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A corporation is principally designed for passive investment of capital, making it easy to put capital to work as well as easy to take it back and put it to wor

• pdonis 6y ago
  > A corporation is principally designed for passive investment of capital One particular type of corporation is, yes--the type that sells stock to passive investors. But that is not the only type of corporation. See below. > A corporation doesn't provide such reduced friction for labor. What you are calling "labor" is in fact a mixture of actual labor--meaning time that can potentially be devoted to productive work--and capital--the skills, training, and knowledge of the people doing the productive work. For most unionized workers, even the ones that are called "unskilled", most of their wages are actually return on capital. So even by your own logic, a corporation, in the narrow sense you are using the term (something that sells stock to passive investors), should be a fine vehicle for efficiently making use of this capital. However, you seem to have missed the fact that what I was describing--a "union" that was actually a corporation, selling the service of organized labor in a competitive market--is not just theoretical; such entities actually exist. They are usually called "worker cooperatives" or something like that, not "corporations", but that's just a matter of choice of words. The point is that they are a way for workers to organize collectively to properly capture the value that is inherent in their ownership of their own skills, training, and knowledge as capital, by having joint collective ownership of a legal entity that provides that capital as a service. In other words, a corporation, in the general sense of that term--a legal entity jointly owned by multiple people. > Labor is an intrinsically different kind of asset than money. Capital is not the same thing as money. And, as above, what you are calling "labor" is in fact mostly capital--just not capital that exists in tangible form as money. It is true that actual labor--a worker's time--is an intrinsically different kind of asset, not just than money, but than any other kind of asset. But a properly organized corporation owned by workers, selling their services in a competitive market, takes care of that asset too, because such a corporation does not sell the workers' time, it sells services, and it prices those services based on their value to the buyer, not how much time it takes its workers to perform them. And that is a much better way to ensure fair treatment of the workers than what labor unions currently do: allowing employers to treat workers as fungible commodities, hours of labor, and then trying to bargain about specifics of how the commodities are handled. > That's the answer to the rhetorical question I said I'd pose if anybody wanted to play semantic word games. It seems to me that you are the one playing semantic word games, not me.
  • wahern 6y ago
    > What you are calling "labor" is in fact a mixture of actual labor--meaning time that can potentially be devoted to productive work--and capital--the skills, training, and knowledge of the people doing the productive work. Technically no labor is unskilled. Trying to characterize the distinction between bargaining your time & effort vs bargaining your knowledge is difficult. And whatever the distinction, they pale in comparison to the distinctions between any kind of labor vs property, and especially labor vs money. Nonetheless, admittedly there's clearly something there because, of course, there's little demand among so-called knowledge workers to unionize. But they could unionize. As you point out, not all investors choose to invest passively, or even choose to be investor-owners (as opposed to investor-creditors), it's merely an option. Simply having the option can be valuable for a variety of reasons, direct and indirect. Furthermore, the fact that it's easier to subclass different kinds of labor is precisely one of the characteristics that make it more difficult for labor to bargain. The fungibility of money is precisely one of the characteristics that make it easier for those bargaining capital, and it's a characteristic that we deliberately enhance through special legal rules. I'll grant that "capital" vs "labor" is a socially constructed, artificial dichotomy. But all of human culture is based on artificial constructs, manifest only by our behaviors. That fact alone doesn't mean they don't exist in any normal meaning of the term. Everybody knows the distinction between an employer and employee--the employer has money, the employee has time (the value of which is a function of his skill, among other things), and they wish to exchange them. I don't think it's a sleight of hand to assume that the distinctions between employee & employer and money & labor are substantive. > They are usually called "worker cooperatives" or something like that, not "corporations", but that's just a matter of choice of words. The point is that they are a way for workers to organize collectively to properly capture the value that is inherent in their ownership of their own skills, training, and knowledge as capital, by having joint collective ownership of a legal entity that provides that capital as a service. Sure, a cooperative is a hybrid. But you do elide at least one very important conceptual distinction--ownership in a cooperative is not alienable. And of course there are technical problems with using them as a general purpose mechanism for collective bargaining of labor. So the mere fact that cooperatives exist doesn't mean they provide symmetry--not unless you restrict all investments to cooperatives or similarly restricted vehicles. There's no need to get bogged down in the distinctions between shareholder corporations, LLCs, LLPs, partnerships, cooperatives, unions, fraternal organizations, churches, non-profits, etc. Part of my original point is that these types of organizations are different, each tailored to different purposes, but that if you stand back and look at the range of options, there are more numerous and more powerful vehicles for promoting and protecting the pooling of capital than the pooling and protection of labor. And if someone wants to argue that labor (whether all laborers, or only a subset--e.g. the U.S. system excludes managers, independent contractors, religious clerics, etc) doesn't deserve exceptional treatment, they should explain why investors do deserve exceptional treatment. At least in the context of political economics and social policy, it's only when we're forced to make and defend such disparate treatment that we're forced to descend from the realm of ideology into the realm of falsifiable and generally meaningful debate. To argue that the social conflict between labor and capital is a fictional narrative simply because those categories are artificial constructs is like arguing that racism doesn't exist and needn't be addressed because race is an artificial construct. > Capital is not the same thing as money. And, as above, what you are calling "labor" is in fact mostly capital--just not capital that exists in tangible form as money In traditional discourse capital would be property, specifically property that can be put to productive use. And capitalism, at least as we might distinguish it from mercantilism or other systems with substantial similarities, only emerges with a financial system that makes capital assets liquid and fungible, which is what money represents. If I'm using loose terminology it's because the ambiguities are irrelevant. Labor isn't capital, at least not since we abolished slavery. And in any event, there are myriad other ways to distinguish labor from capital some of which I describe above--fungibility, alienability, etc. The popularity of the term knowledge capital, or the many similarities between property and labor (e.g. they're both things we can contract for), doesn't mean they don't have distinctive characteristics. -- We live in a capitalist society. Just because Marxism is bunk and modern policy discourse is infected with often incoherent anti-corporatist sentiment doesn't mean capitalism doesn't exist or that the narrative of labor-capital tension is vacuous. Marxism as a movement arose precisely because that dichotomy and tension already existed, and it emerged from the very nature of our political-economic system, such as it has evolved in the past millennia. The precise outline of the tensions and how we describe them are different as between, e.g., hyper-individualist Anglo-American and collectivist East Asian (e.g. Japanese, Korean) capitalist societies. But the same tensions are clearly identifiable and similarly consequential. They're reflected in the political reform movement in Korea, and the social anxieties in Japan around the disappearance of the salary man, both of which involve the disproportionate powers, particularly powers to dictate the terms of employment and for controlling their nations capital assets, of very large corporations.[1] The distinction between labor v capital is meaningful because the society in which we live makes it meaningful. That we can imagine systems where they wouldn't or needn't be meaningful is irrelevant. The degree to which they're meaningful and consequential, that's a different question, one more susceptible to empiricism. [1] Unions are rare in Japan, but they're rare because Japan has alternative institutions that rebalance equities. The disappearance of some of these institutions, like Shūshin koyō, has had predictable consequences.