Within capitalism, economics plays an important ideological role. Economics has been used to construct a theory from which exploitation and oppression are excluded, by definition. We will attempt here to explain why capitalism is deeply exploitative. Elsewhere, in section B, we have indicated why capitalism is oppressive and will not repeat ourselves here.
In many ways economics plays the role within that capitalism that religion played in the Middle Ages, namely to provide justification for the dominant social system and hierarchies (indeed, one neo-classical economist said that "[u]ntil the econometricians have the answer for us, placing reliance upon neo-classical economic theory is a matter of faith," which, of course, he had [C.E. Ferguson, The Neo-classical Theory of Production and Distribution, p. xvii]). Like religion, its basis in science is usually lacking and its theories more based upon "leaps of faith" than empirical fact. In the process of our discussion in this section we will often expose the ideological apologetics that capitalist economics create to defend the status quo and the system of oppression and exploitation it produces.
Indeed, the weakness of economics is even acknowledged by a few within the profession itself. According to Paul Ormerod, "orthodox economics is in many ways an empty box. Its understanding of the world is similar to that of the physical sciences in the Middle Ages. A few insights have been obtained which stand the test of time, but they are very few indeed, and the whole basis of conventional economics is deeply flawed." Moreover, he notes the "overwhelming empirical evidence against the validity of its theories." [The Death of Economics, p. ix, p. 67]
It is rare to see an economist be so honest. The majority of economists seem happy to go on with their theories, trying to squeeze life into the Procrustean bed of their models. And, like the priests of old, make it hard for non-academics to question their dogmas. As Ormerod notes, "economics is often intimidating. Its practitioners. . . have erected around the discipline a barrier of jargon and mathematics which makes the subject difficult to penetrate for the non-initiated." [Op. Cit., p. ix]
So here we try to get to the heart of modern capitalism, cutting through the ideological myths that supporters of the system have created around it. Here we expose the apologetics for what they are, expose the ideological role of economics as a means to justify, indeed ignore, exploitation and oppression. As an example, let us take a workers wage.
For most capitalist economics, a given wage is supposed to be equal to the "marginal contribution" that an individual makes to a given company. Are we really expected to believe this? Common sense (and empirical evidence) suggests otherwise. Consider Mr. Rand Araskog, the CEO of ITT, who in 1990 was paid a salary of $7 million. Is it conceivable that an ITT accountant calculated that, all else being the same, ITT's $20.4 billion in revenues that year would have been $7 million less without Mr. Araskog -- hence determining his marginal contribution to be $7 million?
In 1979 the average CEO in the US received 29 times more income than the average manufacturing worker; by 1985 the ratio had risen to 40 times more, and by 1988 it had risen to 93 times more. This disturbing trend led even conservative Business Week to opine that the excesses of corporate leaders might finally be getting out of hand (Kevin Phillips, The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath, p. 180). The warning apparently went unheeded, however, because by 1990 the average American CEO was earning about 100 times more than the average factory worker (Tom Athanasiou, "After the Summit," Socialist Review 92/4 (October-December, 1992)). Yet during the same period, workers' real wages remained flat. Are we to believe that during the 1980s, the marginal contribution of CEOs more than tripled whereas workers' marginal contributions remained stagnant?
Taking another example, if workers create only the equivalent of what they are paid, how can that explain why, in a recent ACM study of wages in the computer fields, it was found that black workers get paid less (on average) than white ones doing the same job (even in the same workplace)? Does having white skin increase a worker's creative ability when producing the same goods? And it seems a strange coincidence that the people with power in a company, when working out who contributes most to a product, decide it's themselves!
So what is the reason for this extreme wage difference? Simply put, it's due to the totalitarian nature of capitalist firms. Those at the bottom of the company have no say in what happens within it; so as long as the share-owners are happy, wage differentials will rise and rise (particularly when top management own large amounts of shares!). (The totalitarian nature of private property has been discussed earlier -- see section B.4).
A good manager is one who reduces the power of the company's employees, allowing an increased share of the wealth produced by those employees to go to those on top. Yet without the creativity and energy of the engineers, the shop floor workers, the administrative staff, etc., the company would have literally nothing to sell.
It is capitalist property relations that allow this monopolisation of wealth by those who own (or boss) but do not produce. The workers do not get the full value of what they produce, nor do they have a say in how the surplus value produced by their labour gets used (e.g. investment decisions). Others have monopolised both the wealth produced by workers and the decision-making power within the company. This is a private form of taxation without representation, just as the company is a private form of statism.
Of course, it could be argued that the owning class provide the capital without which the worker could not produce. But where does capital come from? From profits, which represent the unpaid labour of past generations. And before that? From the tribute of serfs to their feudal masters. And before that? The right of conquest which imposed feudalism on the peasants. And before that? Well, the point is made. Every generation of property owners gets a "free lunch" due to the obvious fact that we inherit the ideas and constructions of past generations, such as our current notion of property rights. Capitalism places the dead hand of the past on living generations, strangling the individuality of the many for the privilege of the few. Whether we break free of this burden and take a new direction depends on the individuals who are alive now.
In the sections that follow, the exploitative nature of capitalism is explained in greater detail. We would like to point out that for anarchists, exploitation is not more important than domination. Anarchists are opposed to both equally and consider them to be two sides of the same coin. You cannot have domination without exploitation nor exploitation without domination. As Emma Goldman pointed out, under capitalism:
"Man is being robbed not merely of the products of his labour, but of the power of free initiative, of originality, and the interest in, or desire for, the things he is making." [Red Emma Speaks, p. 53]