4.—Limitations of the Effect of Competition on Wages.
All Socialists and most labor reformers assert that competition as an industrial force is destructive of the interests of the working class, and believe that by its elimination alone can the laborer become free. A clear analysis of the working of competition, its effects and limitations, does not sustain this view. To the absence of competition, as before intimated, we may with equal reason charge the economic disabilities of the wage-workers. As in other errors of Socialist economics, I believe that this one is derived from the orthodox expounders of political economy. Competition is assumed by them to be in perfect operation under what they are pleased to accept as industrial freedom in modern capitalistic society. Production and exchange are conducted in accordance with this principle, which operates with no less force in the realm of distribution. But, while we need not dispute the motive power of competition in capitalist production and exchange, when it comes to the distribution of wealth and the determination of the laborers’ share no such general principle prevails. Yet the economists assume its existence, and thereupon justify the present result of distribution and wage system, while the Socialists find fault with distribution and the unjust reward of labor, and denounce competition as the source of the evil. At this point begins the confusion of ideas on the subject. Atmospheric pressure is equal to some fifteen pounds to the square inch, and no evil results, because it is distributed equally from every side; but once let this equality of pressure be set aside, and the force of atmospheric weight at once becomes dangerous. In theory competition with the economists is like the normal pressure of air,—it is perfect when acting in all directions; but in reality it never is so,—a fact they too often forget. Moreover, it is impossible that competition could fulfil the theory under any conditions that have ever existed. Certainly the present system is far from such a consummation. So that those who exalt competition as a perfect economic regulator and those who assail it as the cause of existing wrongs are equally under a delusion.
A narrow view of the subject is displayed by those who on seeing that low wages are connected with a particular aspect of competition, attack the whole principle in all its relations and demand its abolition, without studying the other elements that affect the price of labor and determine the extent of the operation of competition itself. So that, instead of treating a primary and natural force inseparable from the free relations of men as the source of the robbery of labor, a broader view would reveal monopoly in its various forms propped up by authority, restriction of industry and the demand for labor chiefly through an inadequate medium of exchange, as more potent elements in the case.
The limited scope of competition under present conditions in the problem of securing the just reward of labor has been noted by a few economists. While it is practically inoperative between different industrial grades, it is unduly intensified between the members of each class, especially in the lower ranks of labor, wherein supply is artificially maintained beyond the effective demand and wages at the lowest point. Education, social position, and privileges arising out of the command of wealth determine the degree of competition to which the members of each class are exposed. Differences of income, except within the same industrial grade, are due neither to general competition nor the economic value of the services rendered. The higher grades have a monopoly of advantages not possessed by the classes below, which serves to explain the want of relation between the utility of services and their reward. Hence this social monopoly depending on the monopoly of wealth tends to defeat competition and prevents the equalization of the benefits it would otherwise produce.
This view is, however, applicable only to a transitional stage, and tends to become less important with the progress even of capitalist society. In America it is of less account than in England, though competition there continually grows more effective. Education as commonly understood has become of less value in earning a living than the ability to perform almost any kind of manual labor. While no less requisite than formerly, it is now but an adjunct to some sort of specialized training, and, as mere education in the academic sense, has no market value except in pedagogy. A literary vocation is worth less from the pecuniary standpoint than hod-carrying, taking, not the rare specialists whose big earnings are very exceptional, but the combined returns of all who follow it for a living. Owing to the wide facilities open to almost all classes for acquiring the usual medical or legal training, these professions, reckoning all who are in them, compare unfavorably with the average earnings of a skilled mechanic. In Germany and France the glut in the professions is still greater than in the United States. Such are the leveling tendencies of a more general competition. Not the grade or calling that will in future count, but the individual qualities of each in the earning of a livelihood. Specialists in any branch whose services are of great utility in the conditions at the time prevailing, men of genius, great organizers, orators at the bar, and all whose peculiar qualifications supply excessive and intense needs must as at present, however great be the economic reforms, secure to themselves remuneration phenomenally high. I cannot accept the usual Socialistic view, not uncommon among Anarchists, that inequalities of this kind will disappear.
The wages these classes obtain for their services are not likely, even under much freer conditions than now prevail, to be brought down by competition to the common level; though average work not specialized into individual monopolies must inevitably become equalized in value and remuneration. The effects of competition with regard to commodities may with safety be postulated, but not in the case of men. To identify labor and wages with commodities and their prices is the source of much confusion in theories on the subject. Nearly all the economists have done so, and with their
economic men travestied the method and purpose of scientific investigation. Karl Marx, though setting up as a critic of the classic and vulgar teachers, in working out his special theory adopts most of their pseudo-laws, treating labor and commodities as economically identical and subject to the same laws; while in the parts of his work where his theory is not under discussion he recognizes this and many other fallacies,—such, for example, as the reduction of all labor to a quantitative standard measured in hours of work,—which are essential to the elaboration of the doctrine of surplus value.