Undercover Boss, or, How I Learned to Stop Worrying and Listen to Karl Marx

Well, I don’t know about you, but when I go home, I get into politics debates with my family (what can I say? I’ve always been a radical). Recently, I’ve been listening to lectures by Richard Wolff on Marxism (yikes!) and he has given me a whole new way of understanding economics and politics. Then I watched a show called Undercover Boss and I think I threw up in my mouth a little bit. The show demonstrated what’s wrong with America.

Here’s what happened in this week’s episode: The CEO of Diamond Resorts puts on a (really bad) disguise and pretends to be a new hire at various jobs in the company. He works alongside receptionists, plumbers, etc. At the end of the show, he reveals to the people he worked with that he’s the CEO and then he gives the workers that he worked alongside a big bonus, like paying off their mortgage or a new truck. Super generous of him right!? I don’t think so, and here’s how Karl Marx showed me why:

Ok, let’s look at the idea of work more generally first. If we look around we can see that in every society there are people that work and people that don’t work (this isn’t necessarily bad, some of the people that don’t work are children, the elderly, etc.). In order to take care of the people that don’t work, the workers have to produce more than they need for themselves. The word that Marx used for that “more” is “surplus.” Surplus is the extra stuff that the workers produce that goes to take care of needs/wants that are not their own. 

For example: let’s say I have a small shoemaking business and at home I have a baby. In order to take care of the baby (who obviously can’t work), I have to make some shoes to sell to take care of myself and I have to keep making more shoes so that I can take care of my baby. Part of the money that I make from my labor of making shoes goes to me and part of it goes to my baby. Any of the money that comes from my labor that doesn’t go to me is called surplus (obviously, the surplus that goes to my baby is good!).

In the shoemaker example, I make the shoes and I choose to make extra shoes (in Marxist terms: I choose to produce surplus) so that I can take care of my baby. Notice, and this is key: As self-employed person, I’m in charge of my own surplus. 

Now, let’s say that I apply for a job at McDonald’s. Like everyone else, I want to “get paid what I’m worth!” But here’s the rub: we all know that McDonald’s will only pay me $10/hour as long as I am producing more than $10/hour worth of Big Macs to sell. If McDonald’s doesn’t make more than $10 off of my labor, then I’ll get laid off. This is true in all businesses that are organized in what Marx called a capitalist business structure. In other words: in a capitalist business, the worker does not get all the surplus from their labor. Capitalism is not a way of organizing government, it’s a way of organizing labor relationships in a business.

So McDonald’s makes money off of my labor, i.e., they get to keep part of my surplus and I have no say in what happens to it. Marx called this “exploitation.” Now, stick with me because it sounds inflammatory, but all it means is that in capitalism, the worker does not have control of their surplus. The caplitalist business keeps the worker’s surplus. It doesn’t matter if the worker is aware of this, or if you have a really nice boss with good intentions that pays you the “market rate.” It simply means that the worker doesn’t have any say over the surplus of their labor. In US corporations, it is the board of directors who decide what happens to the surplus (keep in mind the workers have no say in electing the board!). Thus, in capitalism, there is a built-in tension between the workers and the people who get the surplus. They must continually argue about how much or how little of the worker’s surplus that the owners keep. For example, every time you ask for a raise, you’re in essence asking to keep more of the surplus from your labor.

Most people recognize the difference between these two types of businesses, even if we don’t have language for it: We praise entrepreneurs. We all want to “be our own boss” (translation: we want to have a say in the surplus from our labor). 

Back to Undercover Boss: the money that the CEO gave to those workers came out of the surplus that the workers themselves produced. The whole show hides the fact that the only reason that the CEO can afford to pay off the mortgage or buy a truck for a couple workers is because he makes a profit off of all the workers. It doesn’t mean that the CEO is a bad person or has bad intentions, the business is set up that way. Every receptionist at Diamond Resorts brings in more money to the company than they are paid (or else they get laid off). Of that vast pool of surplus, the boss in the TV show paid back a little bit to the few featured workers out of the surplus of all the other workers. The owner/capitalist never gives the workers more money than the workers make for him because if he did, the company would go out of business!

As a Christian, I think that we should organize businesses in a way that’s collaborative and doesn’t have the built-in tension between workers and owners inherent in capitalism. There are other ways of organizing labor relationships. I think it only makes sense that workers should have a say over what happens to the surplus of their labor. For example, if businesses were set up so that workers got to vote about what happened to the profits from their company, then businesses would be more efficient, we could have less government intervention, workers would have a stake in their companies, people would have a reason to work hard. A co-op is an example of this. My wife used to work for a company in which all employees are part-owners of the company. Everyone gets an even share of the profits at year-end. Thus, everyone has an incentive and a real stake in the health and success of the company.

In capitalist businesses, relationships in the business are built on tension. As followers of Jesus, shouldn’t we strive for relationships built on collaboration and love? Maybe good ole Karl Marx can help us be better Christians after all.

Guest Post by Deacon Stephen Keating, a recent graduate of Fuller Theological Seminary who is busy currently applying to PhD programs.  He is also wise enough to know that ‘Theology Nerds are Sexy.’  #TrueStory

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If you’re interested in learning more, head on over to Dr. Wolff’s website: http://rdwolff.com/ or check out his book on the recent US financial crisis.

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16 comments
Bill
Bill

I think the big key is you have defined the problem as the system. I disagree, the problem is the people in the system. People will twist any system, the system is not the problem.

Craig
Craig

One thing that I find interesting about a renewed interest in socialism is that it is middle / lower class people that are big fans of it (Not usually the rich) If I could pick on the "Occupy Movement" for just a sentence or two: We've got people crying out for justice, "oh look at the growing divide between the rich and the poor, I can't stand for this injustice!" However, they fail to examine that if we look past just our country and to the entire globe, the very people that they are cursing and judging as rich are in fact themselves.

