Posts Tagged ‘Marx’


The goal of mainstream economists is to get everybody to work. As a result, they celebrate capitalism for creating full employment—and worry that capitalism will falter if not enough people are working.

The utopian premise and promise of mainstream economic theory are that capitalism generates an efficient allocation of resources, including labor. Thus, underlying all mainstream economic models is a labor market characterized by full employment.


Thus, for example, in a typical mainstream macroeconomic model, an equilibrium wage rate in the the labor market (Wf, in the lower left quadrant) is characterized by full employment (the supply of and demand for labor are equal, at Lf), which in turn generates a level of full-employment output (Yf, via the production function, in the lower right quadrant) and a corresponding level of prices (P0, in the upper quadrants). If the money wage is flexible it is possible to ignore the top left quadrant, because, in that case, the equilibrium real wage, employment and output are Wf, Lf and Yf, respectively, whatever the price level. With flexible money wages, the aggregate supply curve is independent of the price level and is represented by YFYF.

That’s the neoclassical version of the story. The Keynesian alternative is that the aggregate supply curve is relatively elastic below full employment and the wage rate is fixed by institutions, and therefore is not perfectly flexible. In such a case, aggregate demand determines the level of output, which will normally fall below the full-employment level.

And so we have the longstanding argument between the two wings of mainstream economics—between the invisible hand of flexible wages and the visible hand of government spending. But, equally important, what the two theories of macroeconomics have in common is the ultimate goal: full employment. In other words, both groups of economists presume that the aim of capitalism is to generate full employment and that, with the appropriate policies—free markets for the neoclassicals, government intervention for the Keynesians—capitalism is capable of putting everyone to work.


But the argument also goes in the opposite direction: capitalism works best when everyone is working. That’s because capitalist growth (e.g., in terms of Gross Domestic Product per capita, the green line in the chart, measured on the left) is predicated on the growth of the labor force (the the red line, measured on the right).

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Mainstream economists also argue that a low work rate is an important cause of low incomes and high poverty. They argue that, when considering different policy interventions for this population—including improving educational attainment, raising the minimum wage, and increasing the number of two-earner families—the most beneficial intervention for improving incomes is to assume that all household heads work full-time.

Finally, mainstream economists argue that, in addition to increasing incomes and decreasing poverty, work has an additional benefit: it gives people dignity and a sense of self-worth. The idea, as articulated for example by Brad DeLong, is that having a job gives workers an honorable place in society, which presumably they are deprived of if they receive some kind of government assistance—whether in the form of payments from one or another anti-poverty program or a universal basic income. “Just giving people money” (according to Eduardo Porter) disrupts the incentive to work and undermines the “social, psychological, and economic anchor” associated with having a job.

That’s why there’s such an intense debate these days over the participation rate of U.S. workers. Even though the unemployment rate has fallen to historically low levels (and now stands at 3.8 percent), the lack of participation—whether measured in terms of the labor force participation rate (the blue line in the chart) or the employment-population ratio (the red line)—remains much lower than it was a couple of decades ago.* According to mainstream economists, that’s why rates of growth in output and incomes have slowed. There simply aren’t enough people working.

Once again, there’s an ongoing discussion among mainstream economists about the causes of that decline and what to do about it. More conservative mainstream economists tend to focus on the supply side of the labor market and the unwillingness of workers to make themselves available—mostly because they’re benefiting from some part of the social safety net (such as disability insurance, welfare, or government health insurance). Liberal mainstream economists also worry about the supply side (especially, for example, when it comes to women, who might not be able to work because they don’t have adequate childcare) but put more emphasis on the demand side (for example, the elimination of specific kinds of jobs based on international trade, automation, or the effects of economic downturns). Underlying this debate is a shared presumption that more people working will be better for them and for the economy as a whole.

