Reading Das Kapital, watching Home Shopping Club

The reliably excellent Justin Fox summarizes last quarter’s corporate profits.

You might not be able to tell this from the chart, but the third-quarter 2010 profit share, at 9.46%, is slightly below the peak of 9.58% in the third-quarter of 2006. But it’s still quite high by historical standards. The chart above only goes back to 1947, because that’s as far back as quarterly data goes. There is annual data to 1929, and the only time besides 2006 and (one can predict with some confidence) this year when the profit share topped 9% was 1929, when it hit 9.9%.

And who is getting the money and why:

So the reason that corporate profits are near their all-time highs would appear to be that financial corporations (mainly big financial corporations) and multinationals are making lots of money and paying less of it out in taxes. Hmmmm.

The corporate profit picture would seem to mirror what’s been going on in the income distribution for individuals for the past few decades. The money is increasingly going to a select group at the very top of the economic food chain, who are able to reap the rewards of global growth, play the financial system astutely, and avoid taxes. You can spin this in a moderately positive way: these are very dynamic economic times, and the rewards are going to those companies and individuals who position themselves to take advantage of this dynamism. But there are an awful lot of negative ways you can spin it, too.

As an aside, Fox mentions that he has never read Das Kapital (I haven’t either). Is it time to start wondering if our economic system might be in something similar to the kind of death spiral Marx predicted for capitalism, that the rich will get richer and everyone else get poorer or stay the same, as far as the eye can see?






84 replies
  1. 1
    BigHank53 says:

    Well, some folks seem determined to find out what happens when you take away people’s jobs, houses, and government assistance, but leave them their guns…

    Hey, they got MBAs–there’s no history requirement.

  2. 2
  3. 3
    Zifnab says:

    There is annual data to 1929, and the only time besides 2006 and (one can predict with some confidence) this year when the profit share topped 9% was 1929, when it hit 9.9%.

    Well, that’s good news. If I remember my history correctly, the years surrounding ’29 were really great times for the US Economy.

  4. 4
    Comrade Javamanphil says:

    As long as you have carnival barkers like Beck convincing a significant portion of the public that the black guy did it, capitalism survives the death spiral.

  5. 5
    ChrisS says:

    Nah, Iraq had super high gun ownership and look how well that turned out for them.

    The rich’ll keep getting richer and they’ll be doing it from mountain redoubts or other countries. Capital has no boundaries and doesn’t have any problem up and moving to somewhere else with a moment’s notice.

  6. 6
    Joe says:

    David Harvey at the SUNY has a great set of ITunes podcasts taking you through volume 1 of Das Kapital. I understood Marx’s argument much better than reading the text.

  7. 7
    ChrisS says:

    The wealthy didn’t really get hurt in ’29 either. The poor folk got all the pain – just when they were recovering from the last great war and the flu. As a bonus they got to send their kids to fight and die in Europe again.

  8. 8
    Culture of Truth says:

    #4

    “David Broder has also been What’s Wrong With the Washington Press Corp ever since he stepped off the campaign bus and began applying his wisdom toward the great problems plaguing the country.”

    snap

  9. 9

    What we may be dealing with now, stated in terms Marx would recognize, is the inherent contradiction of capitalism. Every company wants to get as much for its products as it can and it wants to pay as little as possible to make that product. The difference, of course, is profit.

    Part of the cost of production is labor. And so, the less companies pay in labor the more they make in profits.

    The problem comes from the fact that laborers are also customers. And laborers can buy things only if they make enough in wages. [Remember that Ford wanted to pay his workers enough to buy a Ford?]

    The problem with our economy is that we don’t have enough customers with enough money to buy stuff, so all of us earn less in wages [stagnant or reduced wages, shorter work weeks, layoffs, and unemployment], so there are even fewer customers with enough money to buy things, so . . . .

    Edited to add:
    I think Marx would say that companies [and capitalism] can last a long time if they aren’t too stingy with the workers.

  10. 10
    cleek says:

    also interesting, the top marginal rates from the 20s and 30s:

    year, rate, top bracket $

    1920, 73, 1,000,000
    1921, 73, 1,000,000
    1922, 58, 200,000
    1923, 43.5, 200,000
    1924, 46, 500,000
    1925, 25, 100,000
    1926, 25, 100,000
    1927, 25, 100,000
    1928, 25, 100,000
    1929, 24, 100,000
    1930, 25, 100,000
    1931, 25, 100,000
    1932, 63, 1,000,000
    1933, 63, 1,000,000
    1934, 63, 1,000,000
    1935, 63, 1,000,000
    1936, 79, 5,000,000
    1937, 79, 5,000,000
    1938, 79, 5,000,000
    1939, 79, 5,000,000

    anyone see a pattern ?

  11. 11
    c u n d gulag says:

    Marx and Engels were smart economists and political theorists, but HORRIBLE writers. BORING!!!*
    I remember sloging through them 30+ years ago. But, as boing as it was, it was enlightening.
    To answer your question: From what I remember, ‘yes’ we’re kind of right on track if not in the middle of that death spiral.

    *I think that if they had come AFTER Freud, they might have come up with a better economic model than what they did. Using psychology, flawed as it is, might have helped them.

  12. 12
    dadanarchist says:

    Don’t read Das Kapital. While an excellent book it is nearly 3000 pages long and has some serious outdated and flawed moments.

    Brush up on Marxism by reading contemporary Marxist critics of global capitalism like David Harvey or Robert Brenner.

