Was Marx right?

Let’s leave aside for a moment whether the participants were the right ones to call on (I would have turned to plenty of better commentators, who have read both Marx and contemporary scholarship on Marxist theory, to offer their opinions) or even whether they get Marx right (very little, as it turns out).

What’s perhaps most interesting is that the New York Times felt the need at this point in time to host a debate on the question “was Marx right?” and, then, that most of the participants admit that Marx did in fact get a great deal right.

The problem is, of course, that at this point in time mainstream economics (in either its neoclassical or Keynesian varieties) is not a particularly good guide for analyzing or proposing solutions to the key economic problems of soaring inequality, massive unemployment, and generalized insecurity of a broad mass of the population in the United States and in other high-income countries. So, I suppose it’s not surprising people continue to turn to Marx for ideas about how to make sense of the economic contradictions that caused the Second Great Depression and the new contradictions that right now are preventing a full recovery of capitalism.

In the end, what is key to Marx is not this or that prediction (of which, as it turns out, there is very little in the texts, although there certainly are lots of tendencies that critics are hard put to ignore or effectively counter) but, instead, the idea of critique. Because what Marx set out to do over the course of the three published volumes of Capital was provide the cornerstones for a far-reaching critique of political economy. And the method of that critique—a two-fold critique, of mainstream economic theory and of capitalism as a system—is what endures, precisely as a challenge to what passes for serious economic analysis today.

Marx, then, was surely right about one thing:

if constructing the future and settling everything for all times are not our affair, it is all the more clear what we have to accomplish at present: I am referring to ruthless criticism of all that exists, ruthless both in the sense of not being afraid of the results it arrives at and in the sense of being just as little afraid of conflict with the powers that be.

Cartoon of the day

Special mention

What do a college quarterback, fast-food worker, and magazine intern have in common?

Answer (according to Kathleen Madigan):

College football’s “Norma Rae” moment joins other recent pay-related episodes. First was the proposal to raise the federal minimum wage. Next came the White House’s directive to expand the number of workers eligible for overtime pay. Employees who currently work extra hours for free will soon get paid for their time.

Add in interns and citizen journalists that perform duties for free and a trend is evident: The U.S. economy may be the richest in the world, but sections of it depend on cheap or free labor.

Cartoon of the day

Special mention

Cartoon of the day

Special mention

Chart of the day

As Ed Dolan explains,

The chart [above] assigns a value of 100 to each component’s share in 2007, the year before the recession began. This chart shows that corporate profits were hit hard in the first months of the recession, but began to recover already by the end of 2008, when GDP was still falling. By the time the economy had officially entered the recovery phase in mid-2009, corporate profits were surging to new highs.

Compensation of employees and proprietors’ income behaved differently. During the downslope of the recession, the shares of those two components held fairly steady, that is, they decreased but only at about the same rate as GDI [Gross Domestic Income] as a whole. After mid-2009, when the economy began to recover, the two diverged. Proprietors’ income grew faster than GDI as a whole, so that its share increased. Compensation of employees grew less rapidly than GDI, so its share began to fall, and is still falling.

These trends in the shares of GDI components provide another view of the substantial changes in the distribution of income and wealth that are underway in the twenty-first century United States. The data shown in our charts are only indirectly related to the more widely publicized increase in the share of total income accruing to top earners, but they explain part of what is going on. It is true that some high earners receive the major part of their income in the form of salaries and bonuses, and that many middle-class families receive some corporate profit income through mutual funds and retirement savings accounts. Still, corporate profits are more unequally distributed and compensation of employees less unequally distributed than income as a whole. That means the rising share in GDI of the former and the falling share of the latter are two of the factors behind the rising fortunes of the super-rich and the relative economic stagnation of the middle class.

Cartoon of the day

Special mention

Cartoon of the day

Special mention

March sanity

Peter Sung Ohr, the regional director of the National Labor Relations Board, ruled today that Northwestern University football players are employees of the school and are therefore entitled to a union election.

The stunning decision has the potential to alter dramatically the world of big-time college sports in which the National Collegiate Athletic Association and the universities strike the deals and set the rules, exerting control over the activities of the players known as “student athletes.”

But now they are employees, too, according to the NLRB decision, which will be appealed.

In siding with the union, Ohr said the football players primarily have an economic relationship with the university, which controls and directs their daily activities and compensates them in the form of scholarships.

“The record makes clear that the Employer’s scholarship players are identified and recruited in the first instance because of their football prowess and not because of their academic achievement in high school,” Ohr wrote.

Protest of the day

University of Southern Maine students walked out of class Monday at noon to protest recent faculty layoffs.

The students gathered at the University of Maine School of Law on USM’s Portland campus for a peaceful demonstration to oppose what they are calling unnecessary layoffs. The students are demanding more transparency from the administration.

USM has laid off 12 professors and 14 staff members, with another 10-20 layoffs expected as a result of a $14 million budget shortfall.

The protesters spent the day trying to find a way to reverse the layoffs.

“Because I grew up blue collar, I don’t deserve a classics degree? I don’t deserve an economics degree? I have to wait for them to fish that intellect out-of-state?” said student Brittany Sioux-Goldych.

Economics professor Susan Feiner claims there is no structural gap in USM’s budget and the layoffs are for political reasons.

“Why do you think they want to cut USM? Cheap labor. Cheap labor,” Feiner said at the rally.