Abolish the Wage System, not Wage Labor

Right libertarians tend to be brilliant defenders of wage labor, but often overlook the wage system. They are right as far as they go about wage labor, but ignore the structural inequality that affects the kinds of employment opportunities that people have — the kind that relies on political power. Wage labor is fine. The wage system needs to go.

Wage labor is merely the act of working for wages, usually for an employer. There is nothing inherently wrong with this. Any freely made exchange is, by definition, mutually beneficial since the parties involved wouldn’t trade if they didn’t think they would be better off. The voluntary decision of someone to work for wages is no different.

After all, many people prefer to work for an employer. They might find the idea of “being their own boss” too challenging. Or they might lack the capital to start their own business. Or maybe they just want another source of income so they choose to work for an employer on the side. It doesn’t matter the motivation — there is no reason to think that wage labor, the act of trading labor for wages, is, in and of itself, problematic.

Where right libertarians go wrong is in their leap from the defense of the idea of wage labor to a defense of wage labor as it currently exists in the real world. And the way it actually exists, the circumstances under which people actually choose wage-paying jobs instead of alternatives, is riddled with state violence. That is, the situation under which people currently choose their line of employment is a wage system.

As far as exchanges are freely chosen, they are mutually beneficial. But the instant force is introduced and the exchange is no longer free, the relationship becomes one of exploitation instead of shared gains. This is the key insight of free market economics. When people are free to make their own choices with their own property, a kind of spontaneous order is created that allows people to improve their lot as they choose. When the state interferes in the market, it distorts it. It disrupts the free exchange of goods and services, making people worse off than they would have been otherwise.

The wage system is an economic system that is dominated by state intervention, which artificially makes wage labor more prominent (and alternatives like self-employment and worker-cooperatives less prominent) through policies that increase barriers to entry in the market and increase the average person’s dependence on a group of individuals, possessing strong political power and controlling the large majority of the means of production: capitalists. The wage system is what happens when the government interferes in the market.

The state artificially ratchets up the cost of capital through inflationary monetary policy that disproportionately harms the lower classes; zoning requirements, licensing restrictions, and capitalization requirements that make it harder to compete with larger, already existing companies; intellectual property law that protects politically entrenched innovators from competition, and so on. We don’t live in a free market. We live in one riddled with violent, state interference.

All this state involvement is what creates the wage system. Class exploitation exists. But contra the Marxists, its origins aren’t found in the inner working of a market — that’s impossible since we don’t have one! We have a rigged market where the government intrudes on every voluntary transaction with endless regulations and rules. Where the rich use the state to create barriers to entry, impediments to competition, and legislation that outlaws alternatives. It’s no surprise that government regulations are so often created and/or supported by wealthy capitalists: the laws benefit them by making the lower classes depend on them.

Calls to abolish the wage system aren’t calls to use violence against employers or force to take away capital. It isn’t a call to abolish wage labor, which would exist in a freed market (though probably to a lesser extent). It’s a call to end the use of force. To abolish the system that is founded on and sustained by massive state violence. To eliminate all the instances of coercion throughout the economy. It’s a call to end the “statist quo” and open up leviathan corporations to real market competition and allow individuals to freely choose their line of employment without being forced to earn the elites’ approval every step of the way.

Wage labor will remain after the revolution. After all, every person is different and some prefer it (and using force to prevent an employer from hiring an employee would be as bad as the acts of force that uphold the wage system currently). But as the state is whittled away, the wage system will suffer the same fate. Good riddance.