Sunday, July 25, 2010

Monopoly Capital Blocks Rational Policy of Wage-led Growth

What lesson might the working classes of the global North take from what's happening in China? Canadian journalist Paul Jay spells it out in plain English.

Paul Jay: So we've been talking about macroeconomic policy, the G-20, austerity. And there was one little line in the G-20 document I thought was interesting, and it's sort of buried in amongst everything. It said countries could facilitate wages going up proportional to productivity, which is rather interesting, 'cause it's the only time I've ever heard it even mentioned by these guys. There's quite a big section about how wages need to go up in China. There they understand the need for increasing demand. And we've heard President Obama say, we can't be the consumer engine of the world anymore, you guys have to do it, looking at China. And they talk about increasing the social safety net in China. They even talk about allowing strike struggles in China so wages can go up, but they sure don't talk about it when it comes to their own places. . . . So the problem is -- and this is where it becomes a political problem. I mean, it's not that difficult to sit down and kind of envision a rational solution to all of this -- you just can't pass it anywhere. The way that the politics is controlled and the small gang of people that actually own the commanding heights of the economy, starting with the banks, they don't allow any of this to actually get passed, so you get to an impasse. You can talk rational visions, but you can't execute on it.

The lesson given by Jay is a Kaleckian one, one of the most important lessons, especially today, as we struggle against the drive to austerity in the North. First of all, make clear what obstacle needs to be removed if the rational alternative is to be implemented.

To that Kaleckian lesson, however, we want to add a Gorzian one, especially in the United States: take productivity gains more in the form of gains in disposable time than in the form of more consumption. That's our socialist ticket out of crisis, economic and environmental.

Minimum transitional demands: retirement at 50 with full benefits; free education and social wages for students (all the way up to doctoral degrees for those who want them); paid parental leaves (six years for each new child); two months of paid vacations per year at minimum; indefinite unemployment benefits (to last till the ruling classes come up with worthy jobs at worthy wages for the unemployed).