October 12, 2014

Capitalism and Discrimination between Workers

Prabhat Patnaik

THERE is a peculiar paradox at the centre of capitalism. Since it is a system that institutes free mobility of workers between sectors, real wage rates should be equalised across occupations which are not too dissimilar from one another in terms of their arduousness, or hazardousness, or unpleasantness, or skill requirements, or intensity of effort etc. In other words, more arduous, more hazardous and more unpleasant jobs should be better paid compared to less arduous, less hazardous or less unpleasant ones, other things being equal (i.e., per unit of homogeneous labour-time). But in reality under capitalism, more arduous and more unpleasant jobs have always been lower paid. The obvious example is menial jobs which get paid the lowest wages even though they are far more arduous and unpleasant. That is the paradox. Some may think that menial jobs require less skills, i.e., that the work on such jobs and work on other jobs cannot be subsumed under the same category of “homogeneous labour time”; or, more generally, that all such comparisons which apparently relate to homogeneous labour time, are actually looking at jobs involving skill differences, so that the existence of wage differences, as it reflects skill differences, constitutes no paradox at all. But this argument is untenable for two reasons. First, even what is considered “menial work” requires skills no less than several other jobs with higher wages. And second, even assuming that other work does require “skills” while menial work does not, these “skills” in many cases are acquired “on the job” itself, in which case the wage rate of a new entrant to such jobs should be no higher than that on menial work; but this too is untrue. Adam Smith is the first to have propounded the theory of “equal net advantage” which held that the free mobility of labour characterising competitive capitalism would ensure that the balance of advantage over disadvantage in different occupations got equalised for homogeneous labour (i.e., after accounting for skill differences). He had specifically listed five different “circumstances” for the departure of money earnings from uniformity across different employments: “the agreeableness or disagreeableness of the employments themselves”; “the ease or difficulty of learning the trade”; “the constancy or inconstancy of employment”; “the degree of responsibility attached to the calling in question”; and “the degree of uncertainty of success”. One can add others to this list, but none of these can explain why more arduous and unpleasant menial occupations are paid less than others, a fact that was noted by John Stuart Mill who considered it paradoxical. How does one explain this fact? WAGE INEQUALITY The obvious answer, almost a tautology, is that there is no “free mobility” of labour across occupations. Adam Smith himself had noted that such free movement did not exist in Europe at the time of his writing which explained the much larger wage differences across occupations that actually obtained then: “the policy of Europe, by not leaving things at perfect liberty, occasions other inequalities of much greater importance”; and what he had written had historical validity at that time. But why should such wage inequality persist when “laissez faire” supposedly had come to prevail? To get an inkling of an answer we should perhaps begin by looking at the Indian economy. There can be no job more unpleasant than manual scavenging which alas persists to this day in India. The obvious question that arises is: why should manual scavenging be also among the lowest-paid occupations? The answer cannot lie in the mere fact of unemployment. Such unemployment, while it might explain why some people are forced to take up this employment, would not explain why it is so ill-paid. The answer lies above all in the fact that some people are “locked into” this occupation and are deliberately excluded from others because of explicit or implicit discrimination against them. More generally, under capitalism, menial jobs, despite being arduous and unpleasant, are the worst paid, because some people do not have free labour mobility and are “locked into” such jobs, owing inter alia to explicit or implicit discrimination against them. This absence of labour mobility must be distinguished from what Adam Smith was talking about when he referred to the “policy of Europe” not “leaving things at perfect liberty”. He was talking about the general and pervasive absence of free labour mobility in the pre-laissez faire era because of the existence of guilds and other restrictions. But even when free labour mobility has been introduced, even when all juridical restrictions have been removed from the movement of labour from one job to another in quest of what Smith had called higher “net advantage”, even then some segments of the labour force, despite enjoying this de jure freedom, do not enjoy the de facto freedom of movement, because they are “locked into” particular occupations, one important reason for which among others is the explicit or implicit discrimination they face. If the existence of this remarkable phenomenon, where the most arduous and unpleasant jobs also happen to be the worst paid, is because of the “locking in” of some persons into these low-paid occupations, then an important corollary follows. The fact that capitalism has always been characterised by this phenomenon, only suggests then that the “ideal” state of free competition capitalism, where everyone enjoys both de jure and de facto free mobility