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Profits vs Wages
The Ocandida Case - Bibliography
Disclaimer
I am (or was, in my past life) a chartered accountant, not an economist. Everyone knows that accountants (with their micro focus) have simplistic views about economics (the macro focus). Accountants like me imagine that a country is like a family, only bigger -- and this no doubt overlooks sophisticated structural issues that econometricians study. There may well be numerous learned economic treatises that deal with precisely this subject -- and perhaps I will discover some of these sources as I hear other people's reactions to this fable. In the meantime I list below the couple of recent sources that sparked my Ocandida exercise.
Some books and articles
Saul, John Ralston, The Unconscious Civilization , House of Anansi and CBC, Toronto: 1995 (the 1995 Massey Lectures)
We heard several of the chapters live by John Ralston Saul over the CBC as he was delivering the Massey Lectures in late November 1995 and as we were driving across this vast country that's trying to decide whether it wants to survive -- indeed driving across the country (which I had not done since a teenager) is quite an emotional experience -- but that's another story
- Saul's main thesis is that we blindly worship an ideology of free market forces and corporatism when in fact historically the spread of the productivity benefits of the Industrial Revolution did not take place because of the market system (which led to perversities such as child labour and massive race-based slavery) but because of the restraints imposed by civil society to curb the free market's excesses
- Saul is not against the free market system, but rather against the naive assumption that it will cure all social problems if we simply keep our hands off it
- I do not (as a lay reader) find myself agreeing with every one of Saul's assertions (perhaps because I have a few blindspots, coming as I do from the privileged managerial and professional class which Saul sees as one of the heavy burdens corporatism has placed on the economy) but I do agree with the central thesis: the free market system is good not as an end in itself but insofar as it is a means of achieving economic benefits that are distributed in some just manner -- and to the extent that it fails to do so it needs curbing and channeling by civil society and democracy
- but this begs the question of what, in fact, a just distribution of wealth and income should be (otherwise how do we know what curbing and channeling is appropriate?)
- and it is this question that prompted my amateur explorations (certainly not tutored by any extensive economic education) into the Ocandida case
Finn, Ed, "The Decline of Collectivity", The Canadian Forum , Dec/95 issue
It is from this article that I have taken the quote from Richard Barnet about the world's 358 billionaires.
This is an article I found on a quick search of the World Wide Web. This article documents (with ample graphs and tables) the fact that since 1989 (the end of the previous recovery) profits have gone up (and the highest salary-earners' remuneration has gone up as well) while middle class wages have gone down. Economic growth and productivity gains have occurred but a large portion of them have gone to capital. A brief bibliography is also given. Of course, this article is not addressing the question of what a fair distribution is (the attempt of my Ocandida case) but merely tracking the fact that capital has gained and labour lost during the past six years. The gain for capital has been partly pre-tax gains (mainly from downsizing) and also after-tax benefits from declining corporate tax rates. The Baker and Mishel article is part of a site by "Idea Central", which includes a hypertext magazine "Economics and Politics", which contains references to further articles on the spreading income gap, polarization, etc.
This is simply a reprint of Marx's Chapter 7 "The General Law that Determines the Rise and Fall of Wages and Profits" from his Wage-Labour and Capital . I include it for the sake of completeness but it does not seem to me to be very insightful. There are probably better Marxist apologists around than the original. In any case, the weakness (as John Ralston Saul points out) is the assumption of an economic determinism (in this respect not unlike modern free market theorists) that leaves no role for civil society and democracy.
Soros, George, Soros on Soros , John Wiley, New York: 1995
This book reinforces a number of the points made by John Ralston Saul in The Unconscious Civilization (mentioned above).
- Soros argues that the Western world has tended to lose the concepts of freedom and the public good and replaced them with "a narrower concept -- the pursuit of self-interest".
- He argues that "we must strive for certain fundamental values, such as social justice, which cannot be attained by unrestrained competition." The question of what is, indeed, social justice is, of course, what the Ocandida case was trying to address.
- Soros also argues that unregulated markets are liable to break down -- which suggests that some regulation of the Ocandida gum-tree situation would have been to the benefit of all the citizens of Ocandida.
- Many of Soros's ideas are derived from those of Karl Popper, especially the concept of the Open Society .
The initial views expressed here are solely mine. You don't have to agree with them. However, if you'd like to explain your disagreement (or, gulp, even express concurrence) I'd welcome your comments. I plan to post some of the responses (where I have permission to do so). Some responses to date may be found on the Reactions page.
Last updated: aug 10, 2005
Rod Anderson & Merike Lugus
rod@rodmer.com
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