Cutting the Gordian naught (was lean and mean)

[knowware@xxxxxxxx (Tom Walker)]

Max and I have been discussing the design principles of a tax on overtime.
Max has been prompting me for price tags, definitions, and close
quantifications. I have been averse to multiplying assumptions needlessly.
Now, I'd like to retrace my steps and highlight once again the simple
hypothesis that underlies the tax. That is John Maurice Clark's hypothetical
state, cited by Stabile, in which all industry is integrated and owned by
workers:

"If all industry were integrated and owned by workers, what would be the
relation of constant to variable expense?" Clark's answer is that "it would
be clear to worker-owners that the real cost of labor could not be
materially reduced by unemployment." [Studies in the Economics of Overhead
Costs, 1923, 402]

Contrast this humble hypothesis -- of, dare I say a dictatorship of the
proletariat? -- with the IMFian solution to the problem of reducing costs:
lay off workers. The IMF solution, of course, entirely disregards the
perspective of a society made up of workers. It treats the economy as an
mere aggregate of individual capitals. It is, to put it obviously, a
perspective dictated by finance capital.

To see the contrast between the two policy approaches, it's not necessary to
have an integrated worker-owned industry or even to subscribe to the
political project of establishing one. All you need to do is try to put
yourself in Camdessus's shoes -- how do _you_ explain to workers the
salutory effects of unemployment?

SEOUL, Jan 12 (Reuters) - South Korean President-elect Kim Dae-jung
asked International Monetary Fund (IMF) Managing Director Michel
Camdessus on Monday to help persuade union leaders to accept layoffs
called for under the IMF's bailout plan for the country, said a
statement by Kim's political party.

``Union leaders will understand better the need to accept layoffs if
you explain,'' the statement by the National Congress for New
Politics quoted Kim as saying during a lunchtime meeting with
Camdessus.


Regards,

Tom Walker
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