VI.
High Prices and Monopoly Prices.
We have been considering Low Prices and their effect upon the working class. We discovered that, owing to the competition among wage-workers for jobs, wages are reduced (when prices fall) to just about the cost of living. In discussing Low Prices we have learned what would happen to B (wages) as a result.
We are still speaking of commodities which exchange at their values.
If A, (or the value of the necessities of life) is doubled, the value of your labor-power will also be doubled. Suppose A is doubled without B being increased accordingly—the value of food, clothing and shelter be twice what it was formerly and wages remain stationary.
Reformers will tell you that the grocer, the butcher, clothier and landlord are exploiting you. They say that your employer exploits you, but that when you go to spend your wages these other men also cheat or rob you.
But if wages (B) do not rise to the same level as the necessities of life (A) this merely means that your boss is no longer paying you the value of your labor-
power. The value of food, clothing and shelter determine the value of your labor-power.
Do not be confused into thinking because rents are "high," or because food is expensive, that you are exploited when you pay for these things. As A increases in value your labor-power increases in value. And only when wages equal the cost of living are you receiving the value of your labor-power.
Shortage of workingmen may cause labor-power to exchange above its value temporarily; shortage or an over-supply of any commodity may cause it to exchange above or below its value for a short time. But monopoly alone can cause a commodity to exchange above its value for any length of time. To repeat:
Reformer says: The wage worker receives his wages. That he is exploited by his employer. But when he goes to buy shoes, food, meat or clothes, he finds the owner of these commodities selling them at a higher price than he can pay. Then the reformers conclude that these merchants are exploiting the workers also. These people do not understand that the value of A (the necessities of life) determine wages.
Not all individual workingmen or women receive the value of their labor-power. Some men and women receive a little more than the value of labor-power. We know a young girl in this city who works in a department store for $5.00 a week. She cannot buy food, clothing and shelter for $5.00. Her brother receives $18.00 a week. He can live on less than that sum. He helps his sister pay her expenses. Thus both receive the value of their labor-power.
Men cannot work long upon less wages than the value of their labor-power. They must have help from without. Fortunate members of families help those who do not earn enough to live on. Thousands of families receive intermittent aid from charity organizations, so that the working class, in general, receives just about the value of its labor-power. In other words, the army of workers receive enough to produce more workers for tomorrow and twenty years from now. It is the unemployed fighting for jobs who force wages down almost to the bare cost of living.
We see how an increase in the value of A means a consequent increase in the value of labor-power. We must not, therefore, berate the grocer, the butcher or landlord when our employers fail to pay us the value of our labor-power. We will be forced to demand higher wages in order to live.
But High Prices do not necessarily mean that food, clothing, etc., have increased in value. It may mean that gold—or the medium of exchange—has decreased in value.
The tendency of almost all commodities is to deerease in value, as modern production lessens the necessary labor contained in them. Gold may decrease in value faster than the value of meat, shoes, bread and clothing has decreased.
A is shrinking, but B (wages) are shrinking faster in value. Since gold (or wages) is out-decreasing the necessities of life, in value, it exchanges for fewer of them. One dollar buys less meat today than it bought five years ago.
Reformers are crying for Low Prices, but revolutionists are demanding Higher Wages (the value of their labor-power) in all the gold standard countries today. They are also working for the abolition of wage-slavery tomorrow. Everywhere we see wages slowly rising to meet the increased cost of living.
We have bewailed the High Prices, while prices are only nominally higher than they were five years ago. Gold (or wages) has decreased in value considerably and as commodities tend to exchange at their values, gold buys fewer commodities.
We may still be receiving the same number of dollars each week, but the value of these dollars has decreased. Actually our wages have been reduced. Unless they enable us to buy the necessities of life we are not receiving the value of our labor-power from our employers.
1. An increase in the prices of the necessities of life may come from an increase in the value of commodities. We shall have to receive an equal rise in wages if we are to get the value of our labor-power.
2. Wages (or gold) may decrease in value until they no longer will purchase A. Unless we receive more wages accordingly we will be receiving less than the value of our labor-power.
Monopoly Prices.
Now all through the preceding chapters I could hear, in imagination, the reformers crying, "But what about monopoly prices?"
In the first place, there never was an absolute, permanent monopoly. There are steel mills in China, Japan, Mexico, England and Germany which will supply the American market if they can undersell the home product. China is now shipping steel rails into California at a lower price than the American mills supply them.
There are still many independent oil companies in many lands. Automobile service, electric car lines, aeroplanes, water courses, chutes and flumes all infringe upon the railroads. Whenever the railway charges become more than the traffic will bear the manufacturer removes to another city.
