Tom Cathcart offers the following comment and question: "Thanks,
Bob, for turning me on to your paper on the future of socialism. Very
interesting and thought-provoking--and depressing. Do you see any hope in the
possibility that, just as racial, ethnic, and gender inequalities are mitigated
by the unfolding logic of capitalism, perhaps extremes in income inequality
will come to be mitigated in the same way? I guess I'm thinking of a macro,
world-historical version of the [apocryphal?] meme we all learned as kids:
Henry Ford paying his workers more than he had to so they could afford the
Model A. In the present climate, one could add to the affordability issue the
political risks of class resentment: i.e., the perceived threat to the top dogs
of our electing a Trump or a Sanders. One thinks of the possibility that
corporate America might support the efforts of a President Clinton to
dramatically raise the minimum wage or defeat the TPP, etc. David Brooks, of
all people, argues this morning that Republicans need to wake up and start
supporting government interventions on behalf of workers. Maybe, a la your
analysis in the paper, some hope lies in the logic of capitalism to save
itself, as it did with the flattening of the business cycle."
This is a very interesting
question, and it puts me in mind of a fine old [1973] book, The Fiscal Crisis of the State, by James
O'Connor. O'Connor argues that the state
has two sorts of social expenditures:
One category is expenditures that are designed to reduce the cost to
capital of doing business -- for example, the costs of education for the workforce,
which would have to be borne by the capitalist if the state did not pay them
through state funded public education, or the costs of public transportation
and so forth [not to speak of the costs of the military, which do capital's
bidding overseas.] The other category is
essentially bread and circuses to keep the working class sufficiently happy so
that they do not revolt -- so-called social safety net expenditures, minimum
wage laws, health and safety laws, etc.
O'Connor's analysis led him to conclude that the second category was
rising faster than capital could afford -- hence the title of his book, the
fiscal crisis of the state.
Alas, he seriously
underestimated how much poverty and misery the working class could be persuaded
to accept, especially if race and religion were brought into the mix.
I think the capitalists could
indeed be compelled to cast more crumbs, if not pearls, before those whom they
consider swine. If David Brooks is
starting to talk that way, then perhaps the billionaire class, as Bernie calls
them, have noticed that the galley slaves are beginning to grumble. But Thomas Piketty's global analysis is not
encouraging in this regard.
5 comments:
Henry Ford lived in another era, an era before making cars could easily be outsourced to China or wherever the lowest wages are paid.
"Socialism in one country" seems less and less an option, given how mobile capital is these days.
The question is what to do while waiting for the revolution. I'm in favor of way more crumbs, partly because I'm not sure the revolution Is coming, and partly because, as Yeats says, when things fall apart, the revolution may come in the form of a rough beast. (Trump?) A commenter a couple of weeks ago seemed to be suggesting voting for Trump to hurry the revolution along. Now there's a leap of faith!
Tom Cathcart,
I agree with you. I also in favor of more crumbs and also far from sure that the revolution is coming. My comment about "socialism in one country" means that there's a limit to even social democratic or welfare state measures (crumbs) these days, given how mobile capital is. Sorry that I wasn't clear. In any case, it's obvious that some crumbs (for example, single payer healthcare) could be instituted. However, if too many crumbs are handed out, you have a massive capital flight, unless that capital has nowhere to flee to: that is, unless people are demanding and getting more crumbs everywhere.
By the way, why do we lefties always refer to cutting the safety net in half as "outrageous" but doubling it as "crumbs"?
I haven't read the O'Connor book and will have to check that out. In 1971 around the time he must have been writing it, the US underwent a fundamental change to it's monetary regime with the suspension of the direct convertibility of the dollar to anything, freeing up considerable fiscal policy-space.
Now, what the State *could* do in the areas of bread-and-circus social welfare programs, or cost-reductions to capital, has increased. As the sole issuer of a currency that isn't really backed by gold or any other commodity or bundle of foreign reserves, things like a universal basic income or job guarantee programs become more plausible (though it was perfectly feasible even under the gold standard / fixed-exchange rate times), since the government can no longer involuntarily default on it's debt. Those who actually carry out government spending in the treasury and federal reserve - and even a few congressmen/senators - seem to understand this just fine, but refuse to point it out. I think it's primarily for the reason that it would embolden the working class.
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