Who Owns the Product?

Socialist theory holds that workers collectively own the final product they participate in making, not the businessman (or entrepreneur or capitalist), and especially not passive capitalists who supply financing. The socialist argument rests on the idea that all value is strictly due to labor. On the contrary, in Capitalism, Chapter 11, Part C, George Reisman says it is the “businessmen and capitalists, for they, not the wage earners, are the fundamental producers of products” (p. 482). It is businessmen who decide what is to be produced and how, and where and to whom it will be sold. “The socialists, indeed, have so little conception of the essential role of guiding and directing intelligence in production. ... It is true that the manual worker is necessarily concerned with only a small step in his firm’s overall productive operations. For this very reason, it is absolutely impossible that he could be responsible for its products – that the products could legitimately be said to be his products” (ibid.).

Like the payment of wages, it is businessmen who pay dividends and interest to passive capitalists, not wage-earners. The dividends and interest are a deduction from the businessmen’s revenues or gross income, not a deduction from wages (p. 483).

Socialism holds that workers collectively own the final product. To be coherent it should also hold that workers (1) wait until the product is sold before being paid, and (2) bear any uncertainty of sale price of the final product.