Men may hope to gain permanent complete monopolies, but there is always the danger of somebody coming forth with a substitute. Some one is always providing substitutes.
No man was ever able to raise the general price of a commodity at will, and get that price. If any man ever held such power, he would have charged an unlimited price for his commodity and immediately assumed the world's dictatorship.
John D. Rockefeller may be able to raise the price on oil in certain communities, but he cannot force men to buy at this price. So-called monopolists are subject to economic laws just as are wage-workers. No monopolist was ever so great a philanthropist that he did not charge all the traffic would bear at all times. We see, therefore, that they cannot raise prices at their own sweet will.
No man ever held a near monopoly but what other capitalists with money to invest turned ever longing eyes upon the Golden Goose ready to produce a substitute that will relegate his rival's product to the Past.
But there are some very near monopolies in the United States. Some of these doubtless are able to sell—or exchange—their commodities above their value. A few of these are engaged in the production of food, clothing or houses.
Now it does not mean because a monopolist holds temporary control of a commodity that he will raise the price of that commodity. He will surely seek to lower its value by closing down unnecessary factories and installing improved machinery that will lessen the labor contained in his product. Many "monopoly" owned commodities sell at a lower price than they did before they were monopoly produced.
If a monopoly produced commodity exchanges at its value, under the new method of production, its prices would be lower. Many friends assure me that oil is much cheaper today than it was twenty or thirty years ago, before John D. began to build the Octopus. If a monopolist continues to sell a commodity at the same price it exchanged for formerly, he will be able to appropriate greatly increased profits, for its value will have decreased—perhaps 50 per cent.
But we will take an extreme case to illustrate who pays the increased price where an imaginary Octopus doubles the price of the necessities of life.
Let us suppose that 500 miners are receiving $5 a day working a copper mine in Alaska. Five dollars just affords them a comfortable or tolerable living in Alaska. The man who owns the food and clothing supply in Alaska at this time has a temporary monopoly—an absolute, temporary monopoly of these necessities.
This man finds he actually can double the prices on these necessities for one season. The cost of living in Alaska rises to $10.00 a day.
The employer of the miners will be obliged to double their wages if the miners are to receive the value of their labor-power as formerly. He will need to pay $10.00 a day if he expects to have them to work for him tomorrow. If the mine owner finds $10.00 in wages will leave no profits for him, he will refuse the increase and shut down the mine; the miners will return South and the Monopolist will find himself without a market. The possibility of such a contin-
gency has always to be reckoned with by every "monopolist." There is always the danger of killing the Goose That Lays the Golden Egg.
You see how if the price of A is doubled, wages will need to follow, and as B (wages) are increased there remains less surplus value for the employer to appropriate.
The monopolist, in this case, who has been able to double the price on the necessities of life and cause our wages to be doubled will have forced our mine-owning employer to divide this surplus value with him.
Note Figure C. If the portion returned to us in wages is doubled, there will be just that much less unpaid labor for our employers to keep. The extra portion paid to us will be paid over to the monopolist.
Monopoly generally means that the monopolist is strong enough to force other employers to divide with him a portion of the value of our products formerly appropriated by them.
The real fight is between the monopolist and the mine-owning employer who will do all in his power to "smash the Trusts."
The mine owner in this instance may offer us $9.00 a day and we may try to live on $9.00 for a few weeks. We will be unable to do it because we will be receiving less than the value of our labor-power.
QUESTIONS.
Do the Trusts rob the wage-workers when selling them Trust-made products?
Can a monopoly sell its product at the same price as the independent concern and make a bigger per cent. of profit? Why?
What are three causes for a rise in Prices? Explain.
There are more factories producing barrels this year than last year. All these owners are competing with each other to sell hoops and staves. But the prices of hoops and staves have risen everywhere, Why? Has the value increased? Precisely the same methods of production prevail in the hoop and stave industry as formerly.
Also the wages of men and women working in the hundreds of small factories all over the United States have risen during the past year or two. There are many men and women out of employment, but they have not reduced wages at these points by competing for jobs, although they are always in the market offering to sell their labor-power. Even men out of work are asking MORE for their labor-power than they asked a few years ago.
Why are wages rising at these points and everywhere in general? Why are men who are out of work asking more for their labor-power?
There are no Trusts in China—yet. Prices of the necessities of life are extremely low. Do "low prices" in a country necessarily mean the working class is any better off than where "high prices" prevail?
Suppose one landlord owned all the ground and cottages rented to workingmen in one city. Suppose all these men worked in a factory at this point. Suppose the landlord raised the rent on cottages from $10 to $30. If the workmen had been receiving just about the value of their labor-power before, what would happen when rents were raised? Who would actually pay the increase?