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Cutting wages and solving the crisis...
17 Apr 2008
While it has not become widespread, yet, we are sure to see calls for wage cuts to solve the current economic crisis. We must, apparently, tighten our belts in order to make more profits for the idiots who got us into this mess...
Yet, it is hard on the surface to advance such a call. As one left-wing Keynesian notes:
"This dismal experience comes on top of three decades of wage stagnation during which household income only grew because of longer working hours and having both household heads work."
(The Capture of Keynesianism by Thomas Palley)*
In America, the so-called "middle" classes have have been squeezed. People are working longer and harder for less -- and supplementing their wages by having more members of the family work as well as getting into debt.
Asking for workers and their families to accept even less will be hard to do and, moreover, deepen the crisis. Why is discussed in detail in section C.9** of An Anarchist FAQ (in particular, section C.9.1***).
It should also be noted that the neo-classical economic theory which is used as the basis for cutting wages is simply unrealistic and does not reflect reality (see section C.1.2: Is economics a science?****).
In other words, arguments for cutting wages to fight unemployment are both logically wrong and bear little relationship to the reality of industrial production. Not that it will stop "experts" advocating them...
I'm going to merge these two sections and edit them into an article for Anarcho-Syndicalist Review (and Black Flag as well, assuming the collective likes it). Once I revise my somewhat lengthly article on the Paris Commune....
Links to Works Cited: