they need to utilize to get profit, the workers' health, the workers' well-being, the workers' satisfaction. They don't value that, so they don't mind if they waste that and they do, and outputs that don't disrupt the ecology. They don't value that, they value profit. So efficiency comes to mean something that is not good and that is actually irrational and even suicidal. And yet the word is used continually as if it's a virtue. So efficiency, as I'm suggesting it accomplishing what you desire without wasting things that you value is virtuous. It is a positive thing. But efficiency as it sort of turns out to mean in our society, which is achieving profits without wasting that which can be turned into profit, that's not virtuous. In fact, most often it's pretty disgusting.

Speaker 1:

The chapter continues the claim that equitable remuneration makes ethical sense but could not be successfully implemented arises from a belief that it would be too difficult to measure duration, intensity and onerousness of each person's work, or too difficult to know if a person's work was properly socially valuable. Or it arises from a belief that to make such determinations would even, if possible, require some kind of authoritarian, judgmental approach that would violate solidarity and self-management. First, workers presumably wouldn't be welcome to change their own involvement and workplace activity willy-nilly, simply on their own choice. If I want to work longer hours, perhaps because I want more income for some special purchase, I couldn't unilaterally just stay late every day and do extra work, since that would leave less work for others. I would have to get collective agreement from my workmates, who would also be affected. The same goes for piling up intensity and onerousness points.

Speaker 1:

In any event, let's call the amount a worker earns for working at an average intensity at a job with average onerousness for an average duration the average or basic income. Then each actual worker would earn either the basic income or some higher amount due to having worked longer or more intensely or under worse conditions, or some lower amount due to having worked fewer hours or at lower intensity or at a job that had above average quality of life efforts. I assume we can agree that counting the hours a person works would be easy, even if it wasn't the case that one would have to arrange in advance for any significant variation in hours. Likewise, instances of significant difference in job onerousness would be modest, though perhaps this would arise when dealing with crises that arise. More difficult, it might seem, would be measuring intensity.

Speaker 1:

We must first note that the precise methodology for allotting income inside workplaces among their workforce need not be the same from workplace to workplace. Adherence to the norm is what would be universal, not a particular specific approach to the nuts and bolts of its implementation, which would be collectively self-managed, as with other choices, and perhaps be different for different workplaces or even for different work teams in one large workplace. That said, to demonstrate feasibility, here is one possible general approach that some workplaces might opt for. I interject Remember the idea that some features are central to the new economy, a core scaffold around which much else emerges from practice and contingent on practice and many different circumstances and preferences. Well, the above is a good example of that. The firms all utilize equitable remuneration, but the details of its implementation in different firms may differ. This is analogous to the firms all utilize balanced jobs, but the details of job balancing for different firms may differ. As discussed last episode, there is no blueprint all participatory economies must abide. There are features that make an economy participatory, but beyond those core features, different participatory economies will likely differ and even within a single participatory economy, different workplaces and communities will differ in the details of their arrangements. So here is a possible general approach that some workplaces may opt for, while others will have other detailed approaches.

Speaker 1:

The chapter continues. Each worker receives a kind of evaluation report from their team or perhaps from their whole workplace or from just a committee established for the purpose, where the report indicates the income they should receive to be used for consumption expenditures. This evaluation report might, for example, indicate hours worked, intensity of work and owner'sness of conditions, yielding an overall effort rating in the form of a percentage multiplier. If the rating was one, the person's remuneration would be the social average for the workplace. If the rating was 1.1, it would be a trifle more. It would be a tenth more. If it was 0.9, it would be a tenth less. What would explain a person getting higher or lower remuneration is the person having worked productively more or less hours, or at a higher or lower intensity of effort or owner'sness. But who would judge these differences and by what form of evaluation?

Speaker 1:

This might well be a zone of variation from workplace to workplace. One workplace might opt to have a highly precise numeric rating system where people are graded to one or even two decimal places above or below average. Another workplace might, less precisely and I happen to think more realistically and desirably, designate above average, average or below average, with the designation meaning average income or a tenth above or a tenth below, with the options maybe three, as stated here, or five, say, having been agreed by the workers' council of the workplace to be the only variations permitted without special needs. If those two approaches, more or less precise, did exist in an economy, which would you prefer for your workplace, given that everyone is doing well in any event, that we have balanced jobs and so on, I have to say I think I would prefer the looser to the tighter option. At any rate, the judgment might be made by a workplace committee, all members of which, of course, have balanced job complexes, or in a small or modest size workplace, instead, by a vote of whole councils or by whatever other means each workplace opted for.

