Thread by @RagingCorvid, Let's do a thinking experiment. [Long thread]Why do businesses hire new employees? [...]

Let& #39;s do a thinking experiment. [Long thread]

Why do businesses hire new employees?

Answer is pretty obvious. To 1. Expand. 2. Division of labour.

Why expand? Why implement division of labour?

A: Expand to capture market share. Division of labour to increase productivity.

Why capture market share? Why increase productivity?

A: to maximise profit.

So it& #39;s not just to do something good for the community then? They always boast about creating jobs.

A: No. Profit is always the aim. And wage labour is exploitative.

How is it exploitative?

A: in many ways. But mainly, stealing value created by workers, and through alienation.

How do they steal value?

A: let& #39;s go for an example.
[Not going to use Marx& #39;s surplus value theory here, but a simpler alternative.]

Let& #39;s say you are self employed. You produce something, which after deducting all expenses, nets you RF 6,000 a month.

You know there is demand for your product, because you often have to reject orders due to backlog. And 6000 is hard to live on. So you decide to expand.

So you buy some extra tools and hire your first employee. You tell them you will pay them 6000 a month as a salary. They grumble but accept. Jobs are hard to come by.

You quickly train them in how to make the product and begin your first month as a capitalist.

You both work the same amount of hours and at the same rate. You forecast profit before wages to be rf13,000. But it turns out to be rf11,000. After the rf6,000 wage is paid, you only made rf5,000.

So before you got 6k. Now it& #39;s 5k. You are pretty bummed out, but decide to keep the employee for another month.

Since both of you worked the same amount, the value you both produced would be 5.5k each. So the employee got an extra 0.5k!

You both work equally hard the next month, but the profit before wages came out to 10k this month. :( After paying 6k salary, you only got 4k. Can& #39;t live on 4k, so you tell your employee that you are reducing their wage to 5k a month. You both fight a bit but they accept.

Here you both got 5k each. Full value of each person& #39;s labour, after expenses.

From here on we will go in two situations: situation A and B.

A: The next month you received 14k before wages! After paying 5k to the employee, you got 9k profit! You each worked the same amount, so you received 2k more than the value you created, and they got 2k less.

But the demand is picking up. You decide to hire an additional worker.

So the next month, the three of you all worked hard the same amount. Profit before wages were 21k! You decide to increase wages back to 6k. This got you 9k. The value each of you created was 7k, so you got 2k more. And they each got 1k less. Now you want to divide work.

Division of labour increases productivity several fold while it also can make tasks more repetitive and boring. The employees protest, but demand is currently souring, so you give them little choice. You and the workers divide the production process into three.

The next month, with increased productivity, profit before wages rose to 30k! You pay the workers 6k each and got to take 18k for yourself. Each produced 10k in value though, so you have taken 8k more, while the workers each got 4k less. Finally, you think, it& #39;s time.

You hire an extra worker to do the tasks you did, and step away to perform the overall management of the operation, which is mostly to make sure the workers stuck to deadlines. The 3 employees produced the bulk of the value and the next month the business again raked in 30k.

You pay each worker 6k, while you get to keep 12k. :) Good decision to expand. And you can invest more to hiring more workers if need be, and take a bigger and bigger cut each time. Of course the bulk of the work is done by workers, yet you make the most.

B. Second situation. You have one worker employed. Profit before wages was 10k in the last month, so you decide to reduce your employee& #39;s salary to 5k. And you got 5k profit. You still hope business will pick up the next month.

But it was not to be. :( The next month profit before wages only came to 8k. After the 5k salary is paid you only got 3k. You now have to borrow from family to sustain yourself. Though both produced equal value, the worker got 1k more than they produced, while you got 1k less.

You recognize that a number of customers are loyal to you, so you can keep running the business, but only if self employed. You finally lay off the worker and go back to being self employed. The next month you made 6k. All to yourself. The expansion failed but you survived.

So let& #39;s analyze the two situations. The business can keep running so long as the owner gets equal to or greater than the value they themselves produced. But if it repeatedly makes less than the value produced, then there is no incentive for the owner to have extra workers.

Thus a business that cannot exploit the workers for the value they produce quickly downsizes or goes out of business. But those that can, can expand exponentially. The more they steal from workers, the easier to expand.

But what about risks? Don& #39;t the owners take risks?

Well, how does one quantify risks? All the above values are profit before wages, so the expenses for loans, depreciations, accrued payments, bills, etc have already been paid. The owner takes new risks when taking the decision to expand, such as buying new tools.

But in subsequent months, the cost of these tools get paid off. And no new risks are taken in subsequent months. But the most important question is: why should workers pay for the risks taken by the business owner?
Because at the end of the day, this is the nature of the "job".

A job isn& #39;t something people create and give out of the goodness of their hearts. It is, in actuality, workers paying capitalists in value created, in return for, in most cases, a bare minimum required to sustain themselves every month.

But doesn& #39;t the workers choose to work for the capitalists?
What other choice is there? People can& #39;t live without an income. And workers have little choice in who they work for. This is why people often tolerate abuse from employers. It& #39;s not because they choose to work for them.

Big or small, all capitalist enterprises (those with employees) are exploitative. This is how classes are created. The more they steal produced values the more capital they (capitalists) can accumulate, while for the workers, the situation changes little.

Also we can see from this thread:
The owner can:
• hire and fire workers
• decide how the work is managed
• increase and reduce pay
• make other decisions.

The workers can:
• work

This is how workers can get alienated from their work, life, and family.

But there are things that can limit the capitalist& #39;s power. Employment regulations (can go both ways actually) and strong unions.

Latest Threads Unrolled: