Introducing money into the equation
First of all, let me say a word about money. Economists call it "buying power." But what do you have when you have it? Not a piece of paper or coins, because you can have the same amount of money and spend it just as effectively if you write a check or give your credit or debit card to the salesman. The first difference between cash and these other forms of money is that the pieces of paper with famous people's pictures on them are legal tender, which means that if you offer them in payment, the person can't refuse to accept them, whereas he can refuse a check or a credit card. But the legal tender does not "represent" the gold in Fort Knox or any other actual object (because there's much less gold than the amount of legal tender in circulation).
If you pay with a check, you are asking your bank, it seems, to "draw out" a certain amount of your money which it has "in storage" and hand it over to the store. But the bank doesn't have anything of yours except a number somewhere in the bowels of its computer; and it doesn't draw anything out at all; it just reduces the number by the amount of the check and then sends a number to the store's computer equal to what it reduced yours by. The only tangible thing that happens is that slips of paper confirming that it has done this get sent to the people involved.
And when you pay with a credit card, you don't even have a number in your account. You ask the bank to pay (send a number to) the store, and you agree that next month you'll send them a number to cancel what they did--or if you wait longer, you'll send them a larger number.
The only tangible reality money has, then, is the number. But what is it a number of? Obviously, it's an amount of something. Well, depending on how large the number you can command is, you are able to buy products or services. The number doesn't tell you which ones you can buy, but only the upper limit of the total you can buy. You can even buy a certain amount of sin, if you want (but be careful, it's expensive); the money doesn't care what it's used for.
But when you buy something, then you buy it for its value to you, which means that it enables you to do something you couldn't do without it. Goals, remember, are always activities. Even if you buy a painting, you buy it so that you can look at it in your living room, or perhaps just so that you can tell people you have an original Ruthven, or maybe so that you can prevent anyone else from seeing it.
So money is a quantity of the ability to do things, without specifying which things. But when you can do this or that or the other, then you are free. So money is a certain quantity of freedom. This, of course, is what makes money so desirable; because the more you have, the freer you are to pursue whatever goals you want.
But that's not quite all, because you can exercise the type of freedom money is only in a social context. You may want a given painting, but you're not free to have it and do what you want with it if the present owner won't sell at any price. Money is only useful in the context of a transaction, where there is someone who wants an amount of freedom in exchange for whatever value you want. Hence, if you want to spend money, you have to do it to someone who will provide you with the value you want; or in other words, who will perform the service of giving you the object with the value, or whose service (like that, say, of a teacher) is the value. Even if the person, then, is a manufacturer, he is actually providing the service of transforming something into what has the value you want; and so from his point of view, what he is selling you is his service, not the material thing.
Conclusion 14: The seller-value is always the value of the seller's service (what he gave up to perform it), even if what he is offering for sale is a product.
But this freedom to use the services of others to advance your own progress toward your goals is not an ability to enslave others, because you can't buy unless they are willing to sell. And then to take the final step, they won't accept money unless it also represents for them the freedom to buy whatever they want, which means that everyone they give it to must also recognize that it is the freedom to buy whatever they want. Hence, everyone must recognize that the particular thing you exchange (whatever it is that has the number on it) is this thing called money. What embodies money (as Marx would put it) has to be universally recognized, or the one who receives it won't see it as a certain amount of freedom to buy what he wants.
Hence, we can now make the following definition:
Money is a certain amount of freedom to use others' freely offered services to fill one's necessities or make progress toward one's goals, recognizable universally as this amount of this type of freedom.
I will point out later that it is one of government's functions to define what is to be used as money, and another of its functions to keep it stable, so that a given amount always (within reason) represents a given amount of freedom (i.e. that a dollar buys for anyone the same total amount of products and/or services). If money becomes unstable, as in inflation, then when you pay ten dollars for something, you gave up a certain amount of freedom as universally defined; but when the seller goes to buy something next week with the ten dollars, he has less freedom than he received from you. This is a very serious moral fault of government, because it cheats all receivers of money, and it makes transactions using money fail in their purpose. I will leave to the discussion on civil society what criteria government should use in picking out what should serve as money.
The idea of using money for a transaction is that the people who are swapping don't have to look for the person who has just what they want and wants just what they have; they can look for the person who has what they want, and offer him an amount of freedom as the price, and then he can go look for anyone else who has whatever he wants to exchange this lump of freedom for. Transactions are obviously much more efficient in this way--in fact, transactions are only really understandable in terms of money, even when bartering. You will notice that in our original discussion of the swap of the apple for the orange, we were using pears as a kind of money.
With that out of the way, then, we have discovered that even when the seller is selling a product, what he is actually giving up (beyond, of course, what he had to buy beforehand) is his activity: the time he is spending doing whatever he does to you or to prepare the product so that it has a value for you and to get it into a position where you can buy it.
That's very interesting, because what it means is that he is giving up some of his reality for your sake, and what he wants in return is freedom to induce others to act for his sake. Since the transaction is what distinguishes economic activity from other types of interaction, then we can make the following definition:
An economic system is a system of interaction, organized in such a way that the subordination of one person's own reality to the goals of another person is compensated for by receiving the ability to subordinate others' reality to his own goals.
This is why economic activity is the positive counterpart of rights. Its basis is that I will put aside my own pursuit of my goals and help you pursue yours if you will give me something that allows me to get others to put aside their own goals and help me toward mine. In that sense, the buyer is serving the seller indirectly in giving him the freedom to use other sellers' services. So economics is mutual service.
So the key concept in a transaction is service, not "labor" or even "work." It doesn't matter what you are doing, whether à la Marx you are transforming the world into human shape or simply telling someone else what you know, or just sitting with his kids, the point is that he wants that activity of yours in order to pursue his own goals, and you agree to take a setback in the pursuit of your goals for this purpose, as long as he will give you the freedom so that this setback is at least made up for by your ability to have others serve you. This allows the most intangible things to count in economic transactions, and it isn't all just production. But more than this, it allows us to deal with all the different kinds of transactions, an increasingly small number of which deal with manufacturing and production generally as time goes on.
So the seller-value is the seller's view of what his service is worth, and it is measured by what activities he had to give up to perform it. The buyer-value is the buyer's view of what the product or the service is worth, and it is measured by the relative importance of the activities it enables him to perform. Between these is the money, which each knows stands for a total of various activities, and therefore which represents different things to the two people in the transaction, because they know the various prices of things (and consequently how much money they need to buy what they want).
If, then, we look at a transaction involving money, what are the two parties doing? In order to see this, we have to assume that they have budgets. The buyer takes the total amount of money he has and subtracts from it what goes for necessities (food, house payments, heat, gasoline and car care insofar as it gets him back and forth to work, necessary clothing, etc.); and what is left over is what he can use to pursue his goals (which might involve things like better food and a newer car as well as tickets to the symphony and so on). He has a rough idea of which of these he wants, and how much each will cost.
A person's scale of living is the type of life his resources will allow him to live.
So what the buyer has in the back of his mind is what his scale of living is, and how his available money is divisible into his potential goals, and what the relative importance of each goal is. In actual practice, of course, this is quite vague; but we are oversimplifying here. The point is that he has some kind of idea of what he is giving up when he pays out a certain amount of money. What goals he is giving up for a widget is the buyer-value of that widget.
The seller also knows the kind of life he wants to live. He knows how much money he has already, as well as how much money he has to have to meet his necessities, and how much money will be needed to achieve all his goals. He also knows how much time he spends making the widgets he is selling; and so what he does is divide up the total amount he has to have in order to meet his necessities and his goals for the next year by the number of widgets he sees he will produce next year, and this is the seller-value of one widget.
A person's standard of living is the resources needed to live the type of life he chooses as "really his."
Now we can assume, since we are not bamboozled by the Second Great Myth, that the seller's standard of living is not infinite. He might like to drive around in a hundred-fifty-thousand-dollar Ferrari, but he does not have this as a goal in his life; he's content with his Buick family sedan. I can say this because there are many people who win the lottery and suddenly become millionaires, and who don't change their lifestyle all that much. In any case, we will take it that the seller's standard of living requires a finite and reachable amount of money each year.
Now in the case of haggling, the seller knows the price below which he does not want to go, because then he won't be able to meet his goals; or in other words, the seller-value is still his "floor" in the negotiation. The buyer knows the price above which he will refuse to buy, and so the buyer-value is the "ceiling" in the negotiation. They haggle and agree on some price in between, which (a) allows the buyer to achieve whatever goal this value leads toward, but also more of the other goals than he could have achieved if he had paid a price equal to his buyer-value; so he gains. The seller now has freedom to achieve more of his goals than he could if he had sold the widget for the seller-value of it; so he gains also. Both, once again, are better off for the purchase. The introduction of money now shows a little more clearly what is meant by the buyer-value and particularly the seller-value of something, especially in the sense of the seller-value of the service of the seller. "What he is giving up" amounts to "what percentage of his standard of living is represented by the product or service he is selling."
And just as the case with the swap, in the haggling process there is nothing wrong with each person's guessing at what the other's value actually is, and in proposing a price that will come as close to it as possible, irrespective of what his own value happens to be. That is, each person knows what the widget is worth to him; but what he tries to figure out is what the widget is worth to the other person, so that he can (if he's a buyer) have more left over to achieve his other goals, or (if he's the seller) he can guarantee that he'll be able to achieve his goals if he has to sell some widgets under their value for him, that he'll be able to achieve them even if he can't make widgets in the future, or that he'll be able to do some things he'd like to do but doesn't really intend to do at the moment. He can't sell the widget for anything greater than the buyer's value, and so he knows that even if he gets twenty times what the seller-value is, he hasn't cheated the buyer, since the buyer necessarily bought it for at least marginally less than the buyer value, and so the buyer did gain by the transaction.
Conclusion 15: In purchases involving only values, it is perfectly moral to agree on a price that is beyond--even outrageously beyond--the seller's standard of living.
We might as well add a couple of definitions at this point:
A person is rich or wealthy if his resources are greater than what will enable him to live according to his standard of living.
A person is "well off" if his resources are enough to enable him to live according to his standard of living.
A person is affluent if his resources enable him to live at a higher scale of living than the majority of people.
A person is poor if his resources will not allow him fully to achieve his standard of living.
A person is needy or indigent if his resources will not allow him to escape from being dehumanized.
This explains why many people who are affluent consider themselves as poor. Their standard of living is above their scale of living, because, say, their standard of living includes driving a BMW, and they can't afford more than an Oldsmobile. But be careful here. You have to distinguish, as I said, between the kind of life you'd like to live and the kind of life you'd work to actually achieve. Only the latter is your standard of living; so you're not poor of you'd just like a BMW but don't put out any effort to get one.
When you're rich, as opposed to being well off, then when you buy something with your surplus, you don't have to consider what you're giving up to get it--because you're not giving up anything. That surplus money doesn't represent some goal you want; you just have it to throw around. Most of us, actually, are a "little" rich in our affluent society, because we have a certain amount of "mad money" that we use for "impulse buying": that is, buying just because you'd like to have the thing in question, and you don't consider what you're giving up in order to get it. The richer you are, the more often your purchases are of this type.
So there's a difference between impulse buying and ordinary buying, in that impulse buying doesn't advance you to a goal you had, but puts you beyond your goals, toward what the Scholastics call "velleities," or in ordinary terms "daydreams"--while ordinary buying allows you to achieve your goals.
Note that affluence is a relative term; it means that you're living at a higher level than most people. There isn't really a term I know of that is the contradictory of being affluent, where you can achieve all your goals (where your scale of living and your standard of living coincide), but your standard of living happens to be below the level at which most people live. There are a number of non-affluent people in the world; and not only those who deliberately take vows of "poverty." Many people even in our affluent society live just average lives and are satisfied, in the sense that they don't try to do anything about raising themselves beyond this. In fact, many of the people we call "poor" are simply non-affluent, especially many who have been seduced by the blandishments of welfare into not working to get out of the condition they are in, but simply wait for the government check and watch television all day.
Interestingly, just as there are non-affluent people who are not poor, because they're satisfied with where they are, so there are affluent people who are poor, because they have chosen to be above where their resources put them. Some non-Americans look at the ordinary life style we have in our society and regard it as beyond their wildest dreams, and would consider themselves rich if they could live like our lower middle-class; but many in our lower middle-class consider themselves poor because they actually have goals that they can't achieve with their scale of living. Nor are they affluent in our society; because they are in fact living below the majority in our society.
But one of the things that emerges from what we have said is this:
Conclusion 16: A person can determine his standard of living by finding how much money is required for him to be able to achieve his goals. This income level determines his happiness, economically speaking.
This is a very important conclusion. Income above your standard of living does not increase your happiness, because your happiness is defined by your goals: what you intend to do with your life. Income beyond this level induces you to do more than what you planned to do with your life, and hence induces you to become a different sort of person from the one you intend yourself to be--and it does this in unpredictable ways. Because you can now do something you never thought of before, you say, "Why not?" before you consider, "Yes, but what does it mean for my being the kind of person I want to be? Am I joining this country club because I enjoy golf, or because that's what's expected of a person making my kind of money? Am I going to the ballet because I appreciate it, or do I sit through two hours of boredom because I can afford it?"
This is why riches corrupt; they are an excess of freedom, and since we have the freedom, with numbers attached to it now, we feel some kind of obligation to use it, and we lose control of our lives not because we can't achieve our goals, but because we've lost sight of goals in letting mere possibility lead us on in unforeseen directions.
This is not to say that the rich can't enjoy their wealth, if they know what they are doing. Those born to wealth are perhaps best at this, because they grew up with enormous freedom, and learned that if you want to live, you have to define yourself from within and not be dragged hither and yon by one possibility after another, or stand motionless like the proverbial donkey between the equally attractive bales of hay. Having always had the possibility of buying anything, they only buy what fits what they a priori want to be. What they buy is very high quality, of course, but it is not really extravagant, because they have it under control.
This was recognized as long ago as by Plato. Socrates says to Cephalus at the beginning of Republic that he supposes he had been born wealthy because "you don't seem to me to be terribly fond of money, and that's what people who haven't earned it themselves generally feel." He goes on to say that people who have made their own money tend to care too much about it.
Now of course, being rich, though it has problems connected with it, is a lot better than being poor. The point is that there is a rather vast area in between, in which is it possible to be well off; and you can be well off being affluent or not. Riches and poverty are related to your own goals, and have nothing to do with anyone else; affluence and its contradictory are comparative between people, and anyone who considers that he has to be more affluent than someone else (or else in his mind he is poor) is making a stupid goal for his life.
And it is this confusion of affluence with being well off (and of poverty as being non-affluent) that is what makes true St. Paul's statement to Timothy: "The root of everything bad is a love for money." The reason is that it puts as the goal of your life the mere fact that you don't want someone else to have more freedom than you have. You want to have more freedom, not because you want to do something with it, but just so that you can do more than the Joneses, because you want them to be economically less than you are.
This, of course, is immoral, and is the vice of envy. It is immoral because you want to be a greater human being than other human beings, and there's no such thing. It is also silly because human beings are what they are because they can decide for themselves what they are to be, and objective levels of human activity are irrelevant in setting goals.
So it is not only moral, but it makes sense out of economic life to look inside yourself and find out the kind of life you want to live; find out how much money you need to live that kind of life; and then find some service that will provide you that level of income, and don't worry about whether you're affluent or not. What more do you want if you've got all you want?
But there's another secret to economic happiness that emerges from the introduction of money into your life: Money allows a person to choose as his service what he enjoys doing, if it happens that others want this service.