Speaker 1:

For those wondering, quite reasonably, what prevents a whole workplace from exaggerating their effort so that everyone receives more than they deserve, regrettably the full picture of the overall system in action depends on all institutions and their interactions. Regarding that particular concern, for example, the means of allocation in our new economy is an essential factor. So the question must wait just a bit. But the key idea is to remember the proviso that to be remunerated, work has to be socially valued. So the workplace in question as a whole earns a total income for its whole workforce in accord with its socially valued output in light of its productive assets and workforce, which overall payroll is then internally apportioned to its members by way of their judgments about their relative efforts and sacrifices. The internal evaluation only impacts how the workplace's overall allotment is divided among its members. The overall allotment, which we can call the total payroll the workplace's workforce earns, to then be apportioned among those workers, is determined by the economy's allocation system. The within each workplace step is our current focus. The overall allotment to each particular workplace becomes a focus when we turn our attention to proposing a new means of allocation for our proposed new economy.

Speaker 1:

Another choice that might be prevalent for some workplace's internal apportionment of payments could be for a workplace to assume that, barring exceptional cases and pre-arrangements, everyone works at an average intensity level, so that, for the most part, income will vary only with hours worked. The only exception to that a workplace might decide would be by petition to the council, either by a person claiming to deserve more or by workmates who are convinced some person deserves less, each of which would, in this model, presumably occur only infrequently. Another quite different choice some workplace might prefer is to implement a much tighter rating system that would yield a significant number of employees getting various different amounts more or less than average. But the main point is that, since circumstances and opinions would differ regarding the best and most accurate means to calibrate effort and how closely to do so in different workplaces, not least due to those different workplaces having different jobs and conditions, different workers' councils would be free to opt for different systems, the choice having significant impact on the involved workforce but virtually no effect on anyone outside A workplace. Might even opt to a lot, some payroll to a fund for collective benefit rather than individual income. Assuming different workplaces did opt for different methods of work evaluation, workers might well make this one of the factors they consider to select a job in the first place. And, most important, however different various procedures might be, they could not lead to extreme income differentials, since there can only be so much variation in time worked and intensity and onerousness.

Speaker 1:

In any event, even if workplaces accommodate different preferences on the score, note that the above discussion of remuneration only describes how a workplace in a new participatory economy could conceivably remunerate its overall payroll and adjust in equitable way. It does not yet argue that doing so would elicit desired quality and output of work or foster the other values we favor, or that there wouldn't be negative side effects that mitigate benefits, to be addressed next. Nor does it indicate how the total payroll of different workplaces would be equitably established, a prior step that has to be addressed after later proposing new means of allocation. The concern that negative effects would outweigh benefits generally arises from the belief that equitable remuneration for duration, intensity and onerousness of socially valued labor would not provide needed incentives to get good results.

Speaker 1:

Our persistent critic, margaret Thatcher, returns to point out that if workers are only paid for duration, intensity and onerousness, then workers can't earn way higher incomes for any work they do, and she continues in that case people will not become, for example, surgeons, engineers, accountants or lawyers, and her claim is almost universally accepted. If young students couldn't earn 10 or more times what they could get for other pursuits, they would not become surgeons. Moreover, once in a job, not being able to earn a really high income would mean folks would not give their best. And if Thatcher's claims were true, or even partially true, it would be a problem, perhaps even a vision-destroying problem, for our equity norm, point being, thatcher is right that it wouldn't be a big gain, or arguably any gain at all, to create an equitable society in which, however, no one was motivated to do any creative work that requires a lot of training or, for that matter, to be productive at anything. But is it true?

Speaker 1:

In reply, the proponent of remuneration for only duration, intensity and onerousness of socially valued labor says that with equitable remuneration, the economy's incentives are just what they ought to be. Income earned for duration, intensity and onerousness provides an incentive to work longer, but not so long that the loss of leisure outweighs the gain in income. Harder, but not so hard that the losses due to exertion outweigh the gain in income, and, when need be, to complete really onerous tasks that prove necessary outside of balanced job complexes, but not when the pain due to the onerousness exceeds the benefits due to the gain in income. In contrast, when the remuneration is for property, the incentive effect is, perversely, to exploit others and to amass ever more property with which to exploit others ever more aggressively in the future. Likewise, when remuneration is for power, the incentive effect is for the powerful to amass more power so as to have steadily more means to accrue wealth again in a steadily escalating spiral.

