The Eighth New Commandment:

Thou Shalt Not Be Greedy

So, if my view of life is right, then you should set high goals for yourself and work to achieve them, and that is what will make your life make sense. But the particular New Commandment we're considering now is almost the direct antithesis of this. Those who set lofty goals for themselves and actually achieve something in this world are looked on as evil.

This is not, however, just because of the Seventh New Commandment, that they've made themselves unequal to others. This particular New Commandment has to do with something connected with hard work and setting high goals: if you actually achieve (or come close to achieving) these goals, you're apt to make a lot of money. And that's really horrible. You've not only put yourself on a higher plane than the little guy, who as Senator Daschle (I think it was) said, "hasn't fared so well from life's lottery" (as if your hard work had nothing to do with it), you've got rich by taking from the little guy, and exploiting the people who work for you, and all the other mantras uttered by everyone on the left ever since Marx.

Why Marx hates profit.

To see what's going on here, you have to understand something about Karl Marx's theory of economics. He took the "labor theory of value" from people like Adam Smith and David Ricardo and drew out its logical implications. You remember, I said that the value of something was the fact that it could be used as a means to achieve your freely-chosen goals. Marx admitted this, but he called this sort of thing "use-value," and said that this wasn't what economic value really was; the "value" that something has in exchange for something else in an economic transaction.

This can get quite complicated, so let me boil it down and oversimplify. Basically, what Marx said was that things in themselves didn't have any value; they acquired use-value insofar as they were worked on by somebody to get them into usable shape. But when someone works on something, he makes it different, based on what he did to it; and so some of his humanity-as-a-worker now resides in the product (which Marx called a "commodity"); that is, the page I am writing that comes out of the printer is no longer blank, but has the words I put on it; and so the page now "speaks about" me; and presumably, this makes the page more useful to you than a mere blank page (actually, a tree growing somewhere in the forest, because paper is a transformed object too). So you might want to buy it. And if lots and lots of you want to buy it, I'll be one of those rich people the New Moralists can't stand.

The point is that the exchange-value (for Marx) consists in the human labor that is put into the product; and the price is the money-equivalent of this exchange value. Well, it's not, actually, because I try to sell the product above its exchange value (because otherwise, I just get back what I put into the product, and then why bother?), and you, of course, try to buy it, if you can, below the exchange value, because you want to be able to use your money for all kinds of other things. So the price is actually either above or below the exchange value (which is the labor-value, the only real value), depending on whether the supply is greater than the demand (in which case, I sell at a loss) or the demand is greater than the supply (in which case, you pay a premium). When I sell at a price higher than the exchange value, I make a profit, because I'm getting back more than I put in. So this first idea of profit means that I'm selling something to you at a price higher than its value--which, of course, is unfair to you, and if I'm the big producer, and you're just the little consumer, then guess who's the Bad Guy.

But now when you introduce competition, you find that other people start producing the same (or essentially the same) thing, and they increase the supply, which (by their attempts to undersell others so that they can sell all they make) lowers the price; and, to make a long story short, the price drops below the value, in which case suppliers go out of business, decreasing the supply, which raises the price to the profitable level again, which attracts more producers, which lowers the price--and so the price hovers around the exchange value, which (for Marx, remember) is the value of the human labor that went into producing the product. So in the long run, using this notion of profit, it would seem that producers sell at cost, and so don't make a profit at all. (That's why capitalism, which is based on profit, is automatically doomed, according to him.)

But there's another wrinkle in Marx's notion of profit, which makes it really bad. The real evil, according to Marx, comes when I hire someone to work for me in producing this thing I'm selling. In capitalism, he has to offer himself in the labor market, and there's competition for his services, and he's in competition with other workers. So supply and demand works just as above. But what the worker is selling is his potential to work, not his actual work, because he hasn't done anything before he gets hired, and he's hired on the basis of what he will do. So he's selling himself, or his "labor power," not his actual labor. I hire him for eight hours a day, and he's to exert himself on my product for eight hours a day, putting value into the material I give him.

