Mr. DiLorenzo could better address the issue of labor unions in the same fashion as addressing capitalism — couched in the concepts of private property and voluntary exchange. Just as private capital owners/investors should be freed from government intervention in the market, so should labor ‘owners/investors.’

Rather than denigrate unions for failure to adequately serve either employees or employers under the extant regulatory regime, Mr. DiLorenzo should rather advocate the deregulation and free-market operation of unions as a voluntary collection of individuals with control over one of the factors of production — labor.

In a free-market where capitalists and laborers voluntarily organize and contract with each other, we should expect to see the supply and demand of both capital and labor equalize in the optimal economic solution for both — and hence for the market.

It is admirable that Mr. DiLorenzo advocates for free-market capitalism, but he should similarly advocate for free-market labor unions. In this way, the markets would determine whether workers are at a disadvantage in bargaining individually for wages.

V Harris

Mr. Harris: I think that DiLorenzo is telling us that unions may not harm “Labor,” taken as an unamalgamated whole, but that within the union, individuals will be harmed–to the advantage of others within the union. That is because the effect of the union is to make wages more equal than they should be or would be in a free market.

I am wondering why von Mises seems always to think of employers as “entrepreneurs.” I am thinking that sometimes housewives hire domestic help or yardworkers. I am also thinking that a person who customarily hires such workers as these may be less likely to buy an automatic dishwasher or a high-priced lawnmower or electric saw for the worker to use. Perhaps the hir-er would benefit from furnishing such machinery to the employee? –Giving the employee more time to do those chores that require purely human effort? In any case, in my experience, the hirer is unlikely to do this.

“The larger the firm, the better it may be situated to negotiate wages which are lower than the workers’ “marginal revenue product.”"

Mr. Harris,

Larger companies might pay lower direct wages in general but the benefits package is usually better and the possibility of advancement is part of the opportunity cost of accepting lower direct wages. Your argument therefore falls apart. The larger companies have no more power over the worker than a smaller firm does.

I would also argue (simply based on my own observation, not empiricle data) that the marginal productivity of a given worker in a large company is lower than it is in a small company because of the attendant bureaucracy inherent in a large company.

Jake wrote:

>Larger companies might pay lower direct wages in general but the benefits package is usually better and the possibility of advancement is part of the opportunity cost of accepting lower direct wages. Your argument therefore falls apart. The larger companies have no more power over the worker than a smaller firm does.< I believe the evidence suggests otherwise. Many prospective and existing employees utilize agents to negotiate on their behalf to secure better wage and benefit terms. The reason they do so is because the cost/benefit analysis of employing agents is positive, indicating that without the agent, the employee is at a bargaining disadvantage relative to the firm.

>I would also argue (simply based on my own observation, not empiricle data) that the marginal productivity of a given worker in a large company is lower than it is in a small company because of the attendant bureaucracy inherent in a large company.<

Even if so, this argument doesn’t address the utility of free-market collective bargaining for labor, which, it seems to me, Mr. DiLorenzo is wholly discounting. In your example, voluntary collective bargaining should shift higher value labor to the more productive firm, whereas unrepresented labor may not have sufficient market information to maximize productivity, hence wages and benefits.

V Harris

Jake wrote:
“The fact that such agents exist to negotiate wages and benefits for individuals further obviates the need for collective bargaining.”

Agreed, but also illustrates my contention that the firm, contrary to DiLorenzo’s assertion, has significant bargaining power over the individual.

Jake wrote:
“Those prospective employees who don’t utilize an agent do so to their own detriment but to force an prospective employee to utilize a a particular agent (the labor union) to negotiate wages reduces the liberty of that worker if his industry is dominated by such such exclusivity in bargaining for wages because there is almost no where to go otherwise.”

Exactly so, and this is why I have been careful to couch my argument in terms of free-market collective bargaining.

Jake wrote:
“Harris wrote:
“…this argument doesn’t address the utility of free-market collective bargaining for labor, which, it seems to me, Mr. DiLorenzo is wholly discounting.” Mr. DiLorenzo did no such thing. Exclusivity is NOT free market collective bargaining no matter how you slice it.”

I agree with Mr. DiLorenzo that a union should have no right to ‘exclusivity.’

