back to article Big tech firms holding wages down? Marx was right all along, I tell ya!

We should have more Marxist analysis of the tech business. So here is some, looking at the manner in which the major firms of Silicon Valley are being accused of perpetrating monopoly capitalism upon the rest of us. The full story in all its tedious detail is over at Pando Daily*, but the basic allegation (and yes, it is all …

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Hmmm...

All the tech companies are accused of is not >poaching< staff from each other. It doesn't say anything about them refusing to employ staff from other firms who apply for a job with them, which is different. Firms not poaching staff from one another, either because they don't know how or because of 'gentleman's agreement' is likely the norm in most industries.

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Pint

Like it..a lot

Great bit of writing and astute observation, put into layman's terms - 10% fine? should be more like 20%

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Anonymous Coward

And what will be their eventual punishment? A settlement, without admission of any liability, that pays off the lawyers and perhaps chucks a token amount (say 10% of the money they made by illegally keeping wages low) towards the government or a few of the workers. Ain't capitalism grand.

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Anonymous Coward

competition - we're all schizo

Everyone wants it when it's between their suppliers. No-one wants it for their customers. So our economically rational behaviour is schizophrenic concerning competition, trying to get support of legislators to increase regulation to prevent others competing with us in relation to what we sell, and in reducing regulation in order to increase competition concerning what we can buy.

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Pint

Labour theory of Value

There is nothing particularly Marxist about objecting to price-fixing cartels; if anything cartels and other corrupt practices are a left-over from feudalism. Economist rightly point to the damage that these cartels do to the efficient working of markets.. morally corrupt corporations might start with market abuse, but pretty soon they’re selling pictures of your half-naked children to fizzy drinks companies (yes, Facebook, you).

Where Marx has something to say, is in the theory that Value is only due to the Labour that went into making it (gold is expensive, dirt is cheap).. and nothing else (owning the gold mine doesn’t count). Marx calls profit ‘surplus value’… which in IT terms means “all the money, that all the internet behemoths makes, should be shared by the workers who create the software”!

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Re: Labour theory of Value

Yeah, that's one bit of Marx that is wrong unfortunately. It's entirely possible to construct a logical chain where this should be true but it just isn't the way that human beings actually act.

The way we do act is Adam Smith's theory of value: we value things at the value that they give to us. I value a corkscrew rather more highly than my teetotal aunt does for example.

Given that we don't actually value things according to the labour that went into their production we can't then try to plan our value system on that labour. Just doesn't work.

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Gold badge

Re: Labour theory of Value

Stephen Channell,

The problem with Marx's idea about the value of labour is that he was trying to use it to make a political point. Rather than construct a theory of how the economy works.

In your gold example, without labour that dirt is worthless. But if the capital isn't allowed to make its share of the profits then there won't be any capital. Just try mining for gold without drills, air pumps, metal pit props and all the other expensive things required to make a mine...

Also, by the same idea, if a car is entirely built by robots, the manufacturer should give it away free!

The trick is to try to make sure everyone gets a fair share. Then you too can become a capitalist. That's what a pension is after all. You stick some of your wages in a fund for 40 years, and they should have doubled every decade or two, ready for you to retire and spend the lot.

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Re: Labour theory of Value

There's recursion involved, you said:

"In your gold example, without labour that dirt is worthless. But if the capital isn't allowed to make its share of the profits then there won't be any capital. Just try mining for gold without drills, air pumps, metal pit props and all the other expensive things required to make a mine...

Also, by the same idea, if a car is entirely built by robots, the manufacturer should give it away free!"

The Marxist point is that the 'expensive things' (the drills, pumps et al) are also produced by labour too and take their Marxist value from that. Likewise the robots that build the car are themselves built by labour somewhere in their 'blockchain' (as it were) and will need labour to maintain them so the car isn't 'free' at all...

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Anonymous Coward

@ Stephen Channell

"which in IT terms means “all the money, that all the internet behemoths makes, should be shared by the workers who create the software”!"

Except of course if you believe in Richard Stallman and FOSS in which case the programmers deserve nothing and all profits need to accrue to the managers and investors. Sounds fair to me - or would, if I were a fascist.

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Re: Labour theory of Value

The Marxist point is that the 'expensive things' (the drills, pumps et al) are also produced by labour too and take their Marxist value from that.

That's precisely the point. The labour that built the mining equipment wants to get paid. Someone has to pay them. Otherwise they won't build the stuff, and the mine can't be built.

Unless the equipment workers are willing to give the mine workers credit. If so, what are they going to live on in the meantime until the gold starts to flow? If they do it from savings, then they become capitalists - and will probably want a profit from the deal, to make up for the risk they've taken with their capital.

Now of course you could have a system where the government does all this on the workers' behalf. So they tell the mine equipment builders to make it, and the miners to dig. Paying them both from debt or cash, until the mine is profitable. Planned economies like that have been tried, and turned out not to be very successful.

One of the problems with all governments, democratic and otherwise, is that they tend to stop operating on the workers' behalf, and start operating on the governments' behalf. Which can vary from subtly different to the workers' interests to purges and gulags. Democracies win here though, as they can usually change without having to shoot people.

Actually planned economies can be quite good at things like mining, at least for a time. Heavy engineering can be quite predictable, so the planners have a chance of making a good shift of things. What central planning can't do is pay the workers. Sure it can give them money. But they have to buy things with that money. And workers/consumers tend to be a lot more fickle, and less predictable, than heavy industry. So while the government might successfully work out how many mines to dig, and how much kit to equip them with, it'll never work out how many sandwich shops to build, or TVs to manufacture.

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Anonymous Coward

The flip side of Silicon Valley (and indeed the US)

Is that wages in the Tech sector are high. In my experience (visiting head office in Texas, for example), people doing comparable jobs to their UK counterparts, could easily earn twice as much (and the UK based business unit was, at the time, by no means a poor payer). Don't get me wrong; it's great that bright young things can leave US universities, and do extremely well, but I don't see how wage is any less subject to boom and bust than any other area of the economy.

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WTF?

I know. Not many people take Marx seriously these days

I suggest you get out a bit more !

Or even google "economist marx was right"

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Anonymous Coward

Re: I know. Not many people take Marx seriously these days

Let the free-marketeers dwell in their delusional bubble, where efficient markets operate freely and without friction and every single market participant has at their disposal perfect, complete and always correct information, which they subsequently use to make a perfect decision driven by their own self-interest.

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It is exactly the flip-side of unionism

Unions gang together to drive wages up, way past they should be.

Some corporations gang together to drive wages down.

Both use the same principles and are equally morally bankrupt.

The reserve army theory works well for unskilled and low-skill work where you can fire Joe on Monday afternoon and have Pete doing his old job as well by lunchtime Tuesday. Tech (the real stuff) really isn't like that.

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In soviet Russia

The amusing irony was that the communist government of Soviet Russia did exactly this sort of wage fixing on a continental scale.

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More likely accidental cartel behaviour.

During my 30 odd years of working in technical IT, I've seen the market move from the buy your skills at any price to we pay the market rate for skills for virtually every employer, and every job. Sure there are still a few skills or people that buck the trend but, companies in general like to pay a median market rate for new hires. This is probably driven more by HR policy than any collusion between companies. An HR guru says it's the way to go, and companies follow.

Currently the drive is to deskill and drive down the costs, so highly skilled, multi-skilled and experienced staff are being replaced by cheap single skilled hires, which is great news for Microsoft.

BTW Marxism is a fine political and economic theory, which works, right up until you add people. People are the downfall of every political and economic system you care to mention. Democracy at least allows us to change to a new system we can destroy every few years.

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