But the gimmick here is that his value as "labor power" is not the value of his labor. I hire him, as I said, before he's done anything, as the potential to put value into things. So his value is the labor that's gone into producing him as a worker. That is, his value as a "commodity" on the market is how much it costs to feed, clothe, and shelter him and keep him healthy so he'll be able to work and put labor into my material. That's his value in the market; the price, of course, will depend on what he can get. But the point is that this value (the labor it costs to keep him alive) has no relation to the value of the actual labor he puts into the material.

That is, say, it costs forty dollars a day to keep the worker alive and healthy and so on. That's his exchange value as a worker; and when he's hiring himself out to me, he'll try to get more (because he realizes he can do work worth a hundred dollars a day); and if labor is in short supply, I might even pay him fifty dollars a day, or even go up as high as the hundred if things are really tight, and I need him to keep the factory going and I can't find anyone cheaper. But if labor is plentiful (if there's high unemployment), you can bet that there will be others who will work for less, and then I'd be a fool if I didn't pick them. And of course, when labor is really abundant, there will be people who will take work just to avoid starvation--or in other words, will work for their exchange value, or even temporarily below it (they can't do it for long, because they'll starve). So the price of laborers hovers around starvation, once there's competition for labor.

And this is built into the system, according to Marx, and the "decent" capitalist can't do anything about it. If I have compassion for you and I pay you 50 dollars an hour, my competitors can get labor at 40 dollars an hour and they'll undersell me, which means people will buy their widgets and not mine, and I'll go out of business. So much for compassion.

The kicker here, of course, is that the value the worker puts into the product is far greater than his own value as a worker--obviously, or I wouldn't hire him, because then where's my profit? I sell at cost. And so in the capitalist system, profit is the difference between the value I as a capitalist get out of the worker and the money I pay the worker. Since I'm not paying him for his actual work, but buying his labor power, which is himself, I am making money from his work but not paying him for it (I'm paying for him). And that's the way I make a profit.

There's a lot more to Marxism, but this is the essential evil he sees in capitalism. It is built into the nature of capitalism that the worker can't be paid what his work is worth, or the capitalist couldn't make a profit, in which case capitalism collapses.

But that's just because it's capitalism, the economic system that's driven by the profit motive. But there's no law that says you have to run a business for profit. Even within capitalist countries, there are non-profit organizations, like the college I taught at for thirty-four years. Everyone made a salary, but the business as such didn't make money out of the college. So what was the problem?

Anyway, what the New Moralists who buy into this are saying is that, since profit necessarily is nothing but paying the worker less than the value of his work, capitalism is intrinsically evil and unfair and exploitative, and even if it's more efficient than other systems, it should be abolished. Also, once the capitalist gets power and controls the supply, he exploits not only the worker but the consumer. But not to worry; Marx says that capitalism's own inherent contradictions are going to kill it; it's just that, once labor unions were formed, this slowed down the process (because workers got control over the supply and hence the price of labor). But it'll come, they say; it'll have to. It just might be a good idea by revolution to hasten the process.

What's wrong with all this?

But, though it sounds great in theory (and the New Morality is big on what sounds great in theory, like evolution and global warming, and outcome-based education, and so on), there are tiny things that Marx overlooked that make it just a tad different from what he said.

Let me illustrate. Once, years ago, I had my house remodeled, and we hired a firm with Larry, his brother, and Bud, a worker they took on. They charged me at the time $17.50 an hour labor for each of them--which was cool. But one day Bud mentioned to me that they were paying him $10.00 an hour. I said, "Do you know that on the bill to me your labor is listed as $17.50 an hour? That's what I'm paying you." He answered, "Oh, sure."

I said, "Doesn't that bother you?" and he answered, "Hell, no. I know if I went in business for myself, I could get $17.50 an hour, but then I'd have the hassle of drumming up work, getting insurance, taking care of workers comp, figuring out taxes and social security, planning the jobs, and all that. It ain't worth it. I'm happy; I just show up at work in the morning and go home and have a beer and forget about the job. They're up half the night."

