Re: bankruptcy

["David B. Shemano" <dshemano@xxxxxxxxxx>]

James Devine writes:

>> To Marx, bankruptcy (in the sense of going out of business, not the
>> technical definition) was central to his predictions about the trend
>> of a capitalism unfettered by a powerful labor movement or a
>> democratically-run state (as like nowadays). It was a symptom of
>> systemic _success_ (from a capitalist point of view). Accumulation
>> coincides with the concentration and centralization of capital and
>> increasing inequality between classes, as the smaller and weaker
>> capitalists are driven out of business and into the proletariat. This,
>> he predicted, would lead to increased societal tension and eventually
>> class antagonism.

If I remember correctly, Marx though capitalism was going to break-down because it was too hard for the capitalists to make a profit.  All of that ruinous competition driving down profits.  I am still waiting.

>> In the airline biz, bankruptcy of major carriers is a symptom of the
>> workings of Marx's prediction. The airlines (e.g., Southwest, JetBlue)
>> that have succeeded in driving down wages, benefits, and even safety
>> costs drive out the ones that have treated their workers with a
>> modicum of decency (rather than as interchangeable parts), likely
>> because of pressure from unions.
>>
>> As for societal tension, this can be seen in