Stefan Molyneux
  • last year
In this episode, I investigate the relationship between wealth and poverty through Kropotkin’s lens, questioning how the rich’s fortunes arise from the poor's conditions. I explore how childhood resource allocation experiences shape adult perceptions of wealth and reflect on familial roles mirroring societal class struggles.

The discussion critiques wage differentials and labor exploitation in capitalism, while emphasizing the meaningful contributions of all jobs. I argue that financial success arises from market demand rather than capitalist control, urging listeners to reconsider their beliefs about economic systems and the personal responsibility required for equity.

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Transcript
00:00All right, this is Seeking to Understand, Kropotkin and the Socialists part 3.
00:10Whence come the fortunes of the rich?
00:12A little thought would suffice to show that these fortunes have their beginnings in the
00:16poverty of the poor.
00:18When there are no longer any destitutes, there will no longer be any rich to exploit them.
00:24So again, the big question to me is why is this stuff believable?
00:30Why is it believable?
00:34So it's really important to remember that our first sense of capital, our first sense
00:41of resources, our first sense of the availability of, say, food and shelter, tends to be, or
00:51generally is, a zero-sum game, a zero-sum game.
00:57So let's take some examples from childhood.
01:01So if there is a certain amount of food, let's say it's you and your brother, right?
01:07If there's a certain amount of food, a fixed amount of food, right, it's not coming in
01:14in a conveyor belt, right, there's a fixed amount of food, then if your brother grabs
01:19more, you get less.
01:22If your brother has more food, you get less food.
01:27Let's talk about the best place to watch TV.
01:31Maybe there's a real comfy couch.
01:32If your brother gets the couch or that spot, then you don't, and there's a tussle over
01:37it and it's win-lose.
01:38Only one person can get that spot, that space, whatever.
01:46Sort of back in the day, this is when I was quite young, of course, there was one TV in
01:53the house.
01:54There were no tablets or screens in that way.
01:57So there was one TV in the house, and if your brother got to watch his show, you didn't
02:05get to watch your show, when there was only one computer.
02:09If your brother was on the computer, you weren't on the computer.
02:13Let's talk about a bed, right, if you've ever had to share a bed, if your brother gets
02:22more of the bed, you get less of the bed.
02:25If your brother takes more of the blankets, you get less of the blankets, right?
02:32So this aspect of things is really, really important to understand.
02:35I'm sorry to just reiterate this, but why is it that people believe stuff that in the
02:41modern world, now of course this guy was writing before the true advent of the modern
02:45world, but it's a zero-sum game.
02:51Now if you are in the business world, no, let's go, I mean, if you're trying to get
02:59a job, if you get the job, another person doesn't get the job.
03:03If the other person gets the job, you don't get the job.
03:06That's why the resources are finite in your perception, right?
03:11If you want to date a girl, and some other guy gets to date the girl, then, you know,
03:18at least back in the day, I don't know what situationships are all about now, but back
03:21in the day, if you wanted to date a girl, and some other guy got to date the girl, then
03:27you didn't get to date the girl, right?
03:32So understanding that for children, it's a zero-sum game.
03:38If the person who's bigger and stronger and more powerful gets more, it's because you
03:45get less.
03:48You know, when I was in the business world, we would occasionally hire talent, lure talented
03:52people away from other occupations or other preferences.
03:58Maybe they wanted to go back to school, we'd say, no, no, we'll give you a job or whatever
04:00it is, right?
04:01So if they came to work for us, then they didn't go to school, right?
04:06If we got to hire them, they didn't go to work for our competitors.
04:08So all kinds of stuff was going on that's zero-sum.
04:13So I mean, it would be interesting to do, maybe this would be a little research project
04:17somebody wants to take on, but how many socialists are younger siblings?
04:24Because if you look at the mechanics, the psychological mechanics of younger siblings,
04:38then it is younger sibling is the proletariat, older sibling is the capitalist, and parents
04:47are the state.
04:50Younger siblings are the proletariat, psychologically.
04:52Younger siblings are the proletariat, older siblings are the capitalists, and parents
04:57are the state.
04:59Now sibling conflicts arise from bad parenting.
05:06Sibling conflicts arise from bad parenting.
05:10Parents will often enjoy this sort of infighting that goes on between siblings, and if the
05:18parents give a scarcity mindset to their children, then conflicts over those scarce
05:24resources will inevitably occur.
05:26And there's going to be some conflicts, right?
05:28You kind of have a conflict-free life, that's called being dead.
05:32So I guess you're fighting with the worms.
05:37So the younger sibling blames the older sibling because it's safer to blame the older sibling
05:45than to confront the deficiencies in the parenting, in the same way that the socialists
05:50blame the capitalists rather than the state.
05:57Because younger siblings blame the older siblings rather than the parenting, because it's easier
06:03and safer, right?
06:04And of course the predations of the older sibling are more vivid to the younger sibling,
06:11and they're sort of unfair.
06:12It's unfair, right?
06:14It's unfair.
06:15If the older sibling is getting more, it's because the younger sibling is getting less.
06:19And if the capitalist is getting more, it's because the workers are getting less.
06:27Now you understand, this is not a disproof of the socialist argument, but it is an explanation
06:31as to why this thing that is patently false, I mean, it's obviously false.
06:38Why would people believe in a zero-sum game?
06:40Now of course, younger siblings were evolved to fight like hell and resent the zero-sum
06:45game because otherwise they didn't make it, right?
06:48Because food was scarce and resources were scarce, and it was the case that if you couldn't
06:55get a spot close to the fire, you might freeze to death or be picked off by random predators
07:00in the forest, right?
07:03I mean, you absolutely had to fight tooth and nail to get your resources, and you had
07:08to understand it was a zero-sum game, which of course for most of our evolution it was,
07:12right?
07:13There's only a certain amount of food, there's only a certain amount of shelter, there's
07:16only a certain amount of blankets, there's only a certain amount of spots close to the
07:20fire and so on.
07:21So you had to fight like hell as the younger sibling to get your resources.
07:30They were zero-sum, and those siblings that didn't fight like hell and resent the zero-sum
07:35game and, you know, I mean, I remember my, I shouldn't laugh because it was a long time
07:41ago now, obviously like 50 years ago now, but my brother is older, and I used to, he
07:50was supposed to stay up five minutes later, and I would sit in my bed and I would count
07:54to 300 because that was five minutes and I'd say, time for bed, you know, I didn't want
07:58to stay up later.
07:59And I remember one time I woke up, I fell asleep counting to 300 and I woke up in horror
08:05of horror as I came out and my mother and my brother were making cookies in the night,
08:11the horror, and anyway, it just bothered me.
08:16It bothered me, my brother got to stay up later, he got more privileges, he got extra
08:22pocket money, and it just felt wrong.
08:26And I remember, of course, at my aunt's place with a whole mess of cousins at dinner when
08:35I was like, I don't know, four or five saying, well, but it's fine because I get to live,
08:41you know, X number of years longer.
08:43And people were like, well, you're not guaranteed of that, what are you talking about?
08:46You could die tomorrow, like, oh, this is so unfair, right?
08:50And I think this is why I was a socialist when I was younger.
08:53Now once you understand the abundance mindset, and it's not a zero-sum game, which, you know,
08:58I can understand, you know, the dark satanic mills, 18th century agriculture, 19th century
09:06industrial labor, I can understand saying, you know, there's a couple of rich guys and
09:10there's a whole bunch of downtrodden soot-stained proletariat, I can understand that.
09:14But now in the modern world, the idea that there's this scarcity mindset when we're so
09:22much, I mean, we're just insanely wealthy relative to the past.
09:27And we didn't pillage another dimension or steal from orcs in Lord of the Rings, right?
09:31So now it's harder to sustain and maintain, right?
09:36And of course, those outside the realms of privilege, like those who want stuff from
09:45the rich guys, like the rich kids, right?
09:48So the question is, why are there so many champagne socialists?
09:50Why do so many rich kids turn to socialism?
09:53Well, in part, it's because those who have less have a vested interest in provoking guilt
10:00among those who have more.
10:01Because if they can provoke guilt in those who have more, then those who have more will
10:06pay them to alleviate the guilt, right?
10:11This is sort of the privilege thing, it's a white privilege or male privilege or whatever.
10:14If you can get people who are doing well to feel guilty about doing well, then you inflict
10:20a suffering on them called guilt, and then they will pay you to alleviate the suffering.
10:29It's similar to voodoo, right?
10:30There's a witch doctor, and if you don't pay him, he'll put a curse on you.
10:35And if you do pay him, he'll lift the curse from you.
10:37This is sort of the original sin argument, that since you're born with sin as an ailment
10:46and an affliction, then you have to pay to have the curse or the sin or the guilt of
10:52privilege, you have to pay to get this curse removed.
10:59And that is a very difficult thing to overcome.
11:04That is a very difficult thing to overcome.
11:08And it is the eternal cry of the younger sibling, oh, not fair, not fair, unfair, that's not
11:15fair.
11:16What does he get more?
11:17You're trying to appeal to, you may have given up on the guilt of an elder sibling, but you're
11:22trying to appeal to the sense of unfairness or the guilt the parents might have if the
11:27younger sibling is not getting as much and so on.
11:31Because remember, the parents want the younger sibling to live too, because they've invested
11:34a lot of time, effort, and calories into having and raising the kids.
11:37So the cry of unfair to get resources by provoking guilt, that the person will stop calling you
11:46unfair if you, like that's the deal.
11:49The deal is, you call me a bad guy, a thief, an exploiter, a capitalist, privileged male,
11:58whatever, right?
11:59You call me a bad guy, and then I will pay you and you'll stop calling me a bad guy.
12:05But of course, that's not how economics works at all, right?
12:09If you pay people to alleviate the bad feelings provoked in you by their shame attack and
12:15guilting, then they'll just escalate, right?
