Even the Economist, the house journal of British finance capital, is getting in on the act, fearing the social and economic consequences of massive inequality
Often, sections of the NZ left suggest, or argue outright, that the capitalists are out to smash and pauperise the working class. This claim is generally leveled at the National Party and takes the place of a serious Marxist analysis of capital accumulation which might reveal the objective needs of capital and various points in time and how these needs might be pursued in policy terms by the capitalists, the government and state.
One of the noticeable trends in recent years has, in fact, been the development of elite fears around poverty and inequality. These present problems for the ruling class. They don’t want an impoverished working class, at least not in the First World. The problem is that capitalism isn’t really under anyone’s control. The workings of the market system tend to widen inequality, while ruling class institutions have to deal with the fall-out (and, of course, the working class has to deal with the misery). The ruling class is, essentially, caught in a bind by the contradictory results of the system over which they preside, but whose outcomes they can’t totally control.
One of the Marxists who has been looking at this contradiction is Michael Roberts, whose work we regularly republish on this blog. In the piece below, Mike further explores capitalist fears that inequality is a primary cause of economic crisis, a view which is reflected by those on the left who adhere to under-consumptionist views of crisis rather than Marxist analysis centred on the law of the tendency of the rate of profit to fall.
by Michael Roberts
The argument that rising inequality in the US and the other major capitalist economies, as expressed in the work of Thomas Piketty and others (see my posts http://thenextrecession.wordpress.com/2014/04/15/thomas-piketty-and-the-search-for-r/; http://thenextrecession.wordpress.com/2014/05/19/david-harvey-piketty-and-the-central-contradiction-of-capitalism/ and http://thenextrecession.wordpress.com/2014/05/24/piketty-data-and-the-scientific-method/), was the major cause of the global financial collapse and the Great Recession, continues to gain traction. As Paul Krugman put it only last week: “there is solid evidence that high inequality is a drag on growth and redistribution can be good for the economy”.
Now even mainstream economics and financial institutions have taken up the idea. In a new report, economists at Standard & Poor’s, the US credit agency, reckon that unequal distribution in incomes (they don’t refer to wealth as Piketty does) is making it harder for the nation to recover from the recession.(“How Increasing Inequality is Dampening U.S. Economic Growth, and Possible Ways to Change the Tide.”)
That the S&P, at the heart of Wall Street, should take up this theme, shows that the near-record levels of inequality of income in the major economies is becoming a serious worry for the strategists of capital. They fear Read the rest of this entry »