the wages of working are not age old

The Australian Financial Review, 12 January, 1999


Until the very end of the eighteenth century, the idea that human labour could be thought of as a commodity to be bought and sold in the market-place like fruit and vegetables, was unheard of. Such a revolutionary proposal ran counter to the traditional view held by working people that a man had a right to earn a living, and if unable to do so, a right to be kept alive by his community.

The creation of a free labour market, however, was a precondition for the rise of industrial capitalism. Common lands, customary entitlements and the poor law which had granted people a 'right to live' were obstacles to its establishment, and therefore had to be swept away. Unsurprisingly, laissez-faire capitalism gave birth to a new type of society - one without rights or protections for working people. Two centuries later, it is easy to forget just how the construction of the labour market early last century transformed the very nature of human existence.

From the moment it emerged, wage labour, or 'wage slavery' as it soon became known, was identified as a form of bondage which, in some ways, was worse than slavery itself. In 1767 Simon Linguet wrote that

it is the impossibility of living by any other means that compels our farm labourers to till the soil whose fruits they will not eat, and our masons to construct buildings in which they will not live. It is want that drags them to those markets where they await masters who will do them the kindness of buying them. It is want that compels them to go down on their knees to the rich man in order to get from him permission to enrich him...What effective gain has the suppression of slavery brought him?...He is free, you say. Ah! That is his misfortune...These men, it is said, have no master - they have one, and the most terrible, the most imperious of masters, that is need . It is this which reduces them to the most cruel dependence.

Karl Marx, in words written one hundred years later, made a similar observation about the effect of subordinating labour to the laws of the market. According to Marx,

the whole capitalist system of production turns on the increase labour by extending the working day or by developing the productivity, that is, increasing the intensity of labour power, etc...consequently, the system of wage labour is a system of slavery, and indeed of a slavery which becomes more severe in proportion as the social productive forces of labour develop, whether the worker receives better or worse payment.

The creation of a labour market in England was neither a natural nor a spontaneous process. It was the result of coercive state intervention, culminating in the "inhuman" Poor Law Act of 1834. The commodification of labour unleashed an unprecedented social catastrophe which would last until the 1870s when the Factory Acts, social legislation and the recognition of trades unions began to safeguard working people from the more odious conditions of industrial life. Without protection from the devastating effects of the self-regulating market, the prospects for community life, the preservation of the physical environment and a decent human existence, were limited. As Karl Polanyi explained, "to allow the market mechanism to be the sole director of the fate of human beings and their natural environment....would result in the demolition of society".

The exposure of human labour to the laws of supply and demand marks the demarcation line between 'traditional' and 'industrial' societies. From this revolutionary change in economic and social relations, class divisions and the concomitant struggles between labour and capital would come to characterise the industrial age. However, the new commodity character of human labour had unfortunate consequences given that, as Polanyi reminds us, "it is not for the commodity to decide where it should be offered for sale, to what purpose it should be used, at what price it should be allowed to change hands, and in what manner it should be consumed or destroyed". Subjected to the price mechanism, labour - which after all is a human activity inseparable from life itself - was to be regarded and exchanged in the same way as any inanimate object.

The commodification of labour even changed the way we viewed human nature. When Adam Smith argued that human society comprised individuals with an innate propensity to "truck, barter and trade" he was suggesting that the pursuit of material self-gain was the natural condition of the species. However, it was only in the nineteenth century that economic self-interest became the dominant principle of social life. And it wasn't because egoism and material gain were expressions of our inner being. Self-interest had become an institutionally enforced incentive, behaviour forced on people as the only way to earn a living in a market system. The only alternative to compliance with the rules of wage labour was starvation.

As the nineteenth century unfolded, the "view of middle class liberal economists was that men must take such jobs as the market offered, wherever and at whatever rate it offered... The residuum of paupers could not, admittedly, be left actually to starve, but they ought not to be given more than the absolute minimum - provided it was less than the lowest wage offered in the market - and in the most discouraging conditions" (Eric Hobsbawm). Paradoxically, state intervention was also required to keep the labour market 'free'. The Combination Acts of 1799 and 1800 sought to criminalise collective action by working people and discourage anyone from attempting to remove human labour from the orbit of the market.

This is precisely the same argument made by neo-liberals who claim that a more "flexible" labour market, meaning the reduction of the minimum wage below the market "clearing rate", will solve Australia's current unemployment problem. For them, a high rate of unemployment is a "matter of choice" made by privileged "insiders" comfortably in employment who refuse to let the market set their wage levels, thus keeping the rest "outside" the labour market. Labour market 'reform' is then equated with tighter legislative restrictions placed on industrial action.

On this subject, it appears that the discipline of economics has not progressed in more than 150 years. It assumes that wage labour is the ultimate destination for humanity - the endpoint of our economic and social development. No alternative relationships to those which have had such a devastating effect on human society have even been seriously considered. Economic arrangements with a short and presumably transient history are treated as timeless - as if they were the normal condition of humankind.

If, however, we accept that human beings have an instinct for freedom, and believe there is something degrading about the idea of bondage, the new millennium is likely to bring with it fresh opportunities for the emancipation of the species from the tyranny of wage slavery.