Glad I watched this Stiglitz video to the very end — to the part where he contradicts the (fading) free market consensus that pursuing LOWER inequality inevitably causes market distortions that lead to a loss of overall efficiency.
A more fundamental understanding than even progressive economists usually present (the missing link in macro economics to me) for why HIGHER inequality is associated with higher in-efficiency, higher in-stability and lower growth is that the true market distortion results when labor is unable to test — indirectly — what the ultimate consumer would have been willing to pay for the combined product of capital and labor — through collective bargaining with capital.
When labor is priced only in comparison with other labor – what I call a subsistence-plus labor market — I think that the most serious miscalculation of relative value occurs.
I POSTED THIS COMMENT AT BRAD DELONG’S AND ECONOMIST’S VIEW — may as well cross-post it to AB:
RE: “Neoliberalisms”, Left and Right – Brad DeLong
[W]hat alternative political-economic agenda could both (a) work technocratically and (b) be sold to North Atlantic electorates politically [?]
We wouldn’t have to conjure up anything to sell to North American electorates — their paid advocates would be presenting their own professionally worked out agendas for them — with financial backing equal to that of the 1% and with the 99% of votes — if our labor force could be unionized back to 1950 levels or, much better, to current Western European levels.
Very plausibly, the ONLY thing standing in our way now is business’ ability to fire union joiner/organizers at will. Not only is that employee’s job lost but also that employee’s ability to interact equally with competing economic and political interests are lost (that’s the social crime) — and the same is lost for all the other employees at the firm at the same time. An employee can find another job but where is he or she (or all the other employees) going to find another fair and balanced society (emigrate to Denmark? :-]). It is the loss of a free and balanced society, not the loss of a few jobs that requires criminalization.
Today’s civil penalty level deterrent — not even at the racial or other discrimination level (just reinstatement) — as everybody understands, does nothing to deter. Too much temptation for ownership: huge money at stake; firing one organizer has the atomic effect of locking out a whole workforce with no particular inconvenience to the firm; one employer may feel compelled to bust a union because another employer down the road does the same and he needs to stay competitive.
You can go to jail for the economic crimes of taking a movie inside the movie house or polluting a river or even for giving a friend some free pot. Time for jail to await those who comprehensively tear up up the fabric of both economic and social equality. I am talking about at the state level for now — not expecting “conversion” out of today’s Congress.
* * * * *
RICO prosecution can await those who commit union busting on an ongoing basis — once it is a felony. There are 33 state RICO statutes.
A business (which is not the defendant and which can be perfectly legit) fits the case law definition of an ongoing enterprise — if it has:(a) a purpose,(b) a life outside the crime (a bank robbery gang is not an enterprise),(c) longevity — which is taken as over a year or substantially over. Longevity however may be considered built in: for example, if a demand is made for $1,000 a month. I imagine union busting action could be taken as having a common sense expectation of longevity — if not, wait a year, then factor in the common sense expectation and start your prosecution.
Glad I watched this Stiglitz video to the very end — to the part where he contradicts the (fading) free market consensus that pursuing LOWER inequality inevitably causes market distortions that lead to a loss of overall efficiency.
A more fundamental understanding than even progressive economists usually present (the missing link in macro economics to me) for why HIGHER inequality is associated with higher in-efficiency, higher in-stability and lower growth is that the true market distortion results when labor is unable to test — indirectly — what the ultimate consumer would have been willing to pay for the combined product of capital and labor — through collective bargaining with capital.
When labor is priced only in comparison with other labor – what I call a subsistence-plus labor market — I think that the most serious miscalculation of relative value occurs.
http://economistsview.typepad.com/economistsview/2015/05/video-stiglitz-on-inequality-wealth-and-growth-why-capitalism-is-failing.html
I POSTED THIS COMMENT AT BRAD DELONG’S AND ECONOMIST’S VIEW — may as well cross-post it to AB:
RE: “Neoliberalisms”, Left and Right – Brad DeLong
[W]hat alternative political-economic agenda could both (a) work technocratically and (b) be sold to North Atlantic electorates politically [?]
We wouldn’t have to conjure up anything to sell to North American electorates — their paid advocates would be presenting their own professionally worked out agendas for them — with financial backing equal to that of the 1% and with the 99% of votes — if our labor force could be unionized back to 1950 levels or, much better, to current Western European levels.
Very plausibly, the ONLY thing standing in our way now is business’ ability to fire union joiner/organizers at will. Not only is that employee’s job lost but also that employee’s ability to interact equally with competing economic and political interests are lost (that’s the social crime) — and the same is lost for all the other employees at the firm at the same time. An employee can find another job but where is he or she (or all the other employees) going to find another fair and balanced society (emigrate to Denmark? :-]). It is the loss of a free and balanced society, not the loss of a few jobs that requires criminalization.
Today’s civil penalty level deterrent — not even at the racial or other discrimination level (just reinstatement) — as everybody understands, does nothing to deter. Too much temptation for ownership: huge money at stake; firing one organizer has the atomic effect of locking out a whole workforce with no particular inconvenience to the firm; one employer may feel compelled to bust a union because another employer down the road does the same and he needs to stay competitive.
You can go to jail for the economic crimes of taking a movie inside the movie house or polluting a river or even for giving a friend some free pot. Time for jail to await those who comprehensively tear up up the fabric of both economic and social equality. I am talking about at the state level for now — not expecting “conversion” out of today’s Congress.
* * * * *
RICO prosecution can await those who commit union busting on an ongoing basis — once it is a felony. There are 33 state RICO statutes.
A business (which is not the defendant and which can be perfectly legit) fits the case law definition of an ongoing enterprise — if it has:(a) a purpose,(b) a life outside the crime (a bank robbery gang is not an enterprise),(c) longevity — which is taken as over a year or substantially over. Longevity however may be considered built in: for example, if a demand is made for $1,000 a month. I imagine union busting action could be taken as having a common sense expectation of longevity — if not, wait a year, then factor in the common sense expectation and start your prosecution.
PS. States can enact labor laws in addition to — not in exception to (federal preemption) — federal legislation. I was shocked recently to read that Governor Jerry Brown vetoed card-check for farm workers four years ago.
http://www.huffingtonpost.com/william-bradley/jerry-brown-farm-worker-bill-veto_b_893599.html
Facebook Is Raising Wages for Contractors to $15 an Hour
By Alison Griswold
http://www.slate.com/blogs/moneybox/2015/05/15/facebook_increases_contractor_wages_to_15_an_hour.html