Still, from Mr. DiLorenzo’s article, I can only infer that his thesis is that it is not possible for the firm, in a free-market, to hold superior bargaining power over the individual. I respectfully disagree, as evinced by the utility of third-party intervention with the firm on behalf of the individual. Mr. DiLorenzo rightfully criticizes the extant, government-protected, labor-union system as an incompetent representative of the individual (and perhaps even the collective). However, the thesis that worker wages are already being maximized by the activity of competitive firms in the free market, (and by implication, further intervention on behalf of the worker can have no additional benefit) is false. If DiLorenzo is not making this argument, please cite his article indicating my error.

Jake wrote:
“As was already pointed out above, a group of employees who get together and approach the company is not a “labor union”. The company has no duty to bargain with these people and the other employees have no duty to join the organized group.”

Disregarding for now the impact of the “labor union,” my read of DiLorenzo’s article suggests that his thesis is that the market has already appropriately priced the wages of this ‘nonunion’ group of employees, and so their collective action is futile. Again, if DiLorenzo did not make this argument, please feel free to cite his article appropriately.

Jake wrote:
“You must therefore distinguish between “organized labor” and a “labor union”. There are occassional cases of non-unionized employees striking on their employer without union leadership. That would be a pure example of free market collective bargaining.”

Again, my read of DiLorenzo is that irrespective of the form of organization, these efforts can have no beneficial effect for the workers because the market has already appropriately priced their market wages.

Jake wrote:
“You defense of labor unions is basically indefensible Mr. Harris.”

I do not defend labor unions. Rather, I argue that they, like all monopolies, should not receive any further government protection.

I do claim that the firm may have significant bargaining superiority over the individual which is not, and may never be, eliminated via market forces. Thus, workers have much to gain via third-party representation with the firm on their behalf — whether by an individual agent, an agency, or some type of voluntary collective representation.

Mr. DiLorenzo should either clarify or alter his position, and, in recognizing the limitations on perfect information, acknowledge that just as capitalists can benefit by pooling capital, so too can workers benefit by collective bargaining. I think it’s really that simple.

V Harris

Jake wrote:
“Again, the very fact that agents exist to bargian for the employee prove that the market (devoid of any other government controls) is operating perfectly.”

I agree conditionally with this position. Without checking for historical accuracy, wasn’t government protection of corporations (limited liability of capital pools) given early, while organization of labor was still prohibited by law? In other words, didn’t capital *first* go hat-in-hand, rent-seeking from congress?

Jake wrote:
“The need for these agents isn’t proof that the company has superior bargaining POWER, just superior bargaining experience; the distinction is important. I know many people that have never been educated on salary negotitation. They don’t have less power (which includes potential power) they simply have less education and/or experience with the process.”

Your argument is very well stated. It doesn’t appear to me, however, that Mr. DiLorenzo is making a similar argument. Rather, he leaves the heavy-lifting of worker’s wage maximization to competition between firms for labor, and pooh-poohs any education and/or experience contribution that labor unions might make.

As a free-market advocate, DiLorenzo no doubt believes that government should deregulate (i.e., demonopolize) the utilities, and he no doubt then would welcome them into the big tent of free-market capitalism. Similarly, DiLorenzo should advocate demonopolization of the labor unions, and then welcome them as valid representatives of labor into the big tent as well.

Not only would acceptance of demonopolized unions be intellectually congruous with free-market philosophy, it would garner support from the union rank-and-file who seek the value promised by unions but also value owning their own labor — and being able to voluntarily contract it out, directly or through an agent.

Despite not being desired by big business, this is what DiLorenzo should advocate for big labor. Otherwise, his essay conveys the essence of an apologetics for big business and simultaneously a refutation of any possible valuable contribution by big labor.

Although just short of welcoming big labor to the free-market tent, your argument makes sense. DiLorenzo doesn’t make your argument. Therefore I stand by my original statement: “Mr. DiLorenzo should . . . advocate the deregulation and free-market operation of unions as a voluntary collection of individuals with control over one of the factors of production — labor.”

V Harris

I’ve always thought that in a free market, (with-out all the mercantilsm) businesses would probobly be lobying for maximum wage laws.

As Murry Rothbord defines profit, “temporary differences between the cost of production and the demand of product.” (Paraphrase. PErhaps somebody here knows the exact quote.) And as Mises says, The free market tends towards a point of profitlessness, it’s just that that point is always moving because of new innovation and efficiencies, etc.