For instance, I enjoy informing others about what I know. Fortunately, there are a number of people who are willing to pay to be informed about what I know, and there are enough of them so that I can buy computers and sit down in front of them and do one of the other things I enjoy doing even more: write. Some day--Who knows?--people might even buy what I write, and then I could devote more of my time to it.(1) And if there were enough people who would want to see me perform my dramatizations of John's Report of the Good News and Paul's letters, then as far as I personally am concerned, heaven would be nothing more than an extension into eternity of what I would be doing to make a living. I would pay to do these things if I were rich and could induce people to read my books and see my performances; and I have actually been paid for both of these things--not enough to survive, but some. What do I need more money for? I have a lovely house and a wonderful wife and children, who are now grown up and no longer a worry that I'm not going to have enough money to raise them properly; I have a dog that delights me,(2) and a car I like a great deal,(3) even though it's getting long in the tooth; and I have my computer and enough time from my work as a professor to spend writing. We can take a trip to the Bahamas to relax every year or so, and to Buenos Aires to see my wife's relatives. I once thought I would like to have a little sports car; but now I'd think twice about it even if I got my reserves up to where I could afford it. My only concern, really, is losing what I have. What do I care if both my wife and I together make about as much money (teaching in Catholic colleges) as one person in my position at a state university would make? It might be nice to have the extra money, but I don't want it.
It is possible to be contented in our affluent society. Just figure out what you want to do with your life, and see if you can get someone to pay you for it. Then you don't have to make a great deal of money, because you're fulfilling yourself doing your service to others.
So a second thing that money introduces into personal economics is this:
Conclusion 17: Money enables a person to choose his service to others, and find something that fulfills his own goals while advancing theirs; and using their money to use other's service to fulfill the rest of his goals.
In any case, introducing money into the transaction involving values doesn't do much but make it a little more complex. But when a necessity is involved, things are a bit different, because new moral issues crop up. But the introduction of money can actually help to solve them. Let us take first the case of the service's being a necessity to the buyer, as in having a brain operation. This is not a value at all to the buyer; and the fact that it's a brain operation and not a tonsillectomy or some other simple operation is completely irrelevant to him. He needs it, and wouldn't get it if he could survive in a non-dehumanized condition without it; so he doesn't want it at all, and how complicated it is and so on is only relevant to him as a buyer in the sense of how much added inconvenience is involved in staying on the operating table for four hours and spending a month recovering as opposed to being on the table for fifteen minutes and going home the next day. The extra skill of a better surgeon is not a value either; because he's not interested in an esthetically pleasing suture or fingers flying deftly through the tissues in his brain; he just wants to be sure that the surgeon has enough skill to do the job and do no damage while he's at it. That is, even the surgeon's skill is a necessity, not a value.(4)
Now what is the surgeon's seller-value? Not the fact that he knows a lot; not the fact that he's spent years and years in medical school, and spent huge amounts of money getting the diploma. The seller-value of the operation is basically this: the number of operations that can be performed in a year, and the amount of money he requires in a year to achieve his goals in that year.
All of the considerations about level of skill, cost of training, availability of service, affability, and so on are things which he would think that the buyer should take into account in choosing him as surgeon over someone else; or in other words, are his anticipation of the potential buyer-value in what he is doing for the patient. That is, when the surgeon thinks of the "worth" of what he is doing in terms of his skill and so on, he is acting as if he were in a transaction involving values, where his "floor" is the point at which he can't achieve his goals, and he's looking at how high he can go above this floor in trying to guess at a price that represents the buyer's assessment of what the operation is worth.
And it is here that the fallacy lies. If the transaction were one in which there was a buyer-value, then the surgeon's assessment of how much his service is "worth" to the buyer would be relevant, and the surgeon and the patient could negotiate over (a) whether to have the operation at all, (b) whether to have it from him or someone else, and (c) what the price should be. The problem is, however, that the operation is worth nothing from the buyer's point of view.
Before you just react emotionally to this, look at the argument.
As I said in Chapter 3 of Section 7 of the fourth part 4.7.3, the buyer has a human right to necessities, and the brain operation is a necessity, and so something that he has a human right to, not something that he wants.
On the other hand, if the surgeon does his operations gratis, then he will starve. This is his service to mankind, and it is slavery if he performs a service to another and doesn't at least receive compensation (recovery of what he lost) for it. So if he can't get more than just the necessities of his life for the operation, he's dehumanized, just as the slave who "serves" his master is dehumanized even though he receives all the necessities of his life. Neither has any room to set goals for himself and be self-determining in practice.
So the surgeon has a human right to set goals for himself which he intends to be able to achieve by his service. Hence, he has a right to set a standard of living, and to consider that the seller-value of his service is the ability to live according to his standard of living. But there are two other points here that must be considered. First of all, since his service involves a necessity (that the patient has a right to--but not a right against this surgeon), then the surgeon has a moral obligation not to force the patient to pay more than necessary for the service. The patient will pay whatever is demanded, provided he is capable of paying it; so the surgeon can charge twenty times what his seller-value is and the patient will agree. But that means that the patient has not only helped the surgeon achieve his goals, he is making him rich. So the surgeon is getting more resources than he knows a priori what to do with, and is getting them from someone who is giving up goals not to advance toward others, but simply to get back to where, as human, he has a right to presuppose himself to be. One is giving up goals to minimize a loss; the other is giving up some time pursuing goals to maximize his gain.
The second point is that it the surgeon sets his standard of living very high, then even if he is only achieving his goals by his high asking price, he is still putting himself economically above the vast majority of mankind--and doing so by exploiting the necessity of the patient.