(I might add that one thing Bud didn't mention is that Larry and his partner were responsible for everything the firm did, including what Bud did. If Bud did something egregious on his own and was identifiable as the culprit, he might get sued; but even if he did, Larry would also. And, of course, generally Bud's goof-ups wouldn't be known as his, and Larry would be the one to answer for them. And believe me, people will go to great lengths to escape having to answer for what they do; so Larry was doing a huge favor for Bud.)

There you are. The capitalists aren't just sitting on their duffs clipping coupons. They're providing a service to the workers, which the workers consider valuable (Bud was in effect glad to pay them $7.50 an hour for it--which is less than they paid him, by the way). Once you get beyond the notion that doing something valuable to someone has to be taking stuff and transforming it (actual physical labor), the whole picture changes.

What's valuable economically (from the producer's point of view) is service: acting for another's benefit--or using your own time, effort, and resources (which could be advancing you toward your own goals) for the sake of advancing the other person toward his goals (this latter is Marx's "use-value" and today's "utility"). This can take the form of transforming metal into a car, or waiting on table at a restaurant--or finding work, getting insurance, taking responsibility, and all the rest Bud was talking about.

That's one thing. Another thing, though, if you're going to understand economics, is that the service in question always has two values, not one. The seller looks at the product precisely as his service, and figures out "how much of himself he's put into it," in terms of what he's lost in resources and ability to pursue his goals. This is his cost (what economists call "opportunity cost," not just "money cost"); and it forms the minimum below which he won't sell his product or service, because then he'd be worse off for performing his service. This is the seller-value of the service.

On the other hand, the buyer doesn't care how much of the seller's time and "reality" has gone into what he's buying; he's just interested in how far it will advance him toward his goals. Remember, the goal is always some activity of his; the product is valuable because it enables him to do something with it. So just as the seller's value is in the last analysis his activity (the activity of buying the materials, making the product, and selling it), so the buyer is considering how this product or service enhances his activity. The buyer figures out what he's going to have to forego doing in paying for this thing (you buy a theater ticket, and it means you don't have enough for dinner out), and he picks the activity more important to him. So he's looking at what he's giving up to be able to do the act the product or service allows him to do. The upper limit of what he'll give up is the buyer-value of the product or service.

Marx tried to say that the buyer-value was irrelevant in practice, while contemporary capitalist economics tends to say that the buyer-value (the utility) is the only economically relevant one. They're both wrong. The two are distinct and irreducible to each other.

Because, of course, this buyer-value is a different act or set of acts from that of the seller; and since values are always in terms of goals, and each has different goals, then the buyer-value and seller-value won't come out in money terms to the same figure. Generally, there's a wide gap between what the buyer will pay if you push him hard enough, and what the seller will take if he's driven to the wall.

The third thing to notice here is that the price is the compromise between the two values; price does not reflect any value at all, still less the "real" value of the product or service. Products and services have no real (in the sense of objective) value, since value is always subjective, because it's determined by the freely-set goals persons have.

That's why silly things like pet rocks can sell for $20.00 today, and next week you can't give them away. They cost the seller practically nothing to produce, but he did have to do something to them; and the buyer thought they'd look cute on the coffee table as a conversation piece, saying that he'd actually paid for the stupid thing. But that gets old fast, and so the buyer-value vanishes, which means that the price goes down to zero. In that case, the seller's subjective value in packaging the things makes no difference, because no one wants to buy it any more. On the other side, it makes no difference what you offer Michael Jordan to play for the Bulls; he has no interest in offering his service (so the seller-value is infinite). It's just not true that every man has his price.

So you have to have both values if there's going to be a transaction. Now the "ordinary" way price is determined is by haggling. I, as buyer, express an interest in your car (as I did recently in a Ford showroom). You, as seller, tell me a price--the highest price you think I'm willing to pay. I (having checked with Consumer Reports what the lowest price you can sell for is) say, "No way. I've got X dollars cash (quoting a price below your seller-value), and I'll take it off your hands for that." You come back with the fact that that's impossible, and come down a bit, and then I rejoin with a higher price than my original one. Finally, we reach a figure that I think is a good one, and you're willing to take. This is above your seller-value, and below my buyer-value. So we're both happy.

