Posts Tagged ‘Marx’

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Scenes from my talk last night, “Utopia and the Critique of Political Economy,” sponsored by the Department of Political Economy at the University of Sydney in a lecture series to honor Ted Wheelwright (1921-2007).

Cartoon of the day

Posted: 16 October 2016 in Uncategorized
Tags: , , ,



We know the rich are getting richer in the United States. And, as it turns out, people are well aware of how rich people are flaunting their growing wealth.

One Reddit [ht: sm] thread last week (which, last time I looked, had over 19 thousand comments) started with the question, “What’s the most obscene display of private wealth you’ve ever witnessed?”

Here are some of my favorites:

I used to be a nanny to celebrities and high profile New York financial families. . .The CEO and his model wife of a famous athletic wear company paid for an entire wardrobe for me to keep at their home because they didn’t want “outside clothes” contaminating their house or infant. I was to take my street clothes into the bathroom near the entrance, take them off, change into my “house” clothing, and then only change back after I was finished with the baby for the day and was getting ready to leave. They also had a safe of cash that I was to use exclusively for my meals, drinks and take out food, and then leave the receipts in the safe.

I work for a luxury home builder. Very big, very expensive houses. We are building a home for this guy & he calls freaking out at me because AT&T would only provide him with 9 DVRs when he needs 11. They would provide him with more, but he would need to open a second account to do so. I don’t know why, I guess they had some kind of weird limit at the time. I’m the CTO of the homebuilder, so he expected me to get AT&T to change this policy so he could have a TV with DVR in every bathroom as well as the normal TV-viewing rooms. I obviously couldn’t do this, so he cancelled his contract with us thru his lawyer & never spoke to us again. His deposit was non-refundable, in fact we had already spent most of the money on the initial part of the build. So he walked away from over $100,000 we wouldn’t give him back without ever saying a word to us. It was no biggie to him I guess. It also made NO SENSE.

I was driving for Uber in a college town and picked up a group from one of the richer frat houses to take them to a club. The girls were discussing how one of their friends was upset and went on a huge shoe shopping spree where each pair cost roughly $2,000 except for one. This one pair costed $7,000. One of the girls casually expresses that “$7,000 is really not a bad price to pay for shoes, they should’ve just been a little bit prettier. I would’ve paid $5,000 for them.” Why they called an Uber instead of a limo, I don’t know.

My boss owns a 15+ million dollar cottage. He likes to “entertain” and throws some pretty wild parties. His wealthy neighbours down the lake complained about the noise and frequently called police. One day they saw him on the street and told him smugly that they had a generous offer on their cottage and they were moving. I know, said my boss, I bought it.

A party at the CEO’s house for Halloween. Insanity. I thought I was going to get kicked out of the neighborhood because I was only driving a 30k car, not a 300k car. Anything you can think of, he had at this party – staff with signature cocktails at the door, a fully staffed bar for liquor, a fully staffed bar for wine, an entire table made of ice with ice shot glasses and ten different vodkas. He was wearing a costume made of leather that his wife commissioned for him, handmade in France. The 400 yard bridge to his private lake was strung up with extra lights, and the dock had a separate bar for those who wanted to sit on the lake.

My mother owned a small home-based business doing a whole bunch of different shit, including silk floral arrangements and other artificial plants. Occasionally, she would be hired to do the floral component of some big interior decorating job.

One time, she was hired by a local home builder to do just such an interior decorating gig at his mansion.

He did have a private helicopter pad in his backyard, but someone elsewhere in this thread has already mentioned another one of those.

The conservatory flooring was walnut parquet tile. It was lovely, except that the mogul’s wife had recently had a party where, of course, many of her guests were wearing stiletto heels. These heels made a kajillion tiny divots in the walnut parquet tile, ruining it. Mrs. Homebuilder was unconcerned; she was simply going to replace it.

I think, though, what stands out to me the most was the foyer, mainly its Corinthian columns gilded in 24 karat gold. Who the fuck does that?

Building a house for some rather wealthy people. While they “rough it” in their $1.5M barn waiting for us to finish. The horses they own have their individual quarters being completely cleaned around the clock. There is fresh new hay brought in by the truckload which is then sorted through in front of a fan where the dirt is blown out leaving only clean hay. The floors in each stall are constantly being covered with a bed of imported wood chips/shavings from somewhere in Northern California (we’re in central TX). The chips and hay are brought in by the truckload every week. Each horse is fed a Snickers Bar before bed. They live in a climate controlled area of the “barn” where they are fed filtered water. Hot water during the winter and ice water in the summer. None of these horses are pure-bred or rare/special other than the fact that they were chosen. One day while working we saw one of the barn workers hauling ass through the field so naturally we waited and watched to see what he was doing. He was running to our portopotty. We didn’t think much of it at first. Then we got a phonecall. “Have you guys seen one of the mexicans over there? He asked to use the bathroom and has been gone gone for 7 minites when he’s only allotted a five minute break.” She then proceeded to ask if we’d find him and send him back before he goes pilfering through the construction supplies and tools. These people made a ~45 yr old grown ass man, with kids and shit, haul ass across a field, about 300 yards, in the dead of summer in TX to take a shit…while they timed him. This lady once asked some hispanic concrete workers to move from under the shade of her giant oak tree because they may kill the root system with their boots. When we told her they were just eating luch and that it was hot her reasoning was that “mexicans don’t feel heat anyways”. Money makes people weird. I could go on for hours.

