Cheap labor = Win-Win-Win for consumers, job-seekers, and employers.
Your assumption that lower wages equates to lower prices is not borne out in reality, . . .
It does happen in reality. We see it clearly in some cases, but usually there is little empirical evidence in a particular case to prove that the lower prices were caused by the lower wages. You can always speculate that the lower prices are due to other factors, as in many cases of economic data where it's impossible to establish a cause-effect relation between one event and another. E.g., higher demand > higher prices, but this obviously cannot be proved with the empirical data in all cases, because you can speculate that something else might have caused the higher prices.
But we know that sellers increase or decrease their prices in order to maximize profit, reacting to change in demand, for which there is some evidence, though it cannot be proved because in any one case you can speculate that it was something other than a change in demand which drove the price up or down.
. . . because capitalists have no reason necessarily to pass on the savings of cheap labor to consumers.
Yes they have a reason to lower the price, necessarily, because this increases the sales and thus their revenue and profit. For any product there is a point where a higher price REDUCES the profit to the seller and a lower price INCREASES the profit. If the cost to the seller goes down, he maximizes his profit by reducing the price a certain amount. However, it's impossible to scientifically calculate how much the price must go up or down in order to hit the optimum profit level, in each case. But there are plenty of cases where the evidence confirms this pattern of higher cost > higher price and lower cost > lower price.
In most cases there are too many other factors at play to be able to prove that this or that change in production cost caused a corresponding change in price.
In fact, this is rarely what we see: plenty of products made by cheap labor are grossly overpriced.
That's a subjective judgment. From the point of view of the buyer, ANY price is too high. If a product is really overpriced, it means the seller loses profit by not reducing the price. I.e., it means the product isn't selling, and the seller is losing by being overstocked with that product which won't sell because the price is too high. So overpricing is automatically corrected by the market, which penalizes the seller who sets the price of it too high.
The extra surplus value reaped by the capitalists from cheap labor could just as easily be diverted to more comprehensive advertising, lobbying efforts to reduce government interference, higher dividends for the board of directors, and so on.
But only if the result would be higher profit to the company. If these uses of the revenue are not good for consumers, then the result will be lower return later, as the company's future revenue is negatively affected by its wrong choices of where to spend this surplus value.
The decision where to spend some new revenue now has to be driven by how it will affect the total revenue/profit later, and this is determined by how well the new spending decisions succeed at satisfying the later consumer demand. In all such decisions, the company has to consider the likely increased sales if it reduces its price (or reduces its future price increase). If it fails to consider this, then it makes the mistake of losing out on some future sales and higher profit it would have gained.
What prevents a seller from simply doubling all his prices? Your theory above assumes that in any case where a seller doubles his prices, his revenue doubles. You are ignoring the loss any seller suffers if he exceeds the optimum price level, which is the point where his profit declines if he raises the price above that level. That optimum price level always decreases a small amount with any reduced cost of production, all else being equal.
When you take all those other outputs into account, how much is left for price reductions?
There's always some, but usually no way to calculate this exactly, as a provable empirical fact.
If ALL the factors are taken into account, the prices seldom decrease and often increase gradually, because of the automatic on-going inflation. But
each factor in isolation has its particular impact (whether it can be empirically calculated or not), so that a LOWER cost of production, in itself, always puts downward pressure on the price, thus making the price a little lower than it would have been otherwise without that cost reduction.
If the factors generally are driving the price upward, but a cost saving is added to this, such as lower labor cost, this cost saving is added to the other factors and causes the price increase to be less than it would have been otherwise.
And how do those reductions compare in magnitude to the reduction in labor cost shouldered by the workers?
That depends on the reduced value of the workers which caused the reduction of their wage. It's their reduced value which causes the reduced wage. If your value goes down, why shouldn't you shoulder that loss of price paid to you for your value? In the competition, values go up and down, and those paid for their contribution to the value experience a corresponding increase or decrease in what they are paid for their contribution to the changing values of what they produce.
If, instead of paying each contributor according to his/her added value, they instead are paid out of pity or compassion for them, this just means that others in the economy, such as consumers, suffer a resulting loss, since they are the ones who have to pay for that pity or compassion, because it inflicts cost onto everyone else if any producers are paid according to pity for them instead of paying them according to the value of their contribution. Any pity payments to producers is simply a higher cost inflicted onto someone else who must pay for it, who then becomes the new victim in need of pity.
The answer is obvious to anyone who has eyes. If there is an opportunity to do so, capitalists will keep prices as high as possible, wages as low as possible, . . .
That's what
EVERYONE does. The wage-earner keeps his price (wage) as high as possible and his "wage" (price he pays for anything) as low as possible. Everyone pays for something and is paid for something. And everyone keeps what they're paid as high as possible and what they pay as low as possible. It is nonsensical to expect anyone in the economy to do otherwise.
. . . capitalists will keep prices as high as possible, wages as low as possible, and take as much for themselves in form of profits as possible--why shouldn't they?
Of course they do, as everyone does. You take all the profit you can, in the form of whatever payment is made to you, minus what you pay, which latter you keep as low as possible, to maximize your profit. Why shouldn't "capitalists" do this just as everyone else does?
Thus, the 1:1 relationship between labor costs and prices you propose is a fantasy, pure and simple.
Not just
labor costs, but ALL costs of production. There are millions of examples in the real world of prices going up or down because of increasing or decreasing costs of production. You think it's a
fantasy that production cost directly affects the price of the products?
