The dreaded “C” word—again

from David Ruccio

The unevenness of the current economic recovery is so obvious even mainstream economists have been forced to invoke the dreaded “c” word: class.

As I’ve pointed out many times on this blog, the more mainstream economists try to deny the relevance of class—after the crash of 2007-08, in the midst of the Second Great Depression—the more it rears its ugly head.

And so we have the spectacle of even the most vulgar of economists, such as Robert Samuelson, finding themselves in the position where they can’t ignore it. They really hoped the trend for labor’s share of national income to decline and capital’s share to rise would be reversed. But it didn’t. Not by a longshot.

Now, it’s true, mainstream economists like Samuelson have no idea why the two class shares are moving in opposite directions. But they do know that, as things continue in this direction, there are going to be real problems in terms of the fundamental unevenness and injustice of this recovery, and thus of the legitimacy of the current way of organizing economic and social life. That’s why they’re begging capital to do something about it:

What would improve the odds is more exuberance from the custodians of capital. CEOs seem content to sit on their profits and invest only when the needs and the returns are indisputable. Careless capital, which fostered the financial crisis, has given way to ultra-cautious capital, which is making a lackluster economy self-fulfilling.

Update

Even the students at Harvard Business School are now enunciating the dreaded “c” word and admitting that class matters.

Update 2

And Goldman Sachs [ht: sm], it seems, has been busy creating its own in-house class divisions.