OK so you are saying that it's not just a matter of a worse distribution of a given net product, but the use of labor's weakness to get it to produce an even larger net product? So the distribution story is not just about the distribution of income after production but the intensification of production as well. Yet what I meant by production is something else, and raises the question of how the government could contribute to the prospect of greater profitable real production as a way to stabilize the most volatile element of aggregate demand, i.e. investment demand. I don't think a better distribution of income will do it; in fact it may compound the problem, and the threat of future progressive tax hikes may well depress investment and thereby effective demand as much as an increase in consumption demand would increase effective demand. What the government will have to do is the following 1. Raise the rate of exploitation via inflation from monetizing the deficits. 2. Allow capital costs to be cut by relaxing anti-trust legislation. 3. Hope that debt-financed government demand will allow the working down of excess capacity so that firms are willing to invest in more capital efficient and hence more profitable production systems 4. Secure foreign markets so that firms can see the increased profitability issuing from economies of scale and thus make large scale investments. I would not be sanguine about the government's ability to stabilize the economy either through a social democratic redistributive strategy or through means meant to bolster directly profitability as mentioned above. For that reason I expect the Democrats to be routed and the Republicans to make things even worse eventually. LR
_______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
