Responding to the Question: "Don't Business Owners Deserve Profit?"
Responding to the Question: "Don't Business Owners Deserve Profit?"
My response to: "The owners provide the means of production. Therefore they should reap the rewards."
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Last week I wrote about surplus value, and how profit is the value an owner steals from their workers. I’ve linked it below, but here’s the TLDR:
In a Capitalist society, workers apply their labor to the means of production (tools, factories, computers, etc.) to create value (goods and services).
In return for this value creation, the person who owns those factories, tools, computers, etc. pays the workers a wage and collects the profit of their work.
Because owners need to profit, wages will always be less than the full value the workers created. The difference between what the workers create and what they are paid is called “surplus value,” or “profit.”
Using the allegory of Vincent van Gogh’s Starry Night, I argued that owners taking profit they did not work for is immoral, and constitutes theft.
This argument raises a natural question, which was asked by a friend, as well as in the comments section of the above article. To paraphrase, the question is:
“Don’t capitalists deserve profit? After all, they provide everything the workers need to create value. Without things like warehouses, shoe-making tools, computers, etc. workers wouldn’t be able to create value. Therefore, shouldn’t the owner, who provided these things deserve some profit?”
(SIDE NOTE: I encourage you to ask any and all questions! That’s what the comments are for, so never hesitate to ask a question or share your thoughts.)
There are two things to address here. First is the issue of if owners deserve profit, which is the limitless value workers create. Second is the issue of if owners deserve compensation for providing the workers with the tools necessary for them workers to create valuable goods and services.
Do Owners Deserve Profit?
To answer this, we must clarify what profit is. It is the total value of what the workers produced, minus their wages and other operating expenses. To profit is to have the legal claim to the unlimited value the workers create. No matter how much the workers produce, the person entitled to profit gets to keep it all, minus workers’ wages and expenses. Capitalism, which gives profit to the business’s owner, views the means of production (the things that make things) as the critical ingredient in the formula of production. In my opinion, this is the incorrect view, as throughout history the critical ingredient of production has been human labor.
While the ownership of capital is an artificial and temporary social relationship that varies across societies, human labor has always been of paramount importance. Whether we look at the early hunter-gather societies, ancient slave empires, medieval Feudalism, or contemporary Capitalism, the question of “who owns things” always changes. But the necessity of human labor remains a constant.
Human labor being of paramount importance may sound odd, but that is only because it is deprioritized in our modern socio-economic structure. Picture it this way. If an Amazon delivery van breaks down, the delivery driver can still deliver the packages by walking. Yes, it may take longer, but the worker could still do it. But if the worker stopped working, the van could not deliver the packages. To prioritize the van over the worker is not only illogical but a contradiction to intrinsic human values. For example, if you found a crashed Amazon delivery van by the side of the road, what would you do first? Would you call a mechanic for the van? Or call an ambulance for the driver? Psychopaths excluded, everyone would tend to the driver, as they prioritize humanity over machines.
The Capitalist system forces us to ignore this eternal truth. Its core principle is that people are less important than the things they use. This is why it gives the right to profit to the owners, not the workers.
I oppose this organization with every fiber of my being. It is not the machines humans value, but the people operating them. It is, for this reason, I believe owners do not deserve profit.
The Capitalist stage of humanity may have been necessary to lay the foundation for the more effective and equitable stage of Socialism. But it, and its inversion of our most basic truths, has long outlived its usefulness.
“But without the owner’s tools, factories, and other pieces of property, the workers couldn’t make anything? Therefore, shouldn’t owners be the ones to profit?”
This is another question raised when discussing the issue of who should claim surplus value.
Imagine I saved your life. You had fallen into an icy river, and I jumped in and rescued you. Grateful as ever, you ask if there’s anything you could do to repay me. “Sure,” I reply. “You can pay my bar tab.” You happily agree.
Next week, I call you on Friday night to remind you that I saved your life. “I’m at the bar. Why don’t you come and pick up my tab again?” I ask. You reluctantly agree. The next week it’s the same thing, followed by the next week, and the next. To add insult to injury, each time my tab is bigger, resulting in you having less money.
One night I notice your reluctance. “You can’t get mad,” I say. “After all, if I hadn’t saved you, you’d have no money at all. You should be grateful to have what is left after you pay for my 14 Whiskey Sours.”
Though you were happy to pay for my first drink, you would likely consider the weekly requests exploitative. Yes, I did save your life, but that does not mean I should be able to charge you a limitless amount of money forever. It would also be ridiculous for me to claim I get every dollar you make, minus those used to keep you alive and at a comfortable standard of living.
It is the same with a business owner’s profit. Just because they created the conditions for work, it does not mean they should get to claim everything it produces. That privilege belongs to the workers, whose labor is irreplaceable.
This is only Part 1 of my answer to the question, “What do owners deserve?” As we covered here, it is a violation of humanity’s most intrinsic principles to believe owners deserve profit. The next installment will look at the second part of this question, “Do owners deserve compensation?”, as well as a very important context-setting on the transitionary nature of Socialism.
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