Mercury Rising 鳯女

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Archive for March 21st, 2011

The darkness before dawn

Posted by Charles II on March 21, 2011

Yves Smith:

One thing I have never understood in America is the way that people who lose their jobs become pariahs in the job market.

I’d argue that the roots lie in a fundamental change in policy that took place around 1980. The lesson that economists drew from the stagflation of the 1970s was that labor had too much bargaining power. The excessive fiscal stimulus of the later 1960s and the oil price shocks of the 1970s had been amplified by the fact that workers had enough clout to demand and get wage increases when they faces sustained price increases. That of course led to more price increases since higher wages led to higher production costs which led business owners to increase prices of their goods and servicer, thus accelerating the inflation already under way.

The solution, per neoclassical economists, was to use unemployment to keep wage demands in check.

Before, there had been an explicit agreement between unions and employers embodied in the so-called Treaty of Detroit, which was that workers were to share in productivity gains. President Kennedy even warned major corporations that if they did not adhere to this understanding, he’d push through legislation to make sure they did.

This bias against those out of work is long-standing, although it has gotten worse over time. Talented people over 40 who have lost a corporate perch are pretty much unemployable….

This creation of a “reserve army of the unemployed,” which is what the capitalists of this country have managed to create, is from the Marxist playbook: in Marx’s view, successful capitalism required what we now call a flexible workforce. One can see other elements of right-wing policy as emanating from this fundamentally Marxist viewpoint. Breaking unions, crashing Social Security, ending the minimum wage– all of these are obvious methods of flooding the labor market with cheap labor.

But here’s a less obvious example: the hostility of the right toward not just abortion but towards contraception that emerged during the Reagan years is a fundamental cause of the existence of enormous populations of the young in the developing world… populations which are largely unemployed, desperate, and willing to work for less. Now, hostility toward contraception is certainly consistent with the patriarchal view of the Catholic Church. But consider how ineffective they would be if the wealthy said that population growth of the browner masses endangered their control. To caricature a bit, that’s why so many right-wingers were attracted to Margaret Sanger, and why throughout the sixties and seventies so many right-wingers favored not only contraception but abortion.

As on Animal Farm, we discover at last that, in many ways, there is no fundamental difference between communists and capitalists. They both view a successful capitalism as one in which many people are unemployed. But, as we see in Egypt, if there are people to teach the unemployed about what is going on, so that their idleness does not decay into despair, there are other outcomes. It was mostly unemployed young men who beat back Mubarak’s police.

May this period of darkness be the prelude to the dawn of a new awakening of the American spirit, one that is determined that never again will disproportionate wealth and power be allowed to bring disaster upon us. And may no one come to believe that because s/he is unemployed, s/he is of no worth.

Posted in capitalism as cancer, economy, unions | 2 Comments »

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