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Archive for February 10th, 2010

Rick Wolff argues that the rise in income inequality, and the false scapegoating around its causes, have prevented systemic change:

There is no mystery about why income inequality got so much worse.  The real wages of average workers stopped rising during the 1970s (after having risen for a century or more).  Meanwhile those workers’ productivity kept rising…

Most American workers have not understood, nor were they informed, why they were falling ever further behind…They did not grasp that their decline flowed fromchanged social conditions that ended the tradition of rising wages for rising productivity. First among those conditions were thecomputers that replaced so many jobs…Second, there were the millions of US housewives and immigrants newly looking for paid work in the US after the 1970s — out of necessity and desires for better lives.  The US labor market thus experienced a combination of shrinking demand for workers just as more workers looked for jobs.  Employers from Main Street to Wall Street took advantage of the changed conditions…

Few among the lower 90 per cent understood how the changed social conditions combined with the economic system to cause their falling income shares.  Instead, many blamed themselves or friends and family or found still other scapegoats…but, more importantly, missed a chance to see and solve the problems of the economic system…

What malfunctioned over the last 30 years was the economic system; it generated a divisive, depressing, and dangerous pattern of economic development.  It was the system of production — where employers and employees endlessly seek advantages at each other’s expense — that stopped raising workers wages. It was the financial part of the system that pushed unsustainable loans…It was the political part of the system that looked the other way…

After all, the leading ideologues in the US — politicians, media personalities, and academics — had mostly bought into the system with enthusiasm…

To remove this or that scapegoat while leaving the system in place is no solution…Regulations constraining what private enterprises can do for profit only provoke them further to manipulate and/or corrupt politicians to evade, alter, or remove the regulations.  The system works that way and normally compels its parts to do likewise.  That is what “system” means.  But a systemic crisis like today’s is “abnormal,” a window onto possible system-change that would be terrible to waste.

I think Wolff is right on with focusing on the issue of scapegoating. In fact, this process, broadly defined, is the main reason why the economic crisis has not swung the regulatory/labor-capital pendulum back in favor of labor and regulation. Ignorance about the roots of the crisis (mainly abetted by scapegoating) have muddled the calls for changes. Modern populism has taken a very odd form, in which much ire is directed against regulation and labor unions.

Thus, while I once strongly believed in the backlash predicted by social structure of accumulation theory, the last 12 months have constrained my optimism. The failure of passing an adequate stimulus, real health care reform, EFCA, financial regulatory reform, and even cap and trade, have left me somewhat hopeless. How do we go about de-scapegoating? A lot of the bloggers are doing yeoman’s work on this stuff, but one questions whether these posts reach policy makers, much less lower and middle class Americans. Maybe things like the Zinn Education Project can bring about a broader conception of how our economic and political system actually produces unequal results. Maybe not. However we get there, de-scapegoating seems necessary for real change.

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