State Archives of Florida, Florida Memory. Working in the refining industry in the early 20th century was incredibly dangerous for the low-wage workers, whose labor built wealth that is still held today by the great-grandchildren of the capitalists of that time.
I know I have already touched on this with both the law and with contracts in particular, but invariably there is the temptation to dismiss the system wholesale as a completely disingenuous legal fiction only meant to give the veneer of legitimacy to the undemocratic operations of the capitalists. And I do not deny that the system has no democratic or empirical legitimacy. But it is important to understand how the system works nonetheless, because capitalists have constructed them meticulously to serve the different functions of dispossession and exploitation needed to create wealth and sustain the system itself. Thus we can construct a number of useful correlations between legal mechanisms and economic or political concepts in order to chip away at the system until there is sufficient consciousness to do away with it entirely.
Aside from the bourgeoisie academic Marxists who have the problematic “noble-savage” notion of the working class, most of the Left recognizes an overwhelming need for raising consciousness among the working class. Consciousness is in a dialectical relationship with alienation, and there are four kinds of alienation in Marxism:
- Alienation of the worker from the products of their labor
- Alienation of the worker from the production of their labor
- Alienation of the worker from the self as a producer
- Alienation of the worker from other workers
Consequentially, the Left has designed a number of means to counter each of these alienations, both broadly and specifically. Here a few illustrative examples.
- To counter alienation from the products of their labor, the adoption of profit-sharing.
- To counter alienation from the production of their labor, the use of collective bargaining.
- To counter alienation from the self as a producer, the creation of cooperatives.
- To counter alienation from other workers, organizing in unions.
And in turn, capitalists and their state retaliate against this resistance with:
- Company-controlled contracts.
- Price undercutting
- Right to work laws
In my contracts class, we read a case called Plowman v. Indian Refining Company (20 F. Supp. 1 (E.D. Ill. 1937)) that relates to each of these four types of alienation, but for the sake of brevity I am going to focus on the use of “consideration” requirements to determine the enforceability of contracts, and how it was used in this case to alienate workers from the products of their labor and from themselves as producers.
Plowman is a great example of a case where the judge made his ruling not simply to resolve the legal issue but to formulate policy not even needed to resolve the issue at hand. Because in the legalistic sense, the workers did not have a bit of a case. Their administrators (the court’s ruling occurred after many of the workers had died) sought to collect money promised to them, claiming that the company had guaranteed it for life and that they had terminated the arrangement less than a year later. At evidence was a letter which read:
…Effective August 1, 1930, you will be carried on our payroll at a rate of $_______ per month. You will be relieved of all duties except that of reporting to Mr. T.E. Sullivan at the main office for the purpose of picking up your semi-monthly checks. Your group insurance will be maintained on the same basis as at present, unless you desire to have it cancelled.
[Signature of the vice-president]
There are two reasons why this letter is not enforceable that have nothing to do with consideration. The first is the lack of essential terms and the ambiguity created therein. Specifically, there is nothing in the letter to demonstrate that the offer was for payments until the end of the workers’ lives. Therefore, it fails at being an offer to enter into a legally binding contract, and is merely a notice of what the company plans to do.
The second is that the vice-president was not authorized to make this agreement. The laws around civil liability of corporations for their employees’ actions is a labyrinth of obfuscation to protect corporate actions. It is the power of agents to bind their principals, and the vagueness of its terms (i.e. agent’s actual authority is to perform “acts necessary or incidental to achieving the principal’s objectives”. Restatement (Third) of Agency § 2.02(1).) gives corporations considerable leeway.
In other words, the agreement was not binding. However, the judge created a hypothetical where both of these issues were not present so that he could address consideration. I have found few terms in contracts that more profoundly reifies social relations into commodity relations. It is a cruel irony that the term is called “consideration,” as it serves as crucial foundation for the purging of social considerations in a capitalist society.
More far-reaching than currency and a step-child of debt even more sadistic than its parent, consideration is the notion that contracts require a thing of value to be exchanged for a performance of promise. Particularly, the law wants consideration to be the inducement of benefit by detriment or detriment by benefit, the so-called bargain theory of consideration. Increasingly moving away from even feigning an interest in “fairness,” the courts do not police equivalency of this exchange, and the presence of value in either benefit or detriment is measured solely in exchange value. Consideration fills the “social welfare”-shaped hole in capitalism’s social organization. While its fellows “offer” and “acceptance” are, to a certain degree, a part of democratic organization, consideration is wholly a legal fiction of the capitalist world. What György Lukács wrote on reification demonstrates just how powerful the concept of consideration is:
Its basis is that a relation between people takes on the character of a thing and thus acquires a ‘phantom objectivity’, an autonomy that seems so strictly rational and all-embracing as to conceal every trace of its fundamental nature: the relation between people…The modern capitalist concern is based inwardly above all on calculation. -Lukács “Reification and the Consciousness of the Proletariat”
Lukács goes on to write that this system renders judges into statute-dispensing machines for the capitalists. Pardoning his ignorance on the specifics, it is very much true that consideration allows judges deciding cases to weigh exchange value over social value in nearly every instance.
Plowman presents a rather blatant example of this since the plaintiffs had the audacity state that there was “moral consideration” even if there was no consideration through exchange value. “However strongly a man may be bound in conscience to fulfill his engagements,” writes Judge Lindley, “the law does not recognize their sanctity or supply any means to compel their performance.” Judge Lindley then goes on to emphasize that he of course values that old workers are provided for, and extols the virtues of the old poorhouse system. Rather, the court requiring a company to do so would be overreaching its power, a power that should be left up to the legislature. What was this moral consideration? Mostly it was the past work of the workers. And what better way to alienate workers from the products of their labor and from themselves as producers than to legally declaring that their past work (the infrastructure they built, the new workers they trained, and simply the labor by which they produced value) has no value in consideration.
As Friedrich Engels wrote in The Principles of Communism:
Labor is a commodity, like any other, and its price is therefore determined by exactly the same laws that apply to other commodities. In a regime of big industry or of free competition – as we shall see, the two come to the same thing – the price of a commodity is, on the average, always equal to its cost of production. Hence, the price of labor is also equal to the cost of production of labor. But, the costs of production of labor consist of precisely the quantity of means of subsistence necessary to enable the worker to continue working, and to prevent the working class from dying out. The worker will therefore get no more for his labor than is necessary for this purpose; the price of labor, or the wage, will, in other words, be the lowest, the minimum, required for the maintenance of life.
There is no consideration, by the capitalist or humane definition, for the alienated worker. And their denial of social welfare is heralded by the paradoxical waxing-poetic of how our society values its workers.
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