Marx Ascending

Another May Day – International Workers Day – reminds us that workers have always fought for what they thought were their rights. Many died, just for decent wages and safe working conditions and an eight-hour day. It’s just that all those massive May Day workers’ parades in all the former communist counties year after year have soured us on this specific day. In fact, at that conservative legal site, the Volokh Conspiracy, they’ve been promoting the idea of renaming the day since 2007 – making it Victims of Communism Day of course. That hasn’t caught on, but conservatives really don’t seem to like workers – they keep talking about those heroic business owners and entrepreneurs, the job creators. Those who do the actual work – the wage-earners – are always an afterthought, and they certainly don’t want the workers of the world to unite. Conservatives keep pointing out what they think is obvious – labor unions ruined America, driving up the cost of doing business, and prices too, by always demanding what they said were decent wages and protesting unsafe working conditions and so on. When workers demand fairness and a piece of the pie for their labor, well, that’s really communism, and communism was awful, and that’s not what we should commemorate.

That’s a pointless argument. The particular day doesn’t really matter anymore. Grover Cleveland adopted a proposal for an early September Labor Day, partly to avoid another annual commemoration of that Haymarket business that started the whole May Day thing – the lethal bomb thrown by persons unknown and the police massacre of protesters that followed, all of which began as a rather peaceful early May rally in Chicago in support of workers striking for an eight-hour day. Everyone should calm down. Our day to honor workers, and not the employers who pay them to do all the hard stuff, would be at the end of summer – no matter what the rest of the world does. We decoupled the day from our own history. Now it’s just the unofficial last day of summer – beer and burgers on the grill and no marches or speeches and all that silly stuff.

In fact, last Labor Day there was a Wall Street Journal op-ed that called for a National Corporation Day – a day to honor America’s underappreciated job creators, who risk all to make our lives better. They deserve a little love too, a second official national holiday, with parades and everything, and a day off – just to balance things out. We can’t have the workers thinking they’re just as important as the corporations that employ them, if only for a day, even if none of them now remember what the day is about anymore. Last year there was also that Labor Day tweet from Eric Cantor – “Today, we celebrate those who have taken a risk, worked hard, built a business and earned their own success.”

We do? He should have been reminded that we don’t celebrate anything in particular on that day, and each May Day gets only passing mention in the news. Strange things happen in other countries, not here, although this year what was happening elsewhere was ominous:

Workers around the world united in anger during May Day rallies Wednesday – from fury in Europe over austerity measures that have cut wages, reduced benefits and eliminated many jobs altogether, to rage in Asia over relentlessly low pay, the rising cost of living and hideous working conditions that have left hundreds dead in recent months.

In protests, strikes and other demonstrations held in cities across the planet, activists lashed out at political and business leaders they allege have ignored workers’ voices or enriched themselves at the expense of laborers. In some places, the demonstrations turned violent, with activists clashing with police.

None of that happened here, so there was little coverage of any of it, but there were specific hotspots:

The anger was painfully evident in Bangladesh, where the collapse last week of an illegally built eight-story facility housing multiple garment factories killed more than 400 in a Dhaka suburb. The building collapse followed a garment factory fire in November that killed 112 people in the country, and it has increased the pressure on the global garment industry to improve working conditions.

A loud procession of thousands of workers wound through central Dhaka on Wednesday. Many waved the national flag and demanded the death penalty for the now-detained owner of the doomed building. From a loudspeaker on the back of a truck, a participant spoke for the throngs gathered: “My brother has died. My sister has died. Their blood will not be valueless.”

The Bangladesh tragedy drew a denunciation from Pope Francis during a private Mass at the Vatican. He blasted what he called the “slave” wages of those who died, many of whom were being buried Wednesday as other bodies were still being pulled from the rubble. Francis criticized the focus on “balance books” and personal profit that he said are tied to the failure to pay workers fair wages.