It’s seems to me then, that in the free marketplace, since profit is so ellusive, entrapreneurs, are really the ones who would be on the short end of the table when barganing for wages. I mean, labor is making a fixed amount of money. (for the job, per hour, whatever) but the entrapreneur hs to keep innovating if he doesn’t have state regulations, taxes, and subsidies propping him up protecting him from the competition. Just a thought.

Tracy

What’s up with all this high-falutin chatter?

Mr. Harris is fair and right on. When someone like Howland raises a concern for the “collective” nature of a Union they very conveniently forget the destructive nature of the “collective” nature of the investor class which manages and controls the labor class. That’s what I love about mises… Someone like Mr. Harris writes an eloquent and poignant response to DiLorenzo’s unfair and unbalanced article, and the mises libertarians add flawed and fallacious and hyprocritcal rebuttals. Go ahead and balther about how I resort to ad hominem attacks. We know all the usual rebuttals. They are right her on the web site.

Another example: Dolan says: “I think that DiLorenzo is telling us that unions may not harm “Labor,” taken as an unamalgamated whole, but that within the union, individuals will be harmed–to the advantage of others within the union.

Ms. Dolan, did it ever occur to you that corporations may hurt labor, not as a whole, but by individuals who have controlling interests to maximize profits by laying off American workers and importing cheaper H-1B and L-1 workers as indentured servants (making 30-40% less than their Ameircan counterparts and willing to work six straight years for 50 hours+ per week so they can get their green card) or exporting labor for cheaper labor to China and India so mises can whine about how it benefits all of us with cheaper prices and how Ricardo was wrong when he said factors of labor do not are assumed not to move across international borders?

Maybe mises itself is harming America by allowing individuals to write pathetic diatribes like I read last week about how gouging during a hurricane is part of a free-market? I can’t wait for the next article on how some mises person also believes usury laws are in the same category and we should get back to mafia days of 200% interest and break your bones if you don’t pay back.

Not on my watch.

Have a blessed day! I wish I had time to reply to the other inane arguments to Harris’s wonderful reply, but I must go to labor and worry if my job will be offshored. I must go and read the http://www.faireconomy.pdf about how corporate CEOs at offshoring companys received 46% more salary increases than all large companys taken as a whole. $10M to $80M/year while laying off American workers and succumbing to their investor class owners clamoring to maximize profits by exporting and importing cheaper labor… all while we listen to their and your shortsighted “collective” opinions about how it’s good for us.

Before I leave, let me give you a little moral lesson for those of you on mises who call yourself a Christian:

New recent information shows American Express’s plans (proper, of course, accoridng to mises) to lay off 14,200 U.S. call center workers by 2005. And Motorola, which did not disclose the exact amount of jobs offshored through any media, it is obvious from recent information the numbers will not be few. The company allocated 13 million dollars to build a new Research and Development facility in Bangalore, India. Ingersoll-Rand Co., a financial institution, plans to increase its offshore outsourcing to select countries by 500% but declined to list the exact number of jobs.

The basic Biblical principle regarding wealth is the principle of stewardship, that man is responsible for what he receives. He is **not** called to liquidate his assets; he is called to give as the Lord prospers him.

The protection of private property and our ability to make a living in the free market of our blessed country is so vital to the biblical ethic, that repeatedly we have prohibitions and sanctions against stealing (which mises of course, condemns in a free market).

But remember, stealing can happen in a multitude of ways, some of which are very subtle. It is not limited to the outright grabbing of another person’s property — an obvious form of stealing. Stealing can be accomplished through fraud, by failing to live up to contracts, by using false weights and measures, or even by intentionally debasing of currency within a society. Add to that stealing can be accomplished by selling off hundreds of thousands of American jobs overseas, to cheaper-labor countries like China and India to help American corporate investors and corporate CEOs make extraordinarily excessive profits. ALL OF THESE WILL RECEIVE THE INDICTMENT OF GOD.

Remember, Scripturally the possession of wealth is not condemned in the Bible (Abraham, Noah, Job, Joseph of Arimathea were all very wealthy ) — prosperity and wealth are a clear aspect of God’s providence. However, the means of acquiring wealth are clearly regulated: exploitation, fraud, dishonesty, oppression, and power politics are all **condemned**. Plain and simple. As is coveting of someone else’s wealth. Plain and simple.

As I said, ALL OF THESE WILL RECEIVE THE INDICTMENT OF GOD.

Have a blessed day!

Harry Stein

investor class which manages and controls the labor class.