    The New Left Review, which both gentlemen write for, has good Marxian critics of the economy as does the London Review of Books.

  13. 13
    Raenelle says:

    Was Marx right? I’m not sure why this is in doubt, actually. But don’t stop with Marx. Marx actually needed a couple of fixes–he didn’t anticipate imperialism, for instance.

    The real questions aren’t about Marx. I mean, seriously, I don’t see how anyone any more can deny the central contradiction of capitalism–private ownership and the public good. When the two come in conflict, the private owner will always choose his own benefit. In fact, that’s what he’s supposed to do. What’s in it for me IS the motor of capitalism. So there have to be controls to make sure that private greed doesn’t destroy the public good.

    The real questions follow from that–what to do about it. I think it boils down to Bernstein or Lenin. Social Democracy or Bolshevism. I hope Social Democracy is sufficient. But I haven’t had much luck with that hope thingie lately.

  14. 14
    dadanarchist says:

    @c u n d gulag: Marx and Engels were smart economists and political theorists, but HORRIBLE writers.

    I couldn’t disagree more. The Manifesto is a gripping piece of writing (except for the section on the other socialist parties). It is dramatic, concise and damning.

    His writing is philosophical and dense, but Marx has a wicked wit and a bitter sense of irony that spans all his works, from the early material on German idealism through Das Kapital.

    Engels’ descriptions of 1840s Manchester remain gripping and painful reading to the present.

  15. 15
    ThatLeftTurnInABQ says:

    Don’t bother with Marx. The post-industrial economy in which people make money by creating data rather than making things or growing food is very different from the 19th century industrial economy which Marx critiqued. Read Nick Taleb (Black Swan) instead – his concept of the extremistan economy vs the economy of mediocristan is more important in understanding what has happened recently.

    For folks who have not yet read Black Swan, please note that despite the way it sounds his neologism mediocristan is not a morally loaded term – it refers to a psuedo-Gaussian distribution of results and rewards, i.e. the most successful plumber, dentist, etc. does not make millions of times more money than the mean wage for that profession. In contrast, the birth of an info-centric economy has made possible a distribution of the benefits of economic growth which is power-law scaled (the top 10% make as much as the 90% below them, within the former group the top 1% make as much as the 9% below them, the top 0.1% make as much as the 0.9% below them, etc.) and the result is much, much more unequal than anything previously seen during industrialization.

    The late 19th and 20th century social welfare state was a necessary adjustment to the inequalities brought about by industrialization. We haven’t even started to create the necessary safety net to deal with the vastly greater inequalities inherent in the info economy. In the long run I think we are going to need something really radical by present day terms to stabilize the system, e.g. top marginal tax rates that asymptotically approach 100% as income approaches a non-trivial fraction of GDP, confiscatory estate taxes, etc.

    The alternative is a return to the violent anarchism of the 1890s, but using the whole kitchen sink, from AK-47s and IEDs to 21st century weapons. Post-industrial capitalism is going to destroy itself if reformers can’t manage to tame its worst excesses the same way that progressive reformers tamed industrial capitalism starting 130 years ago.

  16. 16
    blahblahblah says:

    I had most of Marx’s Capital assigned as part of a philosophy and classics class, contrasted against Smith and Ricardo. My sense of it is that Marx’s political theories are far more meaningful than his economics. His ‘cycle of capital’ analysis is particularly ridiculous, especially for anyone who has programmed simple loop constructs and knows the difference between a pre or post increment / decrement. On the political side, Engles’ _The Family, Private Property and the State_ made me want to both puke and punch someone nearby. Which in no way means that because I oppose Marxism that somehow I must support the oligarchical criminals currently running the show here in the US.

  17. 17
    eponymous says:

    For those interested, check out the following link:

    http://davidharvey.org/reading-capital/

    David Harvey has been teaching a class on Marx’s Capital for over 30 years. Viewing the video lectures should help one get an initial understanding Marx’s tome without necessarily having to plow through it on their own.

  18. 18
    ThatLeftTurnInABQ says:

    @ThatLeftTurnInABQ:
    ..and we have to recognize that this is a job that we are going to have to do all over again from scratch. The 20th century reforms that tamed industrialism do not help at all with this new problem. The boulder has rolled all the way back down to the bottom of the hill, and Sisyphus’ coffee break is now over.

  19. 19
    El Cid says:

    This is unpossible.

    So the reason that corporate profits are near their all-time highs would appear to be that financial corporations (mainly big financial corporations) and multinationals are making lots of money and paying less of it out in taxes.

    Everyone knows we have the highest corporate tax rates in the known universe and all dimensions beyond.

  20. 20
    PeakVT says:

    I haven’t read Kapital either, but my impression from history classes long that it’s overly deterministic. I think social democracies are still viable, but keeping one going will require more effort than its citizens are accustomed to giving. In the US, it will take a lot more effort because of the inherent gerrymandering in the Constitution, and because race still splits the country deeply.

  21. 21
    DFH no.6 says:

    Well, I don’t think it’s correct to speak of “the death spiral of capitalism”.

    Capitalism has never been, and is not now, intended for the prosperity of the masses. It is designed to further enrich the already wealthy who bet some portion of their wealth (”capital”) on some enterprise, winning their bet when they are able to secure to themselves enough of the surplus value of the labor engaged in said enterprise.

    Broadly speaking, of course (the economy of the world being a great, great deal more complex than that).

    In that sense (“further enrich the already wealthy”) capitalism is doing swimmingly; in fact, better now than ever before.