That is, it is not just enough if you are providing a necessary service, to set your price so that you don't have so much money you don't know what to do with it. If the service you are providing is a necessity, then since you aren't helping people achieve their own goals by it (but simply alleviating their dehumanization), you have an obligation not to set your goals so high that your lifestyle (your standard of living) is greater than, say, eighty per cent of the population. In that case, you aren't helping the people you serve; you are forcing them to subsidize your extravagant idea of yourself.
You are forcing them, because they have to have your service; they don't seek it because they want it. You are forcing them, because the transaction doesn't have a buyer-value, and hence the only value involved in it is the seller-value, which is freely set by you; and so they have to pay whatever you ask. Because you are a surgeon, you are no greater than the rest of mankind; and so the fact that you are a surgeon gives you no right to live a higher kind of life than the rest of mankind.
I hasten to say that if surgery were a value (as is actually the case with cosmetic plastic surgery, for instance), then there would be no problem in charging so much that you would become rich, even fabulously wealthy. Nobody has to have a face lift; and so if they want to spend ten thousand dollars for one, and your seller-value in the two hours you spend serving them is, say, fifty dollars an hour, there's absolutely nothing wrong with your asking ten thousand dollars for the operation, and in explaining to them your skill and artistry and long training and experience and so on to induce them to accept the fee--which means that you make ten times as much as will cover your necessities and fulfill all the goals you intend to have. You can then buy that villa in Corfu for your third home. Perfectly fine. Your service is worth that much.
What! And you mean to tell me that the service of performing a brain operation is worth less than a face lift is worth? I do indeed. In that sense of "worth" (the buyer-value), it is, as I said, worth nothing at all. Think about it. You, the surgeon, are the person who owns the well in the desert. How much is the water worth to the man without it? But put yourself out there in the desert now approaching the well-owner, and consider what you think of him when he says, "You give me ten thousand dollars for this gallon of water, and you'll be able to reach Cairo, where you'll be saved." Ten thousand dollars for a measly drink of water, and he has a well full of it!
Thus, you are exploiting the patient when you become very affluent by providing a necessary service; and the amount of training and so on that went into it is irrelevant.
Conclusion 18: A person providing a necessity has a moral obligation not to become very affluent from his service.
I would say that someone like a brain surgeon certainly has a right to an average standard of living, and can possibly still be moral if he chooses to be on the affluent side of average. But he has a moral obligation not to go beyond this even if his patients themselves are affluent and can pay, because he is providing his service under the threat of greater harm to them, and so would be gaining because of this threat. He has a right not to have to suffer from providing this necessary service, and so can live comfortably; but he has no right to live more comfortably than the vast majority of people.
If you want to become rich or if you want to be very affluent, then choose some service that provides a value. Otherwise, you will (if you know what you're doing) find yourself on the side of the goats when the Master says, "I needed a brain operation and you bled me while you removed the tumor."
It is the fact that physicians, surgeons, drug companies, and hospitals do not recognize this distinction that health care takes up over twelve per cent of the gross national product of the United States, with the percentage constantly climbing. They are letting the market determine the price, and the market works only when necessities are not involved; so the doctors and drug company officials can have their BMW's and yachts, and the hospitals can compete for having fancy gadgets (that don't get used much because there are too many in the city) and can be as inefficient as they like, because they'll get paid.
I do not think that anything short of the persons involved recognizing this as a moral issue will solve the problem. Socialized medicine still allows the providers to charge what they want, and they will still get paid. Government's restricting them (by setting ceilings on their fees, for instance) won't help if they don't see that what government is doing to them is just, because then they'll get out of the "business" of health care or not go into it in the first place, and the supply will decrease, making the remaining ones able to jack up the prices again. It is only if providers of necessities (and this includes lawyers, elementary and secondary school teachers, oil companies, electric companies, and so on) recognize that their business is simply not like businesses that provide values, and that therefore they have a moral obligation not to make themselves very affluent on the backs of those they are reducing the dehumanization of, that we will find a solution to the health-care problem and the other severe problems in capitalist society.
But before discussing the market in money transactions involving necessities, let me point out that the necessity can be on the part of the seller too. In general, a person who is not born affluent must serve others in order both to meet his necessities and acquire the values that will lead to his goals. We are no longer in the initial state of the world, where you can just claim things and enjoy their fruit.
But since a human being is self-determining, and can meet his necessities and go beyond them to fulfill his goals by serving others, then it does not follow, as I said before, that you are conniving in the dehumanization of a person if you let him starve when he refuses to work. Supposing the person to have grown to adulthood, we can say this, therefore:
Conclusion 19: A person has no right to receive from others even the minimum necessities of life if it is possible for him to acquire more than the minimum by serving others.
If the only thing he can do by serving others is stay alive, then he is a slave, not a self-determining human being, as I have said so often. But if he can meet his needs and also meet a reasonable number of his goals by working (even if he is still poor), and he refuses to work, then those who do not make him a gift of his necessities are not conniving in his dehumanization. Just as we are interfering with a person's self-determination if we try to prevent him from committing suicide or harming his health (supposing he knows what he is doing), so if he chooses to starve himself to death rather than serve anyone, that is his choice, and no one is harming him by letting him fulfill his choice.
But since service is a necessity as well as a value, then the following conclusion emerges:
Conclusion 20: It is morally wrong for those buying a service from someone to force him to accept a price so low that all he can do is meet his necessities.