I think you’ll find that the vast majority of laborers save and invest money also. This is a false Marxist dichotomy that says their even ARE two classes between labor and investor.

The only reason classes like this can exist is because of government interference. Tax laws are very different with different rates and different deductions debending on how you make your money. Income taxes, also create antagonism between employers and employies.

For example. Lets say that the work you do for me brings me $25. I’m willing to pay you $20 to do this, and you agree.

Now, lets add all the regulatory burdens, my half of the Social security tax, quotas, threats of lawsuits because of afirmative action laws, etc. Now all of a sudden, it costs me more then $20/hour to hire you. You’re no longer worth $25/hour to me. You’re only worth, maybe $20 (And this is very conservative.)

But lets look at your end. You’ve got income taxes. You’ve got Social security taxes. You’ve got higher prices because of government fiat. Now, the work that you’re doing for me isn’t worth $20 any more. LEt’s say you’re going to need to make $25 instead to get the equilalent of what you would have gotten.

But I can’t afford to pay you $25 for that job. I’m barely breaking even now at paying you $20.

You see, it’s all these extra costs, imposed by the government, that causes these divisions. They aren’t natural. They didn’t arise spontaniously.

Tracy

Mr. DiLorenzo writes:

“The only conceivable way that the exploitation of workers could work is if there were a universal cartel of employers that operated an ironclad cartel with no cheating, and they all agreed to pay wages below marginal productivity levels. The only known instance of this—and of universal worker exploitation—would be under socialism, where the state is the monopoly employer. It has never occurred—and could never occur—under capitalism because of the well-known cheating problems with all cartels, especially one as gigantic as a universal employer cartel. ‘It has been demonstrated that at no time and at no place in the unhampered market economy can the existence of such cartels be discovered,’ wrote Mises (p. 593).

What about the Robber Barons of the late 19th century, such as Andrew Carnegie and Carnegie Steel, John D. Rockefeller and Standard Oil, and Cornelius and William Vanderbilt and their railroads? Their indifference to the public welfare and their display of wealth at the expense of their workers is well-documented: huge mansions, for example, in contrast to the company towns or urban squalor in which their employees lived. Such comments as William Vanderbilt’s “The public be damned!” dovetail with the disparity of their incomes vs. the incomes of the workers who labored (and sometimes died) for them and were paid pennies. Is it a free marketplace when the population is desperate for any job, no matter how menial or poorly paid? I fail to see anything other than exploitation and “cartel-ism” during the period.

Harry Stein wrote:
“When someone like Howland raises a concern for the “collective” nature of a Union they very conveniently forget the destructive nature of the “collective” nature of the investor class which manages and controls the labor class.”

To be sure, I disagree with Mr. Howland — if indeed he meant to assert that it is simply the ‘collective’ nature of labor unions which is destructive; rather, I suspect he means the governmentally protected and coerced ‘collective’ nature of unions, in which case I agree with him.

Also, I must take this opportunity to disagree with your characterization of the ‘collective’ nature of the investor class as destructive. Rather, it is similarly government protection of the investor class which is destructive.

Capital-Labor, Labor-Capital, either way government should stay out, and — as long as everyone is respecting the property, contract and similar *negative* rights of others — allow individuals to order their lives as they think best. Once government begins down the slippery-slope of identifying and protecting (or restricting) special classes, matters can only get worse.

I appreciate your positive remarks regarding my posts, but I sense in your comments a deep resentment or distrust of the incentive which investors have to maximize their return on investment. Why? I’ve made the argument above that labor should collectivize to maximize their return on labor invested and you seem to agree with that position. Why then would you so despise the same objective when pursued by capitalists?

Regards,

V Harris

About Robber Barron’s

I suggest you read Some articals form the other perspective of these so called “robber barrons”
http://mises.org/fullstory.aspx?control=388 The fact is that by the time the Anti-Trust laws against Rockefeller’s Standard Oil company went through, he only have 10% of the market share. He had 70% at one time, because of greator effeciency and what not. But his competitors took the hint, and figured out ways to compete. But even 70% of the market share is no monopoly.

I would also point out that Carnegie Rockefeller, and Ford for that matter. In spite of the fact that none of them ever developed 100% market share, much less a coersive monopoly, they also all depended greatly on state protection. Tarrifs, to protect them from the rest of the world, for one. And Government Schooling for another. In many ways, as Gatto writes in “The Underground history of American Education.” government schooling was one big corporate subsidy. It was designed from the onset to teach people to work for somebody else as a laboror.

