Again reflecting this collapse into Keynesianism, Martin writes,
“Low class struggle was a factor. Although market demand generally increased only modestly, less than in the 1960s or 70s, employers could maintain or increase profits by squeezing labour costs more easily than by pushing for increased mark-up.”
Firstly, it is not class struggle, but merely distributional struggle, and as described earlier, within the context of capitalism, such struggle always results, eventually, in the victory of capital, even if, in the short-term, labour might recover some of the losses it previously suffered. As Marx put it,
“I think I have shown that their struggles for the standard of wages are incidents inseparable from the whole wages system, that in 99 cases out of 100 their efforts at raising wages are only efforts at maintaining the given value of labour, and that the necessity of debating their price with the capitalist is inherent to their condition of having to sell themselves as commodities. By cowardly giving way in their everyday conflict with capital, they would certainly disqualify themselves for the initiating of any larger movement.
At the same time, and quite apart from the general servitude involved in the wages system, the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: “A fair day's wage for a fair day's work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!"”
What is missing in Martin's account is any investigation as to why it was easier to boost profits, at that time, by reducing labour costs, rather than seeking price rises. The answer is essentially provided by the subsequent comment from Martin in relation to the work of Michel Husson.
“A central factor, documented by the Marxist writer Michel Husson, though he did not discuss its relevance to inflation, is that in the leading capitalist countries investment remained low while profits rose. A larger part of surplus value went to the personal revenues of capitalists and their adjuncts (lawyers, bankers, managers, and so on), and a smaller part to fixed investment (new machinery and buildings).”
A similar thing is described by Marx, in Capital, where he sets out that in a period of a rising rate of profit in the 19th century, resulting from new technological innovations, reduction in wages, and moral depreciation of capital, the capitalists did not seek to increase investment and output, but used the increased surplus value to expand their own unproductive consumption, including a vast increase in the number of domestic servants employed.
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