[OPE-L:2379] the employment contract and capitalism

From: Gerald Levy (glevy@PRATT.EDU)
Date: Thu Feb 17 2000 - 09:01:18 EST

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Re Ernesto's [OPE-L:2377]:
> My view is that the employment contract is not a contract for the sale of a
> commodity (labour power or labour services) but a relational contract that
> establishes a power relation.

The employment contract is, by definition, a contract that states that in
*exchange* for the performance of labour time at the command of an
individual capitalist (or the state in the case of state employees), a
worker will receive an amount of money wages calculated according to
some formula (and, depending on the specifics of the contract, other

In either case (employment of wage-earners by capitalists or the state),
this is a *market* development. Thus, whether you wish to call
labour-power a commodity or not, there is a contract where an
agreement is made to *buy* something (the right to command the
labour-power of workers during some work period) in *exchange
for an amount of money* (generally to be paid at a later date,
i.e. in arrears).

> It produces the conditions for exploitation
> in the production processes independently of the way property rights are
> distributed.

But, are they "independent"? Why *do* workers work for capital? Isn't
the answer to that question related to both the ownership of means of
production by the capitalist class and the *non-ownership* of means of
production by the working class? Thus, property rights (and the absence of
property rights) *directly* relates to why workers enter into a
"employment contract" to begin with.

> The employer can be a private capitalist or a public company
> or a state company or whatever else. There will be capitalist exploitation
> anyway, provided the power relation is used to make workers produce a
> surplus value usable for sustaining capital accumulation. This implies,
> among the other things, that also a system based on state ownership of the
> means of production can be a capitalist system (like the Soviet Union!).

This also implies that state employees rather than being paid out of
*revenues* and performing unproductive labour, are productive labourers
who create surplus value. Yet, this seems to me to obliterate the
productive vs. unproductive labour distinction and the production vs.
distribution of surplus value distinction.

I will pass on a discussion of the former USSR at this point (although,
others can discuss it if they wish). Let me only note here that the
question of whether the USSR was capitalist is a *much more* concrete
question than the question we are discussing now. Also, let me note, that
a position one way or the other on whether the USSR was capitalist or
socialist or a transitional economy can not *determine* our perspective on
the much more abstract question.
> The basic reason why the ownership of the means of production does not in
> itself suffice to produce the conditions for capitalist exploitation is
> that the right to residual control it grants is not a right to control the
> workers but just to control the machines. These do not produce anything if
> they are not handled by workers. But then you need an institution to compel
> the workers to do what the capitalist likes. This institution is the
> employment contract.

The "institution" that compels the wage-earner to perform a certain
standard of work in the labour process is ultimately the understanding
that since the capitalist has the right to hire and fire (a consequence,
in part, of the ownership of the means of production), workers will do as
capital commands or run the risk of joining the industrial reserve army.
This does not, however, imply that workers through *collective action* do
not have any other options. Thus, the "employment contract" is itself
modified by struggle. The major reason for this potential power by
wage-earners is that one aspect of "free labour" is that they have the
right to withhold their labour. And if workers don't work, then
surplus value and profit won't happen. Of course, though, the outlawing of
the "right to strike" does not negate capitalist relations of production.
Historically, this might be explained in the following way: workers are
"free" as *individuals* to seek and quit employment; however, the state
has in many cases said that workers are not free to act *collectively* to
withhold their labour by going on strike (frequently, there is the
specious argument made that workers can not be allowed this right since
trade unions are supposedly a "monopoly"!).

In solidarity, Jerry

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