12:19This is why this stuff doesn't, you know, the sort of woke mob can never be appeased
12:23and it doesn't matter what you say, there'll always be another demand.
12:26And that's because it's not about a moral judgment, it's about exploitation in return.
12:32This is why the word exploitation.
12:34So much of what goes on in the world, and I think a little bit more in the left, is
12:40this projection, right?
12:41They accuse you of what they're doing.
12:44So when they scream at the capitalist, you're an exploiter, you're an evil capitalist, they're
12:51either wanting higher wages if they're semi-socialist, or they want to steal the factory and the
12:58capital equipment and the money and the resources from the capitalist.
13:01In other words, they're saying, well, you're underpaying us, so we're going to kill you
13:04and take your stuff.
13:05Well, that's the ultimate exploitation, is to kill someone and take their stuff.
13:08So when they scream exploitation, they are telling you what they're going to do, what
13:14they want to do.
13:16What they want to do.
13:17It's really important to understand that.
13:20Most accusations are confessions of desires for crime.
13:29Most accusations are indications of criminal intent.
13:35Right?
13:36You're exploiting me, I'm going to exploit you back, I'm going to kill you.
13:38So it is just a threat.
13:41And people kind of understand this when there are these very large threats, particularly
13:45against groups, that the threat is of criminal, immoral, evil intent.
13:53So that's why it is so believable.
13:57And if you get into the habit of getting resources by saying, oh, unfair, unfair, it's not fair.
14:06If you get into that habit, then you don't become productive yourself.
14:09And then, what you fear, and what is actually kind of true as a child, then becomes an inescapable
14:19reality as an adult.
14:20So if you say, get resources not from, you know, hard work and productivity and so on,
14:24you get resources because you're saying, oh, unfair, it's unfair, then as an adult, you
14:33just keep yelling and screaming, it's unfair at people, right?
14:38You just keep yelling and screaming about unfairness, and then the world that you fear,
14:46that is zero-sum, becomes the actual real world that you inhabit, which is you get resources
14:51by verbally abusing other people and extracting resources from them through, I mean, it starts
15:00with threats of guilt, but the threats of guilt are almost always backed up sooner or
15:04later by the threats of violence, right?
15:08So people call me all kinds of bad names, and then if I, you know, poke my head out
15:13in public, they would attack venues and threaten and bomb and death threats and so on.
15:19So it turns from, oh, it's unfair, to I'll kill you if you don't give me stuff, right?
15:29It's a shakedown, right?
15:31Okay, so this is really important to understand that people are not getting out of the, and
15:37of course, you know, there's not just two siblings, right?
15:39I mean, there's, you know, when there was a bunch of kids, six, eight, ten kids, there's
15:44an elder sibling, then there are different layers of sibling greed, resentment, but the
15:52further you go down in the birth order, the more it seems like a zero-sum game and the
15:55more you have to fight like hell to, and you have to appeal to the authorities to get
16:03what your brothers won't give you or your sisters won't give you, right?
16:06And that's running to the government to get equality.
16:10Okay, so let's see here.
16:16Assuredly, this is not, sorry, did I get to the wrong here?
16:22Yes.
16:23If people had the means to support themselves, if they were capable of meeting their daily
16:25needs without hiring out their laborer, no one would consent to work for wages that must
16:30inevitably be if the capitalist is to derive any profit, a mere fraction of the value of
16:35goods they produce.
16:37Even an independent artisan, a labor aristocracy of Kropotkin's day could not hope to do better
16:41than to support his family and put together an almost certainly inadequate pittance for
16:44his old age should he rely on his own effort and diligence.
16:48And he wrote, Kropotkin wrote, assuredly, this is not how great fortunes are made, but
16:51suppose our shoemaker takes an apprentice, a child of some poor wretch who will think
16:55himself lucky if in five years his son has learned the trade and is able to earn a living.
16:59Meanwhile, a shoemaker does not lose by him, and if trade is brisk, he soon takes a second
17:05and a third.
17:06If he is keen enough and mean enough, his journeyman and apprentice will bring him in
17:10nearly a pound a day over and above the product of his own toil.
17:13He will gradually become rich.
17:15That is what people call being economical and having frugal, temperate habits.
17:21Bartleman is nothing more nor less than grinding the face of the poor.
17:26Right, so an apprentice.
17:28So this is a younger, now the shoemaker takes an apprentice and I can only assume that Kropotkin
17:36was never a manager and never, although, you know, it all claims to be so scientific, right?
17:43So the shoemaker takes an apprentice, a child of some poor wretch.
17:48So what he does is, being a shoemaker, back in the day of manual tools and no automation
17:55of course, being a shoemaker was quite a challenge.
17:59So you had to figure out the right materials, you had to sometimes customize it for people,
18:05you had to be able to produce, if you wanted to be a good shoemaker, you know, high quality
18:09items, medium quality items, low quality items, depending on the wealth.
