[lbo-talk] There was only one blogger who defended Marx's ideas out of the five invited to contribute to the NYT debate

[Charles Brown]

"There was only one blogger who defended Marx's ideas out of the five
invited to contribute to the NYT debate - I suppose a fair ratio of
views among economists. Doug Henwood is editor of Left Business
Observer, host of a weekly radio show originating on KPFA, Berkeley,
and is author of several books.
Henwood makes it clear where he stands: "I don't see how you can
understand our current unhappy economic state without some sort of
Marx-inspired analysis." Even better, he places the Marxist theory of
the cause of crises under capitalism squarely with the movement of
profitability. "Corporate profitability -- which, as every Marxist
schoolchild knows, is the motor of the system -- had fallen sharply off
its mid-1960s highs." As Henwood explains, the strategists of capital
moved to raise profitability through a reduction in labour rights and
by holding down wages. "The "cure" worked for about 30 years.
Corporate profits skyrocketed and financial markets thrived. The
underlying mechanism, as Marx would explain it, is simple: workers
produce more in value than they are paid, and the difference is the
root of profit. If worker productivity rises while pay remains
stagnant or declines, profits increase. This is precisely what has
happened over the last 30 years. According to the Bureau of Labor
Statistics, productivity rose 93 percent between 1980 and 2013, while
pay rose 38 percent (all inflation-adjusted)".
However, Henwood reckons the current crisis is the result of
inequality and low wages reducing consumption and thus the answer is
to raise wages and public spending. The problem with this view of Marx
is that it does not match the facts: consumption did not slump at all
prior to the Great Recession: it was the collapse of the housing
market, profits and then investment, not consumption. Raising wages
and reducing inequality will help the majority but lower profitability
further and thus reignite the capitalist crisis. It's not higher
shares for labour that is the answer but the replacement of the
capitalist mode of production.
But at least Henwood understands better Marx's views, unlike the other
bloggers." -Michael Roberts

Marx blogged to death

by Michael Roberts

http://thenextrecession.wordpress.com/2014/03/31/marx-blogged-to-death/#comments