The Cooperativist Manifesto

CHAPTER 5: TECHNOLOGY'S IMPACT ON THE VALUE OF LABOUR AND CAPITAL

In so far as modern economic societies systematically fail to recognize the unique productive contributions of labour, economic arrangements will ascribe most of the benefits of technological progress to the owners of capital. As technology becomes more productive, capitalist economic systems will assign a progressively diminishing value to labour input services.

One of the basic tenets of modern society involves the notion that everyone has the "right to a living wage". This means that every individual has the basic right to earn a living through work. However, individuals and households, whose only property is labour, will find it increasingly difficult to earn a viable income where capital - and not labour - is routinely rewarded.

The transition of Western economic systems from agrarian workers to highly-skilled labour has also been characterized by technological innovation and the development of a sophisticated state infrastructure. The maturation of the industrial economy has led to a reduction of the actual physical contribution of labour relative to other factors in the production of wealth. As technological advances result in increasingly productive capital assets, the value ascribed to labour under the traditional theory of capitalism will continue to diminish.

Information technologies provide the opportunity to improve the foundation of modern economic societies. Technological progress means efficiency gains through the improved effectiveness of open markets. Technology allows us to better realize the possibilities of the market economy. Greater competition and global markets can correlate to economic growth of the whole and, on a microeconomic level, an increase in the residual profits of some commercial enterprises.

Owners of technology will receive an increasingly greater share of productive wealth if legal systems continue to disregard the creative nature of labour. Intellectual property rights, in some cases, authorize the use of knowledge, information and other public goods for private gain. Patent protection, copyrights and other intellectual property rights allow monopolistic claims to prevail over free and competitive markets. The granting of such rights are theoretically and practically defensible as a reward for innovation and entrepreneurial labour. However, where laws allow technological gains and public goods to be converted to private capital without express recognition of the contribution of the innovator or creator, the legal system bestows undue benefits upon the owners of such capital.

Our society has attempted to avoid the downward pressure on labour's wages through artificial mechanisms such as minimum wage laws, collective bargaining, unemployment insurance and social welfare payments that reduce the supply of labour. Such measures represent an inefficient intrusion into the marketplace because they treat labour as a cartel. It is not necessary nor economically beneficial to continue to pit the working class against the ruling class by perpetuating the cartel of labour input services.

Technological progress contributes new elements to the infrastructure of knowledge. The benefits of increased productivity belong to infrastructure's claim of a share of the residual profits of a commercial venture. Technological gains in business - like scientific advances in medical health - belong to the human collective. Governments must develop tax rules and policies that recognize the efficiencies of information technologies while promoting everyone's right to earn a living wage.