Smith's Support of Worker Combination and Marx's Reserve Army of Labor - Fina

    Smith, known for creating the concept of laissez-faire economics, puts forth seemingly contradictory support for numerous forms of market regulation. Smith’s support of unions may seem out of place, but after reading Theory of Moral Sentiments it’s clear why Smith would support workers’ rights. I want to explore this and the relation between Smith’s ideas in the reading and Marx’s ideas regarding the reserve army of labor. 

“We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer.” Smith clearly argues that the amount of power the owners of the means of production hold over organizing in order to limit wages is unjust. He goes farther, criticizing the publicity and violence that worker organization is meant with, and parliament's legal prohibition on said organizing. Smith lays out an argument for worker entitlement that goes beyond typical “invisible hand” conceptualizations of labor market interactions. Considering his theory of justice and hierarchy, which forwards that the pursuit of wealth and exploitative ambition is an origin of injustice through the corruption of virtue and the loss of sympathy. 

Smith’s arguments in favor of collective action mirror his arguments regarding sympathy. Collective action in the workplace works as a restriction on the power and ambition of ‘masters’ in the same way that sympathy works to constrain self-love and self-interest. Marx takes Smith’s advocacy against coalitions of masters and for worker combination a step further. Marx’s theory behind the reserve army of labor seemingly acts to point out a flaw in Smith’s support of collective action within free markets. He forwards that the power to organize is not enough since employers can still undermine collectives through the use of the group of readily available unemployed laborers that always exists within society. Smith’s support of collective action may be another step toward the transition from feudalism to a more fluid social order structured around what would eventually be capitalism, but Marx’s criticism presents this progress as futile unless laborers hold power through owning the means of production. Unless this occurs, the social order simply reforms, and despite increased social mobility, the reality is that employers wield far greater power and control over workers, even if they embrace collective action.

Smith acknowledges that typical national growth cycles the workforce will expand yearly: “When in any country the demand for those who live by wages; labourers, journeymen, servants of every kind, is continually increasing; when every year furnishes employment for a greater number than had been employed the year before, the workmen have no occasion to combine in order to raise their wages.” This gives credence to Marx’s arguments regarding the reserve army of labor. There is, however, a modern phenomenon within industrialized nations of shrinking populations, which will lead to a decrease in availability of workers, and, in theory, larger wages and a greater power of collective action. Marx would argue that this does not matter since employers still wield the power, and in turn can exert their will, but time will tell if we see a resurgence in workers’ rights and payment to the degree that American households used to have the ability to subsist on a single-income and unions wielded far greater power.