Speaker 1:

When remuneration is for output, it is a mixed situation. Incentives to school oneself and become more productive have a potentially positive aspect. But that aspect is often vastly inflated beyond what is needed for the purpose, and payments for having talents not for the training that goes into developing talents have no useful incentive effect. I cannot change my genetic endowment due to the fact that a great singing voice or tremendous reflexes and strength are highly rewarded. How long I work, how hard I work and my willingness to do onerous work is what I can myself decide in part in light of income offered.

Speaker 1:

But what if thatcher's view that we will have fair incomes if we have equitable remuneration but we will have no doctors? If true, that would be disastrous. The reply is that while this parrot's what Econ 101 tells everyone and what all of popular culture ratifies, it is nonetheless self-evidently false. Doctors now earn, let's say, $500,000 a year. The critic claims they receive their high income not because they have the bargaining power to take it, but instead because we would have no doctors if doctors earned a fair salary based on duration, intensity and onerousness of socially valued labor. The observation gets repeated so much and is taken for granted so prevalently that nearly everyone comes to sincerely believe it without giving it any thought. We have to pay doctors vastly more than dishwashers because otherwise doctors would opt to wash dishes.

Speaker 1:

But consider for yourself If you could choose between a rote and repetitive job on the one hand, say on an assembly line, and being a doctor in a hospital or some other coordinator class job on the other hand. Which would you prefer, even without a salary difference? Suppose you are just getting out of high school and have to decide whether to report for work on an assembly line or to go to college and then to medical school and then be a lowly intern before becoming a full-fledged doctor. Would you need to get 10 times the income to suffer the incredible hardships of going to college instead of straight to an assembly line and of going to medical school instead of to an assembly line, all en route to working in a hospital instead of on an assembly line? Not to mention that the schooling, training, would be free, in fact, that it would earn an income in our proposed equitable system?

Speaker 1:

To ask the question is to answer it, but no one ever asks, because every message in media, from cradle to grave, tells us not to think carefully about such matters. You may still not see it. Okay, you are facing the choice Go to college to become a doctor or engineer or whatever you might be interested in, for $500,000 a year, or go directly into a road job for $50,000 a year. Now imagine I start to lower your likely doctor salary. How low do I have to reduce it? So you will reject becoming a doctor or whatever other coordinator level job and take the road job 400,000? Will you switch now? How about 300,000? 100,000?, 50,000? Or will your reply be like that of every student group, including those who are premed I have posed this problem to, which is to say, as the rate dropped? Before answering, would you pause and ask how low an income you could survive on, as you would only switch if survival was in question?

Speaker 1:

Some other concerns about equitable remuneration exist. The first goes like this I work very hard, but I don't think I should receive extra income for it. In fact, I find the prospect of getting extra pay for my hard work degrading. I work because it is part of being a full and worthy person. I don't want to sully that motivation with remuneration for the effort that I give, because I want to give it. Well, that's actually not a problem. You needn't take all payment you are entitled to.

Speaker 1:

There is no reason, lurking in this possibility, supposing it even exists to want to disallow others from doing more labor to earn a bit more in order to get something valuable that they want, will people refuse remuneration in the suggested manner? We can only guess, but in a participatory economy where everyone will earn average and then a bit more or a bit less due to contributing above or below average exertion or duration, the very rare person who offers the above complaint about not wanting more pay for longer hours in our current society is typically someone making way above average rates of payment who doesn't feel right getting still more for work they eagerly do. Were there base income to become like everyone else's base income and were there to have a balanced job, complex, like everyone else, it is quite plausible that they and their family's view of what they deserve for extra effort would alter, though again, it would be no problem if it didn't. I interject it's sort of interesting personally, because now as I read this and I think about my own current situation, I realize that I have a bank account and with life savings in it it's not peanuts, and I don't have it in an account that earns interest. It doesn't even occur to me to do that to try and get income from doing nothing, and so it's just in a checking account and some people think I'm just crazy and for me it's just sort of automatic. I don't know what to say about it, but I think it may bear upon what we just said.

