The “invisible hand of market forces” controls the economy and drives people forward to the advantage of all. This is the prevailing opinion in schoolbooks, economic seminars, party platforms, and newspapers. The reality of the global market economy paints a different picture. Even in the Industrial countries where wealth accumulates, poverty is no stranger to large segments of the population. On the contrary. Phenomenons such as the “new poor,” “old-age poverty,” and the “working poor” are well known along with the ideology of the curative market powers.
So how do you get rich? That is the fascinating question, both for those who want to pursue money as well as for those who want to fight poverty and to do so, must first know the causes of poverty and wealth.
A lottery where the chance of winning is one in two million or a quiz show in TV both operate on the principle of hope, but neither can explain how a few manage to become not only millionaires, but increasingly multi-millionaires and even billionaires, while others cannot exist on their pension payment or always have an empty account at the end of the month.
The simple commodities trade also does not explain this phenomenon. I can try as hard as I might, be as skillful or clever as possible. Commodities trade is the trade in equivalent. »A man who has plenty of wine and no corn treats with a man who has plenty of corn and no wine; an exchange takes place between them of corn to the value of 50, for wine of the same value. This act produces no increase of exchange-value either for the one or the other; for each of them already possessed, before the exchange, a value equal to that which he acquired by means of that operation. The same value, i.e. the same quantity of objectified social labour, remains throughout in the hands of the same commodity-owner, first in the shape of his own commodity, then in the shape of the money into which the commodity has been transformed, and finally in the shape of the commodity into which this money has been reconverted. This change of form does not imply any change in the magnitude of the value. In its pure form, the exchange of commodities is an exchange of equivalents, and thus it is no method of increasing value.« Even if I am successful in competition – which depends not only on myself, but just as much on my competitors – my own labor time in simple commodities trade thus limits the amount of money that I can earn. In comparison with the inevitable losers of the competition, that is a success, but it doesn’t make me a millionaire.
Ripping people off, deceiving, and cheating, trying to sell one’s goods above value by cleverly concealing their true use value is the daily business that results from the contrast between seller and buyer. But you cannot get really rich in this manner. The customers are not stupid. If they feel that you have cheated them, they won’t buy anything from you again. And theft or robbery will be prosecuted. Billionaires don’t need to resort to those means because they have a much subtler method.
In the market economy, in the free commodities trade, there is a permissible and even honorable method of getting rich. It is just as simple as it is obvious – you let other people work for you. If the amount of money that can be earned by simple commodities trade is limited by my own labor capacity and my own labor time, then I can increase my income indefinitely if I can arrange to have others work for me. If ten people work for me and I am entitled to the value of their labor, my wealth will naturally increase quite differently than if I have to rely on myself. That which was solved by direct coercion in slavery or the feudal system of serfdom is accomplished in a market economy by making labor power a commodity.
When I as an employer employ a person, I buy his labor power. Just as in normal commodity trade, here also the law of commodity exchange applies, however with an interesting feature. The commodity of labor power that is sold at value on the labor market creates value just by being used. »The use of labour-power is labour itself. The purchaser of labour-power consumes it by setting the seller of it to work.«The buyer of the commodity labor power thus uses the difference between the value of the labor power that he has paid for and the value created by using the other’s labor power that he can cash in for money. Of course this is interesting only if the value of the labor power is lower than the value that the buyer of the commodity labor power can acquire from the intensity and period of using it. The longer the working day and the more intensive the exertion, the better from the buyer’s standpoint. From the seller’s standpoint, as everyone knows, it is the opposite.
Whether you want to call the economic relationship between the “employer” and the “employee” a class contradiction or social partnership does not change anything with respect to the opposing interests. In a market economy in which needs count only if they can be paid for, he who has only his own labor power as a commodity will never become rich in comparison with the production of wealth in society. At the end of the month, despite dishwasher and DVD player, he does not have enough to live on from the sale of labor power. So he must again sell his labor power to someone who will profit from it. This may go relatively well until he is no longer needed – until he doesn’t pay off anymore, as they say. A dependent employee in this kind of commodity trade can hardly afford to be old or ill, even in the richest industrial countries of the world. So the misery of the people and the wealth of the nation go hand in hand, or better, the need to sell one’s labor power is the basis for the production of wealth in the market economy. Without the possibility of getting rich by using other people’s work, nothing would be produced. It wouldn’t be worth it.
Regarded superficially, some things often appear to be different from what they actually are. The earth is a disc, center of the world, around which everything revolves. If you delve deeper, certain phenomena can be explained.
Labor time is ostensibly paid for by wages related to time. The longer you work, the more you are paid. For work in excess of normal working hours, overtime is even paid. For piece wages, it seems at first glance as if the price for labor is determined by the capacity of the worker. The product of labor is paid; the more you produce, the more money you get.
If this were the case, then the working population should be able to purchase everything, their entire production for that month. But where do profits fit in? How was that again? How can I become a millionaire? If I work ten hours as a craftsman, I can sell the products of my labor in the market as commodities for the value of the socially required labor time for an equivalent in the form of money. I can then buy other commodities at the value of the socially necessary working time needed to produce them. But I will not become a millionaire this way. If I have others work for me and I pay them for their labor time, i.e. the value of the products produced by them, I will also not become a millionaire. I invest a certain amount of money in part of the means of production and labor time and receive the same amount in the market when I sell the products at their value. Simply selling them above their value would be nice of course, but ordinarily the competition does not allow this. And if for example everyone sold at 10% above value, nothing would be gained; the money would just be worth less. Any way you look at it, the difference between the value of the commodity labor power and the value acquired by using it is the key to happiness. »It is not labour which directly confronts the possessor of money on the commodity-market, but rather the worker. What the worker is selling is his labour-power. As soon as his labour actually begins, it has already ceased to belong to him; it can therefore no longer be sold by him.« And nothing is simpler than simply calling the purchase of labor power ‘paying for labor’. »The wage-form thus extinguishes every trace of the division of the working day into necessary labour and surplus labour, into paid labour and unpaid labour. All labour appears as paid labour.«