Even portions of the Left accept the idea that the goal is to move toward more work. Thus, for example, both modern monetary theorists and Bernie Sanders argue in favor of a government job guarantee. The idea is that, if private employers can’t or won’t make the decisions to hire workers and create full employment, then the government needs to step in, as the “employer of last resort.” Again, the presumption—shared with those in both wings of mainstream economics—is that the goal of the current economic system and appropriate economic policy is get more workers to work more.

The utopianism of full employment is so entrenched, as a seemingly uncontested common sense, it’s difficult to imagine a different utopian horizon. But there is one, which emerges from at least three different theoretical and political traditions.

In the Marxian tradition, more work also means more surplus labor, which benefits all those who manage to get a cut of the surplus—but not workers themselves, who fall increasingly behind their employers and others in the small group at the top. That’s because, as employment increases, more workers are performing both necessary and surplus labor. Therefore, even assuming the rate of surplus extraction remains constant, the total amount of surplus created by workers increases. But, of course, the rate itself often increases—for example, as a result of competition among capitalists, who find ways of increasing productivity, which tends to lower the amount they have to pay to hire their workers (as I explain in more detail here). So, what appears to be an unalloyed good in the mainstream tradition—more jobs and more workers—is an economic and social disaster from a Marxian perspective. More workers produce more surplus, which is used to create a growing gap between those at the top and everyone else.

Then there’s the broader socialist tradition, which attacked the capitalist work ethic and claimed “The Right to Be Lazy.” Here’s Paul LaFargue back in 1883:

Capitalist ethics, a pitiful parody on Christian ethics, strikes with its anathema the flesh of the laborer; its ideal is to reduce the producer to the smallest number of needs, to suppress his joys and his passions and to condemn him to play the part of a machine turning out work without respite and without thanks.

And LaFargue criticized both economists (who “preach to us the Malthusian theory, the religion of abstinence and the dogma of work”) and workers themselves (who invited the “miseries of compulsory work and the tortures of hunger” and need instead to forge a brazen law forbidding any man to work more than three hours a day, the earth, the old earth, trembling with joy would feel a new universe leaping within her”).

Today, in the United States and around the world, the capitalist work ethic still prevails.

Workers are exhorted to search for or keep their jobs, even as wage increases fall far short of productivity growth, inequality (already obscene) continues to rise, new forms of automation threaten to displace or destroy a wage range of occupations, unions and other types of worker representation have been undermined, and digital work increasingly permeates workers’ leisure hours.

The world of work, already satirized by LaFargue and others in the nineteenth century, clearly no longer works.

Not surprisingly, the idea of a world without work has returned. According to Andy Beckett, a new generation of utopian academics and activists are imagining a “post-work” future.

Post-work may be a rather grey and academic-sounding phrase, but it offers enormous, alluring promises: that life with much less work, or no work at all, would be calmer, more equal, more communal, more pleasurable, more thoughtful, more politically engaged, more fulfilled – in short, that much of human experience would be transformed.

To many people, this will probably sound outlandish, foolishly optimistic – and quite possibly immoral. But the post-workists insist they are the realists now. “Either automation or the environment, or both, will force the way society thinks about work to change,” says David Frayne, a radical young Welsh academic whose 2015 book The Refusal of Work is one of the most persuasive post-work volumes. “So are we the utopians? Or are the utopians the people who think work is going to carry on as it is?”

I’m willing to keep the utopian label for the post-work thinkers precisely because they criticize the world of work—as neither natural nor particularly old—and extend that critique to the dictatorial powers and assumptions of modern employers, thus opening a path to consider other ways of organizing the world of work. Most importantly, post-work thinking creates the possibility of criticizing the labor involved in exploitation and thus of creating the conditions whereby workers no longer need to succumb to or adhere to the distinction between necessary and surplus labor.

In this sense, the folks working toward a post-work future are the contemporary equivalent of the “communist physiologists, hygienists and economists” LaFargue hoped would be able to

convince the proletariat that the ethics inoculated into it is wicked, that the unbridled work to which it has given itself up for the last hundred years is the most terrible scourge that has ever struck humanity, that work will become a mere condiment to the pleasures of idleness, a beneficial exercise to the human organism, a passion useful to the social organism only when wisely regulated and limited to a maximum of three hours a day; this is an arduous task beyond my strength.

