IMHO, it seems that declining living standards, or at least stagnating
relative to productivity, represents the redefinition of what Marx
referred to as the culturally-specific subsistence wage (CSSW). In Marx,
the subsistence wage is defined socially. So here in the US, access to a
car or health insurance would be considered part of the cultural
subsistence wage. This would necessarily change over time as part of the
development process. As this cultural subsistence wage is pushed down
toward actual subsistence, or actual growth in cultural subsistence wage
is less than its expected growth, the rate of surplus value (or, more
narrowly, the profit rate) increases. With increasing profits come
increased investment, lower unemployment, increased output, and etc....
All appear good.
But why doesn't the population stand up against the relative reduction
in the CSSW? A safety valve, perhaps, has been the growth of
indebtedness. But indebtedness is not the only part of this. With the
widening use of consumer debt and leasing, mainly autos (I think auto
leases are not included in consumer debt?), broad consumption patterns
have changed. I think the change over the years from a save-till-you-buy
to a buy-now-pay(w/ interest)-later pattern has mediated the deleterious
impacts of a lower (or stagnating) CSSW. This brings up a question,
what is the impact on aggregate demand associated with a shift over time
from savings-based consumption to debt-based consumption? In addition,
if the capacity to add debt at an individual level can stabilize demand
(assuming of course that the supply of debt is forthcoming), what
happens when this option has been expended (or retracted all together)?
I may be wrong, pointing to the smallest tree in the forest, or beating
a dead horse. But that is not new.
Jeff
----------
From: Michael Perelman
To: [EMAIL PROTECTED]
Subject: What went right -- once again
Date: Thursday, March 19, 1998 12:25PM
Louis Proyect said that he thought that I was being ironic with my
original
question. I was, but only to an extent. The economy looks sooooo good
from the
top. The stock market is soaring. Business is in command. Even labor
is doing
a bit better in some ways.
I don't think that this situation will last, but I never would have
predicted
that the economy would have been doing this well, this long [from the
perspective of those on top].
We Marxists [even Chico Marxists] tend to see impending crises
everywhere all
the time. Maybe as Rob S. said, E. Asia is the thin wedge. Maybe not.
Why have the capitalists succeeded? Some answered the redistribution of
income
and the defeat of labor [which I suspect is not unrelated to the fall of
the
USSR]. I also think of the opening of E. Europe, China, etc. to
capitalism. I
suspect that more is involved.
I don't think that it will take much to prick the bubble, but still the
economy
has been more resiliant than I had expected.
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 916-898-5321
E-Mail [EMAIL PROTECTED]
