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The following books by Robert Paul Wolff are available on Amazon.com as e-books: KANT'S THEORY OF MENTAL ACTIVITY, THE AUTONOMY OF REASON, UNDERSTANDING MARX, UNDERSTANDING RAWLS, THE POVERTY OF LIBERALISM, A LIFE IN THE ACADEMY, MONEYBAGS MUST BE SO LUCKY, AN INTRODUCTION TO THE USE OF FORMAL METHODS IN POLITICAL PHILOSOPHY.
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NOW AVAILABLE ON YOUTUBE: LECTURES ON THE THOUGHT OF KARL MARX. To view the lectures, go to YouTube and search for Robert Paul Wolff Marx."





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Wednesday, May 26, 2021

REFLECTIONS ON THE MODERN AGE IN WHICH THE NAME OF MARX APPEARS ONLY IN THE OPENING SENTENCE

Let us set Karl Marx to one side and try to get some sense of the state of things as we see them here in the United States in the third decade of the 21st century. I do not have a coherent story to tell about this so these will be somewhat scattered remarks but perhaps they can prompt an interesting discussion.

 

I am someone whose personal memories go back more than 70 years, and certain things strike me as I look around me at the United States. The first, not surprisingly, is the very great inequality in income and the much greater inequality in wealth. Thinking of America as a collection of households rather than individuals, I see a country in which median household income is something less than $70,000 a year, which means that half of all households take in less than that. But there are a number of very wealthy households which each year earn the equivalent of a millennium of the median. Think about that for a moment and just try to get your mind around it. There are households that in one year earn as much as the median household would earn in a thousand years. Wealth of course is much more unequally distributed than that. One could without difficulty but together a foursome for bridge whose collective wealth was greater than the accumulated holdings of one half of all the people in the United States.

 

As Thomas Piketty showed us in his very useful book, the progressive diminution of the inequality in the distribution of wealth which took place during the years when I was a young man was not a harbinger of things to come but a 30 year anomaly caused in large part by the effects of a worldwide depression followed by a world war. The structure of inequality that existed in the late 19th century and in the very earliest decades of the 20th century has now reasserted itself in the early years of the 21st century with no sign of doing anything but getting worse.  Some critics of Piketty took him to task for lumping together private home ownership with productive resources under the heading of “wealth.” There is some merit in that criticism and if you drop out private homeownership from your calculations the inequality in the distribution of wealth is of course enormously greater.

 

Ownership of capital is, by and large, in private hands but there are several extremely important exceptions that complicate the economic picture. Think for a moment about four major spheres of activity in the United States: education, medicine, the military, and local, state, and federal government. Elementary and secondary education in America is almost entirely public, not private, despite the best efforts of Betsy DeVos. Tertiary education is a more complicated picture in America, although not in the same way in other advanced capitalist economies, but in the years after the second world war the public higher education sector grew much more rapidly than the private sector and continues to dominate the university and college world despite efforts now to undermine public control of higher education. The military, which is an enormous institutional structure absorbing a great deal of social resources, is also almost entirely public, once again despite the best efforts of the brother of Betsy DeVos. Finally government is no longer, if it ever was, merely the Executive Committee of the ruling class and has become an extremely large part of the economy.

 

Despite these exceptions, it remains true that productive capital is for the most part privately owned, so that the collective wealth of the country cannot easily or significantly be put to uses that are collectively decided upon.

 

With the perspective of more than seven decades, I find several things about those years extremely striking. The first is the contrast between the steady increase in the productivity of labor and the stagnation of real wages for a large portion of the economically active part of the population. The second is the important change in the proportion of the population of working age. At one end, the almost sevenfold increase in the number of people with four-year college degrees means that for at least a third of young people the age at which they enter the labor force full time has been put off for four years or more. A corresponding change has taken place in the proportion of the population who are beyond working years. Much of the increase in life expectancy over the past century is a result of a dramatic reduction in infant mortality, but if you compare life expectancy at age 65 now with what it was when I was young you will find that those reaching the end of their work life can now on average expect to live twice as long as they could back then. The Social Security program was instituted at the time when most people living long enough to get Social Security benefits could expect to get them for only a few years. Now they can expect 15 years or more of Social Security checks.

 

Thus even during periods of full employment, a smaller proportion of Americans is supporting a larger proportion of the young and the old. This fact makes the grotesque inequality of income and wealth even more of a pressing problem. An extraordinary story in the New York Times last Sunday summarized population data that point to a worldwide decline in fertility with profound implications for the economic organization of 21st century countries, capitalist or otherwise. The statistic that stunned me was a projection that between now and 2100, the population of China will in all likelihood drop from 1.4 billion to 700 million!

 

To bring to a conclusion these scattered observations and reflections, let me say just a word about what the pandemic here in the United States has taught us about labor in the 21st century. When things were going well, before the pandemic hit, it was easy and comfortable and terribly advanced to talk about the fact that everyone these days was in the information business, working on a computer or cell phone, not with a shovel or harvester. Then the pandemic hit and all of a sudden everybody was talking about “essential workers” whom society could not afford to send home for several months to keep themselves safe. Doctors and nurses of course were considered essential workers, but so too were bus drivers and grocery store clerks and meatpacking workers and farmers and long-haul truckers and everyone else who makes it possible for all of us to survive day by day. Needless to say, the touching celebrations of these essential workers did not actually reach so far as to increase their wages any. But it was a helpful reminder that even in this postindustrial information age, we really do need the labor of the men and women produce our food, clothing, and shelter. Happily, as the pandemic comes to an end, we can go back to pretending that those people do not exist and we can go on paying them miserable wages so that Jeff Bezos can buy MGM.

