R.Wolff: Capitalism And Its Discontents

[lektrode]

dunno if this one's made it to the 'tulip prev or not, but just found in a magazine i've not seen before:

presented for discussion (from the econ/intellectual elite, something quite atypical fer yers truly)
Capitalism And Its Discontents

Richard Wolff On What Went Wrong
by David Barsamian / February 2012

the forward and big pieces/concepts:

Today’s economic crisis is the most severe since the Great Depression. Some put the blame on greedy bankers who pawned off credit-default swaps, subprime mortgages, and a smorgasbord of derivatives on hapless investors in a time of little or no regulation. Others blame consumers who irresponsibly took out loans they couldn’t pay back. Economist Richard Wolff says no single sector of the economy is at fault. The seismic failures are systemic and deep, and fundamental change is necessary to avoid future collapses.


Wolff has devoted a lifetime to the study of economics and capitalism. He is professor of economics emeritus at the University of Massachusetts Amherst and is currently a visiting professor at The New School in New York City. His 2009 book, Capitalism Hits the Fan: The Global Economic Meltdown and What to Do about It, is an account of the current crisis and its origins, with suggestions for structural changes rather than tepid reforms. “The issues raised by the crisis,” he says, “go far beyond the stale old debates between those favoring more versus less government. The capitalist system itself has been placed in question.”

........

Barsamian: You write that Americans “had a remarkable 150 years during which workers enjoyed a steadily rising standard of living.” When and why did that stop?
Wolff: What distinguishes the United States from almost every other capitalist experiment is that from 1820 to 1970, as best we can tell from the statistics we have, the amount of money an average worker earned kept rising decade after decade. This is measured in “real wages,” which means the money you earn compared to the prices you have to pay. That’s remarkable. There’s probably no other capitalist system that has delivered to its working class that kind of 150-year history. It produced in the U.S. the expectation that every generation would live better than the one before it, that if you worked hard, you could deliver a higher standard of living to your kids.
Before we talk about why this changed, let’s think for a moment about the trauma the end of this trend represents to the working population. It is the end of the notion that a better future is the reward for hard work. And the trauma is made worse by the fact that there’s no discussion of it, no way to share the experience, because most of the population literally believes that it hasn’t happened.
Barsamian: So why did it end?
Wolff: There are many reasons, but I think four developments in the 1970s were key.

The first was the increasing use of computers, which made it possible for employers to reduce their number of workers, since one computer now did the work of many humans. For example, once upon a time supermarkets needed workers to keep track of how many boxes of cereal and rolls of toilet paper were leaving the shelves. Now a computer scanner at the checkout counter does that. One man or woman sitting at a monitor somewhere can tell exactly how many boxes of cereal have to be ordered at a hundred different super*markets. They don’t need an army of workers to take inventory.


The second thing that happened in the 1970s was that employers moved production to other parts of the world, where wages were lower. Between the computer replacing workers and jobs going overseas, the demand for labor in the U.S. shrank.


The third event was that women joined the paid workforce in large numbers and stayed, largely abandoning the role of full-time mother and housewife. And, finally, we had a new wave of Latin American immigrants who came here looking for jobs and a better life. So while the number of jobs was declining, there was an increase in the number of people looking for work. This combination meant that, for the first time in American history, there was no labor shortage.


With so many people competing for jobs, employers discovered that it was no longer necessary to give raises to attract and keep employees. Since the 1970s American employers have enjoyed record profits. During that same thirty years, according to the Bureau of Labor Statistics in Washington, DC, the wage earned by the majority of American workers hasn’t changed. In real terms, adjusted for inflation, what a worker makes in 2011 is about what the same worker made in 1978.
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the rest: http://www.thesunmagazine.org/issues...ts_discontents

they're beginning to get to me....
suspect that the jingoism of the right is beginning to fade in its effectiveness.
but i'm not ready to concede to the idea that what we need is more .gov spending to offset whats happened in the private sector - certainly NOT of the type we have seen the past few years, which has only delayed the inevitable (the grand plan of the political class, if'n ya asks me - till AFTER they have theirs) and served only to bailout the failed policies of the recent past.

if we are going to get out of the ditch that the beltway has driven The Rest of US into, i AM NOT INTERESTED IN HEARING MORE OF THE SAME tired old bromides from the left, either.

if there's going to be another trillion dollar stimulus WE NEED A PLAN, that does NOT revolve around maintaining the public sector status quo, which is all the last 'stimulous' managed to "accomplish"

methinks the plan needs to focus first on a GAME CHANGER FOR ENERGY SUPPLY - and even tho i'm a solar/alternative energy kinda guy, i'm NOT at all certain that solar panels and windmills are The Solution, as it simply doesnt give us the scale we need to make the next 'quantum leap'

and without that, we're all dead... since the earth isnt going to wait much longer while they play games in washington DC over who can bring home the most bacon....

[don]

Re: R.Wolff: Capitalism And Its Discontents

Solar panels from China won't fix the US economy. As long as the euphoric outsourcing of production, and its concomitant big-stick leverage with what remains of domestic production, is the guiding principal, we're screwed. Sure, layers of entrepreneurial engineering will still be around, but the needed 400 horsepower engine of the real economy will remain a void under the hood.

These are the daze of the full expression of monopoly capitalism (albeit with American particulars), without restrain. With all the historical speedbumps, it's taken a century to get here.

As insightful 'investors', we have to figure out how to deal, not to mention survive, with what we've got.