This is the exact counterpart of the exploitation of the buyer-necessity. For an employer, for instance, to offer such low wages that the employee can only sing the old song, "You load fifteen tons and what d'you get? Another day older and deeper in debt" is for the employer to enslave the employee because the employee has to work (and probably has to work for him, or at least for monsters like him). It is to assume that the "floor" beneath which the potential employee simply will not work is the seller-value of his work, when in fact it isn't a value at all, but survival, which he has a right to expect as a human being, not as a worker. He works to get himself above this zero of humanity and to fulfill his self-set goals. So even if he can stay alive, he is dehumanized at this level, and to keep him at this level is morally wrong.
People like Marx, but even more Dickens, showed the moral flaw in economic theory that allowed the dehumanization of the worker; and since employers were not basically harpies who were trying to get their claws into everything, the wages rose so that in the United States today, practically all workers live considerably above the survival level.
But when buyer-value of the service is so small that it is apt to encroach on the level of necessities of the server, it is only by using the Double Effect that a person can buy a service that only allows the server to meet his needs. That is, if you can't buy his service without doing some damage to yourself, then you're going to become poor by hiring him (you won't be able to achieve your goals now); and so you can agree with him to take the work on the grounds that it's better to work and meet his necessities than starve. But you can only do this if the damage you are doing to him is less than or equal to the damage that would occur if you didn't hire him--the greater damage of his not finding work and starving, plus the fact that if you paid him more, you would be making yourself poor.
Once again, however, you can't in this situation have set your standard of living so high that for you poverty still exists well up into the level of affluence. You have a right to a decent standard of living; but you have no right to become affluent on the backs of those who have to work for bare necessities to make you so.
And it is the fact that wealthy people can command the services of others, who often are poor, that is what is behind the truth of Jesus's statement, "It is harder for a rich man to enter the Kingdom of Heaven than for a camel to go through the eye of a needle." It is so easy to exploit the poor without even thinking of it if you are rich, because they seem so eager to serve you and so happy to do so and so grateful that they can live by serving you.
But there is a further consideration here. The level at which necessities cease and values begin is different for different types of people; because some people have the lives of more than one other person dependent on their income. Thus, a man, say, who is supporting a wife and three children must meet the necessities of five people before he has any income that can be used to pursue goals; and hence the seller-value of his service begins at a higher level than one who has fewer dependents. He (and his dependents) would be dehumanized if he were paid what would be a small but not unjust payment for a single person's service. A single woman who has four children is in exactly the same position as the married man with three children; sex has nothing to do with this. A married man whose wife also works and brings in income (supposing this to cause no hardship to any children) obviously meets his necessities below the level at which a single person would be dehumanized; and so his seller-value begins at that lower level. A teen-ager whose parents are still supporting him has no seller-necessities at all, and so any money he earns is above the absolute floor for seller-value.
What does this amount to?
Conclusion 21: Minimum compensation for a service must be above the place where the seller-value actually begins for the person performing the service; but this minimum will be at different levels for different people.
So there are morally wrong wages because they are too low. But you can't determine one minimum wage for everyone, because for those who are being supported by others, this is in fact above the minimum wage, and for those who have dependents, this will dehumanize them. The person offering the wages must discriminate among those receiving them, and not look solely to the buyer-value of the service they perform.
Here again, it is true that a given service in itself is equal to any other service that does the same thing for the person who buys it, irrespective of who performs it. But this is only its buyer-value. This can be so low that it is beneath the other person's seller-necessity; in which case it is morally wrong to force him to serve at this level.
Some might object to this that the higher seller-necessity of a man who is married and has three children is due to his own choice, and so (like the person who chooses to starve rather than serve) he deserves no special consideration from those buying his service.
But this overlooks two facts. First, as we will see later, one does not choose to marry in order to pursue one's own goals (in fact, to marry another for the purpose of your own fulfillment is immoral); so the choice to marry is of an entirely different order from the choice to buy a car rather than spend a year in college. One is driven by nature to marry; and so it is more on the level of a necessity than choice, as can be seen from the fact that it is morally wrong for society to prevent people from marrying, except using the Double Effect. The same goes for having children. It is immoral to marry and choose to have no children at all; and not all moral attempts at family planning do in fact result in only the number of children one can reasonably expect to support. The second fact is that, however responsible the person may have been for having these dependents, the fact is he has them, and there is no reason why they "deserve" to be dehumanized because of the sins of his past (if any). No one, as I said in Conclusion 10 of the preceding section, ever "deserves" harm from another.
Hence, there is no justification other than the Double Effect for paying any person just what will make him meet his necessities; and the actual amount this is will vary from person to person.
But it is also true that the seller-value of a service differs from seller to seller. One server's standard of living can only be met with a yearly income of fifty thousand dollars; another's is met at twenty thousand. If you pay both thirty thousand, one of them is rich and the other poor. It is only on the assumption that every person who serves wants an infinite amount of money that you could pay everyone equally and be just. The price for the service must be negotiated between the purchaser and provider, so that a compromise can be reached between the two values, consistent with the buyer-value and seller-value that actually exist in each case. To treat all servers equally is to assume that they are puppets who have no personal goals.
And this is why "equal pay for equal work" is simple nonsense. First of all, there is no real meaning to "equal work" even from the buyer's point of view. One server's work is done deftly and cheerfully; another's grudgingly and ineptly, while a third is so absent-minded he has to be supervised constantly. The fact that they are spending the same amount of time at the same job doesn't make them of the same value to the buyer of the service, by any means. He doesn't just want the job done; he wants it done with as little inconvenience and hassle to himself as possible, and in an atmosphere of cooperation, not confrontation. So the buyer-value of different persons' services in the same job description is very, very different.(5)
And from the seller's point of view, the same job description is also very different. One person finds the job just what he would pay to do if he were wealthy, and enjoys it. Another is self-supporting, and has few expensive goals in life, and becomes rich with a salary that just barely meets the necessities of another. Their work does not have equal seller-value, because each is giving up something entirely different from the other in performing it.
