EDITOR’S NOTE: Every society has its mainstream trend of thought and divergent currents as well. Every cultural tradition has its positive and negative sides. Every civilization needs to carry on and develop its own good tradition and learn and assimilate what is good in other civilizations. And human civilization as a whole, in today’s globalized and crises-ridden world, is in urgent need to draw from all ethnic civilizations what has been proved to be true and good through the test of time for the survival and a better future of the mankind. The following essay represents a conscientious effort along this line, one among many made by Easterners and Westerners as well.

(This essay is in two parts and will be posted in installments.

For Part I, (1), see http://www.xinfajia.net/content/eview/6081.page)

THE TEXT

II. From Single-Source Value Theory to World Capital Hegemony

     What is (are) the source(s) of commodity value is THE most fundamental one in politico-economic theory. The answer to this question defines the nature and form of social production relationships and, further, determines the political power relationship, which both in turn deeply impact the spiritual culture of a society and the world. It is the atomistic/mosaic worldview underlying mainstream Western politico-economic discourse that is the ideological root cause for the unprecedented chaos tormenting the world today. The following is a general analysis of its key fallacies and errors as viewed from the DBMDW perspective.

(1) Single-Source Value Theory

     Where does the utility value of all social products come from? Different philosophies give different answers. From the Eastern traditional perspective, which views all humanity as one and man and nature as one while not ignoring the relative independence and autonomy of the human race and of each individual, one naturally comes to the conclusion that the utility value of all social products come from the following three sources:

     a) The potential value for human use in natural resources, which is still there even after more value is added on by human beings through processing or improvement, as evidenced by the fact that wild plants and animals supported early human life for hundreds of thousands or even millions of years.

     b) The collective wisdom of all humanity accumulated from all peoples of the world through generations after generations and hidden in all production tools, equipments, skills, operation management and products.

     The above two kinds of value hidden in all social products and the profits made corresponding to these values should basically belong and go to all mankind.

     c) Individual labor, menial and mental, provided now and before by laborers on the shop-floor and by all other workers as well who provide all kinds of services to social production and to other working people. [1]

     Blinded by their anthropocentric and atomistic outlook, however, mainstream economists choose to ignore the first two sources of value, thus covering up the truth that world big capital has been robbing collective human property value for hundreds of years. And as to individual workers’ labor as another important source, they acknowledge it only in an abstract sense, thus actually recognizing capital as the only real source of value because they see workers’ labor as provided for and owned by capital.

     It is worth special notice here that the prevalent idea about “intellectual property” is another intellectual tool used by monopoly capital to rob that property from the people as the real owners. While individual inventors are entitled by their creative labor to their right as owners of their inventions, there is also a limit to their entitlement, because any invention must have been based on the accumulated wisdom of all others. But what is really outrageous is that collective human wisdom has been usurped by monopoly capital for their own interests. For instance, some Western MNCs have obtained patents for information collected from the global East and South on local medicinal herbs and, while trying to strangle traditional ethnic medicine, are reaping astronomical amounts of profits out of collective human knowledge which has been benefiting local peoples for thousands of years.[2]

(2) Incomplete Definition of Labor

     According to the DBMDW social outlook, all the following different kinds of labor invested directly or indirectly by various social sectors, including all service sectors, that are necessary for the production of all products in all industries – all such kinds of labor are interdependent, mutually complementary, hence closely related and all indispensable:

a. Front-line labor of shop-floor workers;
b. Past-labor-turned just capital (capital acquired in a justifiable way), such as savings from past wage/salary income used as investment, and just profits from such investments; [3]
c. Creative labor of scientists and technologists as embodied in new inventions and innovations;
d. The organizing, operating and risk-taking work of entrepreneurs of business ventures and/or of new product developers;
e. The work of managers running a business;
f. The work of government workers supervising and servicing society on a macro scale;
g. The work of cultural and educational workers for the personal development of all laborers (in the broadest sense as defined by the extended definition of “labor” here, same below) and all people;
h. The supporting work of all laborers’ family members for maintaining their working ability and for assisting the old and raising the young as past and future providers of labor. 

