Time Will Run Back (38 page)

“You mean the worker adds to production a value or a product that the employer can sell in the market for 30 goldgrams a week?”

“Exactly. And let’s suppose also that this particular worker could add the same amount of output or value to the product of any other employer in that line. Suppose employer A wanted to pay this worker only 20 goldgrams a week.”

“Employer A would want to exploit the worker, naturally.”

“Let’s say he would. Then Employer B, just as selfish, would offer the worker 21 goldgrams a week. For B would be content to make only 9 goldgrams a week out of the worker, rather than stand by and see employer A making 10 goldgrams a week out of him.”

“I can see how B’s selfishness would cause him to do that,” agreed Adams.

“But we have reckoned without employer C,” said Peter, “who is just as selfish, and just as profit-minded, as either A or B. Rather than stand by and see employer B make 9 goldgrams a week out of the worker, C would step in and offer him 22 gold-grams a week. And so on. You can assume as many employers as you want—or, for that matter, as few—as long as there is competition among them. At an open competitive auction the price realized for anything is as high as, or higher than, the second most determined bidder feels that he can afford to go. So A and B alone might bid up the pay of our worker—who produces an added product for either of them equal to 30 goldgrams a week—to 26, 27, 28, 29 goldgrams, or 291/2, 293/4, 29% goldgrams, until the profit in employing him all but disappeared. For either A or B would rather make a slight extra profit, however small, than see his competitor make it.”

“In other words, chief, manufacturers bidding for workers act in the long run on the same type of calculation as manufacturers bidding for raw materials?”

“Exactly, Adams. Their competition bids up the price of labor’s services in the same way as it bids up the prices of raw materials.” “As they pay the market price for raw materials, so they pay the market price for labor?”

“Exactly. We can put this in another way by saying that the worker gets the value that he adds to the manufacturer’s total product. Wages are determined by the final or marginal productivity of labor. The worker gets what he creates. He gets the value that his labor adds to production.”

“Then it isn’t the generosity of the employers, chief, but their selfishness and cupidity that leads them to keep bidding up wages to the point where they correspond with the worker’s marginal productivity?”

“That’s one way of putting it.”

“That’s a pretty convincing argument,” said Adams finally. “But maybe—Well, for example: there are a lot of workers competing against each other, but only a relatively few employers. Doesn’t
that
tend to push wages down below the point of marginal productivity?”

“I’ve had that question investigated by our statisticians in the Supreme Economic Council,” said Peter, “and I find that in Free-world there is about one employer for every twenty workers. But even if there were only one employer for every hundred workers, or one for every five hundred, the result would still be approximately the same. As I just pointed out, only two employers in an industry, if they are really competing, can push up wage levels to the point of marginal productivity.”

“And then if there were only
one
employer in an industry,” added Adams, “even if he had a monopoly in that industry, I suppose he would still have to bid labor up in order to keep it from drifting into
other
industries, or perhaps to attract it out of other industries. For he must still compete with other industries as a
buyer
of labor’s services, even if not as a seller of his product.”

“That is true,” agreed Peter. “He would certainly have to compete with other industries at least for
new
labor, or for common labor. He might be able to some extent, perhaps, to exploit his
skilled
labor—provided he did not have to employ any additional skilled labor and provided it would take his skilled workers a long time to acquire other skills. But apart from such exceptional situations, the worker must tend to get what he creates. He tends to get the value of his marginal productivity.”

“All right, chief. You’ve sufficiently convinced me on that point. But I still have a few questions to ask....”

IN Washington, Adams and Peter sat listening to a shortwave broadcast of one of Bolshekov’s speeches in Moscow’s Red Square. It was full of the usual cliches of Communist propaganda, but suddenly Peter was pulled up:

“... I should like in passing to say a few additional words about the two traitors who were hung in the square as part of this morning’s program. Their numbers were EN-57 and L-92. The first was an engineer who passed under the name of John Maxwell and the other a young woman—very pretty, like most women traitors—who posed as his daughter under the name of Edith Maxwell. Those of you who were here to witness their hanging were told that they had confessed their crime, but I think you all ought to know that they confessed also that they had committed each of their acts of sabotage and treason at the direct orders of the archtraitor and criminal, Peter Uldanov....”

It was not until several weeks later that Adams could get Peter to discuss once more the larger problems of Freeworld.

“Bolshekov’s terrible crime, chief,” Adams kept repeating, “only provides a stronger reason for you to try to create a world in which such things will be forever impossible. We can only do that with completely transformed political and economic institutions. And we must be terribly sure that in substituting new institutions for those of Wonworld we are substituting the right ones.”

“I suppose you’re right, Adams,” Peter at last conceded. “The past is irrevocable; what’s done’s done; the future is the only thing we can do anything about. But I wish I could get this horror out of my mind. I know that they’re dead; and compared with my ugliest fears about their fate, and all the tortures my imagination has put me through, that knowledge comes at last as a sort of release. But I wish I knew whether they had
really
‘confessed’ or not; I wish I knew whether they had
really
accused me, or whether that is just a pure lie of Bolshekov’s....”

“Which would you prefer to believe, chief? That they ‘confessed’ and accused you of their own free will, for trivial reasons? Or that they did it only after unendurable torture? Or that they
withstood
terrible torture—which they could have saved themselves merely by consenting to accuse you?”

“Don’t, Adams. I wouldn’t want to believe any of those things.”

“Then why not stop torturing yourself? Bolshekov was probably only lying.”

“The horrible communist system of Wonworld debases and poisons the existence of everybody, Adams. It becomes impossible under it for anybody to believe in human dignity, decency...” He made an effort to pull himself together. “What do you want to discuss?”