Well, you get the idea. There are plenty of other stories—about neighbors, roommates, and so on. The ones I’ve chosen (and there are many more) are all from or about people who have worked for the tiny group at the top.


Provoked, first, by liberal celebrations of the recent decline in the poverty rate in the United States—and, then, by conservative attempts to dismiss the issue of inequality, I decided to run some numbers. Just to see.

As it turns out, the corporate profit share (on the right in the chart above) and the poverty rate (on the left) appear to have moved in tandem since the mid-1990s: when the profit share declines, so does the poverty rate, and vice versa.

This is one of those times when I don’t have a theory or an explanation. But I was reminded of that long-forgotten ruthless critic of political economy:

Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital.


Here’s the link to Adam Morton’s generous—and, in my view, perceptive—review of my book, Development and Globalization: A Marxian Class Analysis.

The main point I want to articulate is that the book is indispensable reading for class in the twofold sense that this phrase can be read. First, as indispensable reading for class in that key chapters in the book shape my classrooms on political economy across the span of undergraduate and postgraduate teaching and research. Second, as indispensable reading for class in delivering a Marxist social class analysis of planning, development and globalisation at a time when many in and beyond the academy are consciously engaged in expunging class as an aspect of radical political economy.


source (pdf)

On one hand, Dave Elder-Vass is absolutely right: “we should see our economy not simply as a capitalist market system but as a collection of ‘many distinct but interconnected practices’.”*

As I have explained before, that view of the “iceberg economy”—which has been highlighted in the work of J. K. Gibson-Graham—represents a fundamental challenge to neoclassical economists, for whom

the entire economy is visible and consists of capitalist markets—or unwarranted constraints on capitalist markets, which should be eliminated. According to iceberg economists, capitalist markets are only the tip of the iceberg, and there’s a proliferation of noncapitalist economies below the waterline.

But Elder-Vass also uses it against Marxists who, in his view, see “one central mechanism in the economy: the extraction of surplus from wage labour by capitalists” and leave out ethical issues.

The problem is, while Elder-Vass credits J. K. Gibson-Graham, especially their book The End Of Capitalism (As We Knew It), with the idea that unified, totalizing metaphors of the economy (like a “capitalist market system”) can make it difficult to think outside the box and imagine alternatives, he forgets that Gibson-Graham themselves used the categories of the Marxian tradition—including the idea of class defined in terms of surplus labor—to decenter the economy.**

He also overlooks the fact that Gibson-Graham (as well as others who have worked with and alongside them in the larger Rethinking Marxism tradition) have insisted on the ethical dimensions of the Marxian critique of political economy—which includes, but of course is not limited to, a critique of the social theft associated with capitalist and all other forms of exploitation (that is, areas of the economy—whether capitalist, slave, feudal, and so on—in which those who perform surplus labor are excluded from appropriating their surplus labor).

In fact, according to two of Gibson-Graham’s close associates, Jack Amariglio and Yahya Madra, ethics are central to Marx’s critique of capitalism and mainstream economics.*** But Marx’s commitment to communism is not governed by an actual model or a fixed morality. Rather, they argue,

The ethical is embodied in Marx’s enduring faithfulness to sustaining a critical position toward the existing state of affairs, not in his particular and changing dismissals of capitalism or in his obscure, partial formulations of the shape communism might take. The lesson of Marx is that, facing the abyss of an unknown communism, the ethical is the will to risk a different social organization of surplus.

To put it in terms of the iceberg economy, the ethical is the will both to recognize the noncapitalist forms of economy below the waterline and to risk a different social organization in which capitalist exploitation ceases to be the exclusive or even predominant mode of appropriating and distributing the surplus.

Contrary to Elder-Vass, then, seeing the economy “not simply as a capitalist market system” is consistent with the Marxian critique of political economy, including the ethical stance that is informed by and embodied in that critique.


*I will try to be careful here because I have not yet had a chance to read Elder-Vass’s book,  Profit and Gift in the Digital Economy. I am relying, instead, on Daniel Little’s review of the book and Elder-Vass’s response.

**Gibson-Graham also borrowed from other traditions, such as feminism, queer theory, and poststructuralism to create their iceberg economy.