18:14If you were just a shoemaker, maybe you had your own store or maybe you sold it to someone
18:19else who would sell the shoes, but all kinds of stuff would be quite complicated and you
18:25have to be hardworking.
18:26It can also, because there's a lot of stitching involved, it can fry your eyes after a while.
18:31So you might not have as long, I mean, being a farmer is a little bit different, right,
18:34than being doing needlework and, you know, the sort of famous stories of people who did
18:38needlework who kind of fried their eyes over time and I'm sort of aware that it's not like
18:43your eyes get fried just from looking at close things, but it does seem to have some
18:47sort of correlation over time.
18:48You might lose the ability to focus on distant things, you know, hunters have to look at
18:51distance and needleworkers and shoemakers have to stitch very up close and so on, right?
18:57So certainly in the realm, in the era before glasses you may not have quite as long a go.
19:02So if you've never been an employer in a complicated trade, then you don't understand
19:13why the employee is paid less.
19:15It just seems kind of incomprehensible to you.
19:17But the reason that you pay your employee less is, like, I'm trying to think, when I
19:27first hired people, they made a third of my wage and then they made half of my wage
19:34and then they got up to two-thirds of my wage as they gained in skills.
19:38So I would hire people often out of school because they hadn't developed bad habits and
19:47I would then have to put a lot of time and effort and attention into training them, into
19:53training them.
19:55I mean, just looking at a box of scrap leather and figuring out what's needed to put together
20:00shoes is a complicated, highly skilled business, right?
20:08So the reason why the child is paid less is the child is paying through lesser pay, the
20:14child is paying to be trained in being a shoemaker, right?
20:21I mean, if you go to a university for an engineering degree, you pay the university
20:29to educate you.
20:30And so the child is paying the shoemaker to be instructed on the trade and not just to
20:36be instructed on the physical aspects of the trade, right?
20:40The choosing of materials, the choosing of thread, the making sure you're efficient,
20:44he also has to know the competition, he has to have some sense of the demand for various
20:50levels of quality shoes, and he has to have contacts, he has to have an entire network
20:55of people who supply him with materials and to whom he can sell the shoes, whether it's
20:58direct to the customer or to other resellers, he has to know how to do the books, he has
21:05to know how to pay the taxes, comply with the regulations, and there's a lot of regulations
21:08certainly in the medieval era for all skilled tradesmen, right?
21:12So it's not just the making of the shoes which is complicated enough, but the entire network
21:20and tricks of the trade and all this kind of stuff.
21:23Like if you've ever opened a business, there's a lot of learning curve.
21:28You know, if I could go back in time to when I first started being a software guy, I mean
21:31there's things that I would say to do significantly differently.
21:35There's a lot of complicated stuff that goes on.
21:37And so in five years, the child can now be a shoemaker.
21:45I mean, that's pretty good.
21:46It takes seven years to become a doctor, four years plus x whatever to become an engineer.
21:50So in five years, this kid has got an entire occupation and he's making less than a shoemaker
21:56because a shoemaker is investing hundreds or thousands of hours into the child to make
22:03sure the child knows how to be a shoemaker, right?
22:06That's the deal.
22:07Now, is it too long?
22:08Yeah, I'm sure it is too long, but that's because the tradespeople have captured the
22:16government and restricted entry to those who don't go through a very long apprentice.
22:19You can sort of see this in electrical, in plumbing, in other trades that go on at the
22:24moment that you have to go through a whole bunch of apprentice stuff.
22:27You have to pass a whole bunch of tests and so on.
22:30And I mean, I'm sure some of it is useful, but a lot of it is just raising the barrier
22:34to entry so you can keep your prices high.
22:36Today, to be sure, workers have, after a hundred years, succeeded in improving their
22:41condition and the apprentice system, already declining in Kropotkin's time, had all but
22:46disappeared.
22:47Yeah, I don't think that's true.
22:50But saving one's earnings is no more the route to real wealth than it ever was.
22:55At best, workers can hope to buy a house, afford some time off from the hated job and
22:59put a little money aside for retirement or hard times.
23:02To become wealthy in economic terms requires exploitation, either directly from workers'
23:06labor or indirectly by exploiting workers' need for the necessities of life.
23:10Okay, so this is another thing that happens, and this is true of a lot of intellectuals.
23:15A lot of intellectuals, I mean, with the exception, obviously there's some exceptions.
23:21I think, of course, of Dan Knapp in Paris and London by George Orwell, Eric Blair.
23:27But if you've not worked side by side with the, quote, proletariat, then you don't understand
23:36their attitude to work.
23:39You don't understand their attitude to work.
23:40So in other words, if you're an intellectual, highly skilled verbally, great analytical
23:45abilities and so on, you've got an IQ of, I don't know, 125 plus and so on, then yeah,
23:52you would be mindlessly bored by repetitive labor.
23:57But that's not really the case with the majority of people who stay in low intellectual labor
24:06for a long time, right?
24:08That's not really the case.
24:09I mean, when I was in my early 20s, I was a waiter at a variety of places, and I had
24:16a waitering job at a very high-end restaurant where I made very good tips, but I had a split
24:20shift which kind of blows because, you know, from two to five, you've got nothing to do.
