Labor is the primary factor of economic production, for without labor land produces no harvest and capital no commodities whatsoever. Yet, labor itself can be broken down into factors of its own, which, while not on the same standing as the classical factors—land, labor, and capital—stand as subfactors to labor as a factor of production.
In my remodernist model of reclassical economy, I contribute a number of classifications of economic returns outside of the standard rent, interest, and wages, including yield, principal, premium, avail, standard, augment, as well as base and endowment. These latter two, and especially the last, will serve as the primary focus of my effort in this work. Base refers to the marginal returns to labor, or marginal wages, reflecting the value of the laborer at the margin of production, whereas endowment refers to the supermarginal returns to labor, or supermarginal wages occurring once that basal wage is surpassed. These terms relate to labor, as a factor of production, on the whole, without distinction between mental and manual labor. Mental and manual labor are worth distinguishing from one another, though not on the level of the other factors of production, and not so as to distinguish the return of one from wages. The distinction, rather, falls meta to these, as subfactors of production, or factors of labor, thereby contributing toward rather than being distinguished from basal and endowed wages. Endowments of labor, that is, may be mental or manual, and reflect that mental and manual labor that pushes it above the margins.
The principal product or purpose of an economy, and the reason for performing any labor at all, is the maintainenance of the life of the organism. Manually, this involves taking negentropic actions, those that decrease entropy overall while inflicting some in the process, while mentally it involves syntropic planning, the arrangement of information so as to be more orderly. Mental and manual labor are ontologically distinct, insofar as mental labor is directly syntropic while manual labor is instead negentropic. From the position of neutral monism and psycho-physical parallelism, which are the metaphysical approaches I take, manual and mental labor are modalities that are rooted in separate attributes of Substance, which Spinoza identified as the attributes of Thought and Extension in Nature and Llull made sure to distinguish causally from one another. Considered within this framework, and following the Law of Complementarity of Ulisse Di Corpo, which holds that when syntropy is increased, entropy is proportionally decreased, and when entropy is decreased, syntropy is proportionally increased, and vice versa; and if referring to syntropy increase simply as syntropy and entropy decrease simply as negentropy; we find that an increase in mental labor reduces the costs of manual labor and the decrease in the costs of manual labor increases the capacity for syntropic planning, such that a positive-feedback loop is uncovered. Such positive-feedback loops, which are treated as physical anomalies, are basic to biological and ecological—that is, animate, organic— systems, which naturally tend to increase syntropy and decrease entropy, unlike dead matter. These positive-feedback loops also help explain some of the discrepancies found in economy, such as that fact that putting two workers together is not a simple addition (summing) but a multiplication (product).
Take, for example, three workers, A, B, and C. Alone, A can produce 1 product, B can produce 2, and C can produce 3, for a total of 6. However, when they work together as a team, they find that by specializing on tasks they can produce 15 products. This is what is known as social force or economies of scale, the fact that emergent returns, a product over and above the sum of the parts, is produced through cooperation on a larger scale. This is, of course, craft, trade, and industry-specific, as some work is most efficiently accomplished on a smaller scale.
This means that each worker has both an individual and a social capacity, each with their own potential. Excluding the other factors of production (land, capital), the potential and the actual production when undertaken alone are synonymous, such that A can potentially produce 1 and does indeed produce 1, etc. However, when A works with B and C, A’s assumed and imputed potential, which is a factor of labor, goes up to ~1.36, such that A actually produces 2.5 when their factor is multiplied by the factors of the others (B’s are ~2.72 and C’s are ~4.08; their actual wages are 5 and 7.5). Their combined actual wages are 15, which is over double the amount they can get alone in this scenario. This is a positive sum, win/win game.
The difference between what can be created alone and what can be created with others owes itself to the positive-feedback loop, which exists as a complementary relationship between mind and body, mental and manual labor. In the above scenario, we have not distinguished between mental and manual labor, but only demonstrated the effects that are typical of combinations more generally.
It must be understood before continuing, so as not to get confused by the apparent contradiction in maths, that mental and manual labor addressed metaphysically or thermodynamically (as negentropy and syntropy) is distinct from its treatment in economics, owing to the marginalistic nature of economic science. There is a marginal yet relative amount of mental labor that cannot be separated from manual labor, which, in not being distinguished, throws the balance off in the economic equation with regard to Complementarity, the Law of which does not deal in margins of production but in proportionality. In metaphysics/thermodynamics, we treat them relative only to one another, while in economics we treat their internals according to margins. As such, the Law of Complementarity does not map directly onto the methods of economic science or vice versa. So do not expect the Law of Complementarity to reveal itself exactly 1-for-1, though the tendency should be readily apparent.