Speaker 1:

The chapter continues. A second confusion is more subtle. You can earn more for working longer, or for working harder or for working at more onerous tasks. The critic says you have a reason to do all those things. As a result, there will be a drift toward a longer work day, toward more intense labor and toward worse working conditions. This is a perverse incentive, says the critic. We will wind up with two long work days, two harsh work conditions and two intense job conditions. Is this true? I interject. Set aside that it's ludicrous in the world that we live in where all those things exist, and it has nothing to do with incentives. But this chapter continues.

Speaker 1:

In an established participatory economy, we all have balanced job complexes, comparable status and influence and let's say we also, at time zero, have equal incomes because we all work the same average work week. With our average income, we get an average share of the total social product, after some goes to free goods, investment and income for those who cannot work. Now suppose all of us want more stuff than the current average. Is that conceivable? Yes, I suppose it is, and if it was the case, we would need to produce more stuff, which means we would need to work longer or harder, or perhaps at some additional, sufficiently productive tasks that were quite onerous. But this result, if it were to occur, would not be perverse. If we all want more product as a whole, tendency desire of the broad population than a good allocation system, as we will soon see, would let us know the human, social and the ecological costs. And if we still wanted more, even taking those into account and despite having to work longer to generate it, so be it.

Speaker 1:

Now, is it likely we will all want more? The predictable truth is likely the opposite, and this is actually the one criticism of this type remuneration system that has been leveled by mainstream economists. To understand the issues With our new approach, such economists point out, people are highly likely to want more leisure, just as people do now, rather than more stuff. And there is nothing in their proposed new economic arrangement the Economist's ad, unlike capitalism's drive to accumulate, that would prevent the new economy's workers from deciding to enjoy relatively more leisure by working less, which would in turn cause total output to drop. We can see this as highly likely, even without taking into account what will be accurate considerations of ecological impact and even ignoring the impact of near equalization of shares of the product and of revamping the product to not squander gigantic productive capacity on weapons and on other anti-social products, and of having sensible, durable collective goods and of having no pernicious status effects of consumption and of having enlarged non-consumption means to fulfillment.

Speaker 1:

But what about a particular individual? Could I work longer or harder, or perhaps even doing more extra-ownerist tasks to get more income? Yes, in the approach we are proposing, I could do so, assuming I could arrange it with my workmates. Is there anything morally or economically wrong with that? No, the extra income would be warranted by my actions and, if properly agreed and organized, would have no ill effects on anyone else's situation. Would having this option mean I would drive myself to dissolution in a mad pursuit of additional income? Of course not. Would it mean I would work as long or as hard as I want at tasks I choose without anyone else having any influence? No, because my choices have to mesh compatibly with other people's choices, I interject. Oddly enough, this latter recognition.

Speaker 1:

Self-management is not do what you will, irrespective of what others want sometimes yields some confusion. Controversy, a critic might say, and a few have. Why should I have to get permission to work longer or harder at whatever I want in my workplace? Because I value the added income more than the loss of leisure To deny me that is encroaching on me, it oppresses me. Well, the answer is that it is basically because we don't value or elevate any one person more than others. You can't say anything goes for everyone, because my choice of whatever I want could encroach on you being able to get what you want. If I can opt to work lots more hours in our workplace, even if it leaves you less hours than you desire to work, the idea that this lets us each be optimally free is simply false. My freedom without permission, so to speak, ends where my choice is encroach on you having the same level of freedom as I do. Thus we collectively, not individually. We socially, not anti-socially, self-manage. It ought to be obvious, but you can imagine someone bemoaning the headache that they can't just do as they please, describing it as intrusive, etc. This kind of dispute is nearly always due to seeing some aspects limits on me of collective decision-making, say, but missing other aspects, for example limits on you.