Notice, here, that both of us gained by the transaction. This is the beauty of economic activity--with a caveat no one has noticed that I'll take up in the interlude--that the transaction, if it involves values, won't occur unless each party gets back (according to his subjective standards) more than he gave up. And since there's no "real," objective value to anything, then this is possible.

In the actual case, once we'd reached the price, I said, "I know at this point I should walk out and come back tomorrow, and I could get you down some more. But that's okay; I'll take it." The fact that I could have got the car at a lower price didn't bother me, because, among other things, I didn't want to incur the cost of haggling any more, and it was about the price I expected to pay anyway. So I was content, even though I assume the dealer thought he taken me to some extent. Fine. Let him be happy too.

Our guide once in the Yucatán told us as much. "When you buy something in the straw market, notice that there isn't any price tag on it; so you talk to the person. Don't take what he first asks; but then don't feel bad when you've paid a price you like and later you ask someone else and they say they got the same thing ten dollars cheaper. You got it for a price that was worth it, so what's the problem?"

He understood. The thing itself doesn't have any objective value; it's what you want to give for it, and what the seller wants to take for it. If both of you are happy, what's your problem if two other people settled on a different amount? You didn't lose; you gained; you got something you figured was worth more than you gave up to get it.

The reason we think that price reflects a kind of objective value is that when you introduce manufacturing, in which you make eighty thousand widgets a day, you have to sell all eighty thousand every day or you'll be drowning in widgets. You don't have time to haggle over each one, the way car manufacturers do (since they make relatively few of them). So you guess at the highest price you can ask (obviously, above your seller-value) that will enable you to sell all of them. If you've got one left over, you guessed too high, and you'd better come down tomorrow, or the leftovers will begin piling up; if you've got ten people calling, "Where can I find another Tickle me Elmo?" then you guessed too low, because you could have sold all you made at a higher price.

Notice a couple of sub-things here. First, there's no magic or "reality" to this "equilibrium" (i.e. sellout) price; it's just the price at which you sell all you make; when Beanie Babies take over the young imagination, you'll only sell all your Tickle me Elmos if you cut the price you're asking drastically. Be aware of this. Ten tons of subjectivity do not add up to one ounce of objectivity. The price is still just the compromise between buyer-value and seller-value; but it's on a large scale, that's all.

Secondly, contrary to what is often implied, there's no law that says you have to sell at the highest price you can and still sell out; if you want to, you could sell your widgets at half that price (always supposing this is still above the seller-value, your floor), and, if the money you make enables you to achieve the actual goals you have for your life, what's the problem?

This is very important. If you want to know what economics is all about, you have to realize that we are not by nature infinitely greedy. That is, values are in terms of the goals we set for ourselves, and these goals may be very lofty (and so require lots of money to fulfill), or they may be not so high in economic terms. I made a retreat in Gethsemani Abbey recently, the Trappist monastery, and the monks I spent a week with are happier than most people I know, and they can live for a year on what I spend in two weeks. Who needs a mattress and a box spring? Three inches of foam rubber and a wooden shelf is plenty.

Of course, they're exceptions in one direction, and there are others who are exceptions in the other. But most of us are in the middle. We have a pretty good idea of who we are, and of how much it costs to live the lifestyle we want. What we want beyond this is security: not to have to give up our way of living. (I was delighted to find that my income from my retirement is just about the same as I was making the year before. Neat.) Sure, we'll take more if we win the lottery, but we don't get our undies in a bunch about it.

Economic theory, however, as usually given, simply assumes that our "needs" (our goals) are infinite, and resources are finite; and so economic activity consists in choosing which are the more important goals to be fulfilled and which we'll have to give up; but we'll never be satisfied. But that's bunk.

Economic activity consists in transactions: Using the freely offered services of others to pursue your own goals, and compensating the server by allowing him to do the same. That is, the money you pay me for serving you now allows me to go out and have others serve me. This is true whether I have so little money that I can't fulfill all the goals I have, or whether, like Bill Gates, I have so much I couldn't possibly spend it all on myself. On the other hand, Robinson Crusoe, alone on his island, was not engaging in economic, but practical, activity when he built his stockade and stored up his food.