So these businesses had government protection to inhibit competition. Yet they still never achieved a monopoly. They didn’t even acheive higher then 70% market share! And certainly none of them maintained it. Think about how much less market share they’d have had if government wasn’t protecting them, and subsidizing them!
Tracy

Obviously, the workers there felt that that such their best option, otherwise they would have chosen to work elsewhere for better benefits or better pay.

i don’t think they really had much of a choice back then. it was either keep working or die. it’s not like these people have college degrees and a job market that’s just fawning at them.

Scott, both your posts are substantially correct in their limited view. Open that view a little, and see what is going on around those limited facts.

The “awful” labor conditions of early factory industry pales in comparison to what else was available. “Children” have always had to pay their way until only very recently, with household chores as soon as they were able, then with their labor. Yes, their labor. The only difference was that in the mills, their labor brought the family money rather than just more field hands at the harvest. That money bought products that the family could not have had otherwise, such as the substantially cheaper cloth than had ever been available before.

As an astounding turn of events, people could afford new clothes more than two or three times in their entire lives. Looking back it’s easy to see how good we have it now in comparison, but the people involved at the time looked back with exactly the same feeling of progress. The “average” American eats better, lives longer, travels further, has more free time, and better everything than KINGS did prior to the industrial revolution.

The reason we can condemn the early industrialists is that the difference of our standard of living is so great that it is inconceivable to us how people lived any other way.

How did Standard Oil, Carnegie Steel, Ford Motorcars, gain such astounding levels of market share during their haydays? By producing a better product. And, as Tracy points out, their market shares dropped as quickly as competition undercut their prices or made better products.

Only in a situation where force is used do monopolies exist. A wonderful example of this is Cable TV providers. There are places where Cable TV is NOT a locally regulated monopoly. In those places, prices are lower and service higher than where providers are granted special protection by government, even when there is only one provider.

They know that if they try to charge more, someone else can always step in and undercut their price or offer more service for the same price. The fact that a profit is being made is a signal to others that there is money to be made. Without barriers to entry into a market segment, competition ensures a high performance/price ratio.

I would love to have quickly rented a tanker truck, filled up with gasoline and headed to Florida to fill the need those people had for more fuel. There was a need, and therefore profits to be made. I’m sure I’m not the only one.

Unfortunately, because I would have had to charge more for that fuel because of the higher costs of having to rent the truck short term, get gasoline quickly, and take time away from my other labors to take it south, the price I would have charged is called “gouging” and I am prevented from providing the needed service. Same with food, or drinking water, or anything else I might think of to provide to those devestated people.

People starve, or thirst, or freeze, because of government force.

And concerning out-sourcing, if the argument had any validity, it would be just as valid between cities, or states. Why aren’t objections being made about Gateway Computers locating their facilities in Wisconsin instead of California? Aren’t Californian jobs being lost?

Cheap labor from Alabama being used to replace high-priced labor from Massachusetts. Companies relocating to Kentucky because of tax breaks. Call centers located in Oregon for firms based in New York. Yet no objections are raised.

Watch the objections to “out-sourcing”. They are either by someone afraid for their own position, or they are based on racism/nationalism. What they are not based on is economics.

i’m not trying to say the jobs they had weren’t better the alternative, i’m simply questioning whether they could have had something better than what they did. sure it was relatively good, but how about in absolute terms? i mean sweatshops are better than prostitution, but that doesn’t necessarily say much for sweatshops.

i can’t remember what it was called, but there was a famous incident in those times when a shirt factory set on fire. but there was only one exit since the management was too cheap to put in fire doors. that exit had fire coming out of it, so the workers were burned alive.

i’m sure the employees wanted such a door but at the time if you did so you’d be canned and your family would starve. you couldn’t even afford to miss a day of work.

this would be a good example of the problems the profit motive can cause when it interferes with human welfare. perhaps you can provide a response to this.

I know my EPI and FairEconomy friends and PCR will appreciate this.

As for the rest who read this email/post, whom shall I believe: you or the combo of Stiglitz, Tolenson, Samuelson, PCR, EPI, FairEconomy, and my own convictions and common sense? I’ll take the latter any day!

Today we add the honorable Paul Samuelson who refutes the liberterian, mises, Manikew lies and amateur economists crud!

