Provocation #119 Labor and capital as a caste system.
Why is the split between labor and capital treated as if we had been assigned by fate into a two caste system? Political philosophy suggests that the unending task for politics is to keep elites from taking the fruits of society for their own. There is no permanent resolution to this problem, it requires a continuous effort to keep such concentration from happening. It seems to be the result of human nature, in particular the dynamics of generations where the new does not have the experiences of the old and sees opportunities and not restraints. The new generation also is divided by levels of talent and energy.
The continuous struggle between elites and those they can marginalize is unavoidable and must be undertaken in each new generation. But dividing the population into labor and capital, two separate and unequal populations, is not helpful because it presupposes the division we are trying to moderate.
What is the history and role of economics in this struggle? The most important people in economics, Aristotle, Adam Smith, Schumpeter, Keynes for example, all stress the importance of shared results and defeating oligopoly, kleptocracy, monopoly… Why then does economics as a field of inquiry seem to avoid this, going along with the inevitable contempt of elites for the rest? There are of course many economists (usually not teaching the core courses in the core universities), but most seem to stick with the standard categories of money, capital, ownership, interest debt, innovation as unquestioned Lego Blocks of an economy.
Much of economics uses the categories Capital and Labor as if they are two different species. But if we had a truly free market it would be easy to move across the boundary between labor and capital. The division between worker and owner would be a choice and the rewards of each would become more equal. Where is the curiosity about why these two seem so frozen? Why it is that capital is free to organize but labor is not?