  22. 22
    Memory says:

    I’ve taught Marx quite a lot. I recommend doing a little bit of historical reading then starting with the Manifesto (easy and well written – goes by in a flash). Beyond this, there are a few excerpts from the Kapital that are worthwhile (much more if you are interested in the intellectual history of economics and the surprising degree to which Marx grows out of classical Ricardian Liberalism), but exactly which ones depend on your area of interest. If you know a little French history, I recommend the 18th Brumaire of Louis Napoleon and just for fun I recommend his three short (ca. 1 page) articles on the future of British rule in India.

    For the stuff you seem interested in from this post, I would actually recommend Lenin rather than Marx. His “Imperialism: The Highest Stage of Capitalism” examines concentrated corporate ownership and the effects of monopolies on national economies in some depth.

    Overall, though, I don’t think that classical Marxism will answer your questions adequately. If you want other recommendations, I will happily provide them.

  23. 23
    Punchy says:

    Just wait until 2013, months before the HRC really kicks in, when Blue Cross and Cigna raise their premiums 700% or some such shit. Just because.

  24. 24
    Raenelle says:

    @eponymous: thanks for the link.

  25. 25

    @c u n d gulag: So the proletariate would be diagnosed with penis envy while the class anxieties of the bourgeousie are driven by unresolved oedipal complexes?

    ETA: apparently the spam filter dislikes Freud’s best known theories as much as I do….

  26. 26

    @c u n d gulag:

    Volumes 2 and 3 were actually written by Engels, assisted by Marx’s elder daughter, and are easier to read.

    On Volume 1, if you can just skip the first section and move on with the rest of it, it is easier.

    Other, shorter works by Marx, such as “Value, Price, and Profit” are more helpful, IMO.

    When Engels wrote by himself, he was very clear. His work on utopian and scientific soshulism is very good. I often think of it when reading some of the current right wing stuff, which is definitely utopian and definitely not scientific.

  27. 27
    El Cid says:

    Soshullist journal Monthly Review, October 2010.

    The Financialization of Accumulation
    __
    John Bellamy Foster
    __
    In 1997, in his last published article, [MR founder] Paul Sweezy referred to “the financialization of the capital accumulation process” as one of the three main economic tendencies at the turn of the century (the other two were the growth of monopoly power and stagnation).2 Those familiar with economic theory will realize that the phrase was meant to be paradoxical. All traditions of economics, to varying degrees, have sought to separate out analytically the role of finance from the “real economy.” Accumulation is conceived as real capital formation, which increases overall economic output, as opposed to the appreciation of financial assets, which increases wealth claims but not output. In highlighting the financialization of accumulation, Sweezy was therefore pointing to what can be regarded as “the enigma of capital” in our time…
    __
    …[The] rise of the modern credit system vastly changed the nature of capital accumulation, as the ownership of real capital assets became secondary to the ownership of paper shares or assets—leveraged ever higher by debt. “Speculation about the value of productive assets,” Minsky wrote in his book on Keynes, “is a characteristic of a capitalist…economy. The relevant paradigm for the analysis of a [developed] capitalist economy is not a barter economy,” but “a system with a City [that is, London’s financial center] or a Wall Street where asset holdings as well as current transactions are financed by debt.”…
    __
    …[F]inancialization, while boosting capital accumulation through a process of speculative expansion, ultimately contributes to the corrosion of the entire economic and social order, hastening its decline. What we are witnessing today in society as a whole is what might be called the “financialization of class.” “The credit system,” David Harvey observes, “has now become…the major modern lever for the extraction of wealth by finance capital from the rest of the population.”47 In recent years, workers’ wages have stagnated along with employment, while both income and wealth inequality have increased sharply…
    __
    …Never before has the conflict between private appropriation and the social needs (even survival) of humanity been so stark. Consequently, never before has the need for revolution been so great. In place of a global system given over entirely to monetary gain, we need to create a new society directed at substantive equality and sustainable human development: a socialism for the twenty-first century.

    The essay centers around observations by both Marx and Keynes.

    And as apparently the rules require, every soshullist analyses has to end with how much soshullist revolution is needed now. Thankfully no more is it claimed that conditions are ripe for it to happen.

  28. 28
    BGinCHI says:

    Doug, I’d say wrong book.

    Marx’s 18th Brumaire makes better reading for this subject.

    The big variable in the equation now is the media. Marx is really smart about historical circumstance and causality, but technology + media in the 21st C raises a lot of questions.

  29. 29
    El Cid says:

    And on the subject of the awful Obama administration’s oppression of big business, there’s this:

    Wall Street Excess Is Back: Hiring A Dwarf For A Bachelor Party, $40,000 Cell Phones
    __
    Wall Street bankers hiring a dwarf for an over-the-top bachelor party in Miami. Nieman Marcus selling out its 100 limited-edition $75,000 Camaros in three minutes. Socialites dropping $40,000 on a custom cellphone at a jewelry store in Chicago. An investment analyst at Goldman Sachs who hired hip-hop queen Lil’ Kim to perform for 1,000 guests at his annual Halloween party last month.
    __
    What is this — 2006?
    __
    Though the unemployment rate remains near 10 percent with millions of Americans about to run out of their jobless benefits, one in five Americans are using food stamps to buy groceries and small businesses are being forced to slash their work forces to stay alive, Wall Street’s top bankers and wealthy investors are spending to excess, indulging their every whim.