Speaker 1:

Due to atomistic decision-making, the chapter continues. At this point another realm of issues arises. What about the whole workplace's motivations? What about its incentives? Do whole workplaces want to sell as much as possible? Do they use false and tricky advertising to do so? Do whole workplaces want to cut costs as best they can? Do they turn off air conditioning? Allow fumes work faster to do so? Do whole organizations adopt the capitalistic mantra accumulate, accumulate. That is Moses and the prophets. Do they have an incentive to spew pollution on outside actors? Rather than answer all this partially now and then more when we discuss allocation, we will leave it entirely for discussion of allocation when we can answer more fully, except to now say the obvious To avoid these perverse, very familiar possibilities, a new economy, unlike existing ones, will have to have an allocation system that properly accounts for personal, social and environmental impacts of economic choices and that doesn't set up any actors with power to benefit from perverse choices in these matters.

Speaker 1:

Another set of critics of remuneration for duration, intensity and onerousness of socially valued labor, this time from the left, don't see the need for remuneration norms and methods at all. They don't actually think about a preferred remunerative norm. They feel there is no need to do so because they prefer to entirely avoid the hassle of tracking values, times, durations or whatever. I interject. Okay, this is actually an instance of what I mentioned in my last interjection. The point of the criticism is that tracking stuff is a headache. Worrying about values, times, durations etc is a headache. So let's just not have a remunerative norm that requires any of that. Let's have a much simpler norm.

Speaker 1:

Now it turns out that these critics do come up with an alternative. They say you get what you want, you work at the level you want, from each according to their ability, to each according to their need, and they feel that this removes the need for the hassle of tracking values, times, durations or whatever. Well, we're going to see that it doesn't do that, that instead it doesn't work, and it doesn't work precisely because people don't have sufficient information to make responsible choices. But we'll see this as we go along. The chapter continues To that end. They say that in a good economy, we should each work to our abilities and each receive for our needs, and that's it. I interject. Okay, I forgot that. I dealt with it here and now the chapter is going to continue to deal with it. I guess it's strange to read something that you wrote and not know what's coming. Anyway, again, the chapter continues. That is, they urge that even if equitable remuneration isn't horribly flawed, and indeed if it is sound and moral, it is unnecessary and less than optimal.

Speaker 1:

This type of critic says the norm from each according to ability, to each according to need is better less hassle, better results. So is this the case, or is the from each to each norm flawed? The from each to each norm is long enshrined in a few different political heritages as the height of radical, socialistic, anarchistic wisdom and desire. But what does the phrase actually mean? If we go beyond the slogan, beyond its worthy, emotional, mutually respectful connotations all of which I like to its actual substance, what do we find? Well, there are a few possibilities, though they are rarely, if ever, fully described by the views advocates.

Speaker 1:

Suppose I am working in a system operating under the from each to each norm. How long will I work next week If I work to my ability? Odds are that I could manage to work 60 hours at a balanced job, complex, or even 70, 80 or more. Should I do that? Is that what working to my ability means and should I work as hard as my ability permits as well? It is incredibly unlikely that any advocate of this norm, much less those concerned about people overworking has in mind the above literal meaning. But what else might them norm mean? It could mean that I should work up to what someone else says is my ability. But again, surely no from each to each advocate favors that kind of authoritarian interpretation. It could mean instead that I should work the average amount and intensity for society, unless I feel able and willing to work somewhat more, or I feel I should work somewhat less. But then on what basis do I arrive at such conclusions? If the only issue is the effect of work on me, I will likely wind up working less than I would otherwise have done. If the only basis, or even part of the basis, is the effect on others, then I need to have some way of sensibly gauging those effects. How do I do that? We will return to that question in a moment.

Speaker 1:

Now, what about consumption? With from each to each operating, I have to determine what I wish to have from the social product According to the norm, if I take the words literally, I should pay no attention to anyone else's situation and no attention to my level of work, and instead I should just consider my needs. I ask myself, not someone else, since to ask someone else would convey absurd authority to that other person. What do I need? One interpretation of needs is that I need what I physically need to survive. This would mean everyone would survive on bread, water and vitamin pills hardly an attractive prospect. Alternatively, my needs might be taken to mean whatever I would like to have, and that would literally mean, as best I can see, that I should ask myself what do I like? And take that Well.

Speaker 1:

I can't believe any from each to each advocate actually favors that, even if we ignore the. And it is often the same critic who just minutes ago thought that if we remunerated for duration, intensity and onerousness of socially valued labor, the hunger for consumption goods would be so great that people would press on to longer and longer hours in higher and higher intensity. Anyone being even a little bit consistent would surely have to agree that, told they can have whatever they ask for, a person will want a lot more than is good for the overall society and a lot more than everyone can have. Why not? The person thinks everyone else can have what they want too. If nothing says having less is better and my desires say having more is better, I would be masochistic to not take more, more, more.

