To take Marx’s warning about monopoly capitalism seriously

Karl did warn us that bad things would happen if that monopoly capitalism ever did. He did not though, mean a monopoly upon production. Rather, he meant a monopoly on the purchase of labour. Something we now call monopsony given the coinage by Joan Robinson. It’s true too, what increases, supports, the wages of the worker is the competition between capitalists for the profits to be made by employing that labour. Where that competition does not exist then labour gets grossly exploited. As in the National Health Service:

But, actually, this Europoor stuff is hitting me where it hurts: my New York-based grad student son out-earns me, and his junior nurse girlfriend is paid six figures – that’s more than I made in a city law firm. Quite right – nurses should earn more than corporate lawyers – but it’s hard to imagine them ever choosing to live here in the UK (an NHS nurse’s starting salary is £32,073).

The US health care system includes many employers, each competing for the money that can be made off the services of a nurse. The NHS is the - near - monopsonistic employer of nurses in the United Kingdom. Karl was quite right, the workers get screwed by the single employer.

There’s not all that much Marx did get right - and most of what he did was what he cribbed from Smith and Ricardo - but this part, monopoly purchase of labour being bad for workers is one of those few things correct that he independently arrived at. Given how many insist that Marx was more generally right we should, perhaps, take more note of this one time he actually was?

The reason to have markets and competition - yea even in health care - is because they’re good for the workers’ wages.

Tim Worstall