Lately, there has been an attempt to legislate "equal pay for jobs of comparable worth," described by jobs involving equal training and skill levels. These again have vastly different buyer-values, and vastly different seller-values; and the attempt to force one salary upon all can even be dehumanizing to those whose necessities are great enough.
Far better to let the market determine prices when only values are involved, and see to it that it doesn't determine prices only when there is a question of necessities.
But that brings the market into the picture. Now the market establishes (by demand) a kind of aggregate buyer-value that individual sellers can use to establish whether they want to sell that product or service or not; and it also establishes (by supply) a kind of aggregate seller-value that individual buyers can use for the same purpose. Of course in a sense, the market-price is the result of innumerable hagglings; but even when a given buyer is haggling with a given seller, in modern times, at least, there is the known market-price in the background, as a rough guide to what the compromise would be with "most" other people. So it saves time, going from one potential buyer to another until you find the one who will give you the most you can get. The seller tries now (if he is haggling) to sell above the market-price, and the buyer to buy below it; and to the extent that sellers find more buyers, the market-price goes up.
But in general, as I said, with manufacturing, there isn't much haggling going on; and a guess is made as to what the market price will be of this product at this production level; and if you're lucky, you can produce at full production and sell all your products. If not, you cut back. If you still have people sending in orders, and you're at full production, then you raise prices or make plans to expand.
And so on. I don't want to go into the details of this (if for no other reason than that this section is getting too long) but to see what are the implications in it as a pricing mechanism.
Since it allows for there to be a price marginally below the average buyer-value based on the number of items for sale, and marginally above the average seller-value, it can permit a seller or buyer the choice of whether to sell or buy this item. As such, there is nothing at all wrong with it, as long as what is at issue is a value. In fact, prices arbitrarily established by government or any other way are almost bound to be worse, either for buyers or sellers (or sometimes both). There are bound to be people who would want either to buy or sell the item at a different price; but they can either fulfill some other goal, or serve in some other way, and so no damage is done to anyone. Any time one price is used for many people, there will be many unsatisfied with having the item for sale at that price; but there is no law that says everyone has to be satisfied. But the point is that the market price is the one that makes the greatest number of both buyers and sellers satisfied.
Even if monopolists get control of supply and therefore of the market price, there is still nothing morally wrong with this, as long as what is at issue is a value. Here, there may be a very small supply and a high price (as, for example, with Ferrari automobiles); but nobody needs a Ferrari, and if you don't want to pay for it, you don't have to have it. I know a lot of people who would like very much to have a Ferrari, but don't consider themselves dehumanized in any way because it's out of their reach.
This is the economic flaw in Marxism and all "command" economies. A price fixed by the government will only by accident be the market price; and so people will be unsatisfied by the whim of the government rather than the ability of producers to meet the demand. Further, since producers know that they can't sell their products for anything but the government's price, and that they can sell any of their products for that price, they will produce shoddy merchandise, knowing that it will sell, and that if they produce merchandise of better quality, they will gain nothing by doing so. The manufacturers of eastern Europe are as I write this facing the shock of the fact that they can no longer get away with producing the ghastly products they had been foisting on the people of their countries; because now, with a market economy beginning to appear, people simply will not buy what they produce, because they can get better products cheaper.
But again when necessities are involved, things change. If the market is allowed to determine the price of a buyer-necessity, then, since the demand is inelastic, the price will rise to the level of ability to pay without greater dehumanization, rather than falling to the level at which all those who have a right to whatever it is can get it. And if the market determines a seller-necessity, such as wages, then Marx's analysis is correct: it will fall to starvation levels.
Hence,
Conclusion 22: The market must be allowed to set prices for values; it cannot morally be used to set prices for necessities.
And this, of course, is the flaw in capitalist economics up to now. It treats everything as a value and justifies setting outrageously high prices for things like health care and legal care, because that is what the market will bear. But the point is that the market will bear an enormous amount for a necessity, up to the point of bankruptcy; and so the necessities siphon off huge amounts of money from the value-sector of the economy into the pockets of those who consider themselves benefactors of the community all the while they are bleeding it dry.
The solution to the problem does not lie, as I said, in government intervention, but in the recognition by those in these fields that they simply have no right to become rich in their field, though they don't have to live abjectly either. But fields involving necessities are essentially different from fields involving values; and those in these professions are in the business of alleviating mankind's woes, not of fulfilling their desires; which makes these professions in themselves that much more noble than anything that supplies a value, however exalted. That's the first point. There is an honor in belonging to these areas of endeavor quite independent of the money that can be made from it.
The honor is all the greater, because it is morally necessary, as I said, not to exploit the alleviation of woes to become super-affluent, however easy it might be and tempting to do so. Hence, people in these areas must be on the watch that the greedy don't enter them simply to gouge the public and make a lot of money. Anyone who does so must be (a) held in contempt by his peers in the profession, and (b) drummed out of it.