Classically, it is understood that labor without land produces nothing, and vice versa. However, there are products that can be produced without land or capital. Mentally, these are spoken information. Manually, they are basic services, such as a massage. Arguably, these were components of our most primitive economy, and belonged to interpersonal rather than social exchanges, though it must be conceded that something greater requires more, such that it is generally fair to start upon the grounds laid by the classics. As such, we may say that manual labor, without mental labor, basically produces nothing at all. All labor must serve some mentally-derived ends. Similarly, mental labor does not produce anything on its own, as ideas without action are typically worthless.
The two cannot be fully divorced, though there is a clear exchange between them. Indeed, cave people exerted a great deal of effort for little return, their economy being quite limited to few exchanges at great cost. As such, the mental labor was low, and the manual labor was proportionally high. As time goes on, more mental labor was used to decrease the manual labor costs, such that much more could be done with much less effort. We see in this that mental labor is connected to final causation, being pulled toward and taking hold in the future, and that manual labor is connected to efficient causation, springing from and leaving behind the past. In other words, manual labor, with regard to cost, becomes a thing of the past as mental labor takes hold of the future.
As individuals, indeed as the cave people were, our manual labor is proportionate to our own mental labor, while as collectivities we may begin to specialize more in one or another area, mental or manual. This can only occur because of the change of identity with regard to the economic agent from the individual to the collective. This is the corporatization of identity, which involves the formation of a corporate persona, requiring good character, a mental labor. It is this shared identity, this unity, that allows individuals to apparently, but not truly, divorce, and so instead to specialize in, the functions of mental and manual labor. Taken on their own, neither produces a thing, for the actions of the body correlate to and require the thoughts of the mind, and the thoughts of the mind correlate to and require the actions of the body, in complementary necessity. They only produce as a unity, and their product is individual or social force appropriate to scale. As such, they must be reckoned together.
This poses a number of problems, because the product of manual labor is material, and so an artifact of an observable past or the products thereof, while the product of mental labor is ideal, and so a speculation upon a yet-to-be-observed future, which could potentially be disrupted. If reckoned purely materially, products of manual labor may be fairly obvious and quite workable, while the products of mental labor are non-existent. It is not possible to reckon purely ideally, owing to the Psychological Arrow of Time, which presents the past as fixed and certain, and the future as open and full of possibilities and uncertainties. This is not the case, of course, as the future is just as fixed as the past, but it speaks to our psychological experience and mortal limitations. As such, we are left to consider manual labor as our standard, upon which mental labor functions as a factor of overall labor. Both the manual laborers and the mental laborers, that is, have their potential wages, but the wages of the manual laborers generally serve as a more objective standard, the ebjective standard of mental ideations being less so. As such, the math must consider the overall production, subtract the manual production, and derive the mental product thereby. In this, we are left to treat manual labor as marginal labor, whether basic or endowed. In other words, basic and endowed labor may each be divided into mental and manual labor, with manual labor to be subtracted from overall production to produce the mental labor.
In this example, all workers exert the same amount (average) of manual labor, but C and B apply mental labor above the amount which is assumed in the manual labor (at A, the margin of production).
Much as the similar equation dealing with rent (the Law of Rent), wherein as rents increase wages decrease and vice versa— and with regard to the thermoeconomics, but applied to labor and so inheriting organic characteristics— as mental production and mental wages increase manual production and manual per-unit, manual wages— that is, manual cost— decrease. This decrease in per-unit, manual wages enables more units to be produced, which are the products of mental labor. Owing to the increase in productivity, and unlike rent, wages (labor products) overall increase. The difference between this and land, of course, which allows for wages to increase overall, is that mental labor, unlike land, upon which rent is based, is not finite, but actually increases. As such, the market may grow rather than being under finite competition the way that land is. The finity of the land is the cause of its being a drain on wages, while the wages of others do not pose the same kind of problem.
If the workers are associated, instead of independent, such that the manual labor of C, who has the comparative advantage in mental effort, can be put to mental effort instead, and used to magnify B and A, who will also synergize on their own, a greater increase will occur. We must treat manual and mental labor now as two separate categories of corporate efforts (but not necessarily separate groups of people, as we do here for simplicity’s sake), rather than treating each worker individually, since the manual labor product of C would now be zero, and that would bring the marginal manual labor product to zero if left undifferentiated. Say their total product is now 12 instead of 6, and that 2 of these is the result of B’s and A’s mutual synergy as manual workers, such that the manual workers can produce 5 together, separate from mental labor, as a corporate group. Mental labor, on its own, still only produces 3. So, manual labor receives 5/8 and mental labor 3/8 of the wages. In other words, mental labor, C, receives 4.5 and manual labor, B and A, receives 7.5 (5 and 2.5).
