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Transcript
Conventional Left Account
•turning-point of recent U.S. economic history:
rise of neoliberalism in early 1980s
•workers’ share of income, and real pay, declined
•causing the rate of profit to rebound
•so the economy could have grown rapidly, if the
extra profit had been invested in production
• But financialization occurred:
profit diverted from productive investment
toward financial speculation
so
• slow economic growth
• rising debt burdens
setting stage for
financial crisis and Great Recession
Yet I found:
•the turning-point was the 1970s – before the
rise of neoliberalism
•the rate of profit never recovered from the fall
of the late 1970s and early 1980s
•the rate of accumulation fell because the rate of
profit fell, not because of diversion of profit
from investment in production
•workers’ share of income has been stable, and
their real compensation has risen, during the
last 40 years.
generation of profit  productive investment of profit
rate
of
profit
rate of
accumulation
(productive
economic
growth
investment)
gov’t & Fed
policies to
counteract
debt
burdens
debt
crises,
burst
bubbles
Rates of Profit, U.S. Corporations, 1929-2009
(profits as % of historical cost of fixed assets)
net value added
- compensation
before-tax profit
U.S. Multinationals’ Rate of Profit on
Foreign Direct Investment, 1982-2009
(profits as % of historical cost of fixed assets)
The Rate of Profit & the
Rate of Accumulation, 1970-2009
% of After-Tax Profit Re-invested
in Production, U.S. Corporations
net value
added –
comp.
net operating
surplus
beforetax
profits
aftertax
profits
“Keynesianism” “neoliberalism”
Profit Share of U.S. Corporations’ Output, 1947-2009
[(net value added – comp.) as % of net value added]
Workers’ Share of U.S. National Income, , 1960-2009
[(net value added – comp.) as % of net value added]
Real Compensation, Civilian Workers, U.S., % of 1989 level
(compensation deflated by PCE price index; figures for Dec. of indicated year)
130 %
125 %
120 %
115 %
110 %
105 %
100 %
1989
1993
1997
2001
2005
2009
all workers
mgmt., bus., & financial occupations
Growth Rates, Avg. Annual, U.S. Corporations
Prospects
• more “kicking can down road”
—papering over bad debt with more debt
• continued sluggishness, recurrent crises
• as debt mounts, U.S. & other gov’ts’
ability to restore confidence declines
• full-scale destruction of capital value
• new boom, or collapse, or revolution
• socialism
Solutions?
• emulate China?
• regulation?
• redistribution?
• debt forgiveness (jubilee)?
• nationalization / worker-management?
emulate China?
regulation?
•U.S. Savings & Loan Crisis (1980s)–
caused by regulation (and inflation that
Keynesian policies couldn’t stop)
•regulations always “fight the last war”
“These new regulations will
fundamentally change the
way we get around them.”
Joseph Stiglitz (2008):
“The ingenuity of those in the financial markets
is impressive. Eventually, they will figure out
how to circumvent whatever regulations are
imposed. But these reforms will make another
crisis of this kind less likely, and … less severe.”
Ben Bernanke (2010):
“We should not imagine, though, that it is
possible to prevent all crises.”
redistribution?
•“share the wealth” struggles face strict limits
• the wealth has not been there to share
• even worse problem now
•struggles to protect & enhance standard of living
can succeed
• but they will cause profitability to fall further,
making the system even less stable
& more prone to severe crises and recessions
•working peoples’ fights to protect their standard of
living help them but hurt the capitalist economy
debt forgiveness (jubilee)?
Will lenders keep lending after that –
at same interest rates?
Or – if at all – only at much higher
interest rates that reflect the risk of
debt forgiveness?
•major slowdown in economic
growth, employment, etc.
nationalization / worker-management?
Fred Moseley: “nationalization of banks … could
be an important step on the road to socialism. …
government banks [would] pursue important
public policy objectives, rather than profit
maximization.”
Rick Wolff: “workers who also served on their
own boards of directors would make different
decisions …. [Their] well-being … would displace
individual enterprise profits … as the prevailing
objective.”
BUT …
•A state-run (worker-run) bank is still a bank
•It has to obtain funds before it can lend
them out
•So it must provide a decent return to those
who supply it with funds
• otherwise, they won’t supply it with
funds, and it won’t survive
• So its investment decisions CANNOT
be based on workers’ well-being or
public policy objectives
• It must try to maximize profit, just
like every other bank
• So “the workers in association
become their own capitalist” (Marx)
– they exploiting themselves “
• In a capitalist system, cutting costs is the
key to survival, including survival of
workers’ co-operatives
• Jobs & income for unneeded workers:
costly
• Produce for need instead of profit:
costly
• Environmental control: costly
• Workplace safety: costly
Putting different people in “control”
does not undo the inner laws of capital
The inner laws of capital are what must
be undone.
But what exactly is needed in order
to undo them and have a viable &
emancipatory socialism?