Chapter 5 Review

Gameshow

Key Terms Introduced

work production value value-added employment paid work unpaid work labour theory of value productivity subsistence surplus tools capital physical capital fixed capital technique of production technology skills

What is Work?
Any productive human activity. The only thing that adds value to the materials we harvest from nature. Comes in many forms, many social arrangements. Not just a means to an end, or a necessary evil
Work can also be a source of meaning, gratification, and social connection.

Job Well Done

Far and away the best prize that life offers is the chance to work hard at work worth doing.

Teddy Roosevelt

Work and Employment

Employment is just one form of work.
Work performed for someone else, under their direction, in return for payment.

A defining feature of capitalism:

Employment (or wage labour) constitutes most of the work performed in the formal economy.

Most people are wage labourers:

They must find and keep employment in order to support themselves.

Forms of Work Under Capitalism

Employment is not the only kind of work under capitalism.
Though it is the most important. Managerial work of company executives. Work of self-employed small business owners and farmers. Unpaid (reproductive) work performed in our families & communities.

Other forms of work co-exist:

The vast majority of work in capitalism is paid wage labour, or unpaid reproductive work (needed to get ready for wage labour).

Wage Labour: An Inclusive Definition

A misleading ideology suggests that youre not a worker unless you work in manual labour (factory, blue-collar, etc.). This is objectively false. Workers with higher education, who work in offices, who earn salaries, still fit the definition of a worker:

They are still fully dependent on their employer, and still face an inherent tussle with them over the terms & conditions of work.

Performing work for someone else, under their direction, in return for payment.

Spot the Worker

White-collar or blue-collar. Goods industry or service industry. High-skilled or less skilled. Salaried or paid by the hour. Private sector or public sector. All these people work for someone else, in return for payment. All depend on their employer. All can be disposed of when they are no longer needed.

Outsourcing Wage Labour

Some employers have tried to convert paid workers into contractors. Does this mean they arent workers anymore? They are still workers:
They still depend on the employer for work. They still perform that work under the employers direction. They still perform the work for payment.

The only change: They are now paid worse, with no benefits, and are more insecure. More broadly, most self-employment is also poorly paid and insecure.
Being your own boss is usually very hard.

Outsourcing Wage Labour

Other factors that determine the nature of the relationship between an employer and a worker include: - whether the worker is engaged in a distinct occupation or business - whether the employer performs any required supervision - how much skill the work requires - who supplies the tools and equipment necessary for the work - the length of time needed to perform the job - whether payment is based on time or by the job - whether the work is part of the regular business of the employer - whether the parties believe they are employer and employee

Work and Value

Two sources of value in the economy:
1. Free gifts of nature: Things that can be harvested directly from the environment. 2. Value-added through work (productive human activity).

Work is the only thing that adds value to the things we find in nature.
All value-added depends on work.

The Labour Theory of Value

Classical economists recognized that work is the source of value-added. David Ricardo developed a Labour Theory of Value: Marx recognized this was wrong.

Prices of goods depend on the amount of labour required to produce them.

Under capitalism, profit is paid out, and this also affects prices. Two products requiring equal labour, but paying different amounts of profit, will have different prices.

What is the standard for measuring the necessities of life?

It could be defined as a physiological minimum More likely to be defined by a cultural norm, which evolves with our economy as to what is considered decent