1. What is the distinction that Reading 4.3 makes between owners and employees? Give an example of each.

The distinction from the reading indicates that Owners are defined as the Wealth Class, while Employees belong to the Laboring Class. The Wealth Class does not rely on physical labor to generate wealth; instead, they depend on the Laboring Class to create production, which serves the demand for what consumers are willing to buy. 

When laborers create mass production for organizations, these businesses rely on their efforts to build surplus upon surplus. In contrast, employees primarily live off wages, salaries, and fees from the work they invest through labor, meaning there is no income unless they physically commit to earning it. 

For instance, consider a business like JPMorgan Chase, which holds all the monetary interests of the public. The owners do not need to work there to ensure profits continue to accrue; they do not need to be visible within this infrastructure to maintain profit. Executives, shareholders, and major investors profit from the institution’s success without directly performing frontline labor. 

On the other hand, a bank teller performs customer service, handles transactions, and assists with banking needs, but they do not share in the profits generated by the bank. Instead, they receive a fixed wage for their work. Laborers must clock in for their allotted time, earning a suggested salary based on their experience and education. However, these wages are often low enough to maintain high profits for the bank, ensuring substantial returns for the owners.

If a laborer cannot work any longer, they will face a loss of income, which could lead to homelessness and other dire consequences. 

1. How do you understand the quote by Adam Smith on pg. 28? What is it saying about labor?

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How I interpret Adam Smith’s quote hints that the original meaning of true labor is energy exchange. It is not leveraged by money, which is merely a tool with no inherent value. Society has been conditioned to believe that capitalism must endure for its own survival. In truth, without labor, there would be no need for capitalism. Smith’s quote argues that labor is the foundation of value. Before the utilization of minerals( Gold and Silver) for monetary trade to purchase goods, the true cost of anything was measured by the amount of work (labor) required to produce it.

The reliance of laborers on the wealth of the upper class illustrates the issue of wealth inequality, which refers to the uneven distribution of wealth in our society. An extremely small group of people owns a significant amount of the world’s commodities. Statistically speaking, less than 1 percent of the population controls the majority of the market. If this extreme imbalance continues, it can further harm those in poverty and also negatively affect the wealthy, as their fates are intrinsically intertwined. As the poverty level rises, due to a lack of surplus produced by consumers, it will lead to potential economic collapse.

1. What are your thoughts on the main argument of Reading 4.4 that class is NOT an identity?

My thoughts are that liberals tend to claim that social class intertwines with the same identities we use through race and gender. This is a mistaken attempt to display the discrepancies that arise in social class, as they do not carry the same distinctions. I understand that liberals aim to address the injustices seen in monetary disparities among specific populations and how these issues affect genders through acts of sexism and racism. 

Social class, particularly the division between labor and capital, does have a connection to these societal dilemmas. However, you cannot use identity to distinguish social class because it is fluid and can change depending on the dynamics between capitalists and laborers. For example, if no one decided to engage in work, there would be no capitalists. 

Identity is a fixed aspect related to one’s pigmentation or other characteristics that society uses to assign distinctions, such as gender. In contrast, social class is a dynamic element of identity that refers to aspects of a person’s identity that can change over time due to personal choices, external circumstances, or evolving social conditions. Identity is generally considered to be a more static aspect; for instance, biological sex or racial identity can typically be perceived as fixed, even though they can be viewed differently through cultural or social lenses.

1. How do you understand the argument Reading 4.4. makes when stating that “class structures are built around a close form of dependency”? What is this close form of dependency, and can you think of an example?
2. The close form of dependency is when one cannot live without the other, much like the conditioned relationship between the capitalist and the laborer. The capitalist relies on the laborers to maintain the profits that their organization depends on for surplus, allowing them the comforts of life without indulging in hard labor. In turn, the laborer relies on the capitalist to sustain their ability to fulfill their consumer needs, which include paying for rent, providing for their family, funding college, and affording proper shelter. Without capitalism, laborers would have no occupations to pursue in their quest for the American Dream, which promises that if they work extremely hard, they will be greatly rewarded. I often reflect on this reward in relation to my parents, who were self-proprietors. I understood the message that the capitalist indoctrinate that “hard work”, is the pursuit of the so-called “land of milk and honey” ultimately resulted in their deaths. An example of this relationship is the clothing manufacturer, who acts as the capitalist and relies on laborers to design, sew, and produce clothing for profit. The laborers, or factory workers, depend on the clothing manufacturer to provide them with jobs and paychecks/ wages.