And there’s a third tradition, one that directly contests the idea that participating in wage-labor is intrinsically dignified.

According to Friedrich Nietzsche (in his 1871 preface to an unwritten book, “The Greek State”), the dignity of labor was invented as one of the “needy products of slavedom hiding itself from itself.” That’s because, in Nietzsche’s view (following the Greeks), labor is only a “painful means” for existence and existence (as against art) has no value in itself. Therefore, “labour is a disgrace.”

Accordingly we must accept this cruel sounding truth, that slavery is of the essence of Culture; a truth of course, which leaves no doubt as to the absolute value of Existence.  This truth is the vulture, that gnaws at the liver of the Promethean promoter of Culture.  The misery of toiling men must still increase in order to make the production of the world of art possible to a small number of Olympian men.

And if slaves—or, today, wage-workers—no longer believe in the “dignity of labour,” it falls to the likes of both conservatives and liberals to ignore the “disgraced disgrace” of labor and create the necessary “conceptual hallucinations.” And then, on that basis, to suggest the appropriate government policies such that the “enormous majority [will], in the service of a minority be slavishly subjected to life’s struggle, to a greater degree than their own wants necessitate.”

Nietzsche believed that, in the modern world, the so-called dignity of labor was one of the “transparent lies recognizable to every one of deeper insight.” Apparently, neither wing of mainstream economists (nor, for that matter, many today on the liberal-left) has been able to formulate or sustain such insight.

Contesting the utopianism of full employment with a different utopian horizon creates the possibility of imagining and creating a different world—in which work acquires different meanings, in which the distinction between necessary and surplus is redefined and perhaps erased, and for the first time in modern history workers are no longer forced to have the freedom to sell their ability to work to someone else and achieve the right to be lazy.


*The Bureau of Labor Statistics calculates the labor force participation rate as the share of the 16-and-over civilian noninstitutional population either working or willing to work. Simply put, it is the portion of the population that is currently employed or looking for work. It differs from both the unemployment rate (the number of unemployed divided by the civilian labor force) and the employment-population ratio (the ratio of total civilian employment to the 16-and-over civilian noninstitutional population).



First there was the Great Gatsby curve. Then there was the Proust index. Now, thanks to Neil Irwin, we have the Marx ratio.

Each, in their different way, attempts to capture the ravages of contemporary capitalism. But the Marx ratio is a bit different. It was published in the New York Times. Its aim is to capture one of the underlying determinants of the obscene levels of inequality in the United States today—not class mobility or the number of years of national income growth lost to the global financial crash. And, of course, it takes its name from that ruthless nineteenth-century critic of mainstream economics and capitalism itself.


Now, to be clear, there are lots of ratios that can be found in Marx’s critique of political economy—for example, the rate of exploitation, the intensity of labor, the technical productivity of labor, the exchange-value per unit use-value, and the value rate of profit (as illustrated above in a fragment from one of my class handouts)—and the ratio Irwin presents is not one of them.

But that doesn’t make Irwin’s ratio wrong, or uninteresting. On the contrary.

Basically, what Irwin has done is take the data from corporate financial reports (net income and the number of employees) and from a minor provision of the Dodd-Frank Act, which requires that publicly traded corporations reveal the gap between what they pay their CEOs and their average worker (and thus they need to report median worker pay) and calculated a number:

The Marx Ratio, as we’re calling it, captures the relationship between a company’s profits — the return to capital, on a per-employee basis — and how much its median employee is compensated, a rough proxy for the return to labor.

Thus, for example, Wells Fargo, which reported $22.2 billion in net income in 2017, with 262,700 employees and median worker pay of $60,446, had a Marx ratio of 1.40. Similarly, we have the ratio for other corporations—from the relatively small real estate investment trust Duke Realty (37.7) to independent energy company Hess (-12.2).

