Does the solution to widening economic inequality lie in a wealth tax? We speak to Emmanuel Saez, an adviser to Elizabeth Warren who helped design the “Ultra-Millionaire Tax” plan.Half-hour podcast.
I cannot stress enough that this elitist attitude towards society is a learned mindset, that comes with a sense of extreme entitlement, and not some inherited tendency. As it succeeds it can become contagious among those who are morally weak and easily influenced.Some good quotes.
It is also imperative to seriously rethink the nature, composition, and distribution of economic growth in order to make growth, and its GDP measure, humane. Economic thinkers belonging to the “classical school” of economic thought believed that the question of distribution of surplus couldn’t be separated from production, as the contribution of different economic classes to social production was dictated by the prior distribution of endowments among them. To turn the focus back to ‘distribution’ we can draw inspiration and insights from the classical school.The classical school culminated in the work of Karl Marx and Friedrich Engels. Arguably it was continued by Thorstein Veblen and the institutional economics he inspired by continuing the exploration of the effect of class and class endowments. But for all practical purposes, the classical approach was sidelined by the rise of marginalism and the neoclassical approach based on it.
The prevailing orthodoxy in terms of class identification over the last few decades has been through the nexus of lifestyle choices and job roles. Indeed, this understanding of class in the subjective sense has, since the emergence of neoliberalism four decades ago, been in the ascendancy while conversely, the recognition that class is an objective category measured in terms of ones relationship to the means of production, has been in retreat....Renegade Inc.
For decades, an increasingly loud chorus has claimed that economic inequality is primarily driven by class, with other possible reasons for disparities, such as race, playing a lesser role. They say that it is counterproductive to focus on inequality between races—instead, it is better to consider the inequality between all of America’s poor and its increasingly rich elite. A new study (pdf) by economists at Stanford, Harvard, and the US Census Bureau seems to refute that idea.
The paper, which assesses data on intergenerational economic mobility for 20 million US children and their parents, shows that when it comes to racial inequality, primarily between black and white Americans, class can’t explain the gap....Cultural and institutional racism it is. Of course, that doesn't imply that class is not also a key factor.
As professor Dugin rightfully says in many of his lectures and books, the individual subjects or the centers of three mentioned totalitarianisms were each different: liberalism centered on Cartesian individual, which is an artificial concept; Marxism centered on class and Nazism - or fascism - centered on race. The deconstruction of these has happened in the reverse chronology, as we know. Communism dragged down - brought down - and collapsed the idea of supremacy of the race; and then liberalism brought down and collapsed the idea of supremacy of the class; and the oldest one of the three, which was initially invented, has remained as the standing beauty without any alternatives. Now we are entering the era of destroying the liberalism and the supremacy of the individual. I have had the honor and pleasure of discussing on numerous occasions with professor Dugin and the some of you what should be the center of the post liberal paradigm, of the normal society. And we all have different opinions, not necessarily contradictory to each other. For example, professor Dugin tends to gear towards the idea of people - people of the empire if you will - as the carrier and the center of the alternative matrix. I tend to favor more – and again I don’t think we are in contradiction here – the idea of family as the center of the alternative constitution. In Budapest[1] yesterday I said that, in my humble opinion, all 193 constitutions on the planet need to be rewritten. The center of each constitution today is an individual and I am not an individual, I am a component, I am a part – I am a brother, I am a husband, I am a father, I am a son – and when I loose these I become the enemy of humanity. Therefore, it is not the rights of an individual that we should be protecting in these constitutions, it is the obligation of an individual towards the family and the rights of the family that we should be protecting in the constitution.Geopolitika.ru
Throughout U.S. history, class has always been there, if only just below the surface. But then in times of crisis, such as the aftermath of the crash of 2007-08 and during the Second Great Depression, class comes to the fore....Occasional Links & Commentary
Michael Roberts reminds us of something important – that Keynesian economics has severe shortcomings. I agree.
