There Is Truth Even In Deviltry

From Naked Capitalism:

The answer, or at least one answer, is that an implicit compact between capital and labour has been broken in developed economies; a compact that said we have to pay our workers a decent wage so that they buy our stuff. The globalisation of labour means that firms can choose not to pay middle class wages at least for some parts of their operations — so of course that is what they choose to do.

But the systemic cost is that demand in developed economies weakens and the incomes of those in developing economies are not high enough to take up the slack. Witness the attempts to make Chinese consumers consume more. It hasn’t worked, partly because they need to save for health and education, but also because they simply do not have the discretionary income to afford it. This is the hidden cost of the race to the bottom on wages. The Economist article describes a somewhat dangerous balance of capital and labour (cheap wages are the reason margins have risen)…

When a friend in an online political group quoted this and mentioned Marx in the opening post, the first response began with this: “Marxist ideology killed more than 100 million people last century and lead to nothing but poverty and economic collapse…”

Why the hell do people jump on the “Marxism is the devil” bandwagon right off the bat? People need to stop reading the way they do, or thinking the way they do, about written works – “for working economists the reason to read old books is for insight, not authority (Krugman).”

Hate Marx for all you believe of him and what has been wrought, whether true or not; however also take what you can from whatever wisdom is in the words he penned. Even the most vile human beings can provide insight into truths many are uncomfortable with because it challenges their apathetic or closed world view.

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