A commenter notes:
This is good stuff. I think you are right on: capitalism is not working for the middle class, what’s left of it.
I heard an interesting interpretation of capitalism the other day by Andrew McAfee, a technology guru at MIT. He says, contrary to public opinion, that capitalism is “very successful,” it has greatly expanded output of technology and other consumer goods and increasingly does so with less and less labor. That is what capitalism is supposed to do.
But he goes on to say because of this high return to capital and low return to labor, the middle class is going south. He suggests “a living wage” for everybody. It was hard to tell whether he meant only people with “jobs,” or the entire society.
Indeed, we should do that through government regulation. One of the functions of government, which we forget, is the goal of “full employment.” It is not, and never has been, a goal of capitalism.
Whether we will ever be able to do that politically is doubtful. One can always hope.
The Sage of Wake Forest
Thank you. I would add that what this guy praises about capitalism is what is so insane about it:
He says, contrary to public opinion, that capitalism is “very successful,” it has greatly expanded output of technology and other consumer goods and increasingly does so with less and less labor. That is what capitalism is supposed to do.
So capitalism works because every year, it needs fewer and fewer workers to output its goods. Ok, what that means is that at some time, capitalism will not be able to provide enough jobs for everyone who wants one. The strategy of every year, trying to eliminate as many jobs as possible seems like a suicide strategy for the capitalists. If you keep eliminating jobs, you keep eliminating workers. If there are fewer and fewer workers with jobs and more and more unemployed, who in God’s name is going to have enough money to buy your stuff, capitalists?
Furthermore, what is wrong with full employment. Any decent society has an obligation to at least offer a job to everyone who wants one, and to provide support for those to whom capitalism can offer any work. We do not do that. There are 4-5 job seekers for each job opening.
Capitalism actually operates on the insane theory of “the necessity of unemployment.” If you go to Business school, they will actually teach you this. They will teach you that full employment is a catastrophe and that a reserve army of labor, preferably a large one, is necessary to discipline the labor market, lest workers get to greedy and demanding.
Indeed, under Clinton when unemployment started to get “too low” (around 4%) the business class around the Wall Street completely flipped out and stock prices started crashing. Alan Greenspan came to the rescue and immediately began raising interest rates higher and higher to satisfy the stock market. As the unemployment rate rose, stock prices climbed higher and higher seemingly in celebration.
That’s insane. A stock market that tanks when too many people have jobs is a crazy institution. A stock market that heads upwards as more and more are thrown out of work is ridiculous. A system that necessitates a certain level of permanent unemployment to ward off the catastrophe of full employment is a lunatic system.
And you guys wonder why we socialists blast capitalism so much.