The Rising Tide of Reality

God Helps Those Who Help Themselves

Brad DeLong is generating some sharp criticism for his Would Marx Say A Rising Tide Raises All Boats article which tries to rationalize the growing wealth inequality distribution and that the solution to our current economic malaise is market competition

DeLong states:

The consequence has been a loss of morale among those of us who trusted market forces and social-democratic governments to prove Marx wrong about income distribution in the long run - and a search for new and different tools of economic management

and concludes:

The problem is a broader failure of market competition to give rise to alternative providers and underbid the fortunes demanded for their work by our current generation of mercantile princes.

Over on the EconSpeak blog, Jim Devine responds to the entire article to show how DeLong is taking Marx theory and unfettered capitalism's wealth inequality consequences on a capitalist joy ride spin.

The history of actual capitalist industrial revolutions suggests that "aggressiveness and enterprise" is a euphemism for theft

DeLong stated:

By contrast, mainstream economists argued, a technologically advancing industrial society was bound to be different. First, the key resources that command high prices and thus produce wealth are not fixed, like land, but are variable: the skills of craft workers and engineers, the energy and experience of entrepreneurs, and machines and buildings are all things that can be multiplied

Levine responds:

It's true that skills of the craft workers who initially benefited from industrial revolution in England (and I presume the US) later found that their skills were rendered obsolete (as their bosses mechanized, de-skilled production, etc.) It's also true of engineers and other "knowledge workers," since they are in very much the same boat as the craft workers, i.e., dependent on the capitalist accumulation process and the capitalist effort to end dependence on any group of high-paid workers. (Computer programmers paid too much to allow you to receive abundant enough profits? I have a H1-B visa program for you...)

Please note the mention of the H-1B Visa as a labor arbitrage vehicle in order to extract more profits from labor:

Damn Straight Jim Levine. I strongly suggest reading the entire post, it's a good history lesson.

There is more analysis on DeLong's article on Economists View

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Comments

The Rising Tide of Reality

Greed and self interest have always existed. Free market competition is the best overall way to sort things out. I would argue that the current labor arbitrage is NOT free market competition. When there is such an imbalance in labor costs, regulatory environment, etc. we don't have a level playing field. Our first objective to fix things should be to greatly restrict immigration (legal and illegal) and a close second is to alter our poor trade agreements. We are forced to take some actions to defend ourselves just as any other nation or group of people does. We have the voting numbers to achieve such objectives if we can obtain some unity.

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I emailed you via this site's interface, which is only for trusted users. Welcome to the Economic Populist. As you can see the corporate tax code is a hot debate.

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