Posted in Discussion Board 4.2

1. Micheal Parenti explains the differences between business owners and employees by highlighting their opposing interests and roles in the economy. Business owners, or capitalists, possess the businesses, resources, and land needed for production. Their main aim is to earn as much profit as possible. On the other hand, employees sell their work for wages but don’t have any ownership or control over production. For instance, if I own a fast food restaurant, I can decide how much to pay my workers and when they work, but the employees have no say in their pay or job security. Owners make money by paying workers less than what they actually produce. Employees want fair pay, but if wages are too high, it cuts into the owners’ profits. Another example is if I run a clothing brand and sell shirts for $50, but it only costs $5 to make one. The worker who sews the shirt might only get $3, while I keep the rest as profit for my business. Parenti argues that capitalism naturally favors owners over workers. Owners hold the wealth and power, while employees rely on their wages and often face exploitation to boost profits for those in charge.

2. Adam Smith’s quote explains his idea about how we determine the value of things in a capitalist economy. He believes that the worth of a product comes from the amount of work that goes into making it, rather than the money spent to buy it. When he says, “labor is alone the ultimate and real standard,” he means that no matter what kind of money is used, the real value of an item is connected to the human effort (like time, hard work, and skills) that went into making it. The phrase “Money is their nominal price only” shows that money is just a way to trade, and its value can change. But the true value of a product is still based on the labor needed to create it. For example, if a product requires a lot of work or special skills to make, it will usually be worth more, no matter what currency is used to buy it. Smith is basically saying that the amount of work put into something is what really determines its value, while money is just a way to show that value in different situations. This idea is really important in classical economics, where work is seen as a key factor in figuring out how much something is worth.

3. The argument in reading 4.4 on “class structures are built around a close form of dependency” means different social classes depend on each other, which helps keep the current power structure in place. The term “close form of dependency” describes how workers and business owners interact in a capitalist system. Workers need business owners to pay them wages so they can live, while owners need workers to make money. However, this situation is not fair because owners have more control—they decide how much workers get paid, how secure their jobs are, and what the working conditions are like. A example of this dependency can be found in fast food restaurants. Employees rely on their jobs to meet their basic needs, but they often earn low wages and have little say in their work conditions. At the same time, the business owner makes a profit from the workers’ efforts while trying to keep expenses, including wages, as low as possible. This creates a cycle where workers stay dependent on their bosses, which strengthens the divide between social classes.

2. The Owner-Employee Difference in Reading 4.3

Michael Parenti makes a clear differentiation between owners and employees in Reading 4.3 Capital and Labor. Owners are classes that depend on investments made in stock, bonds, and property. Absorbed by the efforts of others, they earn their income from business profits. On the contrary, an employee is one who usually earns income as a payment for services rendered in work done by another. These are the ones who sell their labor to eat and drink but actually do not own the means to put it into practice.

For example:
Owner: A major shareholder in a multinational; earns income dividend and capital gains income;
Employee: Factory worker whose cash flows are from wages of the same corporation.

3. Understanding Adam Smith’s Quote: Page 28

On page 28, Smith expresses the phrase: Labor is and can be just so much the ultimate and real standard by which to estimate, at all times and all places, and to compare value between all commodities. Really we can speak about their actual price at these-widely we would call this nominal price.” The actual value of goods and services is based on human labor. Money is the form of exchange. It’s the exertion involved in the production of goods attached value to them.

4. Class Suffering Not an Identity in Reading 4.4: Insights

Class cannot be seen as an identity just like race and gender, the way this counter-argument essay goes. Rather, class is a structural channel within the economic system defined by one’s relation to the means of production. Clearly, the world of classes concerns what one’s role and power are in an economic hierarchy and not an identity of culture and personality. That line of argument embodies the systemic division of class and correlates these structures to the fundamental concern of inequality.

5. Arguments Over Class Entering Into Reading 4.4 “Structures Built Around a Close Form of Dependency”

The claim according to Reading 4.4 is that class structures are built around “a close form of dependency,” which means that classes depend on one another within the capitalist system. Capitalists rely on workers for producing goods and services, while workers depend on capitalists for jobs and salaries. This mutual dependence leads to such a situation that each class’s status, as well as its power, is defined in relation to the other.

For example:

In a factory, owners depend on workers to operate machines and produce goods. If the workers fail to operate in the factory, the production stops, and the profits would go down. Exchanges, on the other hand, are dependent on owners for their jobs and the payment of wages by which they sustain themselves. Such interdependency shows that classes are interdependent by definition in the economy.

1. What is the distinction that Reading 4.3 makes between owners and employees? Give an example of each.
2. How do you understand the quote by Adam Smith on pg. 28? What is it saying about labor?
3. What are your thoughts on the main argument of Reading 4.4 that class is NOT an identity?
4. How do you understand the argument Reading 4.4. makes when stating that “class structures are built around a close form of dependency”? What is this close form of dependency, and can you think of an example?