No amount of distributional struggle can change the laws of capital and economics. Only a successful class struggle that brings about a change in the mode of production itself can change those conditions.
During periods of stagnation, like the 1920's/30's, or the 1980's/90's, the relative surplus population makes it impossible for workers to simply increase wage share, no matter how militant their struggle. Similarly, in periods of economic expansion, capital is forced, by competition, to accumulate more rapidly, as each individual capital seeks not to lose market share, and as intensive accumulation gives way to extensive accumulation, productivity growth slows, and the relative surplus population is used up, leading to labour shortages and wage rises, which accelerates the process.
From the early 2000's, that has again been apparent, and the ruling class, now owning its wealth in the form of fictitious capital, rather than real, industrial capital, has been forced to adopt ever more aggressive means of actually destroying the real economy to prevent it. It introduced fiscal austerity after 2010, and after 2020, introduced physical lockdowns of the economy, and yet, it has failed to prevent those underlying processes of the long wave expansion manifesting themselves.
It is precisely the fact that capital becomes overproduced, as described by Marx above, that leads it to address that condition. Firstly, the crisis results in firms closing down, and unemployment rising. Inflation remains high, in the 1970's and early 80's, not because of entrenched “expectations”, but because, central banks did continue to produce excess liquidity, often linked to fiscal stimulus as part of Keynesian demand-management policies. Secondly, its precisely at such times that capital engages in a new innovation cycle, as firms seek to develop and introduce new labour-saving technologies to address the problems they have in obtaining workers, and it is these new technologies that create a relative surplus population, and so undermine the capacity of workers to even maintain rather than increase their wage share.
That innovation cycle, began in the 1970's, and peaked in 1985, and created all of the base technologies that led to the revolution in productivity, and undermining of the power of labour in the last 30 years. It was that change in material conditions, putting workers on the back foot, that enabled capital to beat them down, reduce wage share and increase profit share, which then meant that central banks no longer had to provide accommodation to enable firms to raise prices to cover higher higher wages.
The position of Bob Rowthorn, cited by Martin, is correct in that context.
“The British Marxist writer Bob Rowthorn emphasised another angle on this: in conditions of fiat money, heightened class conflict would increase inflation, as the state adapted to more intense battles by both bosses and workers to improve incomes in nominal (cash) terms, as their only way to seek improvements in real terms. Right-wingers were not entirely wrong to say that a "wage-price spiral" was driving inflation; only, for workers, a spiral of both wages and prices was better than a spiral of prices alone.”
But, after 1985, as workers were defeated, they could no longer obtain the higher wages, as prices, for a time continued to rise faster, itself bringing a rapid rise in profit share.
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