across occupations, has never been realised in practice. It is worth recapitulating here a point that was made earlier. Unemployment, or the existence of a reserve army of labour, does not per se explain this violation of the Smithian prognostication about free competition capitalism that it achieves “equal net advantage”. True, the existence of labour reserves makes labour available for arduous and unpleasant occupations and even prevents mechanisation in these spheres. But the question being asked is not why people do this work, but why people do this work when wages in this activity are lower than elsewhere. And for answering this latter question the sheer existence of unemployment is not sufficient. There must be some factor preventing the movement of these workers into other activities; they must in short be “locked in” to these particular activities, for some specific reasons, even though the economic regime in general grants them the juridical freedom to move into other spheres. DIVERSE REASONS The reasons for such “locking in” may be diverse. In the Indian case, caste oppression constitutes the main reason for it. In a good deal of academic research these days, discrimination against the Dalits is sought to be established by showing that in identical occupations they are paid less than other segments of the work force. When this actually happens, it certainly establishes discrimination. But even when this is not directly observed, if there is a concentration of Dalits in particular occupations, which despite being unpleasant and arduous are lower-paid than other occupations, then we can infer their being “locked in” to these occupations, and hence discrimination against them. And this latter phenomenon is far more pervasive in the Indian economy. Similar discrimination has characterised capitalism elsewhere as well. In contemporary Western capitalism, immigrant labour typically occupies such menial jobs and is locked into such jobs because of the discrimination it faces in entering other jobs. Thus the most arduous and, paradoxically from a Smithian perspective, the worst paid jobs, are taken up by migrants from the West Indies and the Indian subcontinent in Britain, from Algeria and other African ex-colonies in France, and from Turkey in Germany (though the recent wave of immigrants from eastern Europe may have displaced some of them in such jobs). Even among such discriminated groups, there are specifically discriminated segments that are often “locked in” to the most unpleasant and degrading jobs, and that too at the worst wages. Thus, even among say the South Asian workers in Britain, immigrant women often take up the most unpleasant and the least-paid jobs. Besides, to say that particular groups are “locked in” to menial occupations does not mean that there is no change over time, no social mobility whatsoever. There no doubt is; but whatever be the complex dynamics of social mobility of a particular group that happened to be discriminated against at a certain time, or of particular segments within that group, the existence of some discriminated workers manning the most unpleasant, and yet the least paid, jobs, is a perennial feature of capitalism. But while this is clear today, the question may be asked: has this always been so? In earlier times, before immigrant labour from the colonies, ex-colonies or dependencies, started pouring into the advanced capitalist countries, there were other discriminated groups among the workers, e.g., the Irish immigrants in Britain. The mass out-migration from Europe in the nineteenth century to the temperate regions of white settlement like Canada, Australia, the United States, New Zealand etc., no doubt provided some relief to this “locked in” segment of the work-force, and may have reduced the wage differentials across occupations, even while keeping the average real wages themselves above what they otherwise would have been (with the higher reserve army of labour that would have existed in the absence of such emigration). An important difference between advanced capitalist countries and India would then appear to lie in the fact that there is some change over time in the composition of the “locked in” segment of the work-force in the former, while in the latter the inheritance of an ossified caste system, together with the absence of any such emigration possibilities (and the inability of capitalist development to make a dent on the massive labour reserves), keeps the composition of the “locked in” segment more or less unchanged. Two important conclusions follow from the foregoing: first, capitalism appears to have always maintained an “underclass” among the workers (which is not synonymous with the “lumpen proletariat”). The notion of a “free competition capitalism” where labour mobility equalises the real wage rate for homogeneous labour time, even though this real wage rate is kept close to a historically-determined subsistence level because of the existence of a reserve army of labour, is an “ideal” that has never got realised under actually-existing capitalism. And second, capitalism, it follows, acts to segment and break up the working class in two quite distinct ways: one is by promoting competition among workers even within a regime of “free competition capitalism” that Marx had analysed at such depth; the other is by breaking up the working class into an “underclass” of discriminated workers and the rest. The working class movement in practice has had to reckon with both these forms of segmentation in its long history of mounting a challenge to the hegemony of capitalism.