24:24You're not getting paid.
24:25But at the high-end restaurant, I worked with waiters who were professional waiters.
24:35They were in their 30s, they were in their 40s, and that's what they did.
24:39They were waiters.
24:40And they had pretty good coin.
24:41They made pretty good coin.
24:43And they were generally not smart.
24:45And I don't say this with any negatives.
24:47It's the same.
24:48Some people are not tall, right?
24:49A basketball player who's six foot eight is going to look at a five foot two guy and say,
24:53he's short.
24:54It doesn't mean that he's any less.
24:55It just means he's probably not going to be very big in the basketball world, right?
24:59So they just weren't smart.
25:03And they had got into a job that they enjoyed relative to their abilities.
25:08They generally did not have dreams of, I want to become a rocket scientist or a novelist.
25:14I mean, occasionally you'd come across people like that.
25:16The discontented people who were operating far below, sort of five easy pieces style,
25:20they were operating far below their intellectual abilities, and those people tended to have
25:24severe abuse and emotional histories or drug addictions or alcoholism or some other significant
25:30dysfunction that interfered with their ability to make any kind of real living.
25:36But most of the people that I worked with, and I remember when I used to work at Pizza
25:42Hut way back in the day and Dom Mills, there were these older women who had been there
25:51since, I don't know, prehistoric pizza was invented and they got all the best sections,
25:57right?
25:58And I would sort of complain about this.
26:00Oh, not fair.
26:01Like, why can't I get the best section?
26:02And the manager said, look, bro, you're a fine waiter, you're a good waiter, but you
26:06know, come on, you're just passing through.
26:07These guys are here for the duration, right?
26:09So you're going to come and go.
26:10You're going to go to college.
26:11You know, whatever, right?
26:13And you're coming and going, but these women are here for the duration and you can't, right?
26:20Because if I quit because I couldn't get a good section, he could just hire someone else
26:25and then they'd have to go through the training and it would cost money, right?
26:29But if one of these women quit because they couldn't get a good section, then he lost
26:35someone who was going to be working for the next 10 or 20 years, right?
26:40At the place, or 10 years, let's say.
26:47So the cost for him to lose a permanent worker was far greater than the cost for him to lose
26:53a temporary worker.
26:55And also he knew, and he says like, it's the same everywhere, right?
26:58It doesn't matter where you go.
26:59It's the same everywhere, right?
27:00The guys who, the people who stick around get the best, you know, and I don't want you
27:04to stick around.
27:05Go do something else, right?
27:06You're just passing through.
27:07And so that's, you know, all perfectly fair and valid, right?
27:11So was it exploitive?
27:12No.
27:13I mean, he was just making, but, and the women weren't discontented, you know, they weren't
27:18discontent.
27:19They didn't hate the jobs.
27:20Now, if I was still a waiter in my forties, I'd be pretty depressed.
27:26I would be pretty depressed if I was a waiter in my forties, because it would be a mismatch
27:31to my skillset, right?
27:38So there was an old movie, Hollywood Shuffle, and there was a guy who was a really good
27:48singer, but he ended up working at the post office because he just couldn't get his dreams
27:51of singing going, right?
27:53I mean, if, I don't know, if I had some glorious, fantastic singing voice, then I don't know,
27:59maybe being a podcaster wouldn't feel that great.
28:01I don't know.
28:02It's hard to sort of put these things in alternate dimensions and so on, but I'm certainly infinitely
28:10happier using my skills to their maximum potential than I would be carting food around for people
28:19for 40 years, right?
28:21And again, it's really, really important to understand this is nothing at all negative
28:25to the waiters in their forties.
28:28But they don't live to work.
28:30They don't have any big dreams about work.
28:32They go in, they joke around with people, they do their work, they bitch about the bosses
28:37a little, and they go home and they enjoy their life.
28:42They do.
28:44So what's wrong by that, right?
28:51What's wrong with that?
28:54So it's not a hated job.
28:55This is projection.
28:56This is somebody like Kropotkin, who obviously was a very brilliant but misguided fellow,
29:01he would be miserable and his job, if it was on an assembly line, he would be miserable
29:07and he would hate it, and that makes sense, right?
29:11That makes sense.
29:15And so when he says the proletariat hates their job, or the proletariats hate their
29:23job, what he's saying is that if I had to do that job, I would hate it.
29:28But that is not having empathy for the fact that they don't hate their job, and they would
29:35actually hate being a manager, because it would be really stressful for them.
29:43You know, the fact that I'm really good at negotiating meant that I was sent out when
29:46customers were angry, upset, and so on, right?
29:51And were making threats of various kinds, because something was going wrong with the
29:54project.
29:55So I would go out and come, the feathers, right?
29:57And I remember taking an employee out who wanted to learn how to do this, and you know,
30:02the clients were really angry and upset, and I talked about it, I listened with them, we
30:06made our plans, we made our arrangements, they felt heard, and you know, I saved like
30:11a million dollar project in an afternoon.
