Michal Kalecki’s 1943 Essay on Politics and Ideology gave a clear and cogent explanation of why the investing classes are opposed to full employment policies. In short form, it offends their ideology and undermines their social standing.…It also enables owners of the means of production and finance capital to extract economic rents that are parasitic on circular flow, economically inefficient, and increase asymmetries of wealth, and therefore power, in a representative system of government in which representatives can be bought. It also favors a class structure in which the ownership classes become increasingly isolated from the rest, entrenched in their status, and obvious of the big picture of society as a whole. Worse, society is viewed as a resource for exploitation.
It is vital to understand that high unemployment and low wage growth are solvable problems. But powerful and well placed people believe it is in their interest to keep them unsolved. It will take considerable pressure to change their minds.These are issues that, while economic, are chiefly social and political, and they need to be addressed institutionally at that level. This can be achieved by application of power, which requires organization, although it can also be addressed by refusal to participate that leads to systemic collapse.
Fundamental to change is popular realization that neoliberal capitalism and representative government are antithetical to popular democracy and distributed prosperity. The entire system requires redesign, putting people and the environment ahead of money and machines, and replacing the concept of the neoliberal market state with that of the social democratic welfare state, as well as getting the money out of politics and shutting the revolving door.
Naked Capitalism
Low Wage Growth, High Long-Term Unemployment Recognized as International Problem
Yves Smith
2 comments:
I'm glad Yves posted this. She has good political instincts .... unlike a lot of econ types. :-)
I don't know what the answer is but the first step in problem solving is to identify the problem. Kalecki nailed it, way back in 1943.
Yes, and it underlines the necessary for regime change away from neoliberalism and its push for a market state that prioritizes real and financial capital over people and the environment. This can only be effected by a radical revision of the status quo. There are no permanent fixes for this mindset, and as long as it has access to power, it will seek to dominate. It's a social and political challenge rather than chiefly an economic one, although economics is the basis of power and privilege flowing from economic rents.
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