For me, the problem with Keynes was what he didn’t say. He was largely silent about three related issues: class, power and profits, or least he dismissed them lightly:the problem of want and poverty and the economic struggle between classes and nations, is nothing but a frightful muddle, a transitory and an unnecessary muddle. (Preface to Essays in Persuasion)It’s no accident that it should have been so easy to find a Keynesian-neoclassical synthesis, as both schools of thought ignored these matters.
This omission, however, has had several baleful effects....Stumbling and Mumbling
To be sure, Donald Trump did make a strong appeal to racists, homophobes, and misogynists and whilst his GOP colleagues publicly recoiled in horror, there is no question that Trump was merely making explicit what Republicans had been doing for decades – since the days of Nixon in 1968. The dog whistle was merely replaced by a bull horn.
But that alone doesn’t explain Trump’s success. As I wrote in an earlier analysis of the Trump phenomenon, he became the voice for an increasing number of Americans, who counted themselves amongst the biggest losers of globalization and free trade. In most elections, U.S. politicians of both parties pretend to be concerned about their issues, then conveniently ignore them when they reach power and implement policies from the same Washington Consensus that has dominated the past 40 years. That’s why so many Americans have simply stopped voting (and this year was no different, as it looks like a mere 57.9% of the voter eligible population turned out). And perhaps Trump is a faux populist, who is merely deploying bait and switch tactics, but he explicitly addressed his campaign to those who have been marginalized by the neo-liberal policies dominant in both parties.…
The establishment, especially the Democratic Party establishment, keeps enforcing what divides people rather than what unites people by embracing identity politics and ignoring class. Yes, a huge majority of women were offended by Trump’s “locker room talk”, but a large chunk still voted for him, and larger numbers of Hispanics voted for Trump than Romney. Doesn’t that suggest that identity politics has reached some sort of limit? Why not find common ground on the issue of class?…The real issue is class power and class privilege. Class power and class privilege arise from social status and the networking based on it that gets amplified and stratified by wealth.
It is true that this process is likely to be resisted by the donor class and it may well take another financial crisis before their power is fully broken. Voters crave effective action to reverse long term economic decline and runaway economic inequality, but nothing on the scale required will be offered to them by either of America’s money-driven major parties. This is likely only to accelerate the disintegration of the political system and economic system until the elephant in the room – class – is honestly and comprehensively addressed.Counterpunch
Why does it matter that we as a nation understand this causal linkage [between economic inequality and lack of social mobility]? The answer has to do with both policy and power. One way of summarizing the fundamental problem of narrowly distributed growth is that those whose incomes are asset-driven hold disproportionate political power relative to those whose incomes depend on paychecks.
Thus, anti-inequality measures that threaten the top 1%–that attempt to reduce their economic “rents”—like collective bargaining, higher minimum wages, trade policy that protects workers’ rights and wages, full employment, robust safety nets, progressive taxation, are attacked as counterproductive to growth and jobs.
That leaves us stuck in a cul-de-sac: we can’t increase opportunity because we can’t decrease inequality....Bingo!
Unfortunately, I fear there are more Baltimores in our future.Jared Bernstein | On the Economy
How FBI Illegally Stole Ross Ulbricht's Laptop & Brought Down The Silk Road
"The police exist to maintain the divide between the upper class and everyone else. Nothing more."I'm not the only one wondering why the FBI action against Ross Ulbricht & Silk Road was such a priority.
"Sam Adams, like five of the fifty-six signers of the Declarations of Independence, attended Boston Latin School [at ~age 7]. Required reading at the Boston Latin School for a student's first four years included Aesop's Fables, one of the first of which is a tale of a wolf who devoured a lamb despite the lamb's refutation of all the wolf's accusations against him. The moral of the story, according to Aesop, is that 'The tyrant will always find a pretext for his tyranny.' ...
In years five through seven of the school, students progressed to reading letters, essays and orations of the Roman politician Marcus Tullius Cicero. ...
[Subsequently,] Sam Adams entered Harvard in 1736 at age 14."
