Oh aye Larry?

You can get a little flavour of Larry Elliott\’s philosophical structure here:

Digital technology and bioscience will drive the third industrial revolution, but these changes take place at a time when the spread of the market has vastly increased the reserve army of labour.

That last phrase being straight Marx.

It should be pointed out that certain Marxian ideas can indeed be very useful. Marxism as it is generally understood isn\’t. The difficulty is in working out whether someone is using the interesting bits or whether they\’ve swallowed the entire pitcher of Kool- Aid.

America\’s hegemony is being threatened by the rise of China.

That\’s looking a little pitcherish, seeing things in terms of power.

Hmm:

If the root cause of the financial crisis was the imbalances in the global economy prompted by the search for higher profits, real reform will require higher real wages in the west, so that consumers are less dependent on debt.

Sorry, I can\’t even pretend to understand what he\’s saying here. If the workers in the west have higher real wages (without a corresponding rise in productivity) then fewer of them will be employed and even more will be manufactured in the East where the productivity/wages calculation is more favourable. Which would rather increase the imbalances rather than mitigate them, won\’t it?

3 comments on “Oh aye Larry?

  1. “real reform will require higher real wages in the west, so that consumers are less dependent on debt.”

    Umm, is there any evidence that increases in real wages reduce “dependence” on debt? After all, we have plenty of historical examples of rising real wages to look at. And, aside from increasing the labour share of income, which isn’t to be sniffed at but is not the main story, how does saying “real wages must increase” differ from saying “we need growth”?

    Larry Elliot is the Economics Editor of the Guardian.

    why oh why can’t we have better newspapers?

  2. “Digital technology and bioscience will drive the third industrial revolution”: why on earth has he put that in the future tense?

  3. real reform will require higher real wages in the west, so that consumers are less dependent on debt.

    When I was a penniless student my personal Debt/GDP ratio was a whopping 10-15% or so. A scary number for me at the time, and a worry for my bank manager who often sent me threatening letters.

    Today I am in a worse position than Japan, with my debts far in excess of my income. The bank manager (or his digital assistant) is always trying to offer me new loans.

    Ok this is only anecdotal, but my case does rather cast dispertions on the theory.

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