How do you respond to the argument that it's the capitalists' entrepreneurial skills which organize the means of production?


The People, May 4, 1991, Page 6

How do you respond to the argument that it's the capitalists' entrepreneurial abilities and skills which organize the means of production in such a way as to make the most efficient use of labor and create the most wealth?


Capitalists do have an interest in squeezing the greatest possible productivity out of each worker. But capitalists themselves no longer have much to do with the organization of production. More importantly, the overall social impact of productivity increases under capitalism doesn't exactly make an argument in favor of preserving the system.

Historically, capitalist "entrepreneurs" did play a vital role in bringing together the forces of modern industrial production. But the successful capitalists were those who were most "efficient" at accumulating capital-which means that they were most efficient, not merely in making the most productive use of labor, but in reaping surplus value through the ruthless exploitation of wage labor. Frequently, they were also among the most efficient at scheming against, swindling and otherwise robbing each other, the most successful of them in this country earning the epithet, "the robber barons."

Today there is very little "entrepreneurship" remaining in the capitalist system. New businesses are regularly being started up, but most either die within a few years or are swallowed up by long-established firms. New ways and means of stepping up the rate of exploitation-including, but not limited to, increases in productivity-are of course still being implemented by capitalist firms, but this is done by the capitalists' hired executives and management. Established capitalists may "dabble" in such activity; most don't. In any event, they don't have to.

Today's top capitalists -- most of whom inherited their class status, further indicating that they had little to do with the organizing of production -- typically live off the surplus value from a diversified array of stocks, bonds, banking and other investments. They are far removed from the process of production. For example, a capitalist may have a few thousand shares of stock in an airline in the morning, sell it and use the proceeds to buy up shares of stock in a pharmaceutical firm in the afternoon, and sell that stock two days later to buy up shares in an electronics company. It is obvious that such a capitalist will have little or nothing to do with organizing the means of production in any of those firms.

For that matter, many capitalists don't even have to involve themselves in such buying and selling. They have firms to "manage their investments" for them too!


One could argue that the capitalists collectively are still ultimately responsible for the efficient organization of production. But their profits are not the "rewards" of efficient organization of production. The most efficiently organized production facility in the world wouldn't yield a penny of profit if its owners (or their hired management) did not hold the price of labor power (wages) down below the price of labor's product, i.e., if they did not exploit the workers.

Moreover, to whatever small degree some capitalists may still be "credited" for efficient organization of production within individual firms, the system of capitalist production is marked by anarchy, not efficiency. Separate firms competing for the same markets, with wasteful duplication of effort; the inevitable "crises of overproduction" that arise from that competition and the exploitation of wage labor; the waste of having 20 percent or more of the nations' productive capacity and 10 percent or more of the nation's potential workforce involuntarily idled at the same time; the colossal waste of potentially useful labor being channeled into advertising, real estate, "business services," militarism, regulatory agencies and other institutions that are "necessary" only to capitalism-these conditions are hardly indicative of the most efficient organization of production.

Finally, to whatever small extent capitalists may be responsible for the "efficient use of labor" within a firm, such efficiency, under the capitalist system, does more social harm than good. Productivity improvements under capitalism are used, not to lessen the1 necessary hours of labor for all, but to eliminate the jobs of many, and frequently entail stepping up the workloads or the pace of work for the workers remaining.

All told, capitalists do have an interest in seeing production organized such that it will "create the most wealth"-for themselves. But for the vast majority of the people, who belong to the working class, this is hardly an argument in favor of capitalism.

A class of parasites is not needed for production to be organized in an efficient manner. Production will operate far more efficiently, in the social interest, when the workers themselves are in full control of production and distribution, and there no longer exists another class to "make...use of labor," for its own selfish ends.