“What if all the low-hanging fruit of outsourcing jobs and financialization have already been plucked by Corporate America?
The connection between soaring corporate profits and stagnant wages is both common sense and inflammatory: common sense because less for you, more for meand inflammatory because this harkens back to the core problem with the bad old capitalism Marx critiqued: that capital dominates labor and thus can extract profits even as the purchasing power of wages declines.
(What Marx missed because he was early in the cycle was capital’s dominance over the central state’s political machinery–a topic covered here in The Purchase of Our Republic.)
New good capitalism generates wealth for everyone via soaring profits which drives the valuations of stocks ever-higher, enriching workers’ pension funds and boosting spending, some of which trickles down to those who don’t own any stocks, either directly or indirectly.
Bad old capitalism trumps new good capitalism if the soaring profits are basically wages diverted to the few who own most of the financial capital. In Marx’s analysis, this gradual impoverishment of labor eventually erodes capital’s ability to sell products, undermining capital’s ability to reap profits.
The endgame of this is obvious: once capital can no longer make profits selling goods and services and wage-earners can no longer afford to buy goods and services, the system disintegrates.
The magic “solution” of the past 40 years is to enable labor’s continuing consumption with debt. And when labor is over-indebted and can no longer service more debt, then the central state (government) borrows and spends trillions of dollars to replace sagging private consumption….”
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