… and ….
The world’s productivity revolution is outpacing the political will of rich societies to fairly distribute its benefits. The result is widening inequality coupled with slow growth and stubbornly high unemployment.
I think Robert Reich has some interesting things to day in his essay: The Answer Isn’t Socialism; It’s Capitalism That Better Spreads the Benefits of the Productivity Revolution
Although I also think he’s kind of playing on the word “socialism” ina way that is not fully necessary, but that’s OK.
A resurgent right insists on even more tax breaks for corporations and the rich, massive cuts in public spending that will destroy what’s left of our safety nets, including Social Security and Medicare and Medicaid, fewer rights for organized labor, more deregulation of labor markets, and a lower (or no) minimum wage.
This is, quite simply, nuts.
And this is why a second Obama administration, should there be one, must focus its attention on more broadly distributing the gains from growth. This doesn’t mean “redistributing” from rich to poor, as in a zero-sum game. To the contrary, the rich will do far better with a smaller share of a robust, growing economy than they’re doing with a large share of an economy that’s barely moving forward.
As in the “Keep the money moving” theory of making for a stronger economy.
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The one percent just don’t care. It’s just like the song says:
I think Reich kind of misses the problem of what he’s saying, although I don’t think he’s wrong per se.
“Less work isn’t a bad thing. Most people prefer leisure. A productivity revolution such as we are experiencing should enable people to spend less time at work and have more time to do whatever they’d rather do.”
Less work is seen, by a LOT of people as a bad thing in and of itself. At least, it’s seen as a bad thing when other people do it. This is the real problem. And it’s going to take socialism of various forms, to get from A to B, to reform the economy around a lower work-week in order to maintain full employment.
That said, in the long run, it’s the only chance that capitalism as a system has.
Increased unionization may do it? But I suspect not. I think it’s going to have to be top-down economic reforms. A combination of going to a single-payer system (to keep a major part of consumer costs in check), a reduction in the work week to 32 or so hours, including increased enforcement and punishment, and a wage-replacement subsidy paid to low-income workers based around a sliding surtax based upon employment levels (I.E. High unemployment means higher capital gains taxes)
“Top down” maybe but not trickle down.
Depends on who is doing the less work. People looking for work do not want less, they want more People working two jobs to meet ends would like less work if there was some more payment. The 1% might like to have less work and have the bottom 10% do more for them.
A simple higher tax on higher income brackets with the resulting funds used to rebuild infrastructure and so create jobs is a good idea that is always talked about but never done.
Best results are never achieved by going to extremes. You need some capitalism, but society needs the ‘socialist’ safety-nets to keep it peaceful and working productively. Letting capitalism take over and suck so much money out of circulation that ever more people are forced below the poverty line is not conducive to a safe, peaceful community. A growing pool of poor, desperate people losing their jobs and hopes for the future leads to more crime and violence.
A friend of mine works for a large company. For the upcoming year his raise was $.10 per hour, despite the fact that he had above average ratings on his review. However, he is at the salary midpoint of his job pay grade and so will not receive larger raises unless he is accepted for a job at a higher pay grade.
Shortly after his annual review, his company announced that the prior quarter’s profits were much higher than projected and decided to reward shareholders with a dividend increase rather than reward the higher productivity of the employees by adjusting the salary ranges.
Of course, the dividend increase benefits the board of directors who are given deferred stock options in exchange for their services.
The only reason that he has for pushing his productivity higher is to keep his job. He has given up on expecting any reward for higher work.
And that’s what I like about the south.
Is this guy in a Union? He needs to be in a union!
It’s not just the south tuibguy. I work for a huge employer and while I’ve had a good experience, a good many of my co-workers don’t usually get a COLA level of increase. i.e. they are treading water at best.
@ Dr. Reich, I agree with most all of what he says. I don’t see how the US can have a decent economy when all the gains are hoarded off.
Definitions are malleable, of course. But my tendency has always been to use “socialism” in its historical sense, for economic systems where the means of production are not privately owned. I suspect that’s close to how Reich is using the term. Closer to the old socialist party in France than the current one. In that sense, you’ll know France has become truly socialist when there’s no longer a CAC40.
To me, the term “social democracy” seems better to describe a liberal democracy with strong social safety nets. And, of course, a capitalist economy to fund those.
Personally, I’m a fan of a more communist system, in the particular sense of “means of production are owned by the workers.” By this I do not mean “the workers” as a class, but rather “the workers” as in those who are working at an enterprise are who own it. This is of course entirely compatible with a strong social safety net and a liberal democracy, it just means shaping the incorporation statutes to encourage cooperatives rather than joint stock corporations with employees. I support my position with reference to the Mondragon Cooperatives in Spain (I know, wikipedia, but there are loads of good sources at the bottom) as well as Emilia Romangna in Italy . The Emilia Romagna model includes a great deal more than merely cooperatives, of course, nor are all of the businesses that make it up, but it has played a strong role. The rest of the economic model is something that should be looked into as well, frankly, since it seems to be working very well.
Oliver Wendell Holmes said, “I like paying taxes. With taxes I buy civilization.” What he didn’t say because it probably didn’t need to be said explicitly in his time was, “civilization is good for my bottom line.”
They were closer to the beginning of civilization back then so it did not need to be said.