***See their entry on “Karl Marx” in the Handbook of Economics and Ethics, ed. J. Peil and I. van Staveren, 325-32 (Edward Elgar, 2009).


A constant refrain among mainstream economists and pundits since the crash of 2007-08 has been that, while the state of mainstream macroeconomics is poor, all is well within microeconomics.

The problems within macroeconomics are, of course, well known: Mainstream macroeconomists didn’t predict the crash. They didn’t even include the possibility of such a crash within their theory or models. And they certainly didn’t know what to do once the crash occurred.

What about microeconomics, the area of mainstream economics that was supposedly untouched by all the failures in the other half of the official discipline? Well, as it turns out, there are major problems there, too—especially given the obscene levels of inequality that both preceded and have resumed since the crash erupted, not to mention the slow economic growth that rising inequality was supposed to solve.

In particular, as I have written many times over the years, the idea that a rising tide lifts all boats—along with its theoretical justification, marginal productivity theory—needs to be questioned and ultimately abandoned.

But you don’t have to take my word for it. Just read the latest essay by Nobel Prize-winning economist Joseph Stiglitz.

Stiglitz first explains that neoclassical economists developed marginal productivity theory as a direct response to Marxist claims that the returns to capital are based on the exploitation of workers.

While exploitation suggests that those at the top get what they get by taking away from those at the bottom, marginal productivity theory suggests that those at the top only get what they add. The advocates of this view have gone further: they have suggested that in a competitive market, exploitation (e.g. as a result of monopoly power or discrimination) simply couldn’t persist, and that additions to capital would cause wages to increase, so workers would be better off thanks to the savings and innovation of those at the top.

More specifically, marginal productivity theory maintains that, due to competition, everyone participating in the production process earns remuneration equal to her or his marginal productivity. This theory associates higher incomes with a greater contribution to society. This can justify, for instance, preferential tax treatment for the rich: by taxing high incomes we would deprive them of the ‘just deserts’ for their contribution to society, and, even more importantly, we would discourage them from expressing their talent. Moreover, the more they contribute— the harder they work and the more they save— the better it is for workers, whose wages will rise as a result.

Then he argues that three striking aspects of the evolution of the United States and most other rich countries in the past thirty-five years—the increase in the wealth-to-income ratio, the stagnation of median wages, and the failure of the return to capital to decline—call into question the neoclassical story about the distribution of income.

Standard neoclassical theories, in which ‘wealth’ is equated with ‘capital’, would suggest that the increase in capital should be associated with a decline in the return to capital and an increase in wages. The failure of unskilled workers’ wages to increase has been attributed by some (especially in the 1990s) to skill-biased technological change, which increased the premium put by the market on skills. Hence, those with skills would see their wages rise, and those without skills would see them fall. But recent years have seen a decline in the wages paid even to skilled workers. Moreover, as my recent research shows, average wages should have increased, even if some wages fell. Something else must be going on.

As Stiglitz sees it, that “something else” is a combination of rent-seeking (especially land rents, intellectual property rents, and monopoly power) and increased exploitation (especially the weakening of workers’ bargaining power, based on weak unions and asymmetric globalization).*

The result is that the rising tide has only lifted a few boats at the top and left everyone else behind.

But Stiglitz is not done. He also explains that not only is growing inequality not necessary for growth; it actually has negative effects: it leads to weak aggregate demand (and, in an attempt to solve that problem, asset bubbles), less equality of opportunity (thus lowering growth in the future), and lower levels of public investment (since the rich believe they don’t need things like public transportation, infrastructure, technology, and education).

It should be noted that the existence of these adverse effects of inequality on growth is itself evidence against an explanation of today’s high level of inequality based on marginal productivity theory. For the basic premise of marginal productivity is that those at the top are simply receiving just deserts for their efforts, and that the rest of society benefits from their activities. If that were so, we should expect to see higher growth associated with higher incomes at the top. In fact, we see just the opposite.

Neoclassical marginal productivity theory was never a plausible explanation of the distribution of income in capitalist societies. And, as Stiglitz explains, it is even more questionable in light of the spectacular growth of inequality in recent decades.

The only conclusion is that we live in strange times—when the illusion of a rising tide that lifts all boats (and, with it, trickledown economics, “just deserts,” and the like) has been shattered, and yet mainstream economists continue to teach (and use as the basis of economic policy) its theoretical underpinnings, marginal productivity theory.

There’s nothing left but to declare that both mainstream macroeconomics and microeconomics—as basic theory and a guide for economic policy—have failed. There’s simply nothing there to be fixed. Both mainstream macroeconomics and microeconomics need to be set aside in favor of very different analyses and explanations of capitalist instability and inequality.


*Elsewhere (e.g., herehere, and here), I have raised questions about the rent-seeking argument and showed how it is different from the alternative, surplus-seeking explanation of inequality.