Labor Is Not A Commodity

Labor was conventionally regarded as a private good by both classical political economists and conservative thinkers such as Edmund Burke, who argued, “labor is a commodity like every other, and rises and falls according to the demand.” 

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The counterpoint to that view, since the early 19th century is that labor (power) is not a commodity because it has characteristics that no other commodity has. Labor Economist Robert Prasch summarized these characteristics as: “(1) Labor cannot be separated from its providers. (2) Labor cannot be stored. (3) Labor embodies the quality of self-consciousness. (4) Labor is the one “factor of production” that most of us wish, in the end, to see well compensated.”

The negative claim was officially endorsed in Section 6 of the U.S. Clayton Antitrust Act, passed by Congress in 1915. Hailed by American Federation of Labor president Samuel Gompers as a “Charter of Industrial Freedom,” Section 6 proclaimed that “the labor of a human being is not a commodity or article of commerce.” Nearly identical wording was incorporated into the Treaty of Versailles in 1919 as a guiding principle for the establishment of the International labor Organization and reaffirmed as a first principle of the I.L.O. in 1944.

The everyday experience of working people, economic policies of governments, bargaining priorities of trade unions and theoretical models of economists would seem to conform more to the commodity model than the idealistic but nebulous proclamations of the Clayton Act and the Treaty of Versailles. But an early rationale for the rebuttal was outlined in 1834 by silk weaver William Longson in his evidence to the House of Commons Select Committee on Hand-Loom Weavers:

…every other commodity when brought to market, if you cannot get the price intended, it may be taken out of the market, and taken home, and brought and sold another day; but if a day’s labor is offered on any day, and is not sold on that day, that day’s labor is lost to the laborer and to the whole community…

Longson concluded from these observations of labor’s peculiarities that, “I can only say I should be as ready to call a verb a substantive as any longer to call labor a commodity.” 

Another formidable challenge to the notion of labor as a commodity had been articulated nine years earlier by Thomas Hodgskin in his labor Defended Against the Claims of Capital. Hodgskin pointed out that the most important operation for the production of wealth, “the rearing of youth and teaching them skilled labor, or some wealth-creating art.” As Hodgskin continued, “this most important operation is performed… without any circulating capital whatever,” that is to say, without compensation in either money or goods. Instead, child rearing is performed, “under the strong influence of natural affection and parental love… through all the long period of the infancy and childhood of their offspring.”

In both Longson’s and Hodgskin’s arguments, the unstated distinction between labor and labor power was crucial. No actual labor was performed in Longson’s example. What the laborer offered on the market but was unable to sell was his or her capacity to work on that particular day. Similarly, what parents give to their children by bringing them up and teaching them skills is a capacity to labor, provided the opportunity arises to exercise that capacity. Wage labor per se only comes into existence after the capacity to labor has been purchased and combined by the employer with facilities, equipment, raw materials and direction.