Message: 8 Date: Tue, 6 Dec 2011 14:49:10 -0500 From: c b <cb31450 at gmail.com> Subject: [lbo-talk] Lionizing Wealthy Americans, Rather Than Taxing
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I understand your criticism of Krugman here. But the problem is that determining who "earns" what they get (i.e., who *deserves* what) is not an economic question but an ethical question. I think our approach should be political vs. ethical/moral, because the ethical/moral discourse of the day (rights, etc.) is liberal and idealist. (That's how I interpret the fact that Obama was able to give a speech in Kansas yesterday that was about "fairness," and people interpreted it as picking up on the language of Occupy--minus the anti-capitalist parts, of course!)
Here's a pretty good attempt by an economist to argue, in economic terms, that the super-rich haven't earned what they get, but have in fact stolen it from workers: "The Purloined Trillions, by Jim Cypher ( http://www.dollarsandsense.org/archives/2011/0711cypher.html). He even takes a neoclassical economist as his starting point: "Neoclassical economist John Bates Clark (1847-1938) first formulated what he termed the 'natural law' of income distribution which 'assigns to everyone what he has specifically created.' That is, if markets are not 'obstructed,' pay levels should be 'equal [to] that part of the product of industry which is traceable to labor itself.' As productivity increased, Clark argued, wages would rise *at an equal rate*." Cypher's point is that that happened for a while, but stopped happening (as we all know) in the 70s. If you look at what would have gone to workers if Clark's "law" were true, it amounts to trillions per year essentially stolen.
I like the argument, but it only works with some moral claim about what people are owed, what they deserve, etc. Better to have a political account of the balance of class power (which I'm sure Cypher would agree with anyhow).
CB's post:
http://www.truth-out.org/lionizing-wealthy-americans-rather-taxing-them/1323181144
"Even if you believe that the top 1 percent, or better yet the top 0.1 percent, are actually earning the money they make, what they contribute is what they get, and they deserve no special solicitude."
CB: We need economists who will develop the theory that the top 1% and .01% are not actually earning the money they make.
-- -- Chris Sturr Co-editor, Dollars & Sense 29 Winter St. Boston, Mass. 02108 phone: 617-447-2177, ext. 205 fax: 617-447-2179 email: sturr at dollarsandsense.org