******************** POSTING RULES & NOTES ******************** #1 YOU MUST clip all extraneous text when replying to a message. #2 This mail-list, like most, is publicly & permanently archived. #3 Subscribe and post under an alias if #2 is a concern. *****************************************************************
THE WAPO piece on slow wage growth despite low unemployment reveals another example of policy-makers (and economists) having an idee fixe which, literally, steals income from the working class whenever unemployment gets "too low" The great Michal Kalecki wrote about this in 1943 with his The Political Aspects of Full Employment. The idea of a "natural rate of unemployment" or a NAIRU (non-accelerating inflation rate of unemployment) is to give intellectual justification for policies basically designed to keep wages from rising. As Anwar Shaikh has argued, capitalism as we know it, cannot function well when wage growth exceeds productivity growth --- that cut into profitability is a "bridge too far" for capitalists. Meanwhile, the FACT is that there is no such thing as a NAIRU (or "natural" rate). That didn't stop a group of economists from putting out a lengthy symposium in one of the main Economics journals (Journal of Economic Perspectives) all about the "natural rate". (Even though it had been published in the same journal, at least one of the writers had never even read James Galbraith's piece "Time to Ditch the NAIRU" which showed with meticulous use of data that there was not such animal.) Of course the reason the so-called "natural rate" is so popular with most mainstream economists is that it's a neat way to justify policies of "wage control" without getting your hands dirty with explicit class bias. Glad the WAPO published that piece --- bet most economists will ignore its implications ... _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