News coverage here was all about the Boston Bomber Brothers and Obama’s odd notion that it wasn’t his job to get Republicans to behave and just grow up. Fine, but the rest of the world was exploding:

Unions in Greece held a May Day strike that brought ferry and train services to a halt, and organized peaceful protest marches through central Athens. The country, which nearly went bankrupt in 2010, is now in its sixth year of a deep recession and is dependent on international bailout loans. While the austerity drive has succeeded in reducing high budget deficits, it has been at a huge cost: under the terms of its latest loan disbursement, Athens has agreed to sack about 15,000 civil servants through 2014. …

More than 100,000 Spaniards infuriated by austerity measures and economic recession took to the streets of some 80 cities in trade union-organized rallies Wednesday, with the largest protests in Madrid, Barcelona and Bilbao. Under banners reading “Fight for your rights,” union leaders Ignacio Fernandez Toxo of Workers Commissions and Candido Mendez of the General Workers Union called on the government to reverse its austerity drive and urged politicians to agree to an all-party economic plan aimed at creating jobs. Francisco Moreno, an unemployed bookkeeper, scoffed at Spanish leaders’ calls on the public to be patient. “You can only be patient if you have savings, money in the bank,” the 47-year-old said. “You can’t be patient if you have no income and kids to feed.” …

May Day events in Turkey turned violent when some demonstrators, angered at a government ban on a symbolic rally point, hurled stones, gasoline bombs and fireworks at riot police. Security forces used water cannons and tear gas to prevent crowds from accessing Taksim Square, and Istanbul Governor Huseyin Avni Mutlu said 22 police officers and at least three passersby were injured. More than 72 demonstrators were arrested. The square is the city’s main hub and is undergoing a major facelift. Authorities banned celebrations at Taksim this year, citing construction safety risks, and partially suspended public transport services to prevent large gatherings there. But trade unions had vowed to mark May Day in Taksim, which has symbolic importance because dozens of protesters were killed there in 1977 when unidentified gunmen opened fire on May Day celebrators. …

Boos and whistles from protesters forced Danish Prime Minister Thorning-Schmidt to halt her May Day speech to thousands at the gathering in Aarhus, some 200 kilometers (125 miles) northwest of Copenhagen. Some believe that she has been leaning too far to the right to uphold the goals of her leftist Social Democratic Party. …

Swedish police said seven people were arrested and five were injured as counter-demonstrators tried to interrupt a May Day parade by right-wing extremists in the southern city of Jonkoping. Police spokesman Goran Gunnarsson said 60 others were briefly detained as officers tried to keep the two sides apart.

In Indonesia, the world’s fourth-most populous country, tens of thousands of workers rallied for higher pay and other demands. Some also carried banners reading: “Sentence corruptors to death and seize their properties” to protest a proposal for the government to slash fuel subsidies that have kept the country’s pump prices among the cheapest in the region.

That’s just a taste of it. The same thing was happening in the Philippines and Taiwan and Cambodia and Mexico. Only American workers are passive, accepting less and less so that businesses can thrive and those who own them can show record profits.

Paul Farrell at MarketWatch is rather amazed by that:

Yes, capitalism is working… for the Forbes 1,000 Global Billionaires whose ranks swelled from 322 in 2000 to 1,426 recently. Billionaires control the vast majority of the world’s wealth, while the income of American workers stagnated.

For the rest of the world, capitalism is not working: A billion live on less than two dollars a day. With global population exploding to 10 billion by 2050, that inequality gap will grow, fueling revolutions, wars, adding more billionaires and more folks surviving on two bucks a day.

Farrell sees capitalism on a self-destructive path and calls in some help:

Recently we found someone who brilliantly explains why free-market capitalism is destined to destroy the world, absent a historic paradigm shift: That is Harvard philosopher Michael Sandel, author of the new best-seller, “What Money Can’t Buy: The Moral Limits of Markets,” and his earlier classic, “Justice: What’s the Right Thing to Do?”

For more than three decades Sandel’s been explaining how capitalism is undermining America’s moral values and why most people are in denial of the impact.

Then Farrell offers a condensed version of the latest argument:

In one generation, market ideology consumed America’s collective spirit.

“The years leading up to the financial crisis of 2008 were a heady time of market faith and deregulation – an era of market triumphalism,” says Sandel. “The era began in the early 1980s, when Ronald Reagan and Margaret Thatcher proclaimed their conviction that markets, not government, held the key to prosperity and freedom.”

And in the 1990s with the “market-friendly liberalism of Bill Clinton and Tony Blair, who moderated but consolidated the faith that markets are the primary means for achieving the public good.”

Today “almost everything can be bought and sold.” Today “markets, and market values, have come to govern our lives as never before. We did not arrive at this condition through any deliberate choice. It is almost as if it came upon us,” says Sandel.