30:15And I remember the guy saying like, oh man, you couldn't pay me enough to sit across that
30:19table, like you could not pay me enough to deal with these angry customers, right?
30:27And he just didn't want to do it, he found it kind of intimidating, he found it kind
30:31of negative, and he just didn't want to learn how to do it, and so on, right?
30:37And that's no problem, I mean, I looked at the corporate accountant and I was like, boy,
30:42you couldn't pay me enough to be an accountant, right?
30:44It's just particular preferences and differences.
30:47So just because you would hate the job doesn't mean that everyone who has that job hates it.
30:51In fact, I remember, I mean, of course, a lot of times when people would be leaving
30:55the hardware store and the boss would be up there doing the paperwork and the payroll
30:57of the taxes, they'd all say, yeah, you couldn't pay me to do that job, man, you couldn't pay
31:01me enough, right?
31:02All right, so he says, under capitalism, the harder a man works, the less he is paid.
31:07Well, of course, that's the labor theory of value.
31:11The harder a man works, the less he is paid.
31:14What does that really mean?
31:17Well, what it means is that the intellectual labor is not visible, and the sweaty labor
31:22is more visible.
31:28And that is a very sort of concrete way of doing things, and it's this weird thing that
31:36says, if somebody's doing intellectual labor, they're spoiling, right?
31:44So I remember, was it Jack Welsh, CEO of, I read his book many years ago, CEO of General
31:50Electric.
31:51Now, I'm probably going to butcher this story, but the gist of it is important for what I'm
31:55saying.
31:56So they had their fingers in every pie, and the problem was that when a particular industry
32:01or sector was doing badly, then people would lose their bonuses, like the managers would
32:06lose their bonuses because the section as a whole wasn't making money.
32:12And so the managers would then move to the sectors that were doing the best.
32:15In other words, they lost the best managerial talent in the areas of the business that most
32:20needed it because they were doing badly.
32:24And this caused a lot of death spirals in industries, right?
32:30So the way that he solved it was to say that we're going to pay bonuses based upon how
32:34you're doing relative to the industry that you're in, rather than in absolute ways, right?
32:38So if you're in some area where the entire industry is losing 15%, but you've only lost
32:445%, then you'll get the same bonus as somebody else who grew the business 10%.
32:48So you're not going to compare it to absolute numbers, you're going to compare how you're
32:51doing relative to other people in the same industry, right?
32:56So if you're doing better than other people in the same industry, even if you're still
32:59losing money, then you're going to get a bonus in that way.
33:03And you could even say or make the argument that we're going to increase the bonuses for
33:07people who are doing badly in an industry that's doing even worse in general, and that
33:11way you'll attract the best management to the businesses that are in the most trouble,
33:15rather than attracting the best management talent to the businesses that are already
33:21on an updraft through various economic reasons or factors, right?
33:26So I mean, that's sheer genius, it's absolutely brilliant, and it saved, I assume it saved
33:32tens of billions of dollars or more for the company.
33:37Well, that's quite interesting, right?
33:43What's that worth?
33:44Well, it's worth a massive amount of money.
33:49And it's just an idea.
33:50Now, of course, having the idea, getting people to sign off on it, figuring out how it works,
33:55that's a whole different matter.
33:57The harder a man works, the less he is paid.
33:59And what that means is that the less he does mental labor, the less he is paid.
34:04For sure, because physical labor is not reproducible.
34:10Physical labor is not reproducible.
34:13If you're digging a ditch, you can't copy-paste that, right?
34:18But ideas are reproducible, right?
34:22I mean, Jack Welch was a great CEO, and if he'd gone into these distressed industries
34:26and managed like crazy, but he couldn't do it for all of them, and he couldn't do it
34:29for very long, because somebody needs to be the CEO.
34:31But if he designs a structure which changes the incentive so that the best managers stay
34:36in the most challenging sectors, that's reproducible, right?
34:43So another way of saying it is that the less reproducible your labor, the less you're paid,
34:51because the less profit can be made of it, right?
34:53In other words, if you only have active, not passive income, then the less you're going
34:56to get paid.
34:58So if you write a song that people want to pay you to cover, the song, then you're going
35:04to make a lot of money, because you don't have to do any additional labor to get paid,
35:09because you've already written the song.
35:11Whereas if you're just a live band, then that labor is not reproducible, so you get paid
35:16per gig.
35:17There's no passive income.
35:18You actually go out and work hourly, right?
35:24But the solution to this manifest injustice could not be found in reversing this equation.
35:28In payment according to the service each renders to society, for who is to determine
35:32the value of another service, quote from Kropotkin.
35:35We know what reply we should get.
35:36The bourgeois economists and Marx too will be quoted to prove that the scale of wages
35:40has its reason for being since the labor power of the engineer will have cost society more
35:44than the labor power of the laborer.
35:46Nope.
35:47It's just that the labor power of the engineer is passive.