Bill
Bill

You keep trying to disassociate "the business" from people, this is not possible and is an academic construct. People run businesses, people screw over other people, a business never did anything on its own, people do things, individuals.

Bill
Bill

All people (and by extension businesses) operate on the profit motive. The system-wide problem you are talking about is people. All people are selfish and looking out for number one. No system will protect against that.

Stephen
Stephen

Bill - when viewed from the perspective of an individual labor relationship it is impossible to see the exploitation. That is the the brilliance of capitalism, that its ideology is capable of masking the unevenness of the relationship by causing the worker to think of themselves as an individual. Exploitation occurs because ALL businesses in the capitalist system operate on the profit motive. Capitalist exploitation can only be unmasked through a system-wide examination.

Bill
Bill

How is it not a free exchange? The worker made the choice to work for the company. They were not compelled, there was no gun to the workers head forcing him to work. He is free to work anywhere he/she wants to, at least in America. The worker only has one commodity of value to the company, a unit of work. That is the only basis for the exchange. There is no exploitation, the worker chooses to work there. They share none of the risk of the business so they share none of the reward. If the business goes under the worker only losses a job, no wealth is lost by the worker except potential wages. The wage is fair because they choose to work for it. If they think they are worth more, find a different job. No one is entitled to a job. It is not a right. The talk of surplus is a made up idea, they have sold the right to their work. It is a sale, that is all, a worker is selling their "work/labor/time" for a wage. Once it is sold they don't get to say "oh wait, that time I sold you, it's worth more than you paid me for" that's not how things work.

Stephen
Stephen

Thanks for sharing your experience Cory. Craig - I think that the continual deferral of responsibility is one of the key problems with capitalism. For example, take a company like Massey energy. The individual coal miners had no say in the way that they extracted coal, thus they deferred responsibility to others. Their managers deferred responsibility up the chain. The people at the top of the company can defer responsibility and say that they're just trying to make the best profit they can for share holders. And share holders have zero oversight or responsibility. Everyone plays a part and no one is responsible to anything except the profit margin. Its a recipe for disaster that plays out over and over and over. As to your example, there are always going to be individual cases on the margin where general rules do not apply. But on the whole, I think lack of responsibility is a problem, not a solution. Bill - Marx's point was that the capitalist/labor relationship was inherently unequal and not a "free exchange." Capitalism actively propagates the ideology that workers are paid a "fair wage." However, the only way that a capitalist business can succeed is if they exploit their workers, thus, there will always be an antagonistic relationship between capitalists and laborers.

Bill
Bill

Time is a commodity, that can be turned into a unit of work and/or bartered for money (time= work=money). the worker is choosing to sell this commodity, their time, to the company for a fixed rate to perform a task. There is no surplus because they have contractually obligated themselves to work a fixed amout of time doing a certain task, and if they don't like the compensation they can break the contract, leave and find a different job or preferably they can create their own company where they do actually own the surplus of their labor. You're assuming that the worker owns this time/unit of work/money they have already sold to the company. This is not correct.

Craig
Craig

Where does risk play into things. As an employee I have very little invested in the company I work for, if it goes under I just move on and go somewhere else. I work for a small employer and he gets more of the surplus but he has far more invested in the company for me. If things get bad enough he loses a lot more than just a job. I trade off my stake in the surplus for a reduction in risk and responsibly. If I am not happy with that trade off then I am free to do my own thing. The dynamics are different for a small business and a large corporation but I think the principle remains the same.

Cory M.
Cory M.

Great thoughts. I haven't considered ownership of profits from this perspective before. My current employer is a private company, but every employee gets stock options. When we go public, those employees will become share holders, who actually have a say in board members, what is happening with the profits, etc. it's not perfect, but owning stock in the company for which you work is a method for sharing in the profits. That being said, owning your own business or working for a co-op is better.

Stephen
Stephen

Thanks Joel - You're exactly right about Starbucks. I don't know the details of the corporate structure at Starbucks, but as a former employee, I can definitely say that workers are not brought into the process of running the company in a way that I think is necessary. Wolff recently gave a lecture where he outlined how a company could organized along "communist" lines: http://rdwolff.com/content/presentation-ethical-culture-brooklyn In short: workers should have a say in what is produced, how its produced, and what is done with the profits.

Joel
Joel

Great post, Stephen. Curious to know how we assess a company like Starbucks where every employee is a "partner" given your conclusion. Doesn't seem much different than McDonalds even despite the fact that Starbucks arguably treats their employees better than any other corporation. Maybe some capitalist fetish disavowal "lite"?

Tim S.
Tim S.

Stephen, Thanks for not taking my comment as harsh as it sounded: I realized after I wrote it that it was perhaps too harshly worded. This was a good article. Thanks.

Stephen
Stephen

Tim - Maybe I'm a shift leader at McDonalds? haha Josh - Thanks

joshua m. walters
joshua m. walters

and isn't it ironic that the CEO is literally "redistributing the wealth".... OH THE HORROR!!! Great post, Stephen.

Tim S.
Tim S.

Where is McDonald's paying people $10/hr? I would love to work there. Holy crap. (Maybe you should edit your numbers a smidge: it's more like minimum wage, which is $7.25 federally right now.) I'm not disagreeing with your points, but it sort of seems like maybe you've never had a shitty job for minimum wage before and have no idea what it's like to work there. I like what you have to say and it makes sense, just pointing out that the dollar amounts seem overly inflated. Or else you've spent your entire life in California and have no idea that other places pay smaller amounts to employees. Let's just say this: I'd really enjoy being paid $10/hr for my work because I currently don't.

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