Something did come upon us, which Henry Blodget explains in his May Day post at Business Insider:

Corporate profit margins just hit another all-time high. Companies are making more per dollar of sales than they ever have before. If you’re a shareholder, that seems like good news (in the very short term, anyway). Alas, most people aren’t shareholders. And for folks whose investment horizon is longer than “this quarter” and “this year,” it’s actually bad news. Companies are under-investing in their employees and the future.

Wages as a percent of the economy just hit another all-time low. One reason companies are making so much money is that they’re paying employees less than they ever have as a share of GDP. That’s bad news for everyone, by the way, not just employees. Low employee wages are one reason the economy is so weak: Those “wages” represent spending power for consumers. And consumer spending is “revenue” for other companies. So the short-term corporate profit obsession is actually starving the rest of the economy of revenue growth.

Fewer Americans are working than at any time in the past three decades. The other reason corporations are so profitable is that they don’t employ as many Americans as they used to. As a result, the employment-to-population ratio has collapsed. We’re back at 1980s levels now.

Other than that, things are fine, but not really:

In short, our current obsessed-with-profits philosophy is creating a country of a few million overlords (shareholders) and 300+ million serfs (employees).

It is also resulting in employees sharing less of the corporate wealth that they spend their lives creating than they ever have before.

That’s not what has made America a great country. It’s also not what most people think America or other lands of opportunity are supposed to be about.

So we might want to rethink that.

Specifically, we might want to have the goal of our corporations be to create long-term value for all of their constituencies (customers, employees, and shareholders), not just short-term profit for their shareholders.

Blodget then explores that in AMERICA TODAY: 3 Million Overlords, 300 Million Serfs:

Extreme inequality is bad for everyone, even the overlords.


Because when inequality gets bad enough, serfs don’t have much money to buy products from overlords. This hurts the overlords’ ability to get even richer.

(That’s what’s wrong with the American economy right now. The serfs are tapped out. The overlords are responding by firing more serfs, to increase profits. Unfortunately, because one person’s “costs” are another person’s “wages,” this is making the problem worse.)

The best way to fix inequality is not to tax most of the overlords’ money and give it to the serfs. That just inflames “class warfare” and gets people yelling about “socialism.”

The best way to fix inequality is to persuade the overlords that it is in their best interests to share more of their wealth by paying their employees more for their hard work (work that, not incidentally, is what makes the overlords rich).

Good luck with that, but maybe we should all be Marxists now, given the way things have worked out. Marxism is pretty straightforward:

According to Marxist analysis, class conflict within capitalism arises due to intensifying contradictions between highly-productive mechanized and socialized production performed by the proletariat, and private ownership and private appropriation of the surplus product in the form of surplus value (profit) by a small minority of private owners called the bourgeoisie. As the contradiction becomes apparent to the proletariat, social unrest between the two antagonistic classes intensifies, culminating in a social revolution. The eventual long-term outcome of this revolution would be the establishment of socialism – a socioeconomic system based on cooperative ownership of the means of production, distribution based on one’s contribution, and production organized directly for use.

That sounds so sensible, even if it led to some very dark places. Communism, that classless, stateless, moneyless society based on common ownership, could never be – human nature, the ego structure itself, made that impossible. “All animals are equal, but some animals are more equal than others” – that’s how things always work out in these matters. Dominance, or at least control, is seductive. One’s sense of self-worth is at stake, or even one’s identity. Marx was not a psychologist.

That would mean that he got things wrong, and in honor of May Day, the economist Brad DeLong reposted his 2009 talk on Understanding Karl Marx – and one idea he presented then was that Marx, as a political activist, was far too pessimistic about the ruling class. They might not all be greedy bastards. They might agree to balanced economic growth, where everyone gets something, in the context of a market economy:

That even though the ruling class could appease the working class by using the state to redistribute and share the fruits of economic growth it would never do so. They would be trapped by their own ideological legitimations – they really do believe that it is in some sense “unjust” for a factor of production to earn more than its marginal product. Hence social democracy would inevitably collapse before an ideologically-based right-wing assault, income inequality would rise, and the system would collapse or be overthrown. The Wall Street Journal editorial page works day and night 365 days a year to make Marx’s prediction come true. But I think this, too, is wrong.