Speaker 1:

Alright, let's ignore the two extreme understandings of consumption according to need Suppose. The norm means instead, as I assume it must for those who favor it, that each consumer should use his or her best judgment to consume the social average and then to consume a little more or a little less, based on whether they have some seriously pressing additional needs or not. We should each restrain ourselves, presumably out of a social impulse. I do wonder why it is okay to assume not only that everyone will try to do this automatically and will succeed, but even if we assume we all desire to be responsible, how will we each know how much is appropriate to take? This is essentially the same information problem the worker had, whether the issue is a worker setting his or her level of work responsibly or a consumer setting his or her level of consumption responsibly. Being responsible requires knowing what is average and then knowing whether one has legitimate grounds to deviate from average.

Speaker 1:

Here's the crux of it. First, by assuming there is a known earlier average, we are assuming that in the past, people have functioned with this norm and arrived at something sensible as an average, but there is no reason to assume that unless we say how it happened. Second, the from each to each advocate clearly wants people to engage in some kind of social exchange that provides them with information enabling them to settle on responsible levels of work and consumption. This is what it means to say people will act responsibly, they will have information and will act responsibly in light of it, though there is no pressure to do so. The irony is that this is precisely the type of information and setting that our new economy is conceived to convey. Our proposals provide, as we will see once we discuss allocation, a collective process of exchanging statements of desire about both work and consumption, personal and collective, where one learns what is socially warranted and what isn't, and one settles on socially desirable and warranted choices in order to be able to proceed. The only thing that from each to each advocate who wants people to freely arrive at their own agreed levels of work and consumption could reasonably take issue with would be whether or not the information conveyed by participatory planning is the best that it can be, and whether trying to arrive at responsible choices and succeeding with a norm and institutions geared to helping one do so is worse than trying to arrive at responsible choices and failing due to lacking a norm and institutions to help and to prevent violations. I interject. I think what's attractive about the from each to each norm is that it says people are good, people are social, left on their own, people do the right thing and also folks like it, because it removes need for a mechanism that impacts our freely undertaken inclinations.

Speaker 1:

Some feel if there is an institution at work, then I am hindered. If it is true with markets at work, if it is true with central planning at work, why isn't it true with your mechanisms at work? Well, it is true with participatory economics. Its institutions also have roles we have to fit. So in that sense, we can't be just anything we want. The trick is to make our institutions such that we can all simultaneously be what we all agree is desirable. In this case, institutions that let us all help us all to work and consume in ways that we all agree are just, fair and effective. Another way to think about it is we want freedom from imposition, but we also want freedom to do and means and circumstances to do all sorts of warranted and worthy things.

Speaker 1:

And here is another angle on it. Dylan sings To live outside the law. You must be honest. The law, institutional rules, should be such that they require of us that what we ourselves want we abide, because that is who we are. That is us being honest.

Speaker 1:

The chapter continues. Consider a busy intersection. We want every driver to navigate it, making responsible choices about when to proceed and when to wait. If we just have people drive to it and look around as best they can and do as they will, not only will traffic be a mess, but every so often there will be a crash, even if people only have honorable intentions. Now consider we try to improve things with a stoplight system. Go on green, stop on red. Someone might complain that the system is authoritarian because it constrains behavior. One might answer the goal is for people at intersections to get through without crashing and with a relative minimum of disruption of a steady flow of traffic, and that is what the light system facilitates. And if it does facilitate it, it would be truly weird to reject the lights as an authoritarian imposition, preferring that everyone approach each intersection doing whatever they choose, with the resulting level of safety and flow, depending on how well they coordinate, despite not having any shared agreements on having good information to use in the process.

