Posted: 02 Mar 2012 07:09 AM PST
Promoting this from the comments on the last post—it's an idea I've wanted to inject into the political conversation for ages. It seems to me this is a vital notion and ought to be common knowledge. It helps a great deal in thinking clearly about economics and politics.
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March 2, 2012 at 6:38 am
Posted: 28 Feb 2012 08:27 AM PST
Interesting interview with economist Richard Wolff in The Sun magazine. His prescriptions are predictable, but his diagnosis is startling. Even if you do not favor direct government employment of the unemployed, or taxing the rich and corporations at 1960 rates, as Wolff seems to — ain't gonna happen, so forget about it — he makes some strong points that are hard to answer about the particular ways wealth has been transferred upward.
He talks about how for the first time, after about 1970, there was no labor shortage (because of automation, offshoring, and women in the workplace), so employers no longer had to raise wages to retain workers, while workers had to work longer and harder—and yes, go deep into debt—to maintain or increase their standard of living. Result: productivity and profits increased, but the ones who were doing the producing didn't share in the proceeds.
This too was interesting, on deficits:
I'd love it if you would read and discuss this. I'd love it even more if you did not assume I'm endorsing most of what Wolff says. I don't favor his prescription, but I did find these two points of diagnosis startling. You know I am economically naïve, and these points may have been obvious to most of you. But go ahead, try to explain them away.
You will say that entrepreneurs are rewarded with profit for risking capital and providing products, services, and work opportunities for others. I'm with you so far. But squeezing ever more work out of fewer employees for the same or less real pay, stressing workers and families to the breaking point? Mind you, Wolff is also critical of the overconsumption and overindebtedness of the average American family — yet that, too, has been one of the engines driving profits until recently. Moral disapproval of that behavior from those who've encouraged it and profited from it . . . well, it smells a little.
Can we conceive of a system that would encourage and reward productivity, not just extort and exploit it? And how could that come about (could it?) without empowering the government as enforcer?
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