Capitalism is failing the middle class
(Reuters) -- by Chrystia Freeland --
Global capitalism isn’t working for the American middle class. That isn’t a headline from the left-leaning Huffington Post, or a comment on Glenn Beck’s right-wing populist blackboard. It is, instead, the conclusion of a rigorous analysis bearing the imprimatur of the U.S. establishment: the paper’s lead author is Michael Spence, recipient of the Nobel Prize in economic sciences, and it was published by the Council on Foreign Relations.
Spence and his co-author, Sandile Hlatshwayo, examined the changes in the structure of the U.S. economy, particularly employment trends, over the past 20 years. They found that value added per U.S. worker increased sharply during that period – 21 per cent for the economy as a whole, and 44 per cent in the “tradable” sector, which is geek-speak for those businesses integrated into the global economy. But even as productivity soared, wages and job opportunities stagnated.
The take-away is this: Globalization is making U.S. companies more productive, but the benefits are mostly being enjoyed by the C-suite. The middle class, meanwhile, is struggling to find work, and many of the jobs available are poorly paid.
Here’s how Spence and Hlatshwayo put it: “The most educated, who work in the highly compensated jobs of the tradable and non-tradable sectors, have high and rising incomes and interesting and challenging employment opportunities, domestically and abroad. Many of the middle-income group, however, are seeing employment options narrow and incomes stagnate.”
Spence is neither a protectionist nor a Luddite. He prominently notes the benefit to consumers of globalization: “Many goods and services are less expensive than they would be if the economy were walled off from the global economy, and the benefits of lower prices are widespread.” He also points to the positive impact of globalization on much of what we used to call the Third World, particularly in China and India: “Poverty reduction has been tremendous, and more is yet to come.”
Spence’s paper should be read alongside the work that David Autor, an economist at the Massachusetts Institute of Technology, has been doing on the impact of the technology revolution on U.S. jobs. In an echo of Spence, Autor finds that technology has had a “polarizing” impact on the U.S. work force – it has made people at the top more productive and better paid and hasn’t had much effect on the “hands-on” jobs at the bottom of the labor force. But opportunities and salaries in the middle have been hollowed out.
Taken together, here’s the big story Spence and Autor tell about the U.S. and world economies: Globalization and the technology revolution are increasing productivity and prosperity. But those rewards are unevenly shared – they are going to the people at the top in the United States, and enriching emerging economies over all. But the American middle class is losing out.
To Americans in the middle, it may seem surprising that it takes a Nobel laureate and sheaves of economic data to reach this unremarkable conclusion. But the analysis and its impeccable provenance matter, because this basic truth about how the world economy is working today is being ignored by most of the politicians in the United States and denied by many of its leading business people...MORE...LINK
Chris Moore comments:
These corporatist and statist-corporatist international "American" elites and their political stooges who have greased the skids on this sell-out for decades are some of the most craven lowlifes on the face of the earth. They've essentially enriched themselves through increasing their already healthy profit margins by shipping American jobs overseas in a process of labor arbitrage that will eventually impoverish nearly everyone in the world other than a narrow band of the most ruthless and reptilian; meanwhile, they've arranged it so the goods that they are importing back into the country are mostly tariff-free, so they can have free and open access to the mature American markets -- markets built up over generations by patriotic Americans and their investments in infrastructure, national defense, education, and health and social services.
Historically, authentic American patriots in the traditional Christian mold like Henry Ford knew America needed stable, good paying jobs, economic stability, and a thriving work force over the long term to afford his automobiles, for example, hence his patriotism was motivated both by good intentions, and by economic incentive.
This new breed of money-worshipping, reptilian "elites" hardly has a patriotic bone in its body other than the head rush it gets when it thinks about how the country can be whored to turn a profit for itself. These people don't care where they live, or care about the plight of their fellow citizens. As "citizens of the world," they can live anywhere, and no doubt many of them are already laying plans to flee with their ill-gotten gains once the majority of Americans realize they've been swindled and plundered by these low-cunning parasites.
Hopefully in the future, America can maintain enough wherewithal to track down this Parasite Class, bring it to justice, and strip it entirely of its loot as compensation for its thievery and treachery.
With the right political leadership in this country, there won't be anyplace on earth safe for them or their stolen assets.
Judeofascist war on Arabs: Nearly the entirety of organized Jewry from left to right is on record as supporting either the Iraq war or the war on Libya, or both - The entire establishment lined up behind our war, and it was one of the greatest disasters of history. That is what I saw. Leaders who as young people ha...
1 day ago
I hope and pray, that Americans will some day wake up and do something about these parasites. I fear though, that we're just to dumbed-down, or to inept (lazy) to do anything about it. I hate sounding defeatist and skeptical, but I've been watching this steady decline for thirty years now.
I've never been more desperate for change than I am now.
I find it amazing how academics can be so intellectually bankrupt to say that Globalism is a good thing..I suppose from the point of view of a third-world citizen it is, but it's death for we westerners: Death!
I enjoy your analysis Chris, thank you!
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