In the recent years, more and more International Political Economy (IPE) scholars are dissatisfied with the current state of this field of research and desire to identify the ‘Big Questions’ of the 21st century. In this (open access) article, Benjamin Selwyn (University of Sussex) argues, however, that they miss the Really Big Question of the 21st century: the rise of a planetary labouring class of over 3 billion (and counting), living, for the most part, in poverty or near-poverty.
While this class’s existence is not new (although its size is), International Political Economy’s ignorance of it, as well of capital–labour relations in general, is as old as the discipline’s institutional formation. This important article shows that mainstream International Political Economy’s sidelining of class relations disables it from explaining the global systemic transformations that underpin changes in the relations between states and markets (International Political Economy’s traditional focus). Selwyn illustrates the long-term making of the global labouring class by discussing three examples of global systemic transformation: the rise of capitalism; the post-1945 embedded liberalism–development project conjuncture; and contemporary globalisation.Economic Sociology and Political Economy
Each year, about a million college students take introductory economics courses; their textbooks are selected from among some two dozen on the market. But this apparent magnitude of choices, Roosevelt says, belies the sameness in their explanation of economics. “Class,” for example, is not an independent entry in the index of the most popular traditional textbook. “In our book,” says Roosevelt, “class is not only in the index, but it has more references to it than almost any other word.
”There are power groups, power interests, and much of the world is made up of power relationships. Class is about power relations. We think introductory courses should educate people about the economic system in which we live. This concept is central to this book, and that’s what makes it different.”Putting sociology into economics.
Currency Wars: The Next Generation(hat tip Art Patten)
Many liberal economists envisioned a new dawn of Keynesianism in the 2008 financial meltdown. Nearly six years later, it is clear that the much-hoped-for Keynesian prescriptions are completely ignored. Why? Keynesian economists’ answer: “neoliberal ideology,” which they trace back to President Reagan.
This study argues, by contrast, that the transition from Keynesian to neoliberal economics has much deeper roots than pure ideology; that the transition started long before Reagan was elected President; that the Keynesian reliance on the ability of the government to re-regulate and revive the economy through policies of demand management rests on a hopeful perception that the state can control capitalism; and that, contrary to such wishful perceptions, public policies are more than simply administrative or technical matters of choice—more importantly, they are class policies.
The study further argues that the Marxian theory of unemployment, based on his theory of the reserve army of labor, provides a much robust explanation of the protracted high levels of unemployment than the Keynesian view, which attributes the plague of unemployment to the “misguided policies of neoliberalism.” Likewise, the Marxian theory of subsistence or near-poverty wages provides a more cogent account of how or why such poverty levels of wages, as well as a generalized predominance of misery, can go hand-in-hand with high levels of profits and concentrated wealth than the Keynesian perceptions, which view high levels of employment and wages as necessary conditions for an expansionary economic cycle.…
The claim that the abandonment of Keynesian policies in favor of neoliberal ones began with the 1980 arrival of Ronald Reagan in the White House is factually false. Indisputable evidence shows that the date on the Keynesian prescriptions expired at least a dozen years earlier. Keynesian policies of economic expansion through demand management had run out of steam (i.e., reached their systemic limits) by the late 1960s and early 1970s; they did not come to a sudden, screeching halt the moment Reagan sat at the helm.
As Professor Alan Nasser of Evergreen State College points out, arguments that “policies of economic equity represented costly trade-offs in terms of efficiency” were made by economic advisors of the Democratic administrations long before Reaganomics solemnized such arguments. Arthur Okun and Charles Schultze had each served as chair of the Council of Economic Advisors to Democratic presidents. In his Equality and Efficiency: The Big Tradeoff, Okun (1975) argued that “the interventionist goal of greater equality had inefficiency costs that injured the private economy.” Schultze (1977) likewise claimed that “government policies which impact markets in the name of fairness and equality are necessarily inefficient,” and that such policies were “bound to disadvantage the very people policymakers intended to protect, and to destabilize the private economy in the process."
Jerome Kalur also points out, “Chamber of Commerce and Business Roundtable efforts to gain control of government regulatory decision-making were initiated at least nine years before” the election of Ronald Reagan to presidency, “when corporate attorney Lewis Powell submitted to the Chamber his now well-known memorandum ‘Attack of American Free Enterprise System’” [7]. In concert with Powel’s legal offensive against labor and regulatory standards, big business moved swiftly to “impede union organizing” and “to eliminate regulatory controls via streams of think-tank propaganda from the likes of The American Enterprise Institute (1972), The Heritage Foundation (1973), and the Cato Institute (1977).…”
While theoretical turnaround from New Deal–Keynesian economics by the luminaries of the Democratic Party pre-dated President Carter, policy implementation of such theories began under the Carter administration. Reagan picked up the Democrat’s copy of gradual agenda of neoliberalism and ran with it, replacing the rhetoric of capitalism-with-a-human-face with the imperious, self-righteous rhetoric of rugged individualism that greed and self-interest are virtues to be nurtured. Neither President Clinton eased the supply-side economic policies of the Reagan years, nor is President Obama hesitating to carry out such policies.
The Keynesian view that the government can fine-tune the economy through fiscal and monetary policies to maintain continuous growth is based on the idea that capitalism can be controlled or manipulated by the state and managed by professional economists from government departments in the interest of all. The effectiveness of the Keynesian model is, therefore, based largely on a hope, or illusion; since in reality the power relation between the state and the market/capitalism is usually the other way around. Contrary to the Keynesian perception, economic policy making is more than simply an administrative or technical matter of choice; more importantly, it is a deeply socio-political matter that is organically intertwined with the class nature of the state and the policy making apparatus.…
At the heart of Keynesian economists’ frustration or disappointment is the unrealistic perception that economic policies are intellectual products, and that policy making is primarily a matter of technical expertise and personal preferences. What these economists overlook is the fact that economic policy making is not simply a matter of choice, that is, of “good” vs. “bad” policy. More importantly, it is a matter of class policy.…Enter Karl Marx.
Not only is the liberal economists’ account of the actual developments that led to the demise of Keynesianism and the rise of neoliberalism inaccurate, so is their explanation of the ongoing problems of unemployment and economic stagnation. By blaming the persistently high rates of unemployment on “neoliberal capitalism,” instead of capitalism per se, proponents of Keynesian economics tend to lose sight of the structural or systemic causes of unemployment: the secular and/or systemic tendency of capitalist production to constantly replace labor with machine, and to thereby create a sizeable pool of the unemployed, or a “reserve army of labor,” as Karl Marx put it.
The fundamental laws of demand and supply of labor under capitalism are heavily influenced, Marx argued, by the market’s ability to regularly produce a reserve army of labor, or a “surplus population.” The reserve army of labor is therefore as important to capitalist production as is the active (or actually employed) army of labor. Just as a regular and timely adjustment of the level of a body of water behind an irrigation dam is crucial to a smooth or stable use of water, so is an “appropriate” size of a pool of the unemployed critical to the profitability of capitalist production…Recall Michal Kalecki, Political Aspects of Full Employment
…the Marxian view that meaningful, lasting economic safety-net programs can be carried out only through overwhelming pressure from the masses—and only on a coordinated global scale—provides a more logical and promising solution to the problem of economic hardship for the overwhelming majority of the world population than the neat, purely academic and essentially apolitical Keynesian stimulus packages on a national level. No matter how long or loud or passionately the good-hearted Keynesians beg for jobs and other New Deal-type reform programs, their pleas for the implementation of such programs are bound to be ignored by governments that are elected and controlled by powerful moneyed interests. The fundamental flaw of the Keynesian demand-management prescription is that it consists of a set of populist proposals that are devoid of class politics, that is, of political mechanisms that would be necessary to carry them out. Only by mobilizing the masses of workers (and other grassroots) and fighting, instead of begging, for an equitable share of what is truly the product of their labor can the working majority achieve economic security and human dignity.Counterpunch
