Priority of Labor

over Capital

"Labor is prior to, and independent of,
capital.
Capital is only the fruit of labor, and
could never have existed if
labor had not first existed. Labor is the
superior of capital, and
deserves much the higher
consideration."
THE NEW MILLENIUM is telling the corporate world to reconsider
giving priority to labor, thus giving back the lost glory of the human
dignity in the marketplace.

Within the Asian Institute of Management is a
program center called Ramon V. del Rosario
Asian Center for Corporate Social
Responsibility, dedicated to undertake research
and develop training program on five major areas,
labor and workplace issues being one of them. The
2002 Asian Forum on CSR, with urgency and
passion, devoted a workshop session on
Improving Workplace Conditions, Codes of
Conduct, and CSR. A wider awareness is on.
All capital is the fruit
of human labor
As HR consultant I made sure that almost
always, the interventions we propose have
something to do with equal job opportunity,
affirmative action, socio-spiritual upliftment of
workers, the nobility of the employee, the
dignity of labor. I personally believe that
management is more meaningful and fulfilling
when it is first and foremost developing
Companies cannot survive

people through work. nor thrive in an environment

where its only concern is
profits, said Cesar A.
Buenaventura. In the long
run, the company itself must
depend on people for its
survival.
 Labor

- Human energy employed in production
Human Capital
- human resource (labor)
Intellectual Capital
-human knowledge
 Capital

- includes only the employer (traditionally
known as the CAPITALIST) but also money,
technology, resources and the whole collection
of means, which the capitalist appropriates
and transforms into products and services in
order to obtain profit.
Land
Labor
Money
Time
 Where did all
material capital come
from?

Did capital (things) emanate and spring from labor
(person)?
Yes, it seems right to say that all inanimate capital
(money, technology, resources, machines, factories,
laboratories and computers) inherited from the past and
present, whether the most primitive or the most
advanced technology, resulted from the diligent labor of
the human person. The stone axe, the earliest wheel,
y2k-free computer, and the state-of-the-art robotics of
the third millennium they all come from intelligent
labor.
all capital is the result of human work.
 The world in any given
time has inherited two

gifts:
first, the inheritance of what is given to all
people in the form of primitive resources of
nature and,
second, the inheritance of what other workers
of the past have already developed on the
basis of those resources, primarily by
improving technology.

WHETHER ITS the first or second gift, the
past and present forms of capital come from
the handiwork of human labor. It is safe to
assume that human labor is the mother of
all capital, who conceived and gave birth to it.
 When labor is
sacrificed

2001-2003 one of the ominous and unpromising periods in the
history of international business:
Airline and hotel industries were badly shaken
Financial crisis has affected that global community including
the strongest corporations of the electronic industry
The Japanese economy, the toughest and sturdiest in Asia,
went through a recession for one whole decade that started
in the 1900s
Terrorism attack in the united states in September 2001 or
the 9-11 attack
Toshiba Corp., Japans largest chipmaker, cut 20,000 jobs
globally, which was more than 10% of its workforce in 2001.

As Toshibas reaction to Information
Technology (IT) downturn, the chipmaker
slashed its earning forecasts for that year and
drafted an overall restructuring plan after
similar moves by rivals NEC Corp and Fujitsu
Ltd. Its a sort of domino effect of the worst
kind. NEC corp. and Fujitsu Ltd., two of Japans
electronic giants, had two rounds of massive
retrenchments between 1998 and 2001.
Hitachi Ltd., Japans biggest electronics
manufacturer, has also cut 20,000 jobs in
order to remain competitive.

It appears that when global stagflation
happened, management hit labor, the rank
and file, the strongest.
As the Canadian author, Richard Gwyn has
put it: Labor is sacrificed on the inflation
rates altar of oblation.

Action Plan when there is excess in manpower

DOWNSIZING NOBODY GETS FIRED

Early retirement Transfer

Termination Work sharing

Lay of Reclassification

Demotion
 What say the Church
and Labor Code

It is the solemn role of CSR to remind top management
that the human person indeed has primacy over things,
which can be translated into a conviction of the
prioritization of the workers welfare over that of
capital---by all means.
Human activity proceeds from man: it is also ordered
to him, stated the Second Vatican Council. When
he works, not only does he transform matter and
society, but he transform matter and society, but he
fulfills himself. Rightly understood, this kind of growth
is more precious than any kind of wealth that can be
amassed

Vatican Council II further added that it is what a
man is, rather than what he has, that counts.
Technical progress is of less value than advances
towards greater justice, wider brotherhood, and a
more humane social environment. Technical
progress may supply the material for human
advance but it is powerless to actualize it. Pope
John Paul II brought forth, during his pontificate
that in 1978, the same argument in favor of labor,
that human labor is dignified by his affiliation with
God and must be prioritized over material capital.

