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Thursday, January 30, 2014

The State, Wages, and a Fact about Marx

Posted by on Thu, Jan 30, 2014 at 8:34 AM


"Tonight I ask more of America’s business leaders to follow John’s lead," the president said. "Do what you can to raise your employees’ wages."
Here’s the trouble with Obama's request. Companies have discovered that precisely by keeping wages lower, they have been able to boost profits to record levels and fulfill their ultimate goal: rewarding shareholders. In a report released earlier this month, Goldman Sachs chief U.S. chief economist Jan Hatzius noted that the strength in corporate profits is “directly related to the weakness in hourly wages.”
“The weakness of wages and the resulting strength of profits are telling signs that the U.S. labor market is still far from full employment,” Hatzius wrote.
What's missing in this picture? The role of credit. As heterodox and Marxist economists will point out again and again, it's not just that wages have been flat for the past 40 years (the neoliberal period), but more importantly: the middle class/working class has used credit to make ever-growing ends meet. The explosion of private debt was closely observed and analysed for three decades by the American Marxist economists at the Monthly Review. Also, the Italian Marxists called this state of things (flat wages/growing private debt) the renting/borrowing of pay increases. Meaning, one no longer gets a pay increase directly but must instead borrow/rent it from a bank or against the value of a home.

To conclude, one must always keep in mind that Marxists are essentially critics of capitalism. As the literary critic Frederic Jameson pointed out in a 2012 interview, there really isn't that much politics or utopian visions in Marx's major works.

Frederic Jameson: I know this is probably surprising for people who always think of Marx in political terms, but there is really very little mention of any political action in Capital. There is certainly the implication of the kind of society that could come out of capitalism and also of the contradictions that could lead to the end of capitalism and I am not saying that Marx was not political or didn't constantly think of political strategies, but Capital is not a book about that. It is a book about this infernal machine that is capitalism.


Comments (15) RSS

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venomlash 1
To quote Marx, speaking on the topic of money and taxation:
"Dollars! There's-a where my uncle lives! Dollars, Taxes!"
Posted by venomlash on January 30, 2014 at 9:06 AM · Report this
lark 2
Good Morning Charles,
First of all, I'm no student of Marxism. I've only read "The Communist Manifesto" and a biography of his family "Love & Capital" by Mary Gabriel. But, I believe what you wrote about Marxists is succinct & true, "Marxists are essentially critics of capitalism".

I can agree to that.
Posted by lark on January 30, 2014 at 9:10 AM · Report this
The American people have been living beyond their means for the last 40 years and it needs to stop. Responding to stagnant wages w/ out of control borrowing is a uniquely American vice, not a fact of human nature. In Japan, economic growth has been slow for the last 20 years. However, people there haven't responded by getting into debt. Instead they have tightened their belts and consumed less.
Posted by Ken Mehlman on January 30, 2014 at 9:34 AM · Report this
fletc3her 4
@3 If the serfs would all just switch to gruel everything would go back to normal for the aristocracy.
Posted by fletc3her on January 30, 2014 at 9:40 AM · Report this
Sargon Bighorn 5
#3 yes you are correct. In Japan they have socialized medical care, cradle to grave. Part of the American credit debt growth and "living" beyond their means is just that, borrowing money TO STAY ALIVE. Paying the medical bills. I did say PART of the debt. People buy other stuff too.

