imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Subscribe Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

CopWatch LA

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List





IMC Network: www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech
printable version - js reader version - email this article - view hidden posts - tags and related articles

Paul Krugman Discovers Marx (and Misses the Point)

by Ann Robertson and Bill Leumer Thursday, Dec. 13, 2012 at 4:37 AM
sanfrancisco@workerscompass.org

In his recent New York Times op-ed piece, Princeton professor and regular columnist for The New York Times, Paul Krugman observed: The American economy is still, by most measures, deeply depressed. But corporate profits are at record high. It’s simple: profits have surged as a share of national income, while wages and other labor compensation are down. The pie isn’t growing the way it should — but capital is doing fine by grabbing an ever-larger slice, at labor’s expense.

And then he adds with almost shocked incredulity: “Wait — are we really back to talking about capital versus labor? Isn’t that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy?”

This is exactly the conflict that Marx identified as the fundamental, inescapable contradiction of the capitalist system that would eventually create the conditions of its downfall: there is a tendency for the owners of businesses, the capitalists, to accumulate ever-vaster wealth while the people who work for them experience a declining standard of living.

Marx supported this conclusion by offering a description of the fundamental operating mechanism of capitalism. Capitalism is based on the principle of private ownership and competition. Private businesses compete with one another for customers, and those who fail to attract a sufficient number eventually perish. But in order to attract customers, businesses must maximize the quality of their product while minimizing its price. If two products embody the same quality but one is cheaper, customers, in pursuit of their self-interest, will purchase the cheaper version, all other factors being equal.

This means that capitalists must constantly attempt to minimize the price of their product simply for the sake of their own survival. If a business devises a way to lower costs, it can capture the market. But, as Marx pointed out, labor costs are a huge factor in determining the price of a product. So those businesses that minimize labor costs can prevail in the dog-eat-dog world of capitalism. For this reason, a downward pressure on wages and benefits is always operating to one degree or another.

But Krugman made no reference to this aspect of Marx’s analysis and instead identified two other factors that contribute to the growing inequality in wealth between capitalists and workers, both of which are discussed by Marx.

The first factor involves the introduction of technology into the labor process, i.e. “labor-saving” technology. In other words, machines replace workers or reduce the amount of skill required in the labor process. To give a current example, software has been developed that analyzes legal documents at a fraction of the time it takes lawyers while costing much less. Accordingly, many well-paid lawyers lose their jobs to such software. Living during the industrial age, Marx supplied many such examples.

Krugman referred to his second explanatory factor that increases inequality between capitalists and labor as the “monopoly power” of large corporations where “increasing business concentration could be an important factor in stagnating demand for labor, as corporations use their growing monopoly power to raise prices without passing the gains on to their employees.” Here Krugman is approaching the heart of Marxist theory.

Krugman is basically arguing that large corporations use their power to override purely economic trends and simply demand that their employees work for less. But this is precisely the point of Marxism, although from the other direction. Marx persistently argued that capitalism could not function without the willingness of the working class to perform the work. When workers organize and engage in collective action by withholding their labor, the balance of power shifts in favor of the workers who can then demand higher wages as a condition for their return to work, as the ILWU (International Longshore and Warehouse Union) recently did on the West Coast and the teachers did in Chicago.

Amazingly, Krugman never mentions the decline of organized labor as a huge factor explaining the decline of the standard of living of working people, adding that there has been so little discussion of these developments. But others, especially former Secretary of Labor Robert Reich, have discussed these trends and identified the decline of labor as a major factor.

In the 1930s when labor unions were tenaciously fighting for working people, huge gains were made in terms of salaries and benefits. They conducted militant sit-down strikes and mobilized tens of thousands of people from the community to support labor’s struggles. Their successes were to a large degree responsible for the emergence of the so-called middle class that thrived in the 1950s and 1960s.

Workers who are organized, acting both collectively and forcefully, can change the economic landscape. But once organized labor becomes complacent and relaxes its guard and ceases to struggle, the laws of capitalism ineluctably grind down their gains and the growing inequality returns until workers again rise up.

Marx argued that eventually workers would see the futility of this repeating cycle, reject capitalism altogether, and begin to construct a socialist society built on entirely humanistic and democratic principles.

In a recent New York Times article on unionizing workers at the bottom of the pay scale, a union organizer was quoted as saying, “We must go back to the strategies of nonviolent disruption of the 1930s.” Currently organized labor is all but dying out. Strikes are like an endangered species. Rather than engaging in militant struggles, union members are urged to elect Democrats who then call on workers to accept sacrifices.