No, the fantasy is to imagine that labor is in a special category whose value should only go up but never down. ALL the production costs are subject to change, upward or downward. And when any goes up it puts upward pressure on the price, or if it goes down it puts downward pressure on the price. The seller feels that pressure and must increase or decrease the price in order to maximize profit.
The fantasy is to pretend that labor cost is an exception to this rule, because it must never go down, as a moral imperative, because the economy has to feel sorry for the wage-earners and exempt them from having to compete, out of pity for them.
It also leaves all the power in the hands of capital, who use . . .
Which "capital"? Who? What is this entity wielding power over us? There's a huge amount of "capital" out there doing this and that. There is no one monolithic "capital" entity but millions/billions of capital units out there going one way or the other and driving us and pressuring us and intimidating us, in many directions, and
from many directions. There is no one "power" but multiple powers all greater than any one of us, and we will always be helpless in comparison to them, no matter how much any worker gets paid or how little this or that tycoon takes in profit.
. . . who use their leverage over workers to impose labor beyond what we need to perform to sustain ourselves.
No, there's no one "capital" entity imposing any such thing. You freely choose to accept the terms of the "capitalist" you work for, and you fantasize being offered better terms, but no one imposes any labor onto you. You choose the labor you do to sustain yourself without anyone imposing it. Everyone uses whatever "leverage" they have to get as much as they can out of everyone else, but you're free to refuse anyone trying to "impose" anything onto you. If you do that labor, it's your choice to do it, to make you better off than the other possibilities.
In other words, to answer your question "why would they work here at all?" capital has seen to it that the choice for the vast majority . . .
No, there's no monolithic "capital" entity which sees to any such thing.
. . . that the choice for the vast majority of us is made under duress, at the peril of our homes, families, and health, while their choice . . .
No, just because you can fantasize having something better does not mean some monolithic "capital" Beast is imposing anything onto you. Nature intimidates us with threats to our homes and families and health etc. There's no "capital" monolith which invented all these hazards and uncertainties. Those in the middle-income brackets are more secure than those at the bottom. Those higher are generally more secure than those lower, but no matter what bracket you're in, those higher are more secure and those lower are less secure, so everyone can complain of feeling insecure by comparison to those higher.
. . . while their choice of who to hire and fire is made in a far more secure zone of return on investment.
Yes, everyone is less secure than those higher up. You are more secure than the millions down lower than yourself. That doesn't mean your choices are imposing anything onto those lower down, or that those below you are under duress from your investments.
You ask "who is the labor performing the work for" as if the answer was obvious, . . .
Ultimately it's the consumers who benefit, who are served by the capitalists. In the few cases where capitalists really are not serving consumers but are gaining profits, that is criminal, and those capitalists should be prosecuted for their crimes.
. . . but given that every worker produces more value than they are paid to produce (otherwise they wouldn't be hired, because they would not help generate a profit), and given that the profit is not completely passed onto the consumer, the only possible answer is that the labor is for the benefit of the capitalists.
But the profit not "passed on to the consumer" is the "wage" earned by the capitalist. Everyone is paid their wage for their contribution, and the only point of any of it is to benefit all consumers, or the whole society or nation. So it's for the benefit of everyone, i.e., all consumers, that the production is done.
As long as we are required to sell our time and energy as a matter of life and death, . . .
No one requires you to. It's only nature which requires you to perform work in order to survive. Other humans/capitalists only offer you choices, which you are free to accept or reject. Just as you offer choices to others when you hire them to perform something for you.
. . . time and energy as a matter of life and death, and are not given any direct way of controlling the surplus we create for capital, . . .
You don't "create" it as a wage-earner. The capitalists create it using your labor, which they could easily replace with someone else's labor if you choose not to provide it. Those who pay for the labor are the ones creating the wealth, not the laborers who are a dime and dozen.
. . . we will continue to present ourselves as willing and able to do more and more work. That keeps us from organizing alternative ways to sustain ourselves, outside of the market forces that . . .
Nothing prevents anyone from organizing alternative ways to sustain themselves. Alternative ways have been experimented with and are available to those willing to take the risk and make the investment in them.
. . . ways to sustain ourselves, outside of the market forces that dominate all . . .
Market forces are already circumvented in many ways, by labor laws and trade laws which prevent buyers and sellers from choosing freely. Many efforts are made, using laws and also emotion-driven crusades and moralistic preaching, to try to defeat the market forces of supply and demand, and to condemn capitalists and entrepreneurs and competitive job-seekers offering their labor at lower compensation, who would benefit the economy if allowed to perform their role of trying to meet the market demand.
So the market forces do not dominate all the economy, but are often thwarted, by labor unions and by government and lobbyists who demand favors for special interests, such as corporate welfare, imposing conditions "outside of the market forces" and thus making society poorer.
. . . that dominate all exchange in capitalism.
Not free-market forces. Some of the exchange in capitalism is done contrary to the free-market forces, which are prevented from operating in the best interest of consumers.
Where the free-market forces are allowed to operate, it's not because these "dominate" all exchange, but because these forces work best and are engaged in freely, as being the most efficient and thus producing the best outcomes and making everyone better off. People choose to engage in the market forces, without it being forced upon them, or "dominating" anything. The alternatives to the market forces don't exist usually because they are impractical, not because people aren't free to choose those alternatives.
So, what you're describing is the trap that was prepared for you, and you've fallen for it hard.
I benefit from cheap labor, if that's the "trap" you mean. I plead guilty to having "fallen for" the higher standard of living and lower prices we enjoy as a result of cheap labor. But those benefits would be even greater if we allowed ALL the cheap labor instead of outlawing some of it, as Trump and Bernie Sanders and others want to do.
