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The US worker is a beaten commodity

December 30, 2011

Without concerted political pressure for radical change, the forces of unbridled capitalism, like a plague of locust, are poised to consume all in its path.  The worker has no institutional support, the Democrats being completely in hock with money, and unions having long ago sold their soul.  All forces within the logic of capitalism, from ever advancing productivity to massive foreign competition point to a horribly bleak future.

We all have hope for the Occupy movement but look at this article in the New York Times today.  Individually, the worker is lost.  In Louisville, Kentucky “several thousand people apply for every unfilled, $13-an-hour factory job“.  And to even have those jobs, the city is subsidizing the corporations to locate there.  It’s a-ok with the mayor who parrots the corporate line like an alien zombie, “The trade-off is absolutely worth it,” Mayor Fischer said, arguing that while the city is actively subsidizing G.E.’s expansion here, mainly through tax rebates, that is not enough. “You must have a globally competitive wage to create jobs; the alternatives are $15 an hour or zero dollars an hour“.

The workers are fearfully silent at their ongoing impoverishment.  According to one worker “Too many unemployed people would clamor for her job and her wage if she were to protest.  You don’t want to rock the boat; You take a chance on losing everything you have if you do.”  Others are just thankful to have a job given the alternative of starvation.

Corporate leaders of course, who by the way make quite a bit more than $13 an hour, are quite happy with developments.  “We have gotten to a point where making things in America is as viable as making things any place in the world,” said James P. Campbell, president and chief executive of G.E.’s appliances and lighting division, citing the drop in labor costs as a crucial reason. “They are significantly less with the competitive wage,” he said, “and that is a big help.”

Union leaders, also paid more than $13 an hour, are happily in bed with the impoverishment process.  Here’s how the president of the Labor and Employment Relations Association and, until recently, the A.F.L.-C.I.O.’s director of collective bargaining understandingly assesses the situation: “Some companies want to keep work here, or bring it back from Asia but in order to do that they have to be competitive in the final prices of their products, and one way to be competitive is to lower the compensation of their American workers.”

Today’s onslaught is occurring, it must be remembered, at a time when US workers have already lost 40% of their share of per capita GDP since 1975.  Productive capacity has never been greater yet corporate America, the rich, the 1%, the ruling class, whatever you wish to call it, continue escalating the attack against the ever weakening enemy.

This is robbery, plain and simple.  Where’s the outrage?  There’s never been a more important time for workers everywhere to follow the wise words on Karl Marx’s tomb: “workers of all lands unite“!

From → Dynamics, Suppression

  1. yeahwRight permalink

    sorry to go off topic, but im interested what you think about Krugmans Debt column

    • Andrew permalink

      He makes a lot of good points, but he STILL doesn’t understand that debt doesn’t really make sense in the context of a country that controls it’s own money. Krugman says:

      “First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base.”

      He is wrong. The government doesn’t need to collect taxes at all for the purpose of paying debts. Why? Because it can always make money rather than taxing money away from private holders. If you had a money tree in your backyard, would you ever worry about paying back your debts?

      Government debt is simply a financial asset on which the government agrees to pay interest. There is never any requirement to issue debt – cash can always be paid. The government may want to issue debt in order to control private interest rates or to give guaranteed interest to savers (hoarders), but it need not do so. We should simply stop calling the government debt a debt. It’s not really a debt at all.

  2. Andrew sums it up well.

    Krugman seems to be inching toward the obvious but can’t yet accept that one of the bedrock assumptions of neo-classical economics is just plain silly. If debt is money we owe to ourselves, which he notes in the article, why have it in the first place? You can’t owe yourself money, and as Andrew says, it’s therefore not really debt at all. Which of course brings us to Abba Lerner and functional finance.

  3. Andrew permalink

    Well, I don’t know if I’d call it robbery. People are behaving in the way that they think they are supposed to behave. Some know that their behavior is harming others, but because they are playing according to the rules, they somehow feel absolved.