And as to our "needs" being infinite, you can see this is not so in practice from advertising, which isn't just "letting people know" what's out there; it's an attempt to persuade people that without the widget in question, their life isn't worth living (that is, that you're harmed in some way if you don't have it). My wife succumbed to this recently and demanded that I buy a cell phone especially if I was going off for a week to the wilds of a monastery in the Kentucky hills. Suppose I got into an accident on the expressway and was stranded for a week without food and water. So I now have a stupid little phone, plus monthly service fees for the privilege of being able to be pestered no matter where I am. But it's true; I could have called her if the car broke down. And I did call her when I got back into the home area (early in the morning) out of the "roaming" range, and woke her up to tell her I'd be home soon. So there.

Here's some more advice for you, then, from the old philosopher. Figure out for yourself the kinds of activities you want to do, and how much it costs to do them. That's your standard of living. When you make enough money to do these things, you've got all you want. In other words, don't look on having lots of money as a goal in itself; money is a pure means toward using others' services to achieve your goals. And you're really lucky if you can take one of these things you want to do and figure out a way that people will want to pay you to do it. That's what happened to me. I love to teach, and people actually hired me to do it. Why did I need to make millions at it?

The new-morality dimension.

Now as I'll show in the interlude, all is not rosy with economics, even with the corrections I just made to economic theory. But the point here is that New Moralists have bought into the basic Marxist view that capitalists make money by cheating both the consumer and their workers, and they have power over them, which makes them unequal, and this makes everyone feel bad, and it's just terrible! Let's have some justice and fairness here! They buy into Marxism because, even before Darwin, Marx had a materialist view of evolution, in which man developed reason because he made tools and because he needed to communicate to exploit others; and so Darwin's view of biological evolution up to man fit right in. Besides, Marx raged against capitalists and wanted revolutions and things, which shows that he not only had a theory, he had an agenda, and his heart was in the right place.

New moralists add also the fact that capitalists are in business precisely to make money, often a lot of it, and so they're selfish, and that, of course, violates the Sixth New Commandment; they're not cooperating in this joint enterprise; furthermore, as we know, manufacturing just wrecks the planet, and destroys and pollutes and wastes our precious resources on luxuries while the Third World is starving because of our exploitation of them for our own gain! (I'm sorry; but when this subject comes up, you seem to need a lot of italics.) Not only that, but the capitalists are doing this by using their brains and calculating profits and losses, and not being compassionate toward the poor, still less toward snail darters and spotted owls and all our scaly and feathered companions on the earth.

So capitalists, by and large, violate the First and Greatest Commandment because they think there's such a thing as truth and that facts matter more than feelings and compassion; they violate the Fourth, (not to restrict instinctive gratification) because they postpone satisfactions and save up so they can start their businesses; they violate the Sixth, because they absolutely ruin the environment; they violate the Seventh, because they put themselves above everyone because of their minds. And they violate this one because they've made money by cheating and grabbing it out of the hands of the poor folk. Is it any wonder they're hated?

I think it's the selfishness that really bugs the New Moralists; there's no compassion in Big Business. When firms like Procter and Gamble give hugely to charity, then "Yeah, sure, of course! First of all, they forced the workers to contribute, and secondly, they had to do it to keep people from breaking all their windows in rage. It's all a sham. You don't think they care about the inner city schools and the disabled, do you? Don't be naive!"

The fact that the board of trustees and the CEOs of these firms are also human beings makes no difference; just because of "the system" they absolutely can't have any concern about workers or the public, or they'd close up shop, and become a non-profit organization. The mere fact that they make a profit proves how evil they are, can't you see the nose in front of your face?

And, of course, since they're evil, then they must be suppressed, as far as possible. But the Old Morality is still pervasive enough that it's not possible simply to abolish capitalism and replace it with the just society, which is a Marxist one; unfortunately (because, of course, of the evils capitalism has wrought on the world), the Marxist societies that exist haven't done too well by their citizens--but it's not because of the system, it's because of the way it's been implemented!--and so "socialism" and especially Communism is a bad word, and the people rebel against it. So we have to take subtler measures--

--to impose our moral standard on the country in spite of the people's resistance. We're doing it for their good, of course; it's just that they're not enlightened enough to realize that yet. So we first demonize companies like Big Tobacco and Bill Gates, and show how exploitative and unfair they are. Never mind that we have to bend the truth a bit to do this, they've got the wrong agenda and we have the right one, so we're acting in accordance with the real truth.

