+Dr Goldschmidt consider that things like price gouging and other commercial malfeasance can be addressed in the justice system. Admittedly ours is in shambles and most juries are bewildered by jury instructions. Yet still The idea that automation is the cause of misery is a little off the mark. The remedy can be a simple legal one. Does a corporation have a duty to maintain fair profit distribution to the workers that initiated the cash flow that allowed the corporation to buy the automating machinery? Those terms of employment are usually not considered by the hungry proletariat seeking employment. That does not mean the corporation can automate his lively hood away. It can make his life easier and more productive. However, it is arguable that those savings used to buy the automation belonged to the worker. C.F. The Making of Economic Society R. Heilbroner and Wllm Milberg.

In the second paragraph it should read “earnings to wages cap”

Dear Prof. Wolff

I am a lay economist who has been studying the U.S. economy with great concern for over a decade. Particularly revealing is the trend downward since 1973 in the labor participation rate for prime age workers and wages as a percentage of GDP. Bottom line — neither an economy nor a democracy can survive the destruction of the middle class

The causes of this deterioration, which is toppling democracies all over the world, are automation, globalization, breaching of natural limits and corporatism (as opposed to Capitalism). Corporatism is the reformation of monopolies which gouge the consumer and use the spoils to buy legislators.

I have thought long and hard about how to reach a stable and fulfilling future. I have several ideas that I feel are worthwhile but by far the following is the most powerful:

A constitutional amendment as follows — The federal government shall pass whatever laws are necessary to ensure that U.S. workers receive wages of at least 50% of domestic sales.

I am leaving out many details of how this could be implemented but it appears to me that an excess profits tax of 100% for profits that exceed a profit to wage cap for a corporation would be effective. The history of that ratio for a particular public corporation could easily be determined through inspection of their W2 and SEC earnings. This would be used to determine an initial cap which could be reduced by a small percentage each year until the 50% wages/sales was reached for the country as a whole

Take the case where the executive committee of a corporation with a wage/sales cap of 0.25 faced ending the year with $1 million in excess profits. Then they could do nothing and give it all to the government or maximize earnings by increasing their payroll by
$800 thousand and adding $200,000 to earnings. The executives would decide for their company which payroll increases would yield the greatest impact going forward.

Similarly the workers would know that they would receive 80% of any increased profits they could generate.

In order to prevent executives from increasing their own pay, I would only consider wages to be that portion of each W2 below the first $250,000.

Curious what you think of this scheme.

Regards,

Dr. Robert Goldschmidt
[email protected]

I agree with what I believe Kristin Lawler said, ‘we need to capture the need to conceptualize change (by promoting a fantasty of less drudge & more time to oneself off the clock) in a labor/left movement that results in perhaps fewer jobs with higher pay & benefits’.

“There is a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can’t take part; you can’t even passively take part, and you’ve got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus, and you’ve got to make it stop. And you’ve got to indicate to the people who run it, to the people who own it, that unless you’re free, the machine will be prevented from working at all!” – Mario Savio (December 2, 1964)

We are not cooperating Professor Lawler… that’s it… We are done. We are not complying with this economy and it’s slave wages as well as it’s right-to-work laws that have placed all of the power with the employer. This has been the reason for the non-participation rate holding pretty steady over the previous several years. I would urge everybody to become food-stamp surfer. Non-cooperation with this economy is a great form of resistance. I worked from 15 to 52… and like most people in this country have nothing… of course I’m in good company with 165 million folks that have no assets in the lower 50% of this country. I just wrote a short paper on this erosion of wages over the last 3+ decades… Inside Job: A Critique of Capitalism … https://www.linkedin.com/pulse/inside-job-critique-capitalism-martin-screeton?trk=prof-post

It makes you wonder if it’s the reason movies became more violent and sexually explicit and when that stopped… boom pornography and violent video game explosion! Or if we aren’t becoming more desensitized but more and more desperate to escape.

Just wanted to add that I really liked your guest. One criticism. While I agree that the Trump win was surprising and telling regarding the particular geographic area of the Rust Belt and the working class, he really only won by about 125,000 votes in the 3 largest electoral Rust Belt states. Meanwhile, Clinton won the popular vote by almost 3 million votes. Are we devoting too much time and energy in analyzing why Trump won and are we overestimating the working class devotion (in general) to his cult of personality considering he really only won the election b/c of the electoral college and a very narrow majority in a relatively small geographic area? Are we misconstruing the extent to the radical potential of the US working class? Perhaps not, but I think we are really overestimating the Trump victory.

I think I remarked on the monthly Global Capitalism update, but it bears mentioning here, too.

It is important that we stop referring to the reversal of a few hundred thousand workers in the Rust Belt as some sort of “uprising” against global capitalism. Voting for a billionaire who isn’t even involved in producing anything for society (other than casinos which are a disease for the working class) is hardly an “uprising” against the economic elite. Quite the contrary, the working class, having been thoroughly driven to the right throughout the last 70 years, voted for a roundly reactionary and fascistic cult-of-personality type very much like Mussolini. The false capture of working class anger and redirecting to radical right-wing agendas is well established in history as an occurrence which leads up to hyper-nationalism, world wars, and extremely repressive domestic measures to stifle dissent.

I was hoping you would address the complete farce that was the Carrier deal and even the bourgeois Steel Workers’ union turned on Trump for this BS move. But you left me wanting… :-(.

Please realize that the only reason I am able to point these things out is because of your excellent economic analyses that have led me to radicalized left groups. I do have a lot of respect for you, Dr. Wolff, please don’t misunderstand my criticism as anything else!