      All the above kinds of individual labor are necessary to social production and are directly or indirectly assimilated into those products as value added through their services. But those who hold the mosaic view of social-economic life would exclude all of them except front-line labor from the definition of labor and for the value added they only give credit to those businesses that directly produced them. Obviously this is unfair to all other people who have also contributed through all different channels to their production.

     Actually all those other people also deserve a share in the profits made from these products. It is difficult, however, to accurately measure the quantity and quality of labor invested in the products by each individual either inside or outside of a manufacturing business, and even more so for those from outside. Since it is impossible for a specific business to fairly pay back to those outside contributors of labor and, also, to all those outside owners of the value from nature and from collective wisdom hidden in the products (in fact, the “contributors” and “owners” largely overlapping each other), for all businesses to pay a tax for the government to distribute through different channels among those people who are short-paid or even unpaid what is due to them is a practical way to bring about justice and fairness. This distribution on the social level, as based on the three-source value theory and a full definition of labor, is totally different, however, from that based on the so-called welfare economics, different in rationale, purpose and consequence.

(3) The “Labor-Capital Free Exchange” Fallacy

    The DBMDW social view sees each individual and each social group as a specific product of infinitely diverse and forever changing social relationships and, thus, each as different from all the others. Therefore, we should not look at them as but copies from the same cast, each being exactly the same as all others. Social atomists, however, present workers and capitalists as equally free persons in the society and their relationship as one of “free exchange”  -- they choose to, deliberately or not, ignore the obvious and significant difference between the “goods” they exchange and the ways in which they pay these “goods”: As we know, labor is inalienable from the laborer and thus 1) labor is essentially immeasurable and thus 2) has to be paid with the labor-seller (laborer) kept under the direct supervision of the labor-buyer (capitalist or his agent) and 3) if the labor-seller wants to change his/her buyer, the risk will be much higher (involving family livelihood) than for the buyer who wants to change a labor-seller. Whereas, capital is alienable from the owner, measurable, and thus easier to move with less risk and not subjected to supervision by labor.[4] This sharp imbalance of power between the absolutely advantaged and disadvantaged is so obvious. How can one say their relationship is one of free exchange? Actually, this imbalance is the ultimate root cause for all the imbalances, hence conflicts and wars, and other calamities and crises in all other social relationships nation wise and world wise -- a fact the mainstream atomistic Western economics has been trying to cover up all the time.

(4) Over-Dependence on Quantification

      Quantification is based on the discriminability of things, which in turn is caused by the finiteness of the human being and his senses as the discriminating agent, because human beings can sense the world only in parts (in terms of space, time, and all other dimensions). Without the discrimination of things, there would be no quantity or quantification to speak of. Therefore, all discrimination-quantification depends on the subjective conditions of the discriminator-quantifier (as has been scientifically proved by quantum physics), and thus has always a certain degree of uncertainty and ambiguity and only has a relative significance for expediency. It should not be treated as something absolutely reliable. Over-dependence on it would lead to absurd conclusions and disastrous consequences. 

     Eastern philosophy does not indiscriminatingly oppose all discrimination and quantification, of course, as approximate quantifications in certain limited areas of human activities are indispensable to human life. What distinguishes the East and the West is: Mainstream Western philosophy is not aware of the relative and expedient nature of all discrimination and quantification, not aware of the ultimate indiscriminability and inseparability of all things but, on the contrary, views everything from the atomistic/mosaic perspective and depends overly on  quantification of everything, treating numbers and math equations as can explain and solve all problems; whereas, Eastern wisdom is more conscious of the relative nature, and the limitation, of human cognition and more able to remedy it by conscientiously maintaining dynamic balances between Yin and Yang on all levels and in all dimensions of social relationships.