Regards,

Harry Stein

http://www.iht.com/articles/537609.html

A dissenter on outsourcing states his case
The International Herald Tribune
September 7, 2004
By Steve Lohr (The New York Times)

At 89, Paul Samuelson, the Nobel laureate in economics and professor emeritus at the Massachusetts Institute of Technology, still seems to have plenty of intellectual edge and ample ability to antagonize and amuse.

His dissent from the mainstream economic consensus about outsourcing and globalization will appear this month in a distinguished professional journal, cloaked in clever phrases and theoretical equations, but clearly aimed at the orthodoxy: Alan Greenspan, chairman of the Federal Reserve; N.Gregory Mankiw, chairman of the White House Council of Economic Advisers; and Jagdish Bhagwati, a leading international economist and professor at Columbia University.

These heavyweights, among others, are perpetrators of what Samuelson terms “the popular polemical untruth.”

That untruth, Samuelson asserts in the article for the Journal of Economic Perspectives, is the assumption that the laws of economics dictate that the U.S. economy will benefit in the long run from all forms of trade, including the outsourcing of call-center and software programming jobs abroad.

Sure, Samuelson writes, the mainstream economists acknowledge that some people will gain and others will suffer in the short term, but they quickly add that “the gains of the American winners are big enough to more than compensate for the losers.”

That assumption, so widely shared by economists, is “only an innuendo,” Samuelson writes. “For it is dead wrong about necessary surplus of winnings over losings.”

Trade, in other words, does not always work to all parties’ advantage, according to Samuelson.

In an interview last week, Samuelson said he had written the article to “set the record straight” because “the mainstream defenses of globalization were much too simple a statement of the problem.”

Samuelson emphasized that his article was not meant as a justification for protectionist measures. Up to now, he said, the gains to America have outweighed the losses from trade, but that outcome is not necessarily guaranteed in the future.

In his article, Samuelson begins by noting the unease many Americans feel about their jobs and wages these days, especially as the economies of China and India emerge on the strength of their low wage rates, increasingly skilled workers and rising technological prowess.

The essay is Samuelson’s effort to contribute economic nuance to the policy debate over outsourcing and trade. The Journal of Economic Perspectives, a quarterly published by the American Economic Association, has a modest circulation of 21,000 but it is influential in the economics profession.

Indeed, Bhagwati and two other economics professors, Arvind Panagariya of Columbia and T.N. Srinivasan of Yale, have already submitted an article to the journal, “The Muddles Over Outsourcing,” that is partly a response to Samuelson.

The Samuelson critique carries added weight given the stature of the author. “He invented so many of the economic models that everyone uses,” noted Timothy Taylor, managing editor of the Journal of Economic Perspectives.

According to Samuelson, a low-wage country that is rapidly improving its technology, like India or China, has the potential to change the terms of trade with America in fields like call-center services or computer programming in ways that reduce U.S. per capita income. “Being able to purchase groceries 20 percent cheaper at Wal-Mart does not necessarily make up for the wage losses,” he said in the interview.

The global spread of lower-cost computing and Internet communications, he noted, could accelerate the pressure on wages across large swaths of the service economy.

“If you don’t believe that changes the average wages in America, then you believe in the tooth fairy,” Samuelson said.

For his part, Bhagwati does not dispute the model that Samuelson presents in his journal article.

“Paul is great economist and a terrific theorist,” he observed. “And in markets like information technology services, where America has a big advantage, it is true that if skills build up abroad that narrows our competitive advantage and our exports will be hit.”

But Bhagwati doubts whether the Samuelson model applies broadly to the economy. “Paul and I disagree only on the realistic aspects of this,” he said.

The magnified concern, Bhagwati said, is that China takes away most of American manufacturing and India most of high-technology services business. Looking at the small number of jobs actually sent abroad, and based on his own knowledge of developing nations, he concludes that outsourcing worries are greatly exaggerated.

r. DiLorenzo writes:

“The only conceivable way that the exploitation of workers could work is if there were a universal cartel of employers that operated an ironclad cartel with no cheating, and they all agreed to pay wages below marginal productivity levels. The only known instance of this—and of universal worker exploitation—would be under socialism, where the state is the monopoly employer.”

What about under fascism, as in Nazi Germany where the Arbeitsfront (Labor Front) set wages according to the wishes of the employer? I imagine this kept wages below market rates and thus was essentially a wage ceiling designed to permit rapid investment in capital goods for military use?