    We’re not there yet, but we’re working hard to return to conservatives’ ideal governments, the McKinley, Coolidge, and early Hoover eras.

  30. 30
    John S. says:

    Capitalism has never been, and is not now, intended for the prosperity of the masses.

    Indeed. But even Adam Smith was in favor of a progressive system of taxation to help counterbalance the extreme build-up of wealth in the upper echelons.

    At least HE understood that you had to keep the host healthy in order for the parasites to feast upon it.

  31. 31
    schrodinger's cat says:

    For the MacroEcon class I am taking this fall, we have been reading the original works of Keynes, Marx, Minsky, Schumpeter and so on. Very interesting..
    The main problem I think has been the explosive growth of financial markets relative to the real economy. Since nothing has changed in the way financial markets operate, I predict that we are headed for a bigger crash soon.

  32. 32

    @Linda Featheringill: Unfortunately, there are some sectors of the economy where you don’t need customers, per se, just more people in your group willing to make and take bets on just about anything.

    We could essentially have a modern day aristocracy in all but name soon, with the vast majority of persons slaving under the debt they use to buy things to a few wealthy creditors and corporations their entire lives for generations.

  33. 33

    Capitalism has never been, and is not now, intended for the prosperity of the masses.

    Purely speaking, capitalism is about freedom and allowing people to make their own economic choices. (Of course, purely speaking, communism is about equality, empowering the masses, and looking after the public good and look how well that turned out.)

    We’ve moved on from capitalism to corporatism, and eventually we’ll probably be on to oligarchy pretty soon.

  34. 34
    PeakVT says:

    BREAKING: The Mustache of Understanding comes in at #3. His imaginary cabbie friends think he was robbed.

  35. 35
    Jewish Steel says:

    Elvis Costello! Pony St.

    Had to rack em for a mo there, Doug.

    Brutal Youth is criminally overlooked, IMO.

  36. 36
    BGinCHI says:

    @Comrade Dread: Your post makes no fucking sense.

  37. 37
    schrodinger's cat says:

    Do people remember Enron? We are an Enron economy now.

  38. 38
    Culture of Truth says:

    Upset special!

    Tom Friedman takes the Bronze!

    “what’s that? What Obama needs to deal with Iran is “a Dick Cheney standing over his right shoulder,
    quietly pounding a baseball bat into his palm”? Hm.
    And your message to the people of Iraq? Oh, right, it was, “suck on this.”)

  39. 39

    @El Cid:

    And as apparently the rules require, every soshullist analyses has to end with how much soshullist revolution is needed now.

    Nobody asked me but . . . .

    I don’t think we are ready for a revolution just yet. We haven’t developed a way to meet our needs without profit taking [which is what led us to this point]. Producing for need rather than profit is a good goal but productivity would probably run out of steam pretty soon.

    We just aren’t there yet.

  40. 40
    singfoom says:

    Jesus, it’s enough to make you just give the fuck up. I mean, come on, how exactly are we supposed to fight against multinational corporations?

    They’ve fucked up our economy, they’ve infected our entire government and you can’t get along financially in life without them…..

    So, what now?

    (This is slightly rhetorical…I moved all of my banking from JPMorgan Chase to USAA which is slightly less evil than the other big banks, but that’s an individual answer)

    As a society and a nation, we have to do something to rebalance the public good vs. the corporate good. And I don’t see any light on the government side of the tunnel.

    People who yell about corporations talk about regulatory capture, but shit, at this point, we’re talking complete regulatory, political and media capture.

    Any attempt to challenge the corporate paradigm gets so little air/tv/internet play, is challenged immediately by the minions of the corporations/government/stoooges…

    So seriously, what the fuck do we do? Please note that leaving the US is an unacceptable answer.

  41. 41
    stickler says:

    Marx wrote some excellent stuff (and some of it for the New York Tribune, which is interesting). Here’s a link to his articles, not all of which have been transcribed. One in particular, The Economic Crisis in Europe, reads like it was ripped from our headlines, not from 1856:

    For a set of directors to eat up a company’s capital, while cheering on its shareholders by, high dividends, and inveigling depositors and fresh shareholders by fraudulent accounts, no high degree of refinement is necessary. Nothing is wanted but English law. The case of the Royal British Bank has caused a sensation, not so much on account of the capital as on account of the number of small people involved, both among the shareholders and depositors. The division of labor in this concern appears to have been very simple, indeed. There were two sets of directors, the one content to pocket their salary of £10,000 a year for knowing nothing of the affairs of the Bank and keeping then, consciences clear, the other intent upon the real direction of the Bank, only to be its first customers or rather plunderers. The latter class being dependent for accommodation upon the manager at once begin with letting the manager accommodate himself. Beside the manager they must take into the secret the auditor and solicitor of the Company, who consequently receive bribes in the shape of advances. In addition to advances made to themselves and relatives in their own names, the directors and manager proceed to set tip a number of men of straw, in whose names they pocket further advances. The whole paid-up capital amounts now to £150,000, of which £121,840 were swallowed directly and indirectly by the directors. … Every Year since the bank went in operation, it had been losing £50,000, and yet the directors came forward every year to congratulate the shareholders upon their prosperity.

    As far as capitalism goes, the idea that it’s about “freedom” is utter rubbish. Capitalism is about the acquisition and preservation of capital. Nothing more, nothing less. That’s why unregulated capitalist systems tend toward cartelization, speculation, and cronyism. Capitalism unregulated results in plutarchy.

  42. 42
    WyldPirate says:

    @Linda Featheringill:

    The problem with our economy is that we don’t have enough customers with enough money to buy stuff, so all of us earn less in wages [stagnant or reduced wages, shorter work weeks, layoffs, and unemployment], so there are even fewer customers with enough money to buy things, so . . . .

    No, Linda. You have it all wrong. Little Tommy Friedman at his Hot, Flat and Crowded Mansion in Maryland obtained through marriage has it all figured out. And the problem is–lack of attention span and infatuation with texting by American kids and those shitty American parents who aren’t properly preparing their children to compete with the kids with funny sounding names living in the US and abroad.

    Tommy Friedman is always wrong

    Beyond the recession, this triple whammy is one of the main reasons that middle-class wages have been stagnating. To overcome that, we need to enlist both the U.S.G. and the P.T.A. We need teachers and principals who are paid better for better performance, but also valued for their long hours and dedication to students and learning. We need better parents ready to hold their kids to higher standards of academic achievement. We need better students who come to school ready to learn, not to text. And to support all of this, we need an all-society effort — from the White House to the classroom to the living room — to nurture a culture of achievement and excellence.

    See, if all of those darned kids would just get college degrees and if the gubmint would help them out, everyone would have a great job and big huge house like little Tommy Friedman.

    Perhaps the ass-clown Friedman can tell me why I can’t find a job with a PhD in the sciences and 15 years of experience in industry and academia. Maybe it is because universities are cutting back everywhere and pharma companies have slashed their R&D all over the country to maximize profits. Or maybe it’s because slots at these places are drawing 200 applicants for every open position.

    Or maybe it is because I’m texting too much,

  43. 43

    @BGinCHI: Capitalism is not about ensuring any moral outcomes. It is only about the freedom for each person to make their own economic choices.

    It is, in theory, a perfectly efficient system.

    What we practice in this nation is not capitalism. Not by a long shot. It’s been replaced by a more insidious system whereby those with the wealth have used the political system to ensure their own profitability and privileges at the expense of everyone else: corporatism.

    Once the veneer of democracy becomes inconvenient, or the government ‘collapses’ (as unlikely as that is to happen), I would expect the blatant power grabs will become more brazen and we’ll have a system of government which more resembles an oligarchy or Banana Republic.

    I’m not at all optimistic that the American people care enough to stop it or would revolt as long as they have their internet, television, just enough to eat, and the increasingly mythical promise of social mobility.

    ETA: I will note that I am not advocating completely free market anarcho-capitalist system, precisely because in reality what happens is that you have a few persons who accumulate wealth and power who move to acquire more wealth and power, often by any means necessary (legal and otherwise), and the powerless often get screwed in the process.

    You need a strong regulatory hand involved in the market to keep people honest and to keep the ambitions of immoral men in check. You also need a moderately progressive tax system to guard against some of the inequalities that are produced by the system.

  44. 44
    Zifnab says:

    @ThatLeftTurnInABQ:

    The alternative is a return to the violent anarchism of the 1890s, but using the whole kitchen sink, from AK-47s and IEDs to 21st century weapons.

    I’m actually kind of curious about that. I seriously doubt the modern military can exist without massive cash infusions from the state. And a lot of the equipment used by today’s US Army isn’t designed for individual use. You can’t operate a Predator drone, for instance, without a base camp and a stable transmission system and a plethora of other strategic needs.

    AK-47s will stick around forever. But the 21st Century super toys aren’t winning any wars in Iraq or Afghanistan. I’m not sure why they’d do any better anywhere else.

    What’s more, the US military is expensive as fuck. If we stopped shelling out hundreds of billions of dollars a year, businesses like Raytheon and Boeing couldn’t exist in the way they do today. A real collapse of the US Economy and tax base could make military contractors the first casualties.

  45. 45

    @singfoom:

    So seriously, what the fuck do we do? Please note that leaving the US is an unacceptable answer.

    I agree. Besides, where would we go?

  46. 46
    Culture of Truth says:

    I actually despise – nay, loathe – Cohen more, so this could work out well.

  47. 47
    DougJ says:

    @Jewish Steel:

    I agree, a very good record.

  48. 48

    @Comrade Dread:

    What we practice in this nation is not capitalism. Not by a long shot.

    I agree.

  49. 49
    BGinCHI says:

    @Comrade Dread: Where, oh where, is this phantom capitalism of which you speak?

    What good does it do to start from those kinds of definitions. Your equally ridiculous version of communism (what the Soviet Union and China did) is the same thing. The models/ideals of course lead to systems that are imperfect. There is NO alternative to this.

    We probably agree on the outcomes here, but just pointing out that late capitalism is run by corporations is a little late to the conversation.

  50. 50
    singfoom says:

    @Linda Featheringill:

    Exactly.

    I see a couple choices, but they’re only acceptable on the individual level.

    1)Withdraw from caring about national politics, care for your family and immediate surroundings (National level apathy)
    2)Keep supporting Democrats even as they descend further into corporatism (Please note, not an invitation to a flame war, and not all Democrats are equal) to fight the more extreme corporatism of the Republicans
    3)Support the creation and feeding and maintenance of a 3rd party with a core platform plank of anti-corporatism and a focus on the rights of individual living human beings being greater than that of legal entities…
    4)Wait for the SCOTUS to reverse Citizens United (Turn blue from holding breath, grow old and die)

    Any others?