AFL-CIO President Richard Trumka has called on working people “to fight like hell” to resist cuts to Social Security and Medicare. But these are just words. To this date, the unions have failed to mobilize their members to stage massive demonstrations across the country against cuts to these popular social programs – demonstrations that could culminate in hundreds of thousands of working people descending on Washington, D.C. to make their demands clear to the Obama administration and the rest of the politicians. Without the unions taking the lead in this struggle, there is little individual workers will be able to accomplish. And if the unions refuse to return to their more militant roots but remain invisible, economists like Paul Krugman will continue to ignore their existence and overlook their current historic failure to defend working people.
Report this post as:
Share on: Twitter, Facebook, Google+

add your comments


LATEST COMMENTS ABOUT THIS ARTICLE
Listed below are the 10 latest comments of 1 posted about this article.
These comments are anonymously submitted by the website visitors.
TITLE AUTHOR DATE

Local News

Activists Mark 150 Years Since Chimney Rock Massacre F21 7:00PM

Indivisible local events F16 4:07PM

Help Wanted: How You Can Act Locally To Stymie Trump’s Agenda F16 11:24AM

RACE RELAY - race relations dialogue F16 7:01AM

LA County Greens Oppose S F09 8:52PM

Our Revolution L.A Organizing Meeting F08 12:23AM

First We Marched. Now We Huddle F06 10:54PM

Indigenous, Sacred Lands Disrespected at L.A. Women's March J24 1:52PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 8:22PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 8:00PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 7:42PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 6:04PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 5:48PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 5:30PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 5:02PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 4:23PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 4:03PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 3:39PM

University of California Riverside Students Walkout J22 10:41PM

San Gabriel Valley Anti-Repression Committee Action J22 10:07PM

Staggering Turnout for Women's March L.A. J22 1:09PM

Los Angeles Braves Extended Downpour to Tell Trump Hell No J21 3:32AM

Los Angeles Braves Extended Downpour to Tell Trump Hell No J21 3:04AM

#J20 CalArts in SoCal Plan Walkout; NY Galleries & Nonprofits Plan Art Strike J18 5:25PM

Camp 120 Will Hold Space in Front of City Hall Until Inauguration Day to Protest the Inac J18 5:03PM

Teamsters Local 2010 Initiates Mass Walkout and Strikes at University of California J18 4:12PM

Nurses Storm The Boulevard To Pressure Trump on the ACA J17 4:49PM

Nurses Storm The Boulevard To Pressure Trump On the ACA J17 3:12PM

More Local News...

Other/Breaking News

Destiny of Man as seen through the looking glass F23 8:20PM

Palestine Advocacy Day 2017 F23 6:52PM

The Shortwave Report 02/24/17 Listen Globally! F23 5:31PM

Metal Fist Urban Domination Cheats Gold F23 3:37PM

Treasury Extends Anti-Money Laundering Luxury Real Estate Regulations F23 11:00AM

Metal Fist Urban Domination Hack F23 9:01AM

Fbi COINTEL Operations Expand F23 1:33AM

Le travail est une prostitution F22 10:29PM

Art of War : Executive Order F22 10:16PM

Damage Assessment F22 9:42PM

La société future, la société sans relation F21 6:24AM

The Long History of Human Incapacitation by Politics and the Press F21 6:09AM

Kucinich Warns of Deep State's Plans for War Post-Trump Impeachment F20 4:54AM

KLM refuses seven passengers following Trump's muslim ban/KLM accomplice to discrimination F19 3:50AM

Radio Libertaire ou Persona grata F18 3:47AM

Resistance Recess F17 2:21PM

Congress Moves Slowly on Bipartisan Puerto Rico Recommendations F17 9:30AM

The Shortwave Report 02/17/17 Listen Globally! F16 5:01PM

Paraphysique de l'emprise F15 10:34PM

107 More Groups Oppose Neil Gorsuch F15 4:38PM

Cloudflare’s Transparency Report for Second Half 2016 - FBI National Security Letter F15 10:26AM

Attempt the Impossible! Theses for a New Left Majority F15 4:57AM

Breaking: Miller On Bakersfield Incident F15 1:56AM

Trump Voids Dodd-Frank 1504 Transparency Rule F14 1:49PM

Les mafias du capital F13 11:38PM

The Sleazy Corporate Nazi Tactics of Public Storage F13 3:11PM

Geral Sosbee Presents F12 4:58PM

Théodore dit Théo, violé par la police F11 6:44AM

More Breaking News...
© 2000-2003 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy