- McJobs and Workers -

profit is STILL theft

Posted by: Flint Jones ( IWW, U$A ) on November 30, 1998 at 13:22:58:

In Reply to: profit IS necessary posted by Mike Bacon on November 28, 1998 at 19:55:42:

Mike: who btw provide JOB SECURITY to all the staff there because we TRADE MONEY in EXCHANGE for food and service.

Flint: Well nothing about the relationship of trade requires the creation of PROFIT. Mike, you work at a bank, right? So I'm sure you understand economics very well. PROFIT is the difference between NET SALES and NET COSTS. It isn't part of the repayment of loans, it isn't part of other capital expenditures, it isn't wages or salary, it isn't the cost of expansion of existing enterprises (though this sometimes can be the case). What PROFIT supposedly is a return on investment. By providing capital, most commonly represented by stock in larger corporations, the owner expects to receive a dividend of the proceeds after the cost of operations. So whats the problem with profit? Its theft. The current finanical situation has the majority of the wealth owned by the minority of the population. 1% of the U.S. population owns 43% of all wealth. And this ownership of wealth not only represents their ability to almost completely control access to capital, but makes it very difficult to start your own business without their "help". If you wish to buy land to build your McDonald's franchise, somewhere along the line your buying land from some of that 1%. If you want to purchase ovens or stoves, then your more than likely buying from one of the factories they own, if your looking to buy food to cook your buying from agriculutral corportions they own. And from everyone one of their enterprises they are recieving a dividend of profit. On every sale, they expect a larger and larger cut. They continually work to decrease wages and benefits across an the economy. They work to lobby parliments and congresses to errect and modify more legislation that ultimately aids in the increase of their profit margins.

Mike: No store is going to agree to surrender 100% of the profit to pay employees' salaries and give generous perks like TV in a breakroom, an all-you-can-eat buffet, and a cappuciano bar on top of that. As for "employee-owned" franchises, there will be many issues that will have to be agreed upon amongst yourselves to make 'em work. If you don't leave enough revenues in your store, it will go south and fast! But if you guys ever do open such a venture, I guess yall will just have to find out for yourselves that profit IS necessary.

Flint: Your clearly here confusing PROFIT with REVENUE. REVENUE is NET SALES. The surplus difference between NET SALES and NET COSTS instead of going into PROFIT, can be divided among the workers, or perhaps put into expansion on the store. The difference here is that workers could democratically decide what to do in a worker-owned co-operative, but under single-ownership where profit is extracted the owner (or the CEO, or Board of Directors) makes that decision with little consideration even to the wishes of their employees. Basically, you could look at a Worker-owned co-operative as similar to any other business except that every employee is a shareholder (and holds an equal number of shares as their fellow workers). This is certainly a much more fair, just, and democratic way of handling it.

Now the IWW, advocates abolition of the wage system. That is one in which PROFIT is extracted from the work of workers by owners. One solution is worker-owned co-operatives. Another would be a commune. Another would be growth in which people are truly self-employeed. The Labor theory of value is quite useful here in which the value of any product is based on the labor that was needed to create it. The current pricing system is based on supply and demand, which are artifically controlled by those who own everything. Now, Labor theory of value has its own problems... for instance it lacks an environmental cost (but so does supply and demand, and capitalist ownership).

As you rightly point out, no business is going to surrender 100% of their profit to its workers. Why? Because capitalists are quite happy to continue to extract profit from the work of others. Thats why they one could call them parasites. Its not a symbiotic relationship. The only way we can work towards even getting a little more of our fair share is by organizing together to force our employer to give up a little more of what is already justly ours. What are the tactics? Largely those of economic warfare... the idea that the capitalist is unwilling to loose profit, and is willing to loose a little profit instead of a lot of profit. Strikes are basically seeing who can outlast the other. Ofcourse, capitalists are in a much better situation, all they are loosing is profit which while it may have an effect on their standard of living they don't run the danger of becoming homeless and hungry like someone who lives by their work (instead of living on the works of others). The IWW also suggests workers "strike on the job", by withdrawing efficency workers can hurt the owners profits much more while still recieving their wage. Now there are obviously limits to both these strategy, particularly since workers can be fired for much of this, and scabs can be brought in. Further eventually it reaches a point where a Capitalist simply refuses to give up more profit and would rather sell the business. Another strategy is the General Strike, the idea in that whole sections of the economy, whole metropolitan areas (even the whole world) could simply cease work for awhile to demonstrate who really controls the economy. After that, they could begin running the economy in their interests and not those of the capitalists. We'd simply refuse to give them any of our wealth, and base ownership on use.

Unfortunately, governments largely exist to protect the interests of the powerful... and in the US that means the wealthy. When their interests are threatened they usually resort to the stick instead of the carrot. Its long been a part of history and dealing with violence induced by the upper classes I think is still a problem we will have to overcome. In our non-violent revolution, they are almost assured of using violence to stop it. I still think non-violence (which doesn't preclude self-defense) will be the only manner that we can bring about a just society. Violence is the tool of tyrants.

Wow... this has really gotten long and I didn't mean to wax so philosophical.

Anyway, a bit more of a practical problem for worker-owned co-operatives is their lack of access to start-up capital. After all, what bank would give loans to a co-operative venture (A few do though). Then they have to compete with companies that treat their employees poorly, while the co-operative is its employees. However, there are a number of successful co-operative efforts around the world, some of which are multi-billion dollar enterprises (like the Mondragon Co-operatives). They offer an important model of how we can organize a more just economy. However, alone they can't eliminate the inequalities brought about by the concentration of wealth. We need unions for that.



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