  51. 51
    Phoenician in a time of Romans says:

    Don’t bother with Marx. The post-industrial economy in which people make money by creating data rather than making things or growing food is very different from the 19th century industrial economy which Marx critiqued.

    Uh-huh.

    The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind.

    The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.

    The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations.

    Communist Manifesto.

  52. 52
    Zifnab says:

    @BGinCHI: If I hand you a wad of poop and tell you it’s a pretzel, that doesn’t mean pretzels taste like poop. If I hand you a shitty economic system and call it capitalism, that doesn’t mean “Capitalism” is shitty.

    These are just names applied to greater policies. If you slap the same name on a different policy, complaining about the name won’t fix anything.

    So what we need is policy change. Protectionist policies for US jobs and trade goods, more domestic government spending and less government subsidy for corporate outsourcing, a legal system accessible by individuals and small businesses, not just class action mobs and mega-corporations.

    These policies will move us back towards textbook “capitalism”, but they aren’t going to get much support from modern day self-proclaimed “capitalists”.

    Either way, you’ve got to define the problem before you can develop a solution. So sitting down and defining exactly what “capitalism” is can do a great deal to harmonize the visions of a large enough group of people necessary to get a political movement with the strength to affect change.

  53. 53

    @singfoom:

    Support the creation and feeding and maintenance of a 3rd party with a core platform plank of anti-corporatism and a focus on the rights of individual living human beings being greater than that of legal entities.

    This might prove very useful. If nothing else, perhaps we could encourage a national conversation about these issues and maybe something would grow from that.

    MSM would not want to talk about such a political group, of course, but running for political office does give you a speaking platform.

  54. 54
    jonas says:

    @Raenelle: “What’s in it for me IS the motor of capitalism. So there have to be controls to make sure that private greed doesn’t destroy the public good.”

    This was Adam Smith’s principle insight about economics: the free hand of the market doesn’t work without some kind of ethical framework that makes people look out for others as much as themselves. Everybody reads The Wealth of Nations, but less attention is paid to what is arguably an equally important and indispensible thesis, namely the Theory of Moral Sentiments.

  55. 55
    El Cid says:

    @Linda Featheringill:

    I don’t think we are ready for a revolution just yet. We haven’t developed a way to meet our needs without profit taking [which is what led us to this point]. Producing for need rather than profit is a good goal but productivity would probably run out of steam pretty soon.

    Yeah, I grasp that. I was just pointing out the rhetorical punchline that most of your typical soshullist essays end with.

    They know it, too. Of course, that doesn’t mean it’s wrong that it is a good idea, certainly from their point of view. But no more do they say that this particular crisis [whichever crisis of whichever time period] means that the revolution is imminent.

  56. 56

    @Phoenician in a time of Romans:

    The Manifesto rocks. I have met a number of conservatives who admire it for its honesty and clear thinking.

  57. 57
    ThatLeftTurnInABQ says:

    @Zifnab:

    For the 21st century stuff, I’m thinking less along the lines of conventional military hardware, and more like cyberwarfare, and later down the road biowar using genetically engineered organisms. Imagine the post-911 anthrax attacks only much more intelligently targeted – for example you could develop germs that selectively target the chemical signatures in human tissue characteristic of a diet rich in rare and very expensive food. The weapons deployed would be more likely to be adapted from commercial products smuggled out of proprietary labs and re-engineered on the black market rather than coming from conventional military sources.

    Read the science fiction writer David Wingrove’s Chung Kuo series, or the dystopian future scenarios which Philip Bobbitt speculated about in Shield of Achilles for a better idea of what a war between the levels would be like.

  58. 58

    @El Cid:

    the rhetorical punchline that most of your typical soshullist essays end with

    You’re right, of course.

    And, to refer back to utopian and scientific thinking, I’ll admit that soshulism can be quite utopian.

    I’m getting old. I don’t have time for dreams of perfection and calls to arms if there is no alternative to offer.

    I would really, really like for someone to plant a seed that I could spend a few years nurturing in hopes that it would grow. Something real, not some pie-in-the-sky nonsense.

  59. 59

    I gotta go back to work. See you guys later.

    I LOVED this thread. XOXO

  60. 60
    jonas says:

    As they say, Marx got capitalism right and communism wrong. What Marx never anticipated was a situation wherein the capitalist class could continue to treat the proletariat like shit, and the proletariat would just sit back and take it, or even take on a proactive role in their further and inevitable immiseration. These days, I think Gramsci is probably more appropriate reading. The American working class has essentially agreed that they will get nothing and like it and that Jesus intended all along for hedge fund managers to rule the world.

  61. 61
    El Cid says:

    @Linda Featheringill: You can do both. You don’t have to give up thinking that perhaps someday, whether soon or 500 years from now or never, human civilization might strive toward or even achieve some more rational form of economic and social organization, that is, if we’re not all mystery energy powered robots.

  62. 62

    @BGinCHI: Because words matter. Language matters. Using words correctly matters.

    The word capitalism has certain positive feelings attributed to it by Americans because it is, at it’s core, about economic freedom. Ask an average American which system he would prefer: capitalism, soshalism, or communism, and the overwhelming majority would pick it.

    By allowing people to call the abomination of an economic system we practice today capitalism, you are automatically ceding ground to your ideological opponents.

    Thus any moves you make to try and change or rein in the system become soshalist government interference in our beloved free-market capitalist system. Try and apply law and order to the system? Soshalism. Try and rein in the abuses of a few or the systemic fraud of the many power brokers? Soshalism and un-American.