Speaker 1:

The allocation situation is similar, though actually far less manageable in the absence of helpful aids and effective restraints. The problem with remuneration for need and work to ability is that those norms are either utopian on the consumption side and draconian on the worker side, or they involve someone other than those involved determining need and ability, or, and this is the most likely intention of the views advocates, since the other two interpretations are so completely devoid of positive aspirations, it assumes a mechanism which conveys to each worker and consumer personal and system-wide information that allows them to make responsible choices without imposing class divisions, violating the ecology, enriching the few or unnecessarily hurting anyone. Of course, the irony is that what can provide people that and what has was literally conceived to provide. That is what we will propose called participatory planning, plus remuneration for duration, intensity and onerousness of socially valued labor. There are other problems with the need-ability norm, one of which is particularly instructive. Suffice it to succinctly say that to sensibly know how to invest for the future, and even to know what we should prepare to produce more of or what we should cut back to produce less of in the present. One has to know the relative desires for things, not solely that people would like them or not, but how much. But you can't know relative desires. Do we want more of this or more of that if the only information conveyed by the system is that people want things, but not how much they want things? What about the claim that if people get income and expend work in light of our equity norm, then it will not be an economy based on and also creating mutual aid? Well, it is true that we don't assume saintly people. Instead, we propose institutions which would likely include, certainly at the outset, rather selfish and self-centered people, such as the people we are now due to our training and habits, and lead them us to become more empathetic practitioners of mutual aid. Here is the idea In this new type economy.

Speaker 1:

Let's say I am, by virtue of prior training or even by genetic disposition, a very selfish fellow. I can gain by enjoying less difficult burdens at my work, or I can gain by enjoying a greater share of the social product in my consumption. So how do I seek such gains On the work side? I have a balanced job, complex, so the only way the quality of my work is going to significantly improve is if the quality of socially average work improves or if I find a socially average job that I happen to like better than the one I already have.

Speaker 1:

The second route to a better work experience is straightforward I seek a new job. I get it or not. There is nothing special involved and nothing antisocial or, for that matter, particularly solidaritous either. But the first route is interesting. For my job complex to improve ultimately entails that the socially average job complex improves, which is to say that everyone's job improves. Mine doesn't get better on its own, but only if others do too. How do they all get better? And thus how does mine get better? Well, it happens most dramatically when changes in the way we work or in the tools we use or in the social arrangements at work eliminate or make the worst tasks less bad, since that can significantly improve the average across all tasks. That is, the average typically goes up most when the worst tasks are dramatically improved or even eliminated.

Speaker 1:

So my personal and even selfish desire to have a better experience during my work days would lead me to want labor saving and workplace improving changes for the most onerous tasks, the same attitude that a sense of solidarity and mutual aid would favor an attitude that seeks benefit for all. I don't benefit most by advocating modest changes in my own workplace. Rather, I benefit most if I am alert to everyone's situation and advocate changes wherever they will have the largest impact. This is precisely an economic system that generates solidarity. By the responsibilities and options it gives people, mutual aid becomes a natural way to get along, not something special that one must struggle to maintain against one's surroundings.

Speaker 1:

What about the consumption side? Well, my fulfillment from consumption depends largely on my private consumption choices, and there is nothing special in that, other than when I consume individually, I do so knowing that my acts require work and resources. How can I get more consumption? I can raise my income by working harder, longer and more onerous tasks, assuming my workmates agree on an arrangement of such activities that is good in our workplace. That route teaches solidarity somewhat, because I know, via the planning process, which we have yet to discuss, the human implications of my choices and because my workmates must agree. But I can also get more of the total social pie enlarges, and indeed that is the only route to more income from me and for everyone in society, and that route is one of solidarity and mutual aid. We all benefit together rather than competing for benefits.

Speaker 1:

Making some change that increases productivity in my workplace isn't the point. That doesn't lead to workers in my workplace and myself getting greater income. The point is raising the social output in some total and thus the fair share that we all receive. The key observation is that in a good economy, there should be no way to improve one's consumption or one's work life at the expense of others. There should be no opposed classes, nor even opposed individuals, at least in any damaging, persistent structural sense. This can't be achieved by market allocation where everyone buys cheap and sells dear and nice guys finish last. This also can't be achieved by central planning, where we do what others decide we must do. I interject, I know that quote nice guys finish last. I'm pretty sure it came from a guy named Leo D'Rosha who was a baseball manager, but in any case it's quite remarkable when you think about it. Nice guys finish last. Commonly believed, commonly thought valid is such a sad commentary upon society.