The ruling class isn’t that stupid, you see. Matthew Yglesias cites this, and says that made sense to him a few years ago, but not now:

To me that unquestionably looked wrong as of 2009. But in the interim, those Wall Street Journal editorial page tendencies have grown much stronger. You see a rising tide of Rand-inflected moralism about market outcomes and a reduced emphasis on Friedman-style pragmatism. You also see a sharply reduced emphasis on belief in any kind of macroeconomic stabilization policy, in favor of a “let them eat cake slash move to North Dakota” moralism about unemployment. Last, but by no means least, it really has become the conventional wisdom among American elites that the appropriate policy response to fiscal imbalance in a time of high and rising income inequality is to restore balance by reducing the scope and generosity of social insurance programs.

Yes, that makes no sense, and DeLong also says this:

Marx believed that capital is not a complement to but a substitute for labor. Thus technological progress and capital accumulation that raise average labor productivity also lower the working-class wage. Hence the market system simply could not deliver a good or half-good society but only a combination of obscene luxury and mass poverty. This is an empirical question. Marx’s belief seems to me to be simply wrong.


This is an empirical question and I continue to believe that Marx’s belief is wrong. But the fact is that profit margins are high and rising while wages are at best stagnating. My view is that this is a cyclical phenomenon that represents a failure of the technocratic apparatus of macroeconomic stabilization. But to me the striking political fact is that I hear more and more people disagreeing with me about this not only on the left but on the right.

That data are clear. Absurd income inequality may not be a cyclical phenomenon – something that will work itself out over time. Marx’s belief may not be wrong:

In summary, I’m not a Marxist. But I worry that political conservatives are going to turn me into one. My view is that full employment and robust systems of redistribution from the more fortunate to the less fortunate are possible. I see real evidence for this in the world. The Obama administration has actually enacted a lot of redistribution programs, and the government of Australia has maintained consistent full employment policies for a long time now. But the collapse of the Soviet Union, a good thing on its own terms, has had the bad consequence of breeding massive complacency among the upper classes in the West. It used to seem important to people in the rich countries to prove that market economies not only could but in fact would lead to broadly rising living standards.

Anyone can see that’s no longer important, even if it makes perfect sense, and thus political conservatives are going to turn all of us into Marxists. Americans just need to focus:

Signs against fracking, post office closures, JP Morgan Chief Executive Jamie Dimon, corporate America, deportation, the “Gang of 8” immigration bill, and “naughty bankers” were just a few of those being paraded about on a sunny afternoon at Union Square, as a bunch of Raging Grannies wearing flowered hats prepared to take the stage. Puppets of rats were expected to arrive later in the day.

An amalgamation of Occupy protesters, immigrant rights groups and labor advocates organized events throughout the day in New York, beginning with a morning rally organized by Occu-Evolve, an offshoot of the Occupy Wall Street movement that seeks to represent the 99%. The day’s New York schedule also includes a meeting of people who want free education, a march to a post office in Chelsea and an immigrant rights rally in the late afternoon.

Few protesters seemed to mind that so many different causes were being represented at the New York rally.

“We’re protesting a million things,” said Lillian Pollak, 98, one of the Raging Grannies, who said she was rallying for world peace, against corporate America and for closing detainee centers at Guantanamo Bay.

Marx would weep:

The atmosphere of the protests, concentrated in one area of the park, cordoned off by police barriers from where other New Yorkers ate lunch and held shopping bags, was circus-like at times. People waved giant flags and wore tutus and clothing made of protest signs. An event titled “Resistance is Fertile: Love Bomb Seed Bombs” was expected to bring plant seeds and yet more protesters.

Marni Halasa, 47, a performance artist, was dressed in a black figure skating outfit, wearing roller blades and a hat featuring fake roses and a skeleton. She held a whip and a blow-up doll of Dimon, the CEO of JP Morgan Chase, along with a sign saying that he needed to be whipped.

Yeah, well, whatever. The rest of the world, where the implosion of free-market capitalism is a matter of life and death – and where their leaders say austerity is the answer to everything – gets it. Forget the three or four thousand jihad-mad fools around the world, and that jerk in North Korea and Iran and its hypothetical nukes. There’s a massive worldwide revolution developing, against capitalism itself. Marx was right, even if he was spectacularly wrong about what comes next. Capitalism does destroy itself, and political conservatives are helping it destroy itself, turning all of us into Marxists. We would have noticed that if we hadn’t moved May Day to Labor Day.

About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
This entry was posted in Capitalism's Inherent Flaws, May Day (International Workers Day) and tagged , , , , , , , , , . Bookmark the permalink.

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