NEOCLASSICAL THEORY VERSUS THE THEORY OF ECONOMIC COMMUNITY

Neoclassical economists generally ascribe the goal of maximizing profits to “producers” rather than to laborers. Contemporary adherents of classical political economy ascribe the goal of preserving and expanding capital to capital owners and managers, not to laborers. Labor's aim, economists say, is to obtain a wage or to minimize the disutility from work. These formulations distinguish the goals and interests of labor and capital, and counterpose them as competitive categories or opposing classes of economic agents. Neoclassical economics treats labor and capital as having “alternative” ends. That characterization means that their ends are connected in such a way that they are not attained together, but rather one in place of the other. Specifically, producers maximize profit by minimizing wage costs, while laborers increase their wages by reducing profits.

Reviewing the scene, however, the goals of labor and capital lose some of their distinctness, and, with diminished distinctness, some of their character as alternatives fades, though not all of it. In seeking a wage, labor seeks means to the satisfaction of a multiplicity of needs, just as the capital owner does. Labor is not producing with the goal of consuming the immediate product of the productive activity. Nor is capital producing for self-consumption. Like the capital owner, labor does not merely seek subsistence. The laborer pursues a money wage to gain access to the world of commodities. Such an aim involves a desire to gain a share of the wealth or capital of society. In this respect, it is the same end that capital owners and capital managers have when they strive to preserve and expand capital through capital-based commodity production processes.