Suspect everything

[elfs]

Brad DeLong comments on the 9.5% growth reported in the third quarter, along with a 13.6% growth in productivity and a 7.1% drop in labor costs:

Back in the 1930s there was a Polish Marxist economist, Michel Kalecki, who argued that recessions were functional for the ruling class and for capitalism because they created excess supply of labor, forced workers to work harder to keep their jobs, and so produced a rise in the rate of relative surplus-value.

For thirty years, ever since I got into this business, I have been mocking Michel Kalecki. I have been pointing out that recessions see a much sharper fall in profits than in wages. I have been saying that the pace of work slows in recessions--that employers are more concerned with keeping valuable employees in their value chains than using a temporary high level of unemployment to squeeze greater work effort out of their workers.

I don't think that I can mock Michel Kalecki any more, ever again.

I feel like I'm living in Michel Kalecki's universe nowadays.

I note with amusement that DeLong, who also hosted Shrillblog, where those driven into unholy madness by the malevolence, mendacity, incompetence and disconnection from reality that has characterized the right wing of American politics for the past nine years can ululate in psychotic shrillness at the cold, uncaring stars, has chosen to rename his blog, "Grasping Reality with All Eight Tentacles."

Comments

[solarbird]

I think the key differential is between inventory overhang recessions and credit deflation recessions.

[sirfox.livejournal.com]

I guess 13.6% productivity increase is what you get when you slash jobs and international media attention is crafted to scare the crap out of everybody still employed. Every recession's different, and there's some very different thinking and circumstances around this one from most in history.

Wages and productivity haven't had much to do with each other for a while now. (http://www.irle.berkeley.edu/events/spring08/feller/) Hardly by accident, either. I'm not sure i give a UC Berkley publication my full confidence in nailing down the causes, but any number of sources agree that for the last few decades, there's been a growing gap between flat wages and increased productivity.

Maybe it's from a calculated gutting of the strength of organized labor, maybe it's from a generation of MBA's who were inoculated with a mental virus that corporate profits come before everything else, including employee well-being. I heard somebody on NPR in the last few weeks defending the status quo by saying that health care was eating up all the difference, but i don't buy that either.

The right wing has certainly be in bed with those developments, but i don't see that the left wing (on a national scale) has been struggling against it all that hard either. Somebody's going to have to. I'm not sure who'll step up, or what form it'll take, but if workers keep getting smaller slices of a pie they keep killing themselves to make bigger, something will eventually give. New labor movement for the 21st century? Peasant revolt? I think that the Gen X and Y crowd are expected to just shrug and suck it up, but they've got better means to form an organized and rather devastating response than any generation in history, especially if they all get pissed off at once.

I've gone rambly. I don't know what Poland's organized labor situation looked like in 1930, but without checks and balances in that kind of market, then and now, you'll see small-minded and short-sighted grabs for short term profits by the people able to do so at the expense of everyone else. Most of the US's 20th century was unionized. It was an ugly and bloody struggle to get there, but got us a lot of prosperity.

[http://users.livejournal.com/_candide_/]

Consider the definition of, "productivity." It's the amount of work done by a person.

If you fire half of the people and make the rest do the work of 2 people, then you will, by definition, increase productivity. I scream this at the radio every time I hear the news report that productivity is up, as if that were a good thing. (Newsflash: Rain makes the ground wet, and cutting a pie in half creates two halves.)


As for Gen-X and Gen-Y doing something about the economic climate, it already happened. You had a preview of it at the end of the last decade: no loyalty whatsoever to any corporation, and a predatory attitude of, "demand what you can get based on the job climate." We in Gen-X are hunkered down right now. If the economic climate ever does improve, you'll see us once again become predatory in the job market.