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Socialism and exploitation

from David Ruccio

If you listened to or read the text of President Trump’s State of the Union speech Tuesday night, you might have been surprised by the explicit mention of socialism.

Here, in the United States, we are alarmed by new calls to adopt socialism in our country. America was founded on liberty and independence — not government coercion, domination, and control. We are born free, and we will stay free.

Or maybe not—since just last year the Council of Economic Advisers apparently found it necessary to issue a report, on the cusp of the midterm elections, to push back against the fact that “socialism is making a comeback in American political discourse.” And Fox News is engaged in its own campaign against socialism, since “support for Karl Marx’s collectivist ideas is steadily increasing.”

The irony, of course, is that Trump and his principal media outlet are in part responsible for the growth of support for socialism and for policies that are often associated with socialism (such as raising taxes on the income and wealth of the rich).* Claiming that “our country is vibrant and our economy is thriving like never before” and then scapegoating immigrants in “organized caravans [that] are on the march to the United States,” while ignoring the effects of the largest tax break for large corporations in U.S. history—which, while boosting economic growth, executive salaries, and the stock market, leaves American workers further and further behind—makes the case for socialism even more compelling.

But interest in socialism was growing even before Trump took office, especially among millennials. The question is, why? 

millennialsocialists_E8nBRzp

As I’ve noted before, the members of Generation Y are generation screwed, with lower earnings, fewer jobs, more part-time employment, and a higher unemployment rate than any other generation in the postwar period. As a result, they’re more likely than their elders to think of themselves as working-class and less likely to identify as middle-class.

For Malcolm Harris, the problem is exploitation:

This is a fundamentally capitalist story. Workers have always been exploited, but that rate of exploitation. . .is increasing exponentially for millennials.

What Harris is referring to is the growing gap between productivity and workers’ wages. And it really doesn’t matter how that gap is measured.

153034-19227

Harris refers to the numbers produced by the Economic Policy Institute, according to which”net productivity” has grown 6.2 times “hourly compensation” since 1973.

fredgraph

Alternatively, we can look at the gap between real output per person in the nonfarm business sector and real weekly earnings, which has increased by a factor of almost 10 since 1980.

Both measures point to increasing exploitation—to a growing gap between what workers produce and what they receive back as their pay. And it’s that exploitation—which neither Trump nor, for that matter, “conventional American economists” want to talk about—that is generating interest in socialism today.

Workers, especially young workers, are suffering the consequences of increased exploitation and beginning to look beyond capitalism, to different ways of organizing the U.S. economy and society. Socialism, since at least the end of the eighteenth century, has been the name for those alternatives.

Why is there growing interest in socialism in the United States today? The answer is clear. It’s capitalist exploitation, stupid!

 

*Such policies now include abolishing billionaires. However, Farhad Manjoo, who tried to sort out good from bad billionaires, never asks where those billions come from.  If he did, he’d discover the ways an increasingly unequal and unjust distribution of income is tied to—as both condition and consequence—a fundamentally unequal and unjust structure of production.

  1. culturalanalysis.net
    February 7, 2019 at 11:49 pm

    The central tenet of socialism is “abolishing of private property”, at least in so far as it can be used in trade and commerce. It is important not to conflate social policy with socialism, a category mistake.

    The comparison of productivity vs hourly wage is nearly meaningless without accounting for the standard of living on that wage. The problem of capitalism is of a different kind. Excessive accumulation of capital in few hands is anticompetitive, and this in turn is one of the fundamental tenets of capitalism, so, in essence, the problem is not ‘too much’ capitalism but ‘not enough’ of it, or bastardisation of capitalism by the elites wh are now actively trying to destroy capitalism in order to accomplish absolute power for themselves. Socialism is a convenient springboard for such a change, as socialism for the masses, all equal in their destitution, and absolute power for the Central Comittee of the elites.

    Curiously, after the fall of socialist order in Poland, the communist elites and military brass, provided they did not commit serious crimes (other than exploitation) become the leaders of the new Poland, presidents of leading institutions, various authorities (including the Central Bank).

    I am nonetheless optimistic about capitalism, because its problem can be narrowed down to one property which can be hypothetically fixed: credit. In order to fix capitalism we only need to nationalise bank credit, and the system is bound to become more equitable while profits from credit (interest) would provide a huge revenue boost to the public purse, equivalent to a 20% tax rate on income.

  2. February 8, 2019 at 5:00 pm

    Socialism and scientific incompetence
    Comment on David Ruccio on ‘Socialism and exploitation’

    There is no such thing as economics. There are TWO fundamentally different types of economics: political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

    For non-economists, the most important thing is to realize is that theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years. Economics is a failed science. The four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the foundational concept of the subject matter ― profit ― wrong.

    As a result, since Adam Smith/Karl Marx economic policy guidance NEVER had sound scientific foundations. Economists of all colors sell proto-scientific garbage in the bluff package of science.

    This, of course, holds also for Marxianism:
    • Marx’s profit theory is provably false.#1
    • By consequence, the concepts of exploitation and classes are false. Marx lacks the concept of cross-over exploitation.#2, #3
    • Because the foundational concepts are false, Marx’s whole analytical superstructure is false.
    • Because the theory is defective, Marxian economic policy guidance was bound to fail from the very beginning.#4, #5
    • After-Marxians have not spotted Marx’s foundational blunder to this day.#6, #7
    • Marxians are scientifically incompetent just like non-Marxians and all together are only employable as useful political idiots.

    Because both Capitalism and Socialism have no sound scientific foundations, their respective economic policies are not much more than blind political agenda pushing. Never forget that both left-wing and right-wing economists do NOT know what profit is and how the actual monetary economy works.

    David Ruccio concludes: “Workers, especially young workers, are suffering the consequences of increased exploitation and beginning to look beyond capitalism, to different ways of organizing the U.S. economy and society.” If so, what is their winning formula? Go for it but do NOT think that economists have any solutions for you or that they are of any help. Forget this Capitalism/Socialism thing. Since 200+ years, economists are incompetent blatherers who are too stupid for the elementary mathematics that underlies macroeconomics. Independent of their political color, economists have always been a real hazard to their fellow citizens.#8

    Egmont Kakarot-Handtke

    #1 Profit for Marxists
    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2414301

    #2 Capitalism, poverty, exploitation, and cross-over exploitation
    https://axecorg.blogspot.com/2018/04/capitalism-poverty-exploitation-and.html

    #3 If we only had classes
    https://axecorg.blogspot.com/2018/10/if-we-only-had-classes.html

    #4 Ricardo, too, got profit theory wrong. Sad!
    https://axecorg.blogspot.com/2018/02/ricardo-too-got-profit-theory-wrong-sad.html

    #5 Ricardo and the invention of class war
    https://axecorg.blogspot.com/2018/02/ricardo-and-invention-of-class-war.html

    #6 MMT and Marxism ― blather as immunizing stratagem
    https://axecorg.blogspot.com/2019/02/mmt-and-marxism-blather-as-immunizing.html

    #7 MMT ― backstop or advanced life support for the Oligarchy?
    https://axecorg.blogspot.com/2019/02/mmt-backstop-or-advanced-life-support.html

    #8 Econogenics in action
    https://axecorg.blogspot.com/2019/01/econogenics-in-action.html

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