Marx Warned Us

Capitalism Is Beyond Saving, and America Is Living Proof

By Jacob Bacharach/ Truthdig/ August 31, 2018




Policies that fail in the same way over and over are not failing. Someone is lying about their intent. The drug war didn’t fail to stem the flow of banned narcotics and to stop epidemic abuse and addiction; it succeeded at building a vast carceral and surveillance apparatus targeted at people of color as a successor to Jim Crow.

The war in Iraq didn’t fail to bring democracy to the Middle East; it smashed an intransigent sometimes-ally in the region, and deliberately weakened and destabilized a group of countries whose control of, and access to, immense oil reserves was of strategic American interest.

The “end of welfare as we know it” didn’t fail to instill in the nation’s poor a middle-class sense of responsibility; it entrenched a draconian regime of means-testing and a Kafkaesque bureaucracy for access to even meager social benefits for a rapidly shrinking middle class.

It’s not that “Capitalism isn’t working,” as Noah Smith recently argued in Bloomberg. It’s that it’s working all too well.

Real wage growth has been nonexistent in the United States for more than 30 years. But as America enters the 10th year of the recovery—and the longest bull market in modern history—there are nervous murmurs, even among capitalism’s most reliable defenders, that some of its most basic mechanisms might be broken. The gains of the recovery have accrued absurdly, extravagantly to a tiny sliver of the world’s superrich. A small portion of that has trickled down to the professional classes—the lawyers and money managers, art buyers and decorators, consultants and “starchitects”—who work for them. For the declining middle and the growing bottom: nothing.

This is not how the economists told us it was supposed to work. Productivity is at record highs; profits are good; the unemployment rate is nearing a meager 4 percent. There are widely reported labor shortages in key industries. Recent tax cuts infused even more cash into corporate coffers. Individually and collectively, these factors are supposed to exert upward pressure on wages. It should be a workers’ market.

But wages remain flat, and companies have used their latest bounty for stock buybacks, a transparent form of market manipulation that was illegal until the Reagan-era SEC began to chip away at the edifice of New Deal market reforms. The power of labor continues to wane; the Supreme Court’s Janus v. AFSCME decision, while ostensibly limited to public sector unions, signaled in certain terms the willingness of the court’s conservative majority—five guys who have never held a real job—to effectively overturn the entire National Labor Relations Act if given the opportunity. The justices, who imagine working at Wendy’s is like getting hired as an associate at Hogan & Hartson after a couple of federal clerkships, reason that every employee can simply negotiate for the best possible deal with every employer.

To those for whom capitalism cannot fail but can only be failed, the answers lie at the margins. Neoliberal doctrine forecloses any hope of large-scale change; present circumstances always prevent future possibilities. Instead, as Smith writes, “there are some simpler, humbler changes that state governments can begin taking right away, without waiting for labor-friendly politicians to take control of the White House and Congress.”

These changes involve banning noncompete agreements, through which companies forbid employees from going to work for competitors, and more assiduously policing industry wage-fixing.

Both would be fine reforms, but neither would have much effect on the labor share of gross domestic product. They are minor symptoms of the capitalist disease. Capitalism isn’t broken; it’s working precisely as it’s supposed to: generating surpluses and giving all of them to a small ownership class. The New Deal and postwar prosperity, which barely lasted until 1980, represent historic outliers—the one significant period in which growth at the top was somewhat constrained and a relatively large share of wealth went to the middle. It was possible only through massive government intervention and redistribution, combined with a powerful labor sector backed by that same federal government. It took the collective power of entire societies to briefly restrain capitalism, which, left to its own devices, will do what it has always done: make the already very rich infinitely richer. Capitalism is “working” just fine.

What we are seeing, I suspect, is an acceleration of a broader social transformation that’s been occurring for some time. Rome, the saying goes, wasn’t built in a day, but neither did it fall in one, either. Changes to societies as large and complex as theirs or ours occur subtly and over years—if not decades. Those workers who do remain in the workforce increasingly depend on work and work alone for all their benefits. The companies for which most people work are like the Roman villas that gradually became central nodes of a manorial society as the imperial metropole retreated through a series of self-inflicted wars and crises of governance.

One moment you’re working for some kind of money wage in a fully monetized economy; the next you’re living in a company town, buying your groceries with scrip, and you can’t leave without your boss’ permission.