35:54The value of the engineer continues long after he has moved on.
35:59If the engineer designs a bridge, and the bridge design is great, then the engineer
36:06moves on and the bridge takes a year or two to build, but the engineer is already moving
36:09on to other things.
36:10In other words, the value of the engineer is not based upon his direct labor.
36:14He doesn't need to read out the bits of his blueprints to all the workers for a couple
36:18of years, right?
36:21The engineer, of course, you can copy-paste designs and you can get designs based upon
36:27pre-work, work them out and so on, right?
36:32The engineer, by having intellectual labor, intellectual labor can be copy-pasted, physical
36:36labor cannot, right?
36:43But the employer who pays the engineer 20 times more than the laborer makes the following
36:46simple reckoning.
36:47If the engineer can save him 100,000 francs a year on his production costs, he will pay
36:51the engineer 20,000.
36:52And when he sees a foreman able to drive the co-workers and save 10,000 francs in wages,
36:56he loses no time in offering him 2,000 or 3,000.
36:59He parts with 1,000 francs when he counts on gaining 10,000.
37:04And this is, in essence, is the capitalist system.
37:08Well, that's interesting, right?
37:14Now, the idea that wages are determined by the capitalist is crazy.
37:22It results from a chilling lack of experience in the economic realm.
37:27Wages are not determined by the capitalist.
37:31Wages are determined by the customers.
37:34Your wages are determined not by the capitalist and his preferences.
37:39Your wages are determined by how much the capitalist can sell your labor to the customer
37:48for.
37:50Now, if you are Brad Pitt, you can get paid 15 million dollars to make a movie and you
37:59have to do 15 million sit-ups, apparently, so you get paid a huge amount of money.
38:05But it's not based on the whim of the producer.
38:07It's based upon the value that Brad Pitt provides to the audience.
38:12Brad Pitt is a very charming and good-looking guy with a great physique and so on, and actually
38:18a good actor.
38:19Like, if you've seen him in a variety of roles, he can stretch more than he often does.
38:22He's become sort of a meme like Schwarzenegger and Matthew McConaughey, although Matthew
38:26McConaughey, of course, also gave up on doing the rom-coms and wanted to do more challenging
38:31work, right?
38:32So it is not the whim of the director or the producer that creates the wage of the movie
38:42star.
38:43It is how much value does the movie star add to the movie in terms of getting the word
38:49out, in terms of interviews, in terms of you get free marketing, because whatever they
38:52do is going to be covered in the fairly trash rag press.
38:56So if you pay Brad Pitt $15 million, it's because the audience wants to pay him $15
39:04million.
39:05You're simply borrowing from the audience's ticket sales in the future to give to Brad
39:10Pitt in the present.
39:13So the idea, and even if we were to say this though, so if the foreman is able to drive
39:19the workers and save 10,000 francs in wages, then the capitalist offers him 20 or 30 percent
39:30of the savings.
39:32But if the foreman is so good at saving money, then the foreman will be able to, he will
39:37document this because somebody has to know that he's able to save this amount of money,
39:40and he will go to other capitalists and say, look, I'm saving 10,000 francs in wages at
39:46this company, pay me 9,000 or 8,000 and you'll still make money, so he'll just drive his
39:53wages up, right?
39:57So let no one come up with this talk, says the article, about production costs of the
40:00labor force and tell us that a student who has cheerfully spent his youth at university
40:03has a right to a salary 10 times that of a minor's son who's been wasting away down a
40:07mine from the age of 11.
40:09Wage differentials, whether under capitalism or some future socialist society, must be
40:12condemned as unjust, nor is it possible to determine a just way based upon an individual's
40:18contributions, even if such a system could be tolerated on ethical grounds which it cannot.
40:24So of course, socialism is forced association, which is a violation of freedom of association.
40:33Freedom of association means, if I think Brad Pitt is worth going to see a movie because
40:37he's in it, and some other unknown guy, I don't want to see the movie, right?
40:42In other words, Brad Pitt's going to have a certain level of quality in his movies,
40:46in his acting, and so on.
40:49His last science fiction film, which was total trash, notwithstanding.
40:53But you look at Brad Pitt and you say, okay, well, for Brad Pitt to sign off on a movie
41:00and for all this money to be spent, there must be a good script, must be a good story.
41:04Brad Pitt's a good actor, he's charming, he's funny, he's interesting to watch.
41:09So when I go out to watch a movie where I'm going to spend 20, 30 bucks, and I'm going
41:17to drive out and risk getting into a flaming crash and sit in a dark theater for two hours
41:23and go through a half hour or 20 minutes of ads for a movie that I don't want to see,
41:27I don't want to, like I want some security that I'm not just going to waste my time and
41:31watch a bad movie.
41:32I remember many years ago, a girl I was dating was working at the Toronto International Film
41:36Festival and I went to go and see massive amounts of movies.
41:39She got me free tickets to everything.
41:42I got to see Sin Compasione, which is one of the best adaptations of Crime and Punishment
41:47I've ever seen, but unfortunately it's only available, I think, still in Spanish.
