Class Polarization and the Free Market

Increasing class polarization has only one primary cause: the lack of a free market. It is not America’s free market economy that causes class polarization, on the contrary, it is the absence of a true free market. It is only within the workings of a “controlled” and monopolized marketplace that “polarization” of the classes can occur. It is in this sense that our present system of Capitalism resembles past class defined systems such as Monarchy.

Class polarization can only dominate a social system if there is an actual or perceived difference between groups of people within the society. The most obvious difference would be an “economic” one. A certain group or class is able to gain advantage economically over another class. The “inferior” class must not only perceive the difference but also feel that the “superior” class is benefiting or profiting from the actions of their own class. The “fruits” of their labor are being diverted unfairly to the privileged group. Somehow “work” is not compensated for fairly and a class of “non-workers” thrives on the collection and accumulation of the excess compensation.

This is virtually impossible with a true free market system. Any “work” that is not compensated for fully, would soon be sought after by those who could operate closer to the “margin” of profitability. This would force the underpaying employer to pay higher wages or cause the goods produced to be sold at lower prices, which is in essence a wage hike. This would continue until the profit margin disappeared, leaving only sufficient compensation for both the entrepreneur, whose wage is based on his organizational abilities, and a return for Capital itself. The return for Capital is due to its ability to “enable” production, and the rate of return is based on its supply and its success in its endeavor.

With this “full” compensation in effect, there is no drain of what Marx referred to as “surplus labor value” to a seperate class benefitting from the work of others. All would be compensated in a manner directly proportional to the value of the product they produce. This does not eliminate the need for organizational labor or other variations of the production process. It merely opens the avenues of free competition in all areas of the economy and determines compensation based on contribution rather than position or control.

For this freedom to exist, there must be unlimited and open access to the total production process. Land, buildings, machines and tools must all be subject to free market principles. Land is probably the most difficult factor when considering freedom of the market. The supply is limited and any investigation of title eventually leads to force or fraud, which has been instrumental in creating the class structure we have. Land’s place in the free market has been subject to long and lengthy debate and needs continued exploration. They can be no true free market until this question is settled.

The class polarization we have in America today is a direct symptom of a “controlled” market. Those who call for continuation of the present “free market” are simply referring to the “controlled” market that has benefited them and their interests with such abundance. They are referring to a market in which certain individuals and corporations are permitted to sell their products with little of no competition, externalize many of the costs and pay employees what they see fit, rather than what a competitive market demands. Profit is extracted from all these areas, and huge financial networks are created to multiply and pass these “profits” from firm to firm. If any problem with this flawed system occurs, the Government steps in and infuses billions of taxpayer dollars, again extracting from the productive sector only from a different angle, and distributes the funds where it sees fit, for the most part to those who caused the problem in the first place.

Through the history of our nation, our Government decided who should be bestowed profits and who should labor. The construction of the railroad system was not created by citizen demand, funded by consumer payment and the work competed for by ambitious entrepreneurs. Instead it was fostered by the demands of industrialists and politicians, funded through the outright giveaway of our precious land base and distributed by decision of the Executive and Legislative Branch of our government. Power production, the highway system, our dams and waterways all followed suit. Class polarization was fomented within the branches of our Government and thoroughly embraced by those who benefited financially from its installation and maintenance.

Free market needs are demanded by the consumer and fullfilled by the producer. The producer sucessful in fullfilling these needs at the most competitive price sustains his enterprise while those who cannot supply the product economically may soon become insolvent. The worker demands as much as possible for his labor, but must operate within the constraints of the marketplace, ever governed by the choices of the consumer. The price is the expression of all these interrelated pieces continually making adjustments and increasing efficiencies.

What class polarization can possibly arrive from this pure free market? Who is the producer and worker but the consumer? What is the market but everyone consuming and producing, demanding and fulfilling? In this free market, we all demand what we feel we need, we pay according to our ability and how much we value the product, we are compensated for our work according to the value we all place on the product we produce, and compensation is directed naturally to where the value originated from. It is pure economic democracy. If we by chance ever adopt a free system, there will be no classes to polarize.