Irwin is clear: notwithstanding the limitations in the data, “companies with high Marx Ratios offer particularly strong rewards to their shareholders relative to workers.”* But that doesn’t mean, contra Irwin, that “Numbers below 1 signal the reverse: a more favorable return to labor.” Any positive number indicates that, after paying all expenses (including workers’ wages, taxes, interest on debt, deductions for depreciation, and CEO salaries), the net income or profit per employee is positive.

In fact, with a little algebraic manipulation, Irwin’s Marx ratio turns out to look a lot like Marx’s rate of exploitation.**

They’re not the same, of course. First, because corporate net income leaves out many of the distributions of surplus-value corporate boards of directors make—such as interest payments, taxes, and managers’ salaries—and the number of employees refers to all workers, not just nonmanagerial workers. Second, because the Irwin ratio is calculated for all publicly traded companies and therefore makes no distinction between finance, real-estate, insurance and companies that actually produce goods and services. From a Marxian perspective, the former capture surplus-value that is produced and appropriated and distributed elsewhere in the economy (both nationally and globally).

So, the Marx ratio is not Marx’s ratio.

But Irwin’s Marx ratio does tell us a great deal about how wildly profitable American corporations are, especially in comparison to how little they pay their employees—to the tune of 3, 4, 30 times what the average worker makes. And that’s one of the principal causes of the obscene and growing levels of inequality we’ve seen in the United States for decades now.

I, for one, would love to see the Marx ratio reported in the financial news on a regular basis. Alongside the ratio of CEO to average worker pay. And, even better, Marx’s own indicator of capitalist class injustice, the rate of exploitation.


*The data are a bit of a problem, especially because median worker pay is based on self-reporting:

The denominator is the compensation to the median employee, as disclosed in the company’s proxy statement, which can create distortions in representing rank-and-file employees.

Companies also have some degree of flexibility in how they calculate median pay, so comparisons are not necessarily apples-to-apples. For example, they may choose to use statistical sampling instead of actual payroll records, and may exclude non-U.S. employees depending on privacy rules in overseas markets.

A better number for the idea we’re really trying to get at would be average compensation for nonexecutive employees, but companies aren’t required to report that publicly.

**Mathematically, Irwin’s Marx ratio is (NI/L)/(W/L), which turns out to be NI/W, where NI is net income, L is the number of employees, and W is the wage bill (calculated by multiplying median worker pay by the number of employees). Marx’s rate of exploitation is S/V, where S is the amount of surplus-value and V is the value of labor power.

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Special mention

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Special mention

600_210074  organ grinder monkey

Cartoon of the day

Posted: 5 May 2018 in Uncategorized
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Special mention

marx told-you-so


John Baldessari, “Man Running/Men Carrying Box” (1988-1990)

It was Paul Samuelson who, in 1997, declared with morbid optimism that “Funeral by funeral, economics does make progress.”*

What Samuelson presumed is that, over time, wrong ideas would be killed and laid to rest and better ideas would flourish, thus creating the foundation for progress in economic thought.

That’s what I consider to be the epistemological utopianism of mainstream economic thought: using the correct scientific methods, the work that economists do gets closer and closer to the Truth—the singular, incontestable, capital-t truth. It used to be the case (for Samuelson and many others, such as fellow Nobel laureates Kenneth Arrow, Gerard Debreu, and Paul Krugman) that mathematical models represented the best way of making progress (inspired by a particular conception of nineteenth-century physics).** The current fad is to rely on randomized experiments and big data as evidence that economics is finally becoming a real, empirical science (akin to biology and medicine).

In the first case, rationalism is the reigning theory of knowledge; in the second case, it’s empiricism. However, both theories represent two sides of the same epistemological coin, defined by a radical separation between theory and reality and some sort of correspondence between them. In other words, both rationalism and empiricism are foundationalist theories of knowledge according to which the gap between theory and reality is eventually—”funeral by funeral”—closed.

