"We have started out from the premises of political economy [i.e., free market capitalism]. We have accepted its language and its laws. We presupposed private property; the separation of labor, capital, and land, and likewise of wages, profit, and capital; the division of labor; competition; the conception of exchange value, etc. From political economy itself, using its own words, we have shown that the worker sinks to the level of a commodity, and moreover the most wretched commodity of all; that the misery of the worker is in inverse proportion to the power and volume of his production; that the necessary consequence of competition is the accumulation of capital in a few hands and hence the restoration of monopoly in a more terrible form; and that, finally, the distinction between capitalist and landlord, between agricultural worker and industrial worker, disappears and the whole of society must split into the two classes of property owners and propertyless workers." " Human Requirements and the Division of Labor ;" Economic and Philosophical Manuscripts, p. 48, 1844.
What Marx is describing in this passage is the modern equivalent of the feudal system, of which Western Europe did not fully rid itself until the French Revolution and Napoleonic Wars. But a return to the two tier system of noble and serf seems to be the laissez-faire capitalist's ultimate goal.
Where the laissez-faire capitalists make their mistake is their faith--and that is the only way that it can be described--that the market will somehow correct itself in an open economic system without any outside, i.e., governmental, controls.
The free-market mavens always invoke Adam Smith's book The Wealth of Nation's to justify their belief in a free market system. They always neglect to take notice that: 1) the free market described is always on a small scale, e.g. a town or province; 2) the "invisible hand" is a metaphor that Smith states falls apart at the national or international level, or when competition is reduced to a small enough number of businesses that permits them to effectively collude; 3) as Kenneth Lux explained in his book Adam Smith's Mistake, the failure of Adam Smith to add the word "only" to his famous statement, "It is not [put the word "only" right here] from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self interest," (The Wealth of Nations, Book I, chapter 2, p. 23); made the author of the Theory of Moral Sentiments appear in his second work to be justifying an amoral system.
In fact, The Wealth of Nations elsewhere sets moral standards that are contrary to the above statement, "No society can surely be flourishing and happy, of which the greater part of its members are poor and miserable. It is but equity besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, cloathed and lodged;" (Book I, chapter 8, p.p.110-1).
Laissez-faire capitalism, by its very nature, does everything it can in order to maximize profits, including exploiting workers and eliminating competition.
It is self-evident to me that it is in the best interest of the laissez-faire capitalist to do anything they can, both fair and foul, to increase their business's profitability. To quote Kenneth Lux, " The saving grace was supposed to be the "invisible hand" of competition"competition would keep these instincts [to drive competitors out of business] and "expensive vanities"...in line. Smith would hardly have been surprised at the motives of Rockefeller, but"would have been chagrined at his success. Smith"overlooked the possi bility that self-interest would work to undermine and eliminate competition and"tie up the invisible hand. It is"unrestrained self-interest that is the fundamental flaw in any absolute policy of laissez-faire." (Adam Smith's Mistake: How a Moral Philosopher Invented Economics and Ended Morality; 1990, p.p. 118-9.)
Michael Schwalbe, in his recent article on Common Dreams, "A Primer on Class Struggle" (March 31, 2011), stated the employees' position in this amoral situation very succinctly:
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