     Though we can ignore many insignificant inaccuracies in our daily life, any initial discrepancies in some key areas of human society, if not conscientiously remedied through constant dynamic adjustments of important social relationships, however, will inevitably be expanded exponentially into disastrous social imbalances on the macro level (the so-called “butterfly effect”). As we will see below, the sharp imbalances in economic status and huge differences in economic gains to the tune of astronomical figures between world monopoly capital and the majority of the world’s people – this horrible gap, finally speaking, actually originates from the relatively smaller gaps between capital and labor in status and gains on the shop floor, and yet such astronomical figures have been justified by seemingly accurate and impeccable quantifications and calculations by economists. Why so? That is because, when the society is split between an enormously powerful few and essentially powerless majority with sharply antagonistic interests, any quantification and calculation can be easily manipulated and distorted. And in fact, many things in social life can only be differentiated in imagination, but immeasurable and incalculable in actuality. Technical quantifications and calculations can never solve all the problems which can only be solved by live interactions in actual social relationships aiming at regaining relative balances in real life. It is because only through this dynamic process can the limitations in human cognition and calculation be continuously discovered and remedied. This dynamic balance approach should be the basic guiding principle in governing a society, economically, politically and culturally, shop floor wise, local wise, nation wise and world wise.

     Now let us come back to political economy. As said above, duo to the physical inalienability of labor form its supplier, the value it adds to the product is essentially immeasurable. The values contributed by different people from different posts and in different ways can only be compared very roughly and the result of calculations based on such comparisons can only have, if any, very much limited reliability. More than that, it is even more difficult to nearly accurately differentiate and calculate the different values in products which originate from Nature and from collective human wisdom and those from individual human labor. All the above conditions make it utterly impossible to have labor value measured with any accuracy. The prices of labor, as quantifications of the value of this special kind of commodity, have been conditioned and outrageously distorted by the serious imbalances in actual power relations between the sellers of labor and usurpers of means of production, imbalances accumulated through a long, long history, and, so, cannot be correct and just assessments of the laborers’ contributions, not even nearly correct. 

     Hence, the mainstream economists have done the quantifications and calculations for the value of labor based on a different formula, different from that for all other commodities: They measure the former by estimating the cost needed for ensuring survival of the labor-seller and his/her family while they base the latter on the products’ utility values. Although many laborers in Western countries today (except ethnic minorities and new immigrants) are living a life above the survival level, this, however, has been possible only because the monopoly capital power of those countries have been exploiting the whole world for hundreds of years, subjecting a much larger number of people of all countries to abject poverty, deteriorating living environment, other miseries and even loss of lives in times of peace and war. Overall, they have not changed their basic formula for assessing labor value and calculating labor’s share in the gains from production – they have always tried to make it the lowest possible, just enough to keep the workers alive, compliant and productive. Moreover, the cost on the part of the laborer in the labor-buyers’ calculation does not include the loss  (cost) of a sense of spiritual fulfillment and enjoyment that the labor-sellers and their family members should have derived from their value-creating work but cannot just because of the unequal position they are subjected to in the labor-capital relationship. Indeed, in the theorizing and calculations of capitalistic economists, there is no difference at all between a live human worker and a robot!

     In short, the quantifications and calculations of a limited and arbitrary range of economic factors by the mainstream economists have merely served to cover up the following basic fact: The largest portion of product value from all three sources has been usurped by capital, especially by world monopoly capital and their comprador agents in all countries of the world.

(5) The Private (Economy)-Public (Politics) Split 

     From the DBMDW point of view, the political and economic realms of a society interpenetrate and influence each other and can never be really cut apart. But mainstream Western theorists deliberately separate and dub them respectively as “public” and ”private” arenas to show that they have a clear sense of distinction between public and private interests but actually they are only serving to cover up the mutual reinforcement between the big capital’s hegemonic power over national and world economy and its hegemonic power over national and world politics.

     As a matter of fact, any organization, whether political or economic, whether large or small, is a mini-society by itself, with its own economy, politics and culture, its own “private” and “public” aspects. While the business of an enterprise is “private” in a way (not totally, see below) from the standpoint of the larger society, it is a “public” affair so far as it affects the rights, interests and well-being of each and every human individuals working inside. And even to the larger social “public”, a “private” business should be held accountable in a way because its operation may bring about, besides possible benefits, also harm and/or cost or even disasters (externalities), not only economically but also politically and culturally, to the local, national and world community and even the whole ecosphere.