It’s a utopianism that serves as both the premise and promise of mainstream economists’ practice. And we know something about the consequences of that epistemological utopianism—for example, the combination of ignorance and arrogance when it comes to the work of nonmainstream economists (who stand accused of not doing science and therefore of not contributing to the progress of economics), noneconomists (whose methods are neither mathematically nor empirically rigorous enough), and everyday economists (who either produce cultural representations that accord with the lessons of mainstream economics, in which case they be invoked as illustrations, or whose work is dismissed and needs to be attacked and eradicated, because it runs counter to mainstream economics). Not to mention the idea that, in the midst of the worst economic crises since the first Great Depression, mainstream economists could blithely assert that their theories had done just fine; the only problem was the fact that policymakers hadn’t adequately listened to or followed the advice of mainstream economists. Finally, of course, there’s the closing-off of publishing venues (like the leading journals), research funding (especially the National Science Foundation), teaching positions (especially in research universities), and so on—all in the name of a singular scientific method and conception of truth.

As I have shown (e.g., here and here), mainstream liberals today are also obsessed with the defense of science and capital-t Truth. In their zeal to attack Donald Trump and the right-wing media’s defense of his administration’s outlandish claims about a wide variety of issues—from climate change to the Mueller investigation—they increasingly invoke and rely on an absolutist theory of knowledge. And then, of course, claim for themselves the correct side in the current debates. They, too, are guided by the utopianism of essentialist theories of knowledge.

The problems with epistemological utopianism are legion. I’ve mentioned some of the nastier consequences above. But there are other issues. For example, in their defense of absolute truth, they invoke a time—before the current “post-truth” regime—when a set of institutions (such as journalism, science, and the academy) supposedly got it right. Except they can’t ever cite an example of how those institutions successfully adjudicated the facts in play—when, supposedly, there was universal assent to the truth claims, either within the academy or the wider society—and they ignore all the times when they simply got it wrong.

Moreover, they’re willing to admit that the claims to truth are often deflected by lots of other influences—such as narratives, confirmation bias, ethics, and information overload. But the problem is always “out there,” among regular people, and not the scientists themselves (whether in economics or other disciplines). Epistemological utopians simply can’t acknowledge that, in their daily practice, mainstream economists and liberal thinkers are also engaged in story-telling, that they accept evidence that confirms their preconceived notions and assess counter evidence with a critical eye, make ethics-laden decisions based on relations of unequal power, and operate with overconfidence based on the illusion of knowledge.

There are, of course, many alternatives to the utopianism of absolutist epistemology. One of them is what I call “partisan relativism,” associated with the Marxian critique of political economy.

In fact, I (with my friend and frequent coauthor Jack Amariglio) have just published an entry on “epistemology” in the Routledge Handbook of Marxian Economics. There, we discuss many different contributions to Marxian epistemology and highlight the role that postmodernism has played in providing an alternative to and moving beyond the long history of attributing to Marx a modernist project of attempting to delimit the certainly of scientific knowledge from non-science (or ideology). Thus, we write, postmodern Marxists

frequently call attention to the “relativism” that they believe is Marx’s main epistemological message and/or is exemplified in his texts. Marx’s aleatory materialism, for postmodern Marxists, also establishes an under-determination in the realm of knowledge; a discursive whole cannot close itself. Influenced by Jacques Derrida’s conception of “deconstruction,” postmodern Marxists insist that discourse is always marked by slippages, aporia, displacements, and deferments. For them, meaning is overdetermined and uncertain. A certain knower is thus a contradiction in terms.

In addition, if scientific discourse is not the mirror of nature, then there is an “ethical” dimension to all knowledge production. Cornel West, utilizing Richard Rorty among other “pragmatist” philosophers, brings out the enduring, constitutive ethical and political aspects of how and what we know, and what we intend to do with this knowledge.