Thirdly, these people will have to learn to recognize what income represents. We cannot afford any longer to have income be a sign of social status, as it is in capitalist countries today. The function of income is to allow a person to fulfill his goals, not to give him grounds for looking down his nose at someone else. Hence, the people in the professions involving necessities must assess what their goals in fact are, and realize that they don't need the riches of Croesus to achieve them; they must set reasonably modest goals for their lives, and make the act of helping people one of the prime fulfillments of themselves as persons, thus not using alleviating suffering as a means toward their own extravagant pleasure.
That is, instead of using "conspicuous consumption," as Thorstein Veblen put it, for establishing social status, we will have to resurrect the kind of attitude that the nobles used to have toward the nouveau riche, and think, as a society, that those who simply have a lot of money and spend it are ignorant and to be pitied, rather than shrewd and to be envied. What I am proposing, if you will, is an aristocracy of service, in which those who perform necessary services will be honored by the mere fact that they are performing them rather than by how much they can gouge the public by doing so. This isn't really utopian; something like this attitude existed (in principle, at least) for centuries.
And one of the reasons, I am convinced, why there are so many malpractice claims is that patients see doctors fattening themselves on their patients' necessities; and the patients naturally want to get back at them whenever this is possible. They say that while hostages are kept captive, they tend to fawn on their captors, and are actually grateful to them when they lessen their torment; so doctors cannot look to patients' abject gratitude as if the patients are not resentful at having to give up their life savings for the service. Just as hostages' attitudes toward their captors changes after they have tasted freedom for a while, a patient's attitude toward a doctor who has reduced him to poverty is not apt to be very benign once the crisis is in the past.
But if patients see that their doctors are leading only ordinary lives, even if they are comfortable, then they will be more inclined to recognize that mistakes can happen, and that there is no percentage in trying to reduce doctors to poverty because they are human; and they will have real gratitude toward their benefactors; because doctors will then be true benefactors.
So social status will come from the profession itself, not from the income; and people in these professions will still be able to live decently, and will now not have what amounts to an adversarial relationship economically with those they serve so well in other ways.
Don't call me hopelessly naive. In Argentina, where there is no Argentine Medical Association to lobby Congress, and where there is a good supply of doctors, doctors make only a decent income, and work just as hard for it, if not harder, than in the United States. The fact that they don't become rich has not affected the supply of doctors; because the honor in being a doctor and the fact that they are truly helping their patients is compensation enough.
In other words, it is only on the assumption of the Second Great Myth, that everyone is infinitely greedy, that what I am proposing wouldn't work. Let the greedy play baseball for a living; no one has to watch baseball.
One thing the government can do is forbid people in professions involving necessities from banding together in unions to look after their interests, especially to lobby the government in their behalf. It is one thing for the group to defend itself from harm; it is another to lobby to its own advantage; and, as I said, there is a vast difference between lessening one's benefits and being subject to harm--and this distinction is not recognized today, precisely because of the failure to see the difference between values and necessities. Either that, or doctors and lawyers and teachers and so on must see to it that groups like the American Medical Association and the American Education Association do not lobby the government for favors for doctors and teachers and do not engage in price-fixing. It is interesting to note that deterioration of education began to be severe as teachers' unions began striking and demanding higher pay and better working conditions.
There is a danger here, however, and the teachers' plight illustrates it. Before they banded together, teachers were paid miserably, because the public did not value education. Precisely. Elementary and secondary education is a necessity, not a value; and therefore, it is something people take for granted, and it simply cannot be compared with things like owning a BMW or having a season ticket to the symphony. It is either infinitely more "valuable," or infinitely less so; and therefore, how much money you are to pay for this service is not dependent on how much you think it is worth; it is based on the seller-value only.
When sellers are not in a position of power, as teachers weren't, then, as with factory employees, the price drops far below the seller-value. Hence, something must be done to protect providers of necessities so that they are not as a group deprived of a decent living because of their profession. But at the same time, this protection may not morally be used to make them affluent at the expense of the people they are serving.
Can government step in here? Possibly, but only with great circumspection. Obviously, it was the government's stepping in that gave the teachers' unions such enormous power that they now fatten themselves at the expense of their students. The problem is by no means an easy one to solve, nor is it with the medical profession. The answer has something to do with reviving the notion of a profession rather than a business; a professional in this sense has a right to a good living (because, as educated, deprivation occurs for him at a higher level than Johnny Six-pack), but no right to an extravagant one.
Well, I think I have made my case as well as I can, so let us push forward.
Next
Notes
1. Then again, as happened, after a certain length of time I retired, and now do what I want, as I want, and when I want. A good deal of it is writing, as it happens, a you can see from this book.
2. No longer, sad to say. I hope she's waiting for me to go home so I can be with her again. A dog? Why not? That is, my affection for the dog is frustrated (I still miss her) unless I can have her by my side.
3. It finally had to be traded in for one I don't like as much; but my wife has one (which I drive when we go somewhere together) which was beyond my dreams a few years ago.
4. Of course, proven expertise and attendance at prestigious schools and so on are apt to be guarantees of competence; and in that sense, the buyer takes them into account, since he is weighing the risk of having a botched operation (a distinct harm) against the risk of not having an operation at all. So the surgeon's skill is still not a value, but a necessity, because what you are weighing is potential harms not positive advantages.
5. It's odd, but I never hear the advocates of "equal pay for equal work" complain that workers who have been on the job a longer time (even long enough to get jaded at it) don't somehow "deserve" higher wages, in spite of the fact that the job description is still what it always was.