     In the same way, the “private-ness” of an individual, a family, a local community, a sovereign state or nation and the “public-ness” of a community on larger scales, and the economic, political and cultural aspects of any such community are always closely intermingled and dynamically acting upon one another towards a relative balance either in the form of a harmonious co-existence both internally and externally or in the form of a partial or total destruction. In short, there is public-ness in private-ness and private-ness in public-ness, never totally separable, except in imagination and empty talk serving some privileged “private” interests only.

     The two results of such empty talk derived from the mosaic view are: (1) Stripping “[t]he most powerful form of collective organization in contemporary capitalism -- the modern business corporation –“of “its communal status” and “treat[ing it] as a quasi individual on law”, thus exempting such a basic social sphere as the economy from application of the political principles of freedom, equality, and democracy [5] and covering up its unequal, undemocratic and oppressive conditions under the camouflage of “economic freedom”; (2) Obscuring the connection between the big capital’s political and ideological hegemony and its root -- capital’s domination over labor in the “private” economic sector -- so that that hegemonic power, which has been extended from the “private” economic infrastructure to the “public” top of political superstructure through lobbying, political contributions, public opinion manipulations during election and at ordinary times, and through other political games and tricks – that the hegemonic power so extended can pass as the result and embodiment of a democratic political process based on individual freedom and equality of all citizens, thus in turn serving to protect exploitation and oppression in the “private” economic sphere. Such is the magic of the mosaic view fallacy!

(6) The “Flat World” Fallacy

     This fallacy, also derived from the mosaic view, describes the present-day world as flat as a jigsaw puzzle (each piece representing a nation), as is typified by Thomas Friedman, the New York Times columnist, in his book The World is Flat. How has the world come to be flat?  Because, as is so said, there is no more imperial rule by the former Soviet Union, no more Berlin Wall separating the West and the East, but instead transportation and communication are much less expensive so that the world has become a huge market for free competition without any hindrance. The advocate of this fallacy turns a blind eye to the glaring fact that the Western countries have been erecting border walls, visible or invisible, to keep foreign labor from coming in freely [6] while resorting to political pressures or even wars to blaze the way for monopoly capital to flow to all corners of the world freely and grab astronomical profits. The “flat” fallacy fabricator chooses not to see the abysmal gap between the developed and developing countries and between the handful of superrich profiteers and the majority of the world’s hard-working people, not to see the no less, if not more, aggressive rule of the U.S. Dollar Empire over the world through financial, military, and ideological hegemony.

     It is true that the world should be flat in the sense that all people should work on an equal footing and all nations co-exist in harmony. This means that hegemony in any forms which dominates the world from a commanding position should be abolished and prevented. But this is only a dream so far, though cherished by the majority of the world’s peoples – IT IS NOT A REAL FACT YET! To make it real, it is of first and foremost importance to have socio-economic-political theory and practice return to nature’s way as represented by Chinese Daoist philosophy.

(To be continued:

Bring Social Science Back onto the Daoist Path, Part II: Culture Theory
Bring Social Science Back onto the Daoist Path, Part II: Culture Theory (continued) )

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Notes:

[1] For a more detailed discussion see:
    http://www.xinfajia.net/content/eview/5333.page

[2] Ben Mah: America and China, Tri-City Press, 2007, Chaps 8, 10.

[3] For a detailed explanation of “just capital” and “just profits” see:
     http://www.xinfajia.net/content/eview/5335.page

[4] Dow, Gregory and Louis Putterman, 1999, "Why Capital (Usually) Hires Labor: An Assessment of Proposed Explanations", in Blair, Margaret M. and Mark J. Roe, eds., Employees and corporate governance, Brooking Institution Press, Washington, D.C.,1999.

[5] Samuel Bowles and Herbert Gintis, Democracy and capitalism: Property, community, and the contradictions of modern social thought, Basic Books, New York, 1986.

[6] Yuzhong Zhai: The Globalization You Do Not Know About

http://www.xinfajia.net/content/eview/4159.page