Blue Planet 2 demonstrated the terrifyingly fragile state of nature’s ecosystem. One of the key messages from the BBC series was that a delicate balance exists in the oceans between predators and prey. If there are too many predators, the stocks of prey fall. The predators go hungry and their numbers dwindle, allowing the prey to recover. Balance is restored.
Humans have their equivalent of this predator-prey model. It is best demonstrated by the workings of the labour market, where there is a constant struggle between employers and employees over the proceeds of growth. Unlike the world of nature, though, there is no self-righting mechanism. One side can carry on devouring its prey until the system breaks down. Over the past 40 years, employers have been the predators, workers the prey.
Even sodding Ol’ Karl got this right. Full employment is the cure. Only if there is a reserve army of the unemployed can the capitalists not pay their workers more as productivity rises. Without the reserve army then rising productivity means the capitalists are in competition for each other for that labour – wages rise therefore.
Really, we know the mechanism here.
And this isn’t even true:
Seen in the simplest terms, the story of political economy over the past four decades is a class war between capital and labour, which capital has won hands down. The battlefield is littered with evidence of labour’s defeat: nugatory pay awards, precarious work, the collapse of collective bargaining, and cuts in public spending.
And to the victors have gone the spoils: higher profits and dividends; lower personal tax rates; a higher share of national income.
The capital share is about the long term average. Risen from the 70s, sure, but not out of line at all. Taxes upon consumption and subsidies to production have risen (VAT largely) and mixed income has risen. Thus the labour share has fallen, but not the capital share risen.
This is simply incorrect.