On the Labor Theory of Property: Is The Problem Distribution or Predistribution?
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Much of the recent discussion in progressive circles [e.g., Stiglitz; Galbraith; Piketty] has focused the obscene mal-distribution of wealth and income as if that was "the" problem in our economic system. And the proposed redistributive reforms (e.g., changes in income, wealth, and estate taxes, increased minimum wages, income caps, and universal basic incomes) have all stuck to that framing of the question. To put the question in historical perspective, one might note that there was a similar, if not more extreme, mal-distribution of wealth, income, and political power in the Antebellum system of slavery. Yet, it should be obvious to modern eyes that redistributions in favor of the slaves (surely a good thing), while leaving the institution of owning workers intact, would not address the root of the problem. The system of slavery was eventually abolished in favor of the system we have today which differs in two important respects: (1) the workers are only rented, hired, or employed (i.e., the employer/master only buys some, but not all, of employee's labor); and (2) the rental relationship between employer and employee is voluntary. Today, the root of the problem is the whole institution for the voluntary renting of human beings, the employment system itself, not the terms of the contract or the accumulated consequences in the form of the mal-distribution of income and wealth.