11 comments:

s. wallerstein said...

In all these very enlightening posts about work and value, you have not touched upon the role and value of unpaid housework and childcare, generally carried out by women.

I brought that up in a previous thread, but no one else commented on it.

Could you (Professor Wolff) or others comment on the role and value (because it certainly is valuable) of unpaid housework and childcare in contemporary society?

LFC said...

I intend to comment on this post, but may not be able to do so for a couple of days.

marcel proust said...

2 observations:

1) The second is the important change in the proportion of the population of working age. At one end, the almost sevenfold increase in the number of people with four-year college degrees means that for at least a third of young people the age at which they enter the labor force full time has been put off for four years or more.

This site has a very detailed set of breakdowns of time-to-completion for a "4 year" college degree. While the median is 52 months ("4 years of more"), this stretches out to years. This, plus the ages at which many graduate (> 23 y.o.) suggests that a large fraction of these students are simultaneleously in the labor force.

2) A corresponding change has taken place in the proportion of the population who are beyond working years. Much of the increase in life expectancy over the past century is a result of a dramatic reduction in infant mortality, but if you compare life expectancy at age 65 now with what it was when I was young you will find that those reaching the end of their work life can now on average expect to live twice as long as they could back then. The Social Security program was instituted at the time when most people living long enough to get Social Security benefits could expect to get them for only a few years. Now they can expect 15 years or more of Social Security checks.

Most discussions that stress these facts proceed to the need to raise the age of retirement and reduce the benefits from social security. A central number here is the dependency ratio, which can be thought of as the average number of other people supported by each worker -- not family, but in the economy as a whole: total # of people not in the labor force / total # of people in the labor force (s.b. those employed, but that's the way it's done). If this is high, then after-tax per-capita income of those in the labor force and pensions of retirees will be lower than otherwise.

Dean Baker has written extensively in opposition to this sort of argument. Two points he has repeatedly made are (1) immigration reduces the dependency ratio & (2) productivity growth substantially reduces the implied burden of the dependency ratio.

anon. said...

You say, “But there are a number of very wealthy households which each year earn the equivalent of a millennium of the median.”
It’s picky, I know, and probably idiosyncratic, but I always find myself bristling at this usage, perhaps because I favor this

Definition of earn [Merriam-Webster on line]
transitive verb

1a : to receive as return for effort and especially for work done or services rendered

2a : to come to be duly worthy of or entitled or suited to she earned a promotion

I don’t see most of what accrues to the wealthy households you mention as deriving from their work or services rendered. I suppose one would have to explore the ‘non-labor theory of value’ to figure out the origins of their good fortune.

A transfer of much of their grotesque wealth into truly decent pay for essential workers would be good.

Michael said...

^Ha! I have the same deal. :) I make a point not to say, "I make/earn X dollars an hour." That would seem to imply that the rate of pay is rightful, legitimate, deserved. Instead I prefer to put it in the passive voice: "I get paid X dollars an hour." This leaves open the possibility that the rate of pay is explained by something other than my effort or ingenuity or whatever.

Similarly when someone describes a highly paid employee as "successful."

Jerry Brown said...

I thought this was a very interesting post that points out quite a few not necessarily related things that I think are true- and in a way that I would almost automatically agree with without much thinking. But there were some really good comments that make some good points also.

marcel proust notes that your discussion of the dependency ratio is often a prelude to a call to raise retirement ages and cut social security benefits- and that is true, although you did not call for that yourself. And Dean Baker, among others, has often written why that is not necessarily the case.

And Anon and Michael point out that all income is not necessarily 'earned' income, which is a distinction I would also make. I would seem to agree with them completely here. 'Earned' has a connotation of something that is recognized as deserved.

And then another thing that troubled me somewhat was your mentioning your personal memories go back more than 70 years when you regularly remind us that you are like 87 years old. I understand not remembering much before you were 4 years old- but do you not remember anything before you were 17? Yes I know 82 or 83 years still qualify as 'more than 70 years'- but 80 years is even more impressive than 70 years, so why not use that as a round figure?

Jerry Brown said...

Mr. Wallerstein, everyone, except possibly a minority of economists, knows that there is a lot of value in caring for children whether or not it is 'paid for'. It is arguably more valuable when it is not 'paid for' but that does not show up in GDP statistics or employment data. At least not at the time it is provided. Doesn't mean it is not valuable.

If we expand the idea of 'unpaid housework' to the exterior of the home and property, one noticeable thing was that during the great recession here, many homes were foreclosed on and the unpaid exterior housework that the previous owners would have continued to provide became sorely missed in many neighborhoods. I might say that not providing the 'unpaid housework' imposed costs on neighbors. That got a little attention at the time.

LFC said...

A brief comment about the end of this post: it mixes together two separate, though overlapping, categories of workers: "essential workers" and workers who produce things. For example, a grocery store employee who works as a cashier or shelf-stocker is an essential worker but doesn't produce anything, whereas a farmer is probably both an essential worker and someone who produces something. (I myself had a part-time job that fell into the former category: essential but not "productive.")

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