The ACA is designed (poorly) to remedy that flaw.
Plus in America saving is double penalized. The money going into saving has already been taxed, the money earned in savings is taxed. The rates are lower than during the Depression. Americans are using the tools provided to them. Worthless tools by in large, but they are all that are available.
Posted by Sargon Bighorn on January 30, 2014 at 9:47 AM · Report this
total bullshit. Marx was very wrong. first capitalism worked far better than he thought it would. Second, it was consistent with broad democracy, it's not really true that there is a dictatorship of capital in a democracy. third, he was totally wrong in his political predictions of revolution -- have you NOTICED that it DID NOT HAPPEN in the leading industrial nations, Charles? what the fuck. It also happened in rural Russia where he said it could not happen. So while he was right on some things about business cycles and other things to be criticized his major life work was to set up the international and call for and expect and prediction revolution so he was mainly WRONG and in fact the places that had the revolution are not stellar successes economically -- just the opposite -- so he was wrong on economics too. he's also wrong economically in his labor theory of value whjich negates and ignores the value of thought, science, innovation, and technology. the value of labor is combined with the value of technology and that's why we have living standards today that are like one thousand times higher than what marx predicted which was total impoverishment of the working classes and basically only a tiny middle class. he's also wrong in thinking we only had capitalism after about 1800 we have always had capitalism, globalism, and trade, and finance since the roman empire, combined with servitudes and feudalism etc. his stage theory is off; life is messier than that. fucking globalism as of 1650 started bringing tens of millions of Africans against their will to the Caribbean and new world and this was a feudal capitalist system of world trade. it was neither what he called feudalism, nor what he called capitalism, as it was agricultural slavery not industrial. but it ended, too. today we see even brazil doing better economically, china also, through capitalism. this success of capitalism, flawed as it is, is about 100% contrary to what marx predicted economically and politically. it's so easy to fling the word marx and dialectic about, it makes you hip, yes, you can sell word poems easily -- but marx was wrong, fundamentally wrong. the proof of it is Sweden, the social democratic countries, America, Australia, france Germany etc. today all the very successful capitalist nations that work best when it's tamed by the soft "socialism" of single payer or national health plus high taxes and lots of programs and the vote for most everyone. this is NOT what marx predicted at ALL, it's a fairly good outcome and if you don't acknowledge it -- you're basically wrong as a scientist of economics and politics.
Posted by marx: today's easy hipsterism on January 30, 2014 at 10:12 AM · Report this
Marx was categorically wrong on almost everything. The things he was right about were cannibalized from other philosophers and latter-day Marxists claim ownership of critiques that in and of themselves are particularly "Marxist"

More free snake oil. If you don't like it, you can get your money back. But Russia is a great example of what happens when Marxism is allowed to live a full life in state power. Without Lenin, we would have at least seen a social democratic Russia by now.
Posted by hmmmmm on January 30, 2014 at 10:48 AM · Report this
*aren't particularly Marxist.
Posted by hmmmmm on January 30, 2014 at 10:49 AM · Report this
keshmeshi 9

Yes, in Japan, corporate executives make far less than their American counterparts.
Posted by keshmeshi on January 30, 2014 at 11:47 AM · Report this
sirkowski 10
Marxists think the Earth is round, yet they get no credit.
Posted by sirkowski on January 30, 2014 at 12:05 PM · Report this
@3, immediately go and read (I know, reading is sooooo hard) Laura Gottsdiener's A Dream Foreclosed, Das' Extreme Money, and Ellen Schultz's Retirement Heist, and then get back to me, douchey!
Posted by sgt_doom on January 30, 2014 at 12:45 PM · Report this
Pope Peabrain 12
Credit is usury and when the banks own you, you are no longer a free person. Some people buy into that.
Posted by Pope Peabrain on January 30, 2014 at 2:48 PM · Report this
care bear 13
@3 Economic growth in Japan has been abysmal BECAUSE people aren't spending money.
Posted by care bear on January 30, 2014 at 5:15 PM · Report this
Without debt there would be no money...
Posted by Upchuck on January 31, 2014 at 6:39 AM · Report this
thelyamhound 15
The American people have been living beyond their means for the last 40 years and it needs to stop.
Surely even a quasi-objectivist pseud like you would have to admit that this is truer yet of the 1% than of the other 99%.
Responding to stagnant wages w/ out of control borrowing is a uniquely American vice, not a fact of human nature.
Of course. But why? Could it be that a certain amount of ostensibly "frivolous" consumption is necessitated by our system? I don't have a smartphone because I want one. I have a smartphone because, as an actor and trainer, I'm expected to be reachable across multiple media at pretty nearly every moment that I'm not actively working with a client or in rehearsal, including times that I'm commuting or even "off-duty" (so far as any such time exists).

When I point out that corporations--individually or consolidated into "markets"--are de facto governments, I'm generally referring to the ways in which those who manufacture our products engineer society as a whole around those products, turning luxuries into necessities. Civilization organizes itself around the automobile until one either needs a car to function economically or requires the intervention of government in creating transit to replace the car without which one cannot expect to travel in reasonable time between the areas in which one lives and in which one works. Mixed use neighborhood offer scant relief from this cycle because the service industry jobs that exist in those neighborhoods don't pay enough to meet what the property owners are charging in rent.
Posted by thelyamhound on February 5, 2014 at 8:28 AM · Report this

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