Thus, we go on to explain, relativist Marxists dispute the claims of a certain knowing subject (indeed, they challenge the very idea that knowledge begins with a knowing subject) and focus instead on how knowledge claims are internal to theoretical frameworks and the manner in which knowledges produce within different theories or discourses have specific—and often quite different—conditions and consequences in the world within which those knowledges are produced.


For many Marxist epistemologists, knowledge is active and actionable, and its existence as material image/image of the material is one requisite condition for the revolutionary socioeconomic—especially class—change that Marx vehemently proposed.

And that, in the end, is the utopian moment of Marxian epistemology—not a utopian appeal or aspiration to absolute truth, but instead a practice (one might even call it an ethics) of materialist critique. That critique operates at two different levels: it is a critique of all theoretical claims (such as those made by mainstream economists) that normalize or naturalize the existing economic and social order and a critique of capitalism itself, since from a Marxian perspective capitalist societies are based on and serve to reproduce an exploitative class structure.

It should come as no surprise then that the utopian horizon of Marxian epistemology is summarily rejected by mainstream economists and liberal thinkers—or that the latter’s epistemological utopianism often serves to locate itself within and ultimately to justify, by treating as normal or natural, the existing set of economic and social institutions.


*“Credo of a Lucky Textbook Author,” Journal of Economic Perspectives 11 (Spring): 159.

**It’s a particular conception of physics that has been disputed by many others, including Thomas Kuhn (and his theory of “scientific revolutions”), Paul Feyerabend (who argued that there are no useful and exceptionless methodological rules governing the progress of science or the growth of knowledge), Richard Rorty (who criticized the idea of knowledge as representation), and Michel Foucault (who showed that different systems of thought and knowledge—epistemes or discursive formations, in Foucault’s terminology—are governed by different sets of rules). Their criticisms of essentialist epistemologies apply as well to the more recent turn to “empirical” methods as the foundation of economic knowledge.

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Economic inequality is arguably the crucial issue facing contemporary capitalism—especially in the United States but also across the entire world economy.

Over the course of the last four decades, income inequality has soared in the United States, as the share of pre-tax national income captured by the top 1 percent (the red line in the chart above) has risen from 10.4 percent in 1976 to 20.2 percent in 2014. For the world economy as a whole, the top 1-percent share (the green line), which was already 15.6 percent in 1982, has continued to rise, reaching 20.4 percent in 2016. Even in countries with less inequality—such as France, Germany, China, and the United Kingdom—the top 1-percent share has been rising in recent decades.

Clearly, many people are worried about the obscene levels of inequality in the world today.

In a famous study, which I wrote about back in 2010, Dan Ariely and Michael I. Norton showed that Americans both underestimate the current level of inequality in the United States and prefer a much more equal distribution than currently exists.*

In other words, the amount of inequality favored by Americans—their ideal or utopian horizon—hovers somewhere between the level of inequality that obtains in modern-day Sweden and perfect equality.

What about contemporary economists? What is their utopian horizon when it comes to the distribution of income?

Not surprisingly, economists are fundamentally divided. They hold radically different views about the distribution of income, which both inform and informed by their different utopian visions.

For example, neoclassical economists, the predominant group in U.S. colleges and universities, analyze the distribution of income in terms of marginal productivity theory. Within their framework of analysis, each factor of production (labor, capital, and land) receives a portion of total output in the form of income (wages, profits, or rent) within perfectly competitive markets according to its marginal contributions to production. In this sense, neoclassical economics represents a confirmation and celebration of capitalism’s “just deserts,” that is, everyone gets what they deserve.

From the perspective of neoclassical economics, inequality is simply not a problem, as long as each factor is rewarded according to its productivity. Since in the real world they see few if any exceptions to perfectly competitive markets, their view is that the distribution of income within contemporary capitalism corresponds to—or at least comes close to matching—their utopian horizon.

