Repost from the old site.
Great video by Richard Wolff, professor of Economics at the University of Massachusetts at Amherst.
Wolff is a Marxist, and the lecture is from a Marxist POV. However, it is interesting in many ways.
One thing that is clear to most sensible folks with an understanding of economics is that Marx’s analysis of capitalism is one of the greatest ever done by anyone. For a long time, it was taught in all economics departments. With the advent of crazy Friedmanite neoliberalism in the past 30 years or so, Marx may not be being taught so much, but that’s a mistake.
It’s sometimes said that Marx is great for analyzing either what capitalism does well or poorly, but not the opposite. Not true. Marx is great for analyzing capitalism both when it is doing well and when it is doing poorly.
In my opinion, where Marx has problems is in proposing alternatives to capitalism, and history has born this out to some extent. Capitalism, with all of its chaos and problems and horrors and deaths, may just be the only way forward for the time being. Like death, disease and taxes, it may be a necessary evil.
Wolff describes how US workers saw 150 straight years of growth and improvement in their living standards, from 1820 to 1970. This is correct. He doesn’t lay out how this happened, but there are many explanations for this. He also says that this scenario was rare to unheard of in the rest of the capitalist world.
After 1970, things changed. Productivity kept going up, but wages went flat or even went down. A US worker in the late 1970’s made more per hour than a worker working today. As productivity rose and wages went flat, capitalists began raking in incredible profits.
This is what has happened to the US economy over the past 35 years, as neoliberalism took hold and 80% of the population saw its wages stagnate or go down. The top 20% of the population, and especially the top 1%, saw its income explode. But the vast majority of workers of every race got screwed.
As workers got more and more screwed and the capitalists, the owners, those who lived off the labor of others, saw their incomes skyrocket, confused workers began advancing all sorts of explanations about why this was happening. Anti-Semites, as usual, blamed the Jews. White nationalists and White Supremacists blamed Blacks and Browns. Lots of middle class and working class Whites blamed Big Government.
The truth was that the culprits were the business owners who were reeling in superprofits while workers got the shaft.
As this process continued, capitalists found more ways to keep the cost of labor down. They began importing massive amounts of legal and especially illegal immigrants as labor to drive labor costs down even further. They began moving many enterprises offshore and later, began offshoring work via the Internet.
Confused workers scrambled to keep up their standard of living. Others in the family, often the wife, began taking a job, bringing in a second income. Then one or more persons in the household began to work second and third jobs. Americans worked more and more hours, setting new records for workers in the West.
The despicable US media extolled this fact, and praised US workers for working themselves nearly to death, taking pains to point out how tough and hard and slaving-away Americans are compared to pampered, wussy, “soft” Europeans kicking back under socialism.
It’s true – part of the US war against European social democracy has been to declare that Europeans are soft, wimpy, sissified and wussy. How did they get this way? Socialism turned hard self-reliant European men into soft, pampered girlymen. Americans were hard, tough and macho. They didn’t need no nanny state to help them out. They could do it on their own. The American worker as Marlboro Man.
Wolff points out that that extra workers did not necessarily fix matters, as when the wife started working, it turned out that she needed many things, for instance a vehicle to get to work in.
Working more than one job didn’t seem to work very well, nor did having others in the household go out and work, but it did the trick for a while.
After some time, Americans would have to turn to some new tricks to try to keep up their standard of living. They turned to loans. At first they ran up their credit cards. Americans were setting records for going into debt on credit cards and were among the Western world’s poorest when it came to saving money.
This isn’t really very good personal economics, but the vile media cheered it on nonetheless. Silly, wimpy Europeans and Japanese saved their money for a rainy day, presumably because they were too neurotic to enjoy life. Americans went for the gusto! They spent ever nickel they earned and then went in debt up to their waders! Cheers, cheers, cheers!
After the credit cards were maxed out, there was an explosion in US housing prices. Call it a housing bubble. This came at a propitious moment, for it enabled Americans to use as collateral the biggest asset they owned, their homes. Americans borrowed on their homes, refinancing them, taking out second mortgages and using the money like a credit card to continue to pursue the standard of living to which they had become used.
The capitalists continued to reel in the dough from the leveling of wages, now via outsourcing and use of immigrant labor, and now the capitalists found a new tool – debt.
They loaned money to their own workers! It was like the old days when you lived in a company town, bought at the company store and ate at the company diner, all deducted from your check. Not only will we pay you a crap wage, we will snag every dollar you spend on food, rent and shopping too.
