Today, capital predominately hires labour. To avoid personification, maybe it is better to say that capital owners, that is, owners of the means of production, hire workers for a fixed wage. Workers are, in such a rental system, rented and to the extend of the contract owned by the capital owners. Both liberals like Mill and radicals like Marx have argued against renting people. They have all argued for the alternative, which is to rent the capital, which is, unlike the labour, alienable from its owners.
It was not only academics who defended this view. Owen D. Young (1874-1962) was an American industrialist, businessman, lawyer and diplomat, who served for ten years as a chairman of General Electric. But he was also a progressive thinker, who had the following to say about labour renting capital (excerpts from Owen D. Young and American Enterprise, A Biography):
It was not only academics who defended this view. Owen D. Young (1874-1962) was an American industrialist, businessman, lawyer and diplomat, who served for ten years as a chairman of General Electric. But he was also a progressive thinker, who had the following to say about labour renting capital (excerpts from Owen D. Young and American Enterprise, A Biography):
"Perhaps some day we may be able to organize the human beings engaged in a particular undertaking so that they truly will be the employer buying capital as a commodity in the market at the lowest price. It will be necessary for them to provide an adequate guaranty fund in order to buy their capital at all. If that is realized, the human beings will then be entitled to all the profits over the cost of capital. I hope the day may come when these great business organizations will truly belong to the men who are giving their lives and their efforts to them, I care not in what capacity. Then they will use capital truly as a tool and they will all be interested in working it to the highest economic advantage. Then an idle machine will mean to every man in the plant who sees it an unproductive charge against himself. Then every piece of material not in motion will mean to the man who sees it an unproductive charge against himself. Then we shall have zest in labor, provided the leadership is competent and the division fair. Then we shall dispose, once and for all, of the charge that in industry organizations are autocratic and not democratic. Then we shall have all the opportunities for a cultural wage which the business can provide. Then, in a word, men will be as free in cooperative undertakings and subject only to the same limitations and chances as men in individual businesses. Then we shall have no hired men. That objective
may be a long way off, but it is worthy to engage the research and efforts of the Harvard School of Business.
That's what the people who work would have to do if they ran the company for themselves. They would have to insure the same things in order to get the capital. They would likewise have to establish a management to make the company function and that is all we are doing under the present scheme of things ... . If all the stock were owned by the employees themselves, it would not change the position of management in the least, nor its duties, nor its responsibilities . . . [for] management's ... sole purpose is to make these two other groups-investors and workersfunction together . . . to produce something . .. of value ...."
(Owen D. Young, 1927)
Author: Tej Gonza
may be a long way off, but it is worthy to engage the research and efforts of the Harvard School of Business.
That's what the people who work would have to do if they ran the company for themselves. They would have to insure the same things in order to get the capital. They would likewise have to establish a management to make the company function and that is all we are doing under the present scheme of things ... . If all the stock were owned by the employees themselves, it would not change the position of management in the least, nor its duties, nor its responsibilities . . . [for] management's ... sole purpose is to make these two other groups-investors and workersfunction together . . . to produce something . .. of value ...."
(Owen D. Young, 1927)
Author: Tej Gonza