Greed is good

Andrew Kliman Andrew_Kliman at
Wed Jun 10 08:52:06 PDT 1998

I think the whole line of inquiry that Chris Hartman is involved in is very important, politically and theoretically. My own experience leads me to concur with him -- the problem is not so much that people lack information, but that they lack a theoretical framework that really makes sense of it. Also, the Left is really *not* articulating an alternative to capitalism (instead we get a lot of information and critiques).

I thought the 20/20 snippet was very useful, and I'd like to see more.

I don't disagree with Nathan Newman's post, but it is only a small part of the story. It seems to me that "Stosselism" needs to be challenged on a more fundamental theoretical level.

First, although he is correct that the production of wealth is not a zero-sum game, what is important to demonstrate is that, under capitalism, the poverty of the many is the *absolute precondition* for the wealth of the few. Think about this and myriad rejoinders come to mind.

For instance, it is impossible for workers generally to share the wealth to such an extent that they could free themselves from the necessity of working for someone else under alienating, unsafe, take-it-or-leave-it conditions. Once that would happen, labor discipline would slacken, costs would rise, business would become unprofitable, and mass unemployment would result. And the ensuing starvation would bring us right back to where we are -- people forced to do others' bidding. Moreover, workfare, the booming prison industry, and the whole "underclass" phenomena also serve to ensure labor discipline, keep wages low, and therefore KEEP COSTS DOWN. And THIS is how the profits are being made.

Which brings me directly to what I see as the second line of response. Stossel's taken-for-granted premise is that wealth is just a matter of *physical* production. But under capitalism, this isn't true: the system runs on the production of *value* and *surplus-value*. What makes microelectronics, for instance, a booming industry is largely that it displaces workers and therefore REDUCES COSTS. Receptionists, graphic artists, bank tellers, etc. (And yes, the number of people displaced must exceed the number of new jobs created, unless wages fall, or this wouldn't be profitable in the long run.) Stossel is right that, for the greedy to succeed, they must fulfill a need. But he forgets that the need they fulfill is that of other "greedy" businesses!

Many other things can also be mentioned in connection with this second point. For instance, although net additional wealth is indeed being created all the time, it is also being continually *destroyed*, for reasons that have nothing to do intrinsically with physical production and everything to do with value production. East Asia is not less productive than it was a year ago. One can of course say that a lot of their wealth (asset values) wasn't "real" to begin with, but that's precisely the point.

And, given that physical productivity is so great, why aren't we all rich? It is certainly NOT a matter of the rich taking everything. Look at the computer industry -- how much computing power produced in the past fifteen years has simply been destroyed, because it becomes obsolescent so quickly, and because firms need not only to be productive, but, to compete successfully, they need to be (close to) the *most* productive?

In The Eastern Economic Journal about two years ago, Gary Burtless had an article with an introductory quote from Time Magazine in 1966, which predicted that productivity growth would create so much wealth that by 2000, even NON-WORKING families would have average incomes of ... I forget the exact numbers, but it was something like $128,000 to $160,000 (in today's dollars). Something is *seriously wrong* with the idea that the system runs on physical production. And again, the rich are simple not that rich enough or numerous enough that upward redistribution can explain the discrepancy between the 1966 prediction and the 1998 reality, even though productivity HAS increased tremendously.

But a truly effective response will have to make clear and concrete that things really can be different and better. Because they certainly weren't in Russia, China, etc., and people know this.

Andrew ("Drewk") Kliman Home: Dept. of Social Sciences 60 W. 76th St., #4E Pace University New York, NY 10023 Pleasantville, NY 10570 (914) 773-3951 Andrew_Kliman at

"... the *practice* of philosophy is itself *theoretical.* It is the *critique* that measures the individual existence by the essence, the particular reality by the Idea." -- K.M.

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