These same capitalists were now swimming in ultraprofits with the money they were making off loaning money to workers and home mortgages (just another type of loan). They had so much money they did not know what to do with it. They threw it into the stock market, and the market for high-end goods of all sorts went through the roof.
Conspicuous consumption came back with a vengeance, and the scummy media once again sang and danced the praises of the most idiotic and obscene ways the rich chose to blow their unneeded and often unearned cash.
A whole new financial industry, a parasitic industry on the economic body of the nation, sprung up, an industry that created no products and no real wealth. It was nothing but a gigantic casino on Wall Street.
All sorts of funky instruments that no one understood were dreamed up – derivatives, CDO’s, mortgage securities and all sorts of other stuff that probably shouldn’t even be legal. Almost no one understood these things and no one seemed to understand what they were worth.
The inevitable bubble came and the party crashed, as it always does when capitalist bubbles go bust.
The root causes were the destruction of the regulations put in in the 1930’s, during the Depression, in order to prevent another Depression. As soon as these regulations were put in, the capitalists began plotting and working to get rid of them.
Over the next 80 years, the capitalists created a Gramscian cultural hegemony that attacked socialism, government and regulation and exalted free market capitalism. Socialism, government and regulation were described as possibly good ideas, but doomed to failure. The only way to avoid the inevitable failures of socialism, government and regulation was to completely deregulate the economy. Anything less was the road to ruin.
With their money, the capitalist interests bought up all the media and most of the politicians. They used this to get rid of the Depression-era regulations and create the manipulate US culture to where your average worker thought that was a great idea, if he understood it at all.
There are various proposals for how to deal with this economic mess. As discussed in a previous post, conservatives, reeling and increasingly discredited, have tried to blame the catastrophe on too much regulation, not too little. Even the slimy media that normally goes along with this crap is finding this too much to buy.
White racists are promoting the racist notion that liberals (via affirmative action and anti-discrimination laws), niggers* and beaners* are the ones that destroyed the US economy. The Republican Party has to some extent bought into this, as has the business press, their amen corner in the mass media, and their academic hacks, but the argument is too slimy and racist for most decent people, plus there isn’t an ounce of truth to it.
Steve Sailer, an excellent writer who is widely read, is the latest to promote this racist travesty, much to his shame. Sailer is looking more and more like a Republican Party hack than a really deep-thinking, independent and empirical author.
Furthermore, Sailer has been skating on the edges of racism for some time now without really going over. More often, he seemed to be giving the racists lots of nice talking points. Now he’s finally pushing an explicitly racist discourse, and it’s not even true. Too bad.
Rate of subprime mortgage defaults by race:
Whites 19% Blacks 19% Hispanics 19%
End of discussion!
Liberals, Leftists and social democrats have proposed re-regulation, but the problem here is that we are probably going to re-do the 1930’s experience all over again. We will put in a bunch of great regulations and as soon as we put them in, the capitalists and their mass media machines will start plotting to get rid of them.
Then the capitalists and their media machines will launch a jihad, for as many decades as it takes, to reverse all these regulations and get back to total deregulation again. In time, workers will forget why they put the regulations in in the first place, and they will go along with it.
The capitalists will buy most of the politicians all over again, and the politicians will vote to deregulate again. The capitalists will work to recreate their Gramscian cultural hegemony, and the average worker will once again think deregulation is the smart thing to do. The economy will blow up again and we will be right back to 1929 and 2008.
Wolff suggests that there is a third alternative. He describes a paper done by a colleague that describes Silicon Valley workers who hated their jobs. They had to dress up, sit in a cubicle and take orders and crap all day from a bunch of assholes. Can they pay anyone enough to put up with that? With the destruction of the Silicon Valley workforce, these workers were laid off.
A number of them got together and formed IT worker-run cooperatives, a non-capitalist form of ownership along the lines of anarcho-syndicalism. The study found that these workers said that they had never been happier. They were manufacturing software, selling it to buyers and dividing up the profits among themselves. The workers themselves were the new owners.
Wolff said that as a condition of the bailouts to the financial industry, we should mandate that they staff their board of directors with workers, not management, as a first step towards workers democracy.
Wolff also said that he had been giving speeches like this for 25 years now and he has had more interest in the past five weeks than in the previous 25 years.
That’s ending on a hopeful note for now. Enjoy the video.