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July 20, 2018


Peter K.

Fully support increased workers' bargaining power and full employment to incentivize labour-saving productivity.

In the U.S. there has been a push among progressive economists to focus on monopoly as a source of many ills, putting workers at a bargaining disadvantage and squashing competition and entrepreneurship.

They argue that during the soc dem golden era there was tougher anti-trust enforcement. It went away with the neoliberal era and they look approvingly on the EU's massive fine of Google for example. ($5 billion which is only 2 weeks of income for Google)

As a socialist I'm not sure what to make of it. "Competition" seems overrated to me.


«ten years of stagnant productivity might mean we are now at the phase of capitalism that Marx foresaw:»

It could be that rather than 10 years it has been over 50 years, barely compensated by massive debt expansion.
My impression is that since Marx's time what has happened has been not a huge increase in productivity, but a huge increase in land rent extracted from fossil fuels.

That is, we haven't escape the malthusian trap, we have simply moved to one with a much higher ceiling, because we have discovered that some land that looked like desert (for example Ghawar) actually is much, much more fertile than the best land of Kansas or the Ukraine, as long as it does not lose that fertility.

Malthus or Marx may have been right in the longer term, their expectations may yet come to pass, delayed by this fantastic gusher of land rent.

«William Nordhaus famously showed that capitalists capture only a “minuscule fraction” of the benefits of innovation.»

But those benefits are in the vast majority the consequence of having discovered that amazingly fertile land producing extremely cheap calories, rather than "innovation" as such.


«ten years of stagnant productivity might mean we are now at the phase of capitalism that Marx foresaw:»

The overall point I am trying to make is that the "political economy" is both a machine-system, that can be studied with an engineering approach, and a social-system, that can be studied with a political-economics approach.
Of course the two interact, and a better social-system can result in a more productive machine-system, but also viceversa.
In particular the vast majority of the increase in living standards in the past 200 years may not be due to improvements in the social-system, as in improvement in technology or organization of production as such resulting in a greater efficiency of the machine-system, but to an extraordinary increase in the *inputs* of the machine-system, that is the extraordinary increase in the input of calories into the production process thanks to the diffusion of extremely cheap "food"/"fuel", first coal and then oil to power the machine-system.
That is the machine-system has only in small part improved to produce more with the same or fewer inputs, but it is rather producing a lot more with a much, much, much bigger amount of inputs; overall its material efficiency may even have substantially fallen.

Tony of CA

Capitalism is toast.


Capitalism never worked all that well. It worked best under extreme socialism pressures, from the mid-1940s into the 1970s. Socialism and unionism made sure workers got some benefit from rising productivity. Once that collapsed, that stopped. That meant the market stopped growing. Less demand, less need for innovation. More seriously, we have two generations of workers who KNOW that no matter what and how well they produce, they won't see much for it. It's the old Soviet Union. They pretend to pay us, and we pretend to work.


Responding to Kaleberg. The hilarious thing is that our Sunday morning conversation was exactly the old Soviet Union paradigm. Keep up the good work!


"Capitalism is toast."

Either capitalism or democracy is eventually toast. You can only con some of the people all of the time if they're not cold and hungry and can't remember something better.


Blissex, Yes, Yes, and Yes.

It astonishes me that "learned economists" stare uncomprehendingly at the lack of growth during the middle ages. Suddenly growth appears miraculously. "We don't know how that happened"

Coincidentally, at the same time we discover how to use fossil fuels.

Why is growth now stagnant? At least one cause (of many) is that all the "good stuff" is now used up or polluted.

Diyarbakır çiçekçi

capitalism has good and bad sides.


Growth from 1945-1973 was the result of reconstruction in Europe and the Pacific Rim after WWII, plus economic development in the developing world, Social Democracy had little to do with it.

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