“I want to come back to the questions we were debating a month ago, chief. You said the worker in our new system gets the value of what he produces. But how can he, when the owners of capital insist on a share of it?”

Peter passed his hand across his brow as if trying to rub out the distractions that were not relevant to this question.

“Let’s begin, Adams, by simplifying the problem. You and I are two workmen. I produce a hatchet. I lend it to you, and you chop down trees with it. Suppose you were paid in accordance with the number of trees you chopped down? Would you say you had done all this yourself, and that I was grasping to expect to be paid for the use of my hatchet?”

“No, chief. Your work in producing the hatchet is as necessary to chopping down the trees as my direct work on the trees. Therefore I would
pay
you for the hatchet, and
buy
the hatchet from you.”

“Very well. But suppose you didn’t yet have the money to do that. Then you might propose, instead, either one of two things. You might come to me and say that you needed a hatchet for chopping down trees, and that if I would lend you one of my hatchets you would give me, in return, part of what you earned with it.”

“That would be only fair.”

“So you have already admitted, Adams, that I, as the maker or owner of the capital instrument, have been responsible for, have helped to create, part of the product that you, in turn, have completed by the joint use of capital and labor—that is to say, by the joint use of the ax and your muscles.”

“I have admitted it.”

“Now suppose I, as the owner of the hatchet, decline your proposal that I get some definite percentage of your earnings. Perhaps I don’t want to be dependent upon your particular industriousness or your particular ability to get contracts to chop down trees. I may nonetheless agree to let you
hire
my hatchet for a definite sum each month.”

“Such an arrangement would seem to me entirely fair, chief—provided you did not try to charge too much for the use of your hatchet.”

“The amount of rental I could get for my hatchet would depend, Adams, on the one hand, on how many tree choppers there were like yourself who wanted my hatchet, and on how high the top bidder was willing to bid for it. And it would depend, on the other hand, on how many hatchet owners there were and for how low the lowest offerer was willing to rent. But the tendency would be for the woodchoppers to bid anything up to the amount by which the hatchets would increase their earning power—and that would depend, in turn, upon how much the hatchets increased their productivity.”

“But how could you possibly separate, chief, the production of the hatchet from the production of the worker who swung the hatchet?”

“It might help us if we look at the problem in another way,” said Peter. “Suppose I made a hatchet, but that a third man, putting in much more time and work, made one of these portable power saws with an endless chain of whirling teeth. Now suppose that with the ax you could only chop down 10 trees a day, but with the motorized saw you could cut down 25 trees a day. The
additional
productivity of the power saw would be 15 felled trees a day. So if you hired out as a tree-feller and charged for each tree you felled, you could earn 150 per cent more with the power saw than with the ax. And therefore you would be willing to bid anything up to that much more for the rental of the power saw. Being a sensible man, you would know that it wasn’t
your
productivity that had suddenly gone up 150 per cent, but that what was responsible for the result was the
joint
productivity of yourself and the power saw.”

“Very well, chief. I see all that. I acknowledge that capital instruments and land and labor each contribute towards what is inextricably a
joint
product, and that the immediate naked labor is not entitled to the
sole
credit for that product—”

“And with free competition,” said Peter, “each factor tends to get paid the
relative
or
proportionate
share that it contributes to the total value of the product that all the factors jointly produce.”

“But what I can’t understand is this,” said Adams. “If everything is
jointly
produced by tools and labor—by capital instruments and labor—how can you tell which part of the product to attribute to each? An ax can’t chop down trees without a worker to swing it; a worker can’t chop down trees without an ax to swing. And therefore you might argue that the
worker
does everything, because without him no trees would be chopped down; or you might argue that the
ax
does everything, because without it no trees would be chopped down. But the one thing that wouldn’t make any sense at all would be to argue, for example, that the ax chopped down two-fifths of the tree and that the worker was responsible for chopping down the other three-fifths.”

“You are entirely correct, Adams, in saying that it wouldn’t make any sense to state the matter that way. The proportional contributions, the relative productivity, of the ax and the worker can’t be calculated in
physical
terms. But they
can
be calculated in terms of
value.
How much would a power saw increase my earnings? That’s a practical question; it has a practical answer; and I can afford to bid up to that amount as rental on the power saw. Or if I own a factory employing a hundred men, I can ask, ‘How much would ten more men increase my earnings?’—and I can afford to bid up to
that
amount as wages. Or take a more complicated problem. Fertilizer is only one element contributing to the total productivity of a farm. It can never be used by itself, but only in combination with land, capital, labor and waiting. How much can a farmer afford to pay for a given quantity of fertilizer? This will depend on how much more corn he can grow by using more fertilizer, how much less he can grow by using less, and upon the existing or expected price of corn. So the answer depends upon the
marginal
productivity of the fertilizer. That is, it depends upon the
difference
that a given
increment or decrement
of fertilizer makes to the final product—or more accurately, to the
value
of that product. In sum, with free competition, wages are determined by the marginal productivity of labor; and the rental of land and of capital instruments is determined by the marginal productivity of land and of capital instruments. Each factor gets the amount of wealth or income that it specifically brings into existence.”

Adams took a pinch of snuff and looked thoughtful.

“I’m still not satisfied,” he said at last. “Take money. People are lending money now, and they are demanding for it what is being variously called use-money, usury, or interest. I can’t see the slightest justification for that. I’ll admit that a power saw—or land, or a factory, or any kind of machine or tool whatever—adds to a worker’s production. All these things are productive instruments; and therefore it is perfectly fair to charge a rental for them, corresponding to their productivity, to repay the people who have made these things or who furnish these things. But money? Money is sterile. Gold is sterile. It produces nothing. Why should anything be paid for the loan of it?”