The priority of labor over capital is asserted as a needed
correction to the economic order. A listing of four rights
of labor are defended by Pope John Paul II:
1. Right to suitable employment for all those capable of it
2. Right to just remuneration for the work done
3. Right to the organization of the labor process to respect
the requirements of the person and his or her life
4. Right to form unions.
The assertion that economic rights are part of the body of
human rights emerges in the tradition.
Technology as capital

It may be that the main purpose of high
technology and automation is not actually to
displace workers but to increase safety
measures within the plant and promote
efficiency in the workplace. At times though
we cannot avoid to see people getting
suspicious of the prominence and
domineering attitude of the new technology.
 Early experienced
of industrialized

nations
The United States entered the Industrial
revolution in the early 19th century. By this
time, England had already begun building up a
strong industrial base.

In England
Luddites a group of highly skilled textile
workers, destroyed textile machines in a series
of riots from 1811 to 1812.
 Huge investment,
high productivity

high technology is basically geared towards
the maximization in productivity.

Conflict between
labor and capital
 Offshoots were
regrettable

There was a conflict between the forces of
production (labor) and the forces of capital
(management) - in a small town enterprise -

Philosophical basis of
the conflict
 1. Economism

Is a corporate attitude centered on the
economics, a simplistic approach to business
that is based purely on the law of supply and
demand, by the rules of buying and selling.
 2. Materialism

Has automatically placed the spiritual and the personal
in a position of subordination to material realities.
Only the material realities mattered and all other
realities (socio-political and moral included) were
considered secondary to the former.
Materialism here is somehow related to consumerism,
eudemonism, epicurean psychology. Consumerism
emanates happiness due to material possession, while
eudemonism prioritizes happiness as the result of
economic prosperity. Epicurean psychology makes us
believe that the soul is composed of fine particles
distributed throughout the body.
 Error of Economism
and Materialism

These errors do not appear as obvious and
prominent errors.
If we are not cautious and vigilant, the free
market, when left to the absolute persuasion
of these doctrines, can become a reversal of
the social order laid down by the natural law.
Economism and materialism can slowly
corrode the moral fiber of business
 CSRs defense

CSR insists that business opens itself to the
social order that constantly yield to the good
of the person, since the order of things
must be subordinated to the order of
persons and not that either way around:
Capital should be as the service of labor and
our labor at the service of capital.
 alienation of labor

The alienation of labor comes about when the
relative priority of labor and capital becomes
reversed. It is at this point--when capital is
prioritized over labor--that we start entering
into the possibility of slavery. After all, slavery
is nothing else than the complete absorption
of human labor into capital.
Labors own dark age

Bean during the time when the English
intellectual John Davidson erroneously
introduced Bargaining Theory, which later
gave birth to the concept that labor was a
commodity whose price was the wage.
CSR dictates that, because he is priceless, the
human person cannot be traded, purchased or
bargained for.
Labor: also a psycho-
emotional personality
The beginning of industrialization was
not only characterized by too low a
salary and unjust wages, but also by long
working hours, want of needed
vacations, insufficient safety measures,
the exploitation of women and, worst of
all, child labor.
 Labor reform in a
small cotton
mill
One who called for reform was Robert Owen,
a British self-made capitalist and cotton mill
owner, who tried to set an example by
transforming a squalid Scottish mill town
called New Lanark into a model industrial
community between 1815 and 1828.
His single aim was to improve working
conditions as well as effect basic social and
economic reforms.
 With the same
emotions, tendencies,
and reactions as those
of the
managers
Over the years as the idea and practice of
corporate social responsibility were evolving,
laborers have demanded to be treated as
human persons and not as farm slaves or
mere wet-market commodities for gain. More
and more employment since then have come
to treat labor with appreciation and respect by
putting more significant values on the
workingmen than what they are worth in
muscle, sweat, and energy. It dawned on them
tat labor is more than an item to be used in
buying and selling.

But above all we must remember the priority of labor over capital: labor is the cause of
production; capital, or the means of production, is its mere instrument or tool.
The means of production cannot become a separate property, called capital, as opposed to labor.
They cannot be owned against labor or to exploit labor. They cannot be owned just for the sake of
owning them. The only title to their ownership - whether private, public, or collective- is that they
serve labor. This means that under suitable conditions the socialization of certain means of
production could be acceptable.
Capital is both the earth's resources and all the means invented to help us to use -and to
humanize- those resources.
From the simplest tools to the most modern ones -machines, factories, laboratories, and
computers- all are the result of human work
It is right to struggle against an unjust economic system that does not uphold the priority of the
human being over capital and land.
The capital at the disposal of management is in part the product of the labor of those who have
toiled in the company over the years, including currently employed workers. As a minimum,
workers have a right to be informed in advance when such decisions are under consideration, a
right to negotiate with management about possible alternatives, and a right to fair compensation
and assistance with retraining and relocation expenses should these be necessary. Since even
these minimal rights are jeopardized without collective negotiation, industrial cooperation requires
a strong role for labor unions in our changing economy.