But after getting the people in a frenzy against these companies, we then tax them to death--well, not to death, because that revenue is pretty tempting, and after all, there's the story about the golden eggs. In the case of Big Tobacco, it's irrelevant that this doesn't hurt the companies at all (since they just raise prices, and the poor addicts will simply pay the tax; and the kids will smoke all the more because of teenage rebellion), this will (a) show that we care, that we're trying, and (b) put all that extra money in the government's pocket to use to redistribute to the poor (i.e. to the ones who are paying this extra tax--of course, they only get some of it; we need to hire administrators to distribute it, of course, of course).

And if we can't get a tax passed through that Right-wing Bible-thumping Congress, well then we'll sue the companies, which will (a) give us even more money, (b) hurt them even more (i.e. make them raise prices to pay for the suit, which they'll then collect from the smokers), (c) show where we stand on the matter, and (d) give the lawyers that much more money as an incentive to keep up the good work, and to vote for us next time.

It's not the money, it's the principle of the thing.

Notice that this enrichment of the lawyers is not regarded by the New Moralists as really a bad thing. There's a dirty little secret here. The New Morality is not against riches as such, only riches that come from profit. But if you're wealthy because you inherited it à la Kennedy and the majority of the liberals in Congress, or because you're a lawyer, or because you're an entertainer, in the news business, or a sports figure, then you can make millions with no problem.

Why is this? First of all, why doesn't anyone treat Michael Jordan like Bill Gates? I hinted at the answer in the discussion on the Seventh New Commandment, not to discriminate. Michael Jordan is outstanding because of his physical skills, which means that his body has evolved farther than that of the rest of us poor slobs who can't dribble worth a damn. This should be celebrated, not belittled. (I almost put "denigrated" down, but based on what happened to the man who used the word "niggardly" recently--he had to resign--I thought better of it.) But more than that, people liked to go to see him soaring through the air, licking the breezes as he dunked another one; it made them feel happy; and feelings are everything, aren't they? Besides, he's black, and he's made it big, which (a) puts a little fairness into life, and (b) in an area which, as good New Moralists, we know is the only one blacks can excel in on their own. He deserves every penny he can get, since whites owe it to people like him.

So that's simple. Now why can entertainers and news anchors make gazillions of dollars without any New Moralist's batting an eye? Because they're the new Apostles. Of course! The entertainers appear in dramas whose purpose is to preach these Ten New Commandments in season and out of season, and to ridicule, vilify, and--yes, denigrate--everything connected with the traditional view of things, like religion and capitalism. The fact that these movies, as Michael Medved has shown, are flops is irrelevant, because they know they're fighting an uphill battle, and it's a matter of time before everyone will see things the new way, and really appreciate their tremendous courage for portraying mothers who choose abortion as sensible and right-to-lifers as slavering fanatics, for showing that gays are just like everybody else, that Big Business only has unscrupulous cretins in the board rooms, that all priests are pedophiles (which would be okay, you understand, if they weren't priests who preached against it), and all the rest of it.

It's absolutely amazing how these people think of themselves as counter-cultural for bravely uttering what is politically correct and wins nothing but applause from anybody who matters.

But anyway, somebody said someplace that "the worker is worthy of his hire," in the context, I believe, of those who go out and spread the good word; and so who would begrudge these intrepid souls their mansions in Beverly Hills? And of course, the news anchors, who take what happened during the day and spin it into the cotton candy of the New Moralist take on everything, are the crème de la crème of this noble effort; so why shouldn't they be able to take their place alongside Michael Jordan, Oprah, and O.J. sailing along to the summer villa somewhere near Monaco?

But Bill Gates? Michael Milken? Rush Limbaugh!? Better a millstone should--sorry, I seem to have got stuck back in antiquity.