    You’re already on the retreat now. You have to now take the time and explain that it’s nothing of the kind, in a nice, reasoned, but longer argument. While your opponents can simply scream soshalism on the Sunday morning shows and everyone nods along because of course we have a free-market capitalist society.

  63. 63
    Zifnab says:

    @ThatLeftTurnInABQ:

    For the 21st century stuff, I’m thinking less along the lines of conventional military hardware, and more like cyberwarfare, and later down the road biowar using genetically engineered organisms.

    So what you’re saying is that the future will be all of my Sci-Fi nerd dreams come true.

  64. 64
    BGinCHI says:

    @Zifnab: I agree. That’s what I was trying to say, so maybe I just didn’t make myself clear. Defining the system and how it works IS politics, and we need to play it better.

  65. 65
    wengler says:

    @Comrade Dread

    There was a poll awhile back asking Americans about whether they preferred Capitalism or Socialism. Among younger age groups they were essentially tied.

    Asked whether capitalism or socialism is a better system, 53% of American adults cited capitalism, 20% said socialism and 27% said they weren’t sure.

    According to the poll, adults over 40 strongly favor capitalism, while adults under 30 are essentially evenly divided.

    http://www.nydailynews.com/new.....z16E8ljimh

  66. 66
    ThatLeftTurnInABQ says:

    @Phoenician in a time of Romans:

    In those passages Marx is describing what we today call globalization. But globalization today involves the emerging info economy as well as industry and agriculture and as a result the speed and scalability of it is quantitatively different from the Victorian and Edwardian era regimes, and that quantitative difference is so large that is becoming a qualitative change. There are many similarities with industrialization in Marx’s day however. The info economy today (of which FIRE is one sector) is cannibalizing the older industrial sector in much the same way that rural agricultural labor (whether in England, India, or Eastern Europe) was impoverished as the industrial sectors of Marx’s Europe built up.

    I think the open question is: has the info economy achieved takeoff – is it self-sustaining even if the flow of wealth from the older economic sectors are somehow cut off. The financial bubble and resulting collapse in 2008, and the bailouts we are paying now suggest that the answer is no. Our political fights over the bailouts are really an argument over whether the info economy will be permitted to be born into an independent and self-sustaining existence by sucking the life out of the older economic sectors, or not. And my pessimistic best guess is that the former is exactly what is going to happen.

    Now it is possible that our current era of globalization may collapse into autarky, much as the previous one did. But I don’t think a global great power war is going to be the proximate cause like it was in 1914. I think an anarchistic war between the levels is much more likely.

  67. 67
    ThatLeftTurnInABQ says:

    @Zifnab:

    So what you’re saying is that the future will be all of my Sci-Fi nerd dreams come true.

    Dreams for some, nightmares for others, but yeah that’s about it as I see it.

  68. 68
    BGinCHI says:

    @Comrade Dread: Gotcha.

    I’m on your side in that argument for sure.

    Having stupid media people like Andrea Mitchell, who ought to fucking know something after all her time in her biz, is exactly the problem. We can’t progress with weak-minded people sitting in her chair.

  69. 69
    russell says:

    My favorite “get out the pitchforks” quote for the year so far, from here:

    In total, these 500 executives earned $5.7 billion in 2008, which averages out to $11.4 million apiece and computes to less than 1% of total revenues and 3% of total profits of their companies.

    “these 500 executives” are the CEOs of the Fortune 500. On average, they put 3% of the total enterprise profits in their own pockets.

    3%, off the top, for one guy.

    These are publicly traded companies. It’s not their fucking money.

  70. 70
    singfoom says:

    @ThatLeftTurnInABQ: Chung Kuo was interesting, but we’ll need to create “Ice”, the material that’s lighter than air and stronger than steel before we can cover all habitable land in cities.

    It’s been a while, but didn’t the levelers basically revolt en masse and destroy at least one of the continent cities?

    It’s not even a war at this point. The moneyed interests have won and we’re living in the occupied territories…

  71. 71
    lou says:

    @Comrade Dread: Nicholas Kristof (and I think the column was highlighted on BJ) pointed out we’re already there.

  72. 72
    JohnR says:

    @Linda Featheringill:

    I would really, really like for someone to plant a seed that I could spend a few years nurturing

    Well, there’s your answer. Why do you have to wait for someone else to plant the seed? Do it yourself. We can only do what we can with what we have, and I’d rather do small things than dream about doing big things. Marx and Engels and all the rest of the utopian philosophers are all very well, but people are people, not angels or robots. We corrupt every ideological system in an attempt to rig it for our personal benefit, and then rationalize our corruption to ourselves. I vote for what I see as the best possible outcome, knowing that “best possible” is a relative, not an absolute, and that my vote will almost certainly at best only succeed in delaying the inevitable cyclic catastrophe. Meanwhile, I’ve raised my kids to understand that cooperation is a better approach than selfishness, when it comes to the group, and that the group that counts is “people”, not “Real Americans” or some other vicious and asinine subset. All I can do is hope that my tiny actions will have some long-term positive effect. Probably not, people being people, but it’s still worth trying. Some seeds fall on stony ground, some fall in the desert, but once in a while one will fall on good soil.

  73. 73
    ThatLeftTurnInABQ says:

    @singfoom:
    I don’t expect anything remotely like the specific details of Chung Kuo. But I think it presents a very vivid picture of anarchistic revolt from within, in which some of the anarchists (e.g. Devore) are highly placed both socially and technically and use their inside access to all of the technological treasures their era has created to blow up a society which has lost its moorings in terms of legitimacy.

