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Kevin Mayes's avatar

"up until 1974, workers generally had the upper hand". I would say they had an 'even hand'. From American data https://www.epi.org/productivity-pay-gap/ worker share of productivity exactly tracked productivity increase from 1947 to 1960, and was only slightly divergent from 1960-74. I imagine this divergence was a result of innovations such as containerisation and ro-ro shipping of vehicles allowing international trade to become much more competitive. There is a sharp turn in 1974 as you say. Financialisation became the big stick to beat the workers with, since it was possible to make money without the vicissitudes of industry. This probably also accounts for the contemporaneous fall in productivity from 2.5% p.a to 1.4% p.a. with all the brightest and most ambitious management material (as well as capital) being sucked into the finance sector rather than the industrial.

Pretty much the sole purpose of anything 'real' in this world such as natural resources, goods and non-financial services, land and housing only exist to provide a starting point upon which fictitious capital can be hypothecated. What could possibly go wrong?!

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Steve Hummel's avatar

All of your critiques of neo-classical economic theory are valid. Full stop. But the deepest problem with it is the entire idea that "free" market theoretics enables COMPLETE FREEDOM...which in the human universe is a dangerous delusion...because the little thing known as ethics cannot RATIONALLY be escaped. So you're also correct that economic theory and economic actions must be rationally bounded.

"Free" market theoretics is a delusion and a misnomer for its actual reality which is alternately goosed and strangled unstable dominating monopolistic financial and monetary chaos...and the solution to that rather long adjective is to integrate the new monetary paradigm of Direct and Reciprocal Monetary Gifting into the Debt Only system with a 50% Discount/Rebate policy at retail sale instead of using the current ham handed methods utilized by neo-classically deluded central banks...and then rationally and ethically regulate the economy instead allowing a suave or unabashed financial and economic oligarchy to dominate the general populace for another 6000 years or maybe another 50 years until climate change kills off 4-5 billion of us.

We must "go deep, go long" on APPLIED conceptual/paradigmatic analysis because anything other than an ACTUAL paradigm change gets gamed and the clock is ticking very loudly.

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