American Capital: Too Strong For it's Own Good

    This occurs to me from after browsing David Harvey's The Enigma of Capital which the reader Foppe suggested the other day in his comments to me regarding a piece I wrote about the Clinton 90s.

    http://diaryofarepublicanhater.blogspot.com/2011/12/clinton-90s-consdiered.html

     While I'm not a Marxist I am not adverse to reading Marxist stuff-have done and certainly will do again- plan to reread Capital in the near future. Harvey made a good point that liberals like myself should keep in mind. While we look at the old New Deal age as a Golden Age-not wrongly I don't believe-how much has the subsequent compression of American living standards been due to the successful disciplining of labor that was caused by the labor shortage of the 60s?

    While workers were dong pretty well into the 70s many capitalists didn't feel so sanguine. What we have had starting with Volcker's anti Full Employment Fed has been a successful 30 year campaign of putting the American worker in his place.

    Here is the paradox though: capital has been if anything too successful, it is now too strong relative to labor. The case can be made that stronger labor today would benefit capital. The problem is that with labor weakened effective demand has been wiped out. For a few years this was made up with credit cards, etc. but that party if over. Today we suffer from a labor glut-there is this huge what Marx called-"reserve army." But there is nothing for them to do.

   Similarly we have a glut of capital as well. Capital was used against labor in the 90s to bring down labor costs. But now capital too sits on the shelf gathering rust. Then we have all these empty houses with all these homeless people. We have a glut of everything, while banks and businesses hoard. The only answer is to restore demand. Part of this restoration could come by strengthening rather than weakening labor laws.

   Here one is reminded of Marx who said that he had spoken with factory owners who agreed with him-Engels of course was a factory owner-about say the need to have legislation to limit the working day. Basically these factory owners said "Yeah you're right. It would be better if the working day was limited. You'd think we could do that. But we somehow lack the ability to do so. Please force us to."

   In a way capital would be benefited by forcing on it a stronger labor right now. If only it could impose it on itself. It's like the U.S after WWII.  Europe and Japan were decimated yet it was in our interests to rebuild them though they were potential competitors-eventually they would indeed become so.

  Or to wax a little philosophical if not theological, God all-powerful in Heaven had the need to create beings-the devil and mankind-that would ultimately rebel against him. This is the paradox of capital at present.