Speaker 1:

The chapter continues Equitable remuneration and solidarity instead point toward needing a new approach to allocation. It will turn out to be that we cooperatively negotiate outcomes to enjoy gains and endure losses together, even as we also seek work and consumption that is best suited to our personal fulfillment. We will want a new allocation mechanism like our other proposed, defining new economic features to produce solidarity and to make typical kinds of anti-sociality literally irrational, while abetting equity and delivering collective self-management. This would allow us to say that the new economy we seek would literally propel the values we favor. It is a tall order. There is another point to make in this chapter dealing with who earns what. How do we propose our new economy would handle free consumption.

Speaker 1:

Even in contemporary economies where there is little solidarity, the public sometimes allows individuals to consume at public expense on the basis of need. Since we believe one of the merits of an equitable economy is that it creates the necessary conditions for attaining humane economic outcomes, and since we wish to incorporate features designed to build solidarity in our allocative procedures, we can reasonably expect considerable consumption on the basis of need. This will likely occur in two different ways. First, particular consumption activities such as healthcare, education or public parks may be deemed free to all. This would not mean that they have no social costs or that they should be produced beyond the point where their social costs outweigh their social benefits. We don't want unwanted medicine, training or parks. Rather, the point is that individuals would not be expected to reduce their requests for other consumption activities because they consume these free goods. On the other hand, of course, the average individual consumption per person will drop when society as a whole consumes more free goods. For example, if we produce more healthcare, education or parks, overall we have less productive potential left for everything else.

Speaker 1:

Basically, everyone who benefits from their availability presumably pays for free goods equally, due to the reduction of other outputs available, regardless of the direct participation in consuming the free goods. This occurs on the assumption that the benefits of the consumption are generalized or that, with medicine say, the costs ought to be universally apportioned rather than penalizing those in need. Of course, these, like other details of future economic choices, would emerge and evolve in light of lessons from future experience. Likewise, what items should be on the free list would be debated, presumably, in consumer federations, but medical care is an obvious example. Second, presumably people will also be able to make particular requests for need-based consumption, to be addressed case by case Occasionally. For example, individuals or collectives might propose a consumption request above the level warranted by their income, accompanied by an explanation of what they regard as a justified special need. These requests would presumably be considered by relevant consumer councils and either approved or rejected. If approved, for example, the costs might be spread over the population of the council approving. The councils decide as usual.

Speaker 1:

The other deviation from income for duration, intensity and owner-ness of socially-valued labor occurs for those who cannot contribute socially-valued labor for reasons of health, age or whatever else may be the case. In that case we can guess that any humane future economy would provide a full income, with society essentially collectively subsidizing those unable to work. Presumably the desirable economy we are seeking would decide to do likewise. I interject when I say we can guess, I am saying we are talking about details that will reflect contingent conditions and preferences in the future, and we can guess what those might wind up being, but not prescribe, much less now demand, how they will play out. The chapter continues. It has been a long survey. Do we really want equity, not in a philosophical debate, but in real terms, in real situations? Since our answer is unequivocally yes, we finally arrive at our proposal for what we have called equitable remuneration, after deductions from the total social product, for free goods, for income for those who can't work and for agreed-upon investments. We should allot income, which is a claim on the remaining social product, in proportion to the duration, intensity and owner-ness of the socially-valued labor each worker contributes.

Speaker 1:

Another question that we mentioned briefly earlier now arise. We refer repeatedly to socially-valued labor, but what determines whether this labor or that labor is in fact socially-valued? What lets us do that which is socially-valued and avoid that which isn't? What lets us remunerate the former but not the latter? More broadly, having to this point proposed new property, decision-making, division of labor and income norms and relations, is there any way allocation can abide and actualize our emerging proposal? Can workers and consumers interconnect without compromising our emerging commitments? Can allocation not subvert and indeed support the features already proposed? Can allocation promote self-management, solidarity, diversity, equity and ecological sustainability, while it sensibly determines and apportions the inputs and outputs of economic activity? That is our next focus. First in a chapter on markets and central planning, each of which options we reject. Then in a chapter on participatory planning, which option we propose and advocate. And that said, this is Michael Albert signing off until next time for Revolution Z.

Income Distribution and Economic Equality
Meritocracy and Fair Distribution in Economy
Efficiency and Equitable Remuneration
Equitable Remuneration and Job Choices
Perverse Incentives and Remuneration Norms
Challenges of "From Each to Each"
Equitable Remuneration and Allocation in Economies