41:51I got to see Once Were Warriors, which was a pretty horrifying movie about the indigenous
41:55population of New Zealand and all of the dysfunctions there.
42:02It might have actually influenced me on my Australian tour, come to think of it.
42:05But anyway, I went to see a whole bunch of movies and most of them were terrible.
42:09Most of them were terrible.
42:11Like maybe a massive, I don't know, I can't really remember how many movies I saw, but
42:14it was a lot.
42:15And I only remember two out of the probably 10, 20 movies that I saw at the film festival.
42:23So let's just say 10% right now.
42:26Those movies were great and I wouldn't say Once Were Warriors was powerful, but it was
42:30not obviously enjoyable.
42:32So whereas if I look at the Brad Pitt movies that I've seen, I would say probably 90% of
42:40them are good and worth watching.
42:45So instead of 10% of the movies being good, which is a bunch of unknowns, 90% of the movies
42:50are good.
42:52So that's great, right?
42:55So I saved, I mean, let's imagine I paid for all these other random movies, I saved hundreds
42:59and hundreds of dollars and, I don't know, 20 movies, two hours, 40 hours, like a full
43:04work week of time, plus travel there and from, 60 hours or whatever, right?
43:08So 60 hours and hundreds of dollars were saved simply by going to a Brad Pitt movie.
43:17I mean, minus 10% because a couple of Brad Pitt movies are pretty bad, for me anyway.
43:22So it's just an economic calculation.
43:24You're liable to get a better quality movie if there's a movie star in it, which is why
43:28the star system exists.
43:32It's sort of like, why do people hire celebrities to try to sell new goods and services?
43:39Well, because if you hire a celebrity, it means you've invested a lot, which means you
43:41want to stick around for the long term.
43:43So it's a way of conspicuous consumption display that says you're not just a fly-by-night organization
43:47that's going to vanish.
43:48So it's determined by the customers and the customers are making valid choices based upon
43:54costs and benefits to go to a movie with a movie star.
43:58And of course, if it's some beautiful woman, then even if the movie isn't that great, well,
44:04I guess you get to eyeball a beautiful woman for a couple of hours, not the worst thing
44:07in the world, right?
44:08For women, I'm sure it's the same with Brad Pitt.
44:12So it's not possible to determine a just wage based upon an individual's contribution.
44:21So why not?
44:23Why are people not allowed to make rational calculations?
44:25And if you look at, say, the movie industry or whatever it is, if you go and see some
44:30unknown band, then the odds of them being really great is very low.
44:34If you go and see a band you already love and know their music, then the odds of you
44:37having a good time are pretty good, right?
44:42Certainly good, right?
44:44So why are you not allowed to make your rational calculation about where you allocate your
44:48funds based upon cost-benefit analysis, which is instinctual for a lot of people, right?
44:55You know, there's a bunch of albums that used to come out every year, and if they still
44:59do albums, I guess they do.
45:01But when Queen would put out a new album, I'd buy it.
45:05I'd buy it, like 100%.
45:09I talked to someone in the music industry who was saying that, you know, in Canada,
45:13if I remember the numbers rightly, there are so many Beatles fans that if Ringo Starr puts
45:17out a new album, you're going to get 10,000 sales like right off the bat, like bang.
45:22You just know that's the baseline, right?
45:24Whereas if some other random drummer puts out an album, nobody's going to buy it, right?
45:29And I sort of say this because in university, I was a DJ, and I had a radio show.
45:37I've still got a tape of it somewhere, a couple of tapes of me doing a radio show at the age
45:42of 19 or 20.
45:44And I was in the radio station, and there were thousands of albums on the wall.
45:53And sometimes I just sort of flicked through them when I was playing a long song, sort
45:57of flicked through them.
46:02I remember playing the clap by Yes, and at the end of it, screaming that my fingers were
46:09bleeding.
46:12So you just see the number of albums out there, and most of them lost a fortune or lost money
46:20or never made money, and people come and go.
46:23Whereas even a song like Free as a Bird, Resurrected, not a great song, but people will be really
46:29interested in it, or the Freddie Mercury one or the Queen one that came out recently.
46:35People will just listen to it because, and so will I, right, so will I.
46:38So what's wrong with people making rational cost-benefit calculations based upon economic
46:45preferences?
46:47Nothing wrong with that.
46:48Now, for someone to armchair quarterback and say, well, this is fair, this is just, this
46:54is unjust, I agree with this, I don't agree with that, who cares?
46:57You're just a yapper, you're just yapping.
46:59Let people make their choices.
47:00Let people allocate their finances and capital and choices wherever they want.
47:06It's their right, it's their choice.
47:08You don't have the goddamn right to go in with a gun to people's heads and tell them
47:12where to spend their goddamn money, you sociopathic a-holes.
47:16All right, freedomain.com slash donate to help out the show.
47:19Massively appreciate it.
47:20Lots of love from up here.
47:21Talk to you soon.
47:22Bye.