In America today, supposedly the most prosperous society ever to exist on earth, nearly a third of families report experiencing economic hardship. Sixty percent—60 percent!—say they could not cover an unexpected expense of $1,000, and nearly 40 percent have less than $500 in savings. People with good insurance get billed $100,000 for having a heart attack. People commute four hours a day because they can’t afford to live in the cities where they work.

The barbarians aren’t at the gates. They’re already here in the boardrooms; they’ve been here all along.

Jacob Bacharach is the author of the novels “The Doorposts of Your House and on Your Gates” and “The Bend of the World.” His most recent book is “A Cool Customer: Joan Didion’s The Year of Magical Thinking.”…
This entry was posted in Economics, economy, government, inequality, poverty and tagged , , . Bookmark the permalink.

16 Responses to Marx Warned Us

  1. Pingback: Trending Now #45, 8.31-9.6.18 | Daily Links & News

  2. I think we also need to acknowledge that since the 1980’s the government, through the combination of deregulation and the creation of knew regulations, has created the conditions we find ourselves in today. This was made all the more clear in the 2008 bailout. No one, right or left, wanted to admit to the American people that the cause of the crash was a natural byproduct of capitalism. To let the banks fail would have led to too many questions that no one in power wanted to really answer. So rather then admitting true nature of the system, and laying bare the lie of the American dream, the government bailed the banks out. Thusly creating yet another means for those who control the majority of GDP to gather up more of it.

  3. Just because talk of class bothers conservatives, Jeffrey, is no reason to stop talking about it.

    • Arlen Grossman, the only legitimate use of the word class belongs to academic institutions. Not this Leftist rhetoric that pits us against each other.

      • I disagree. Class is a real, observable situation. Bill Gates and a typical child care worker are clearly in different classes. It is clearly legitimate and people use it all the time.

        • Arlen Grossman, I know that Leftist political types want to have things handed to them, so as to justify their laziness and entitlement addicted mentalities. I know that Leftists also want to play stupid games like pitting people against each other. An example of this is a forced increase in the minimum wage by mandate. Some people may work much harder than other people, so why should you have a mandated wage being paid across the board instead of a merit based system where you are paid according to your diligence and effort?

          • Jeffrey, sometimes you sound very reasonable and intelligent, but when you throw out blanket stereotypical statements about “Leftists” and “Leftist political types,” you lose me. How would you feel if I said “all right-wingers are racists” or “all righties just want to help the rich”? Let’s keep our conversation on a higher plane.As for $15 per hour minimum wage, that is to make sure that workers can make a living on the salary they make. Right now the minimum wage is $7.25, which hasn’t changed in almost ten years, which means a full-time worker on that wage is still in poverty and needs to receive help from the government to survive. $15 per hour is more of a living wage.  

          • Arlen Grossman, aside from yourself, any discussions I have attempted to engage in with other people of your ideological mindset has turned into a pissing contest. You seem to be perfectly reasonable, however, my experience with other people who think as you do has not worked out well.

          • Whatever your past experiences, Jeffrey, I believe in treating even my political adversaries with respect, and expect the same from others.

          • Arlen Grossman, for my part, I will do the best I can not to be too harsh with my comments. I believe that all opinions should be respected. So we are on the same page. Here are a few examples of issues where people will feel differently: 1: Drug legalization. Some people may support it and some people may oppose it. 2: Same-sex marriage. A lot of people may oppose that. Many people may support it or just not want to make their beliefs law. 3: Foreign policy. Some people believe in a non-interventionist policy and some believe that we should police the world.

  4. As if Karl Marx had any credibility.

    • Okay,Jeffrey, maybe I shouldn’t have used Marx’s name (my bad). It is too distracting. Ignore the name Marx and concentrate on the substance and content of Bacharach’s article.

      • Arlen Grossman, Karl Marx was a Communist. That is an indisputable fact. You and I disagree about the idea of using the term class. Outside of academic institutions, class is divisive language otherwise.

        • Talk of class might be divisive, but it is nonetheless real. Don’t you see that Jeff Bezos and you are not in the same class (as far as I know)?

          • Arlen Grossman, that is a valid point. The problem is that class (outside of educational institutions) is division oriented when used from an economic standpoint. I know that Leftist types want to create divisiveness among the population, however, what more should be expected?

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