    This notion of competition for jobs is just silly. It’s like Tom Sawyer and fence whitewashing. The powers that be seem to just be saying “if we run faster or work cheaper, we’ll get to whitewash the fence.”

    We need to rethink work. Work should be about something more than earning an income. Until we rid ourselves of this notion, we’ll languish in inequality and waste.

  4. Andrew,

    I think of it as institutional robbery – the system promotes robbery by one group against another. Neither the perpetrators nor the victims need necessarily be aware of what’s happening.

  5. to a certain extent, the US and the UK are printing money to pay stuff, like debt, Europe does not, and with good reason: hyperinflation. This is not just a theory or something that happened a longtime ago: Think Brazil/Latin America in pre-social democrat times!
    I really wonder why you wouldn’t consider (hyper)inflation

    The “money tree” idea is even sillier than the “taxes is robbery” idea.

    Reconsidering the value of work is okay, but do realize that you’d go against a custom that has been there for thousands of years. Not capitalism or the making of profits, those are relatively new.
    But we can’t even get rid of the QWERTY-key board, in favor of the superior Dvorak-keyboard, so ….

    • Andrew permalink

      First, inflation isn’t necessarily bad. Inflation transfers resources from debtors to creditors. When most of the country is in debt, it provides an alternative (or supplement) to raising taxes on the rich. Taxing those that have is no different from spending on those that don’t have — it regulates relative wealth. The money has to come back to the masses in some way.

      With regard to hyperinflation, it is a phenomenon that occurs NOT from simply printing money, but printing money without regard to the economic situation at hand. In order for uncontrolled inflation to occur, people either have to forsake the money of the sovereign, or the government prints money without regard to need — say, to satisfy some foreign denominated debt with an exchange rate that it cannot control. The US has no foreign denominated debt and people (other than nutty gold bugs) haven’t in any way given up on the dollar — nor have people in other countries. Inflation is near 1% right now. Frankly, it seems kind of like chicken little to talk about US hyperinflation at this point – Peter Schiff has been doing it for years, and has been wrong for years. I don’t think he will live to see his forecast come true.

      You might think that the “money tree” is silly, but what would you call it? The government CAN print money as it chooses. It could be foolish and pick all the fruit at once, but that’s not what we’re talking about here. We’re talking about spending money to allow people to satisfy fill real needs where the resources exist to satisfy those needs. We’re not talking about giving each person a million dollars just because we can. We’re talking about providing a way for people to access the resources that are available.

      Just think about falling-apart bridges. We have the concrete, steel and people to build them, but we sit idle because we have no money. Doesn’t this not strike you as absurd? Or what about not providing health care to the sick who have no money when doctors and medicine exist to treat them?

      As far as rethinking the value of work, we don’t have to do something drastic. We could cut the work week to 35 hours. We could expand programs already in place to refund taxes not paid (EITC). We could get the government more involved in creating work that is valuable beyond the current earnings cycle. There are lots of possibilities.

  6. Yeahwright,

    You ask: “I really wonder why you wouldn’t consider (hyper)inflation”. I’m not sure why you think hyperinflation isn’t being considered. It’s a central concern of everyone who understands the real dynamics of money. You’re right that inflation isn’t just a theory, but neither is poverty, vast under-employment, massive concentrations of wealth, etc, etc.

    The vast weight of the evidence, IMO, is that inflation is a negligible threat today when you have massive unemployment. You support the orthodox policies in Europe which are causing massive unemployment and insecurity but I’m wondering at what point you change your mind. Spanish unemployment is well over 25%, what do you say when it hits 40%? Mass production capitalism can’t ultimately support itself without ever expanding widely based purchasing power to buy its products. But the never ending forces of corporate consolidation, technology, automation, and concentration of income are squeezing purchasing power like never before. And to that, add the conservative ideology of inflation fear that keeps governments from trying to solve the problem. The orthodox views we find in Europe (and also the US) will ultimately aid those like myself who detest this system of greed and power. Without massive state aid, it’s bound to collapse – 1st in a spiral of deflation but then probably in the very hyper-inflation you fear.

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