You will notice that this uncovers a disparity in the potentials of the workers. Individually, they produce (sum) an aggregate of 6, but collectively they produce an aggregate of 12, which is double. 3 + 2 + 1 is 6, but is not 12, so how did 12 get there? The difference is a result of different potentials, those of the lone individual and of the social, which differ with regard to their syntropic-negentropic values owing to the corporatization of overall work identity. In other words, the social force and economies of scale resulting from balancing mental and manual labor in a common whole increase wages. As lone individuals, the potentials are consistent with the actual, such that C could potentially produce 3 and does indeed produce 3. This is because, mathematically the product is derived from a factor of 1 (3x1=3). But the social factors differ from 1. They are, instead, roughly (more iterations could have been done to refine it further) ~2.68, ~2.98, and ~1.49, with their product (multiplication) totaling 12. This is, of course, assumed by imputation, and could be an incongruent abduction, but it serves its purpose for the sake of our simplified model, which is not aimed at prediction but explanation. Different proportions would produce similar results.
Total Product = 12 Z = Social Force A + B = 5/8Z C = 3/8Z (A + B) x C = 15/64 Z2 = Total Product Total Product x 64/15 = Z2 = 51.2 Total Product x 64 = 768 768/15 = Z2 = Social Force2 Squareroot of 51.2 = ~7.155417 = Z 5/8 Z = 4.4721356 = 2.98142373 and 1.49071186 3/8 Z = 2.6832813
The increase in production owing to mental labor applied to the manual labor within a corporate identity is a social product, which also raises mental wages and manual wages (or reduces their cost), rather than reducing the wages of manual labor. This may produce a collective endowment of labor relative to other firms for some time, functioning much like premium does, potentially dropping when forced to by the competition catching up. Competition, not being part of the shared corporate identity, can negatively impact endowments for the firm and push it into the margin or submargin of wages (which may make the price of the wage, the contract wage, fall). If market share is greatly affected, this can result in a more-or-less absolute decrease in wages for the firm (physically as lost opportunities, monetarily as reduced price-per-unit), though in expanding markets it may result in a relative (in comparison to competitors) or temporary decrease only, without a reduction in wages in the long-term.
The above is the mental map of the economic realities, but it assumes information where it may be difficult to assess in reality. For instance, potential wages certainly correlate to reality— we have all potential that can be actualized—, but reality is quite cryptic about them. We can’t objectively assess one another’s potential before actualization (though we can project ebjectively). It is much easier to know actual wages and work back to derive the potential wages, but this is still just an imputation or extrapolation. It may be tempting to superimpose the long-term trend of potential wages as if they are true to the current potential wage, but this risks the Problem of Induction and the stifling of labor, which is an injustice. Instead, these sorts of classical economic models are best used for a posteriori assessments or for informing, a priori, which methods may be used to best converge upon an increasingly greater approximation, and what the outcome should tend to do. As such, it may not always be reasonable to allocate returns based on what potentials may be expected in a plan— as if the ideals are sure to be realized— in a rigid fashion.
A good a priori solution should converge on an equilibrium at cost, without requiring much in the way of accounting and calculation. One a priori solution is to consider proportionality, that is, how proportionally mental ideas are likely to increase manual production or reduce its costs and what the costs of duplicating that proportionality are. This is the proportion to which mental labor should be entitled to overall production. Sorting it out ultimately rests upon supply and demand in the market and the leveraging of bargaining power—honor and dignity— of both sides, with each side being responsible for its own assessment of the overall situation. I have a mechanism for this, including a written computer program, which I may share in the future.
It cannot be said that mental and manual labor have much application with regard to basal labor, which (at least in the abstract) assumes the minimal amount of each, though it could technically be put to use. It is greater considered as factors of the endowments of labor. Mental labor alone is not sufficient to differentiate endowed labor from basal labor, as other endowments of labor— such as size, strength, endurance, habituation, etc.—cannot at all be considered basal, yet neither are they purely mental. To complicate things, it may be difficult to always qualify and quantify mental and manual efforts, as with endurance and habituation. Yet, there is a perennially and common sensically noticeable and rational distinction between them, and each has its standout specimens. The endowments of labor may be mental or manual.