Other mainstream economists, especially those on the more liberal wing (such as Paul Krugman, Joseph Stiglitz, and Thomas Piketty), hold the exact same utopian horizon—of just deserts based on marginal productivity theory. However, in their view, the real world falls short, generating a distribution of income in recent years that is more unequal, and therefore less fair, than is predicted within neoclassical theory. So, bothered by the obscene levels of contemporary inequality, they look for exceptions to perfectly competitive markets.

Thus, for example, Stiglitz has focused on what he calls rent-seeking behavior—and therefore on the ways economic agents (such as those in the financial sector or CEOs) often rely on forms of power (political and/or economic) to secure more than their “just deserts.” Thus, for Stiglitz and others, the distribution of income is more unequal than it would be under perfect markets because some agents are able to capture rents that exceed their marginal contributions to production.** If such rents were eliminated—for example, by regulating markets—the distribution of income would match the utopian horizon of neoclassical economics.***

What about Marxian theory? It’s quite a bit different, in the sense that it relies on the assumptions similar to those of neoclassical theory while arriving at conclusions that are diametrically opposed. The implication is that, even if and when markets are perfect (in the way neoclassical economists assume and work to achieve), the capitalist distribution of income violates the idea of “just deserts.” That’s because Marxian economics is informed by a radically different utopian horizon.

Let me explain. Marx started with the presumption that all markets operate much in the way the classical political economists then (and neoclassical economists today) presume. He then showed that even when all commodities exchange at their values and workers receive the value of their labor power (that is, no cheating), capitalists are able to appropriate a surplus-value (that is, there is exploitation). No special modifications of the presumption of perfect markets need to be made. As long as capitalists are able, after the exchange of money for the commodity labor power has taken place, to extract labor from labor power during the course of commodity production, there will be an extra value, a surplus-value, that capitalists are able to appropriate for doing nothing.

The point is, the Marxian theory of the distribution of income identifies an unequal distribution of income that is endemic to capitalism—and thus a fundamental violation of the idea of “just deserts”—even if all markets operate according to the unrealistic assumptions of mainstream economists. And that intrinsically unequal distribution of income within capitalism becomes even more unequal once we consider all the ways the mainstream assumptions about markets are violated on a daily basis within the kinds of capitalism we witness today.

That’s because the Marxian critique of political economy is informed by a radically different utopian horizon: the elimination of exploitation. Marxian economists don’t presume that, under capitalism, the distribution of income will be equal. Nor do they promise that the kinds of noncapitalist economic and social institutions they seek to create will deliver a perfectly equal distribution of income. However, in focusing on class exploitation, they both show how the unequal distribution of income in the world today is affected by and in turn affects the appropriation and distribution of surplus-value and argue that the distribution of income would likely change—in the direction of greater equality—if the conditions of existence of exploitation were dismantled.

In my view, lurking behind the scenes of the contemporary debate over economic inequality is a raging battle between radically different utopian visions of the distribution of income.


*The Ariely and Norton research focused on wealth, not income, inequality. I suspect much the same would hold true if Americans were asked about their views concerning the actual and desired degree of inequality in the distribution of income.

**It is important to note that, according to mainstream economics, any economic agent can engage in rent-seeking behavior. In come cases it may be labor, in other cases capital or even land.

***More recently, some mainstream economists (such as Piketty) have started to look outside the economy, at the political sphere. They’ve long held the view that, within a democracy, if voters are dissatisfied with the distribution of income, they will support political candidates and parties that enact a redistribution of income. But that hasn’t been the case in recent decades—not in the United States, the United Kingdom, or France—and the question is why. Here, the utopian horizon concerning the economy is the neoclassical one, or marginal productivity theory, but they imagine a separate democratic politics is able to correct any imbalances generated by the economy. As I see it, this is consistent with the neoclassical tradition, in that neoclassical economists have long taken the distribution of factor endowments as a given, exogenous to the economy and therefore subject to political decisions.