    And that is the fundamental problem with post-modern and post-industrial capitalism today – it has no credible theory or ideological basis for establishing and maintaining the legitimacy of a new society in which a handful of individuals control more wealth than everyone else on earth put together (other than suck on this, which isn’t going to age well) – which is the logical end point of a power-law scaled income distribution. And the very process of its creation is undermining the legitimacy and stability of the older industrial and agricultural societies from which it is being born by sucking all of the wealth out of them and leaving nothing behind but dry and empty husks.

  74. 74
    Joe says:

    @eponymous: The Harvey lectures are also on ITunes.

  75. 75
    PWL says:

    It’s something I’ve started to wonder–whether Marx was not wrong, but a little premature.

  76. 76
    Alwhite says:

    The middle class makes the society stable. If you have a large middle class, ample opportunity for low income to at least get their kids into the middle and the sense that even if something goes wrong you can still stay middle class you will have a stable society. Revolution comes not from poor people but from middle class people made poor or in great danger of becoming poor.

    So, yes I think we are seeing the end times for capitalism as practiced in the US.

  77. 77
    Aaron says:

    On a meta-note, this was a really great thread. Any chance threads/topics like this could turn into a regular feature here at BJ?

  78. 78
    liberty60 says:

    A quick note (since unlike the rest of you strapping young bucks guzzling 4 Loko, I am a hard working Galtian Producer on his lunch hour)-

    Viewing capitalism as the opposite of Communism makes the same error as the Maxists themselves- it accepts the idea of a Perfect Clockwork System, a system of laws and regulations that produce prosperity and justice.

    What makes more sense to me is to view things with the caution and pragmatism of seeing public sphere and private sphere as simply being different methods of delivering goods and services-

    Should firefighting sevices be delivered the same way we deliver hair styling, that is, a chaotic hodgepodge of small entities that go in and out of business daily?
    Should hairstyling be delivered via a permanent government Ministry?

    Aren’t there some goods and services that can be delivered more efficiently by one or the other methods?

    The Objectivists and Marxists both fell down the rabbit hole of madness by trying to create the Perpetual Motion Machine of politics and failed miserably, but the pragmatic liberals of the New Deal Era actually produced a society of both liberty and prosperity by assigning some things to the public realm and other things left in private hands.

  79. 79
    The Raven says:

    Is it time to start wondering if our economic system might be in something similar to the kind of death spiral Marx predicted for capitalism, that the rich will get richer and everyone else get poorer or stay the same, as far as the eye can see?

    Marx predicted there would be a socialist revolution in the end, as a result of that spiral. I don’t see the revolutionaries, though–the Tea Partiers aren’t socialists. Communists and many other radical socialists believed that during the last depression. If it hadn’t been for the reforms implemented by the Democrats led by FDR, perhaps it would have been revolution.

    For an introduction to Marx’s thought, Fischer and Marek’s introduction, original title Was Marx wirklich sagte (I make that “What Marx Really Said”–can you read the original German?), published in English as How to read Karl Marx, Marx in his own words, and perhaps The essential Marx, comes highly recommended. Not having read deeply in Marx, I can’t evaluate its validity myself. You’re at a major university–you can get a copy from the library and evaluate it for yourself.

    BTW, the English-language title of Das Kapital is, of course, simply Capital.

    You can read Marx, and many other significant works of economic history at Marxists.org, which Paul Krugman has described as “the best site for so many economics classics.”

  80. 80
    jfxgillis says:

    Doug:

    As an aside, Fox mentions that he has never read Das Kapital (I haven’t either).

    Unconscionable. If you cannot stomach the original in translation, there are some very good English abridgments/synopses out there, maybe the kind used in a top-rank-college survey course.

  81. 81
    Platonicspoof says:

    @Aaron:

    Any chance threads/topics like this could turn into a regular feature here at BJ?

    Also 2.
    If only BJ still had a business and economics editor.

    One of the comments at the link in the post leads to Umair Haque’s webpage which leads to

    Three link limit, will continue.

  82. 82
    Platonicspoof says:

    Continuing:
    . . . which leads to a collection of manifestos (“starting points”) like this one with comments digging down now and then, e.g. when this commentor is describing his meanings for change and transformation:

    “. . . unless you can transform people, you can talk your whole life about change, and only horizontal variation will happen.
    People resist transformation with all of their might, because it is exactly the equivalent of suicide. you have to demolish your self-identity.”

    Probably a few more examples on the internet, just sayin’, thanks for any posts generating comments and links like this one.

  83. 83
    miwome says:

    I want to second the motion that Capital is a completely hellish reading experience. The trick is that everything else Marx ever wrote is worse if you haven’t already read salient parts of it (and/or Manuscripts of 1844, which is even worse because it’s unfinished notes). Clever bastard.

  84. 84
    Acharn says:

    @ChrisS: Yeah, and they hadn’t recovered from the Depression of 1921, either, contrary to the Austrian School. My Grandfather and Father told me about it when I was a teen-ager. The cities might have recovered (although I don’t think the working class did), but agricultural prices crashed in 1921 and stayed there. 1930 was no worse for my Grandfather than 1921 was. When I heard the first Austrian School economist use the argument that the Depression of 1921 was over quickly because the government didn’t intervene I turned him off and will not bother with anyone else who calls himself Austrian or who thinks Hayek had anything worthwhile to say.

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