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Will Karl Marx please pick up the white courtesy phone?

In Businessweek, of all places. A book review, of James Livingston's Against Thrift, but still:

One key complexity in Livingston’s argument is that private investment by business is not the kind of spending that creates jobs and spurs growth. All the clamoring about companies needing lower taxes because the resulting increase in profits will drive them to build more factories and create more jobs is, Livingston writes, a two-syllable word that includes the letters b and s. He argues that all the surplus profits—such as the ones still accruing on the books of America’s biggest corporations—are really invested in speculative bubbles like the ones that helped cause the Great Depression and the current global crisis. (He has a 19-page appendix with numerous graphs to bolster his points.)

So what should be done with all the surplus capital? Livingston thinks it should be redistributed to workers—in the form of higher wages—so they can presumably spend it on everything from iPads to Whirlpool washing machines, never mind that many of the most consumed products these days are made in China, a weakness in his argument never quite acknowledged. All the same, Livingston insists on “a redistribution away from profits and toward consumption,” or actually the socialization of investment. He acknowledges violating “the common sense of our time.”

Livingston is willing to step off that ledge because he says what drives jobs, economic growth, and the general fiscal happiness that causes GDP charts to show nice, steady upward curves is the sound of wallets opening. “We should now be empowering consumers by ensuring that they can earn, or rather receive, incomes sufficient to make their demands for goods and services effective,” he writes. Note the “rather receive” portion of that declaration. Corporations, he implies, should spend on salaries (not just executive bonuses) to grow the overall pie.

And while we're at it, can we fire as many executives as possible and crowd-source the decision-making to the "bottom" of the supply chain? Because the system we've got is working so well?

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Comments

stuartbramhall's picture
Submitted by stuartbramhall on

Livingston is writing from the perspective that a kinder gentler capitalism is possible. I agree with Marx that it isn't possible because of inherent flaws in the capitalist economic model. Businesses don't withhold capital investment from production because they're mean or greedy. They do so because their profits drop once everyone has an SUV, refrigerator, washer and drier. They do so because their profits drop once consumer demand for durable good becomes saturated. In other words, once everyone has a fridge, washer, drier and SUV, companies that make those things have to find some other way to make a profit.

Marx predicted 150 years ago that monopolistic capitalism was inevitable. Ironically he and Lenin also predicted the fusion of the monopolies that control finance with those that control production and manufacturing. 

athena1's picture
Submitted by athena1 on

So what should be done with all the surplus capital? Livingston thinks it should be redistributed to workers—in the form of higher wages—so they can presumably spend it on everything from iPads to Whirlpool washing machines, never mind that many of the most consumed products these days are made in China, a weakness in his argument 

 

I'm not sure that's a weakness, were it implemented. I'd be fine with Chinese workers having iPads, etc instead of Apple just hoarding up their gazillions of dollars (err...or yen?)  in profits.

Neil in Chicago's picture
Submitted by Neil in Chicago on

can we fire as many executives as possible and crowd-source the decision-making to the "bottom" of the supply chain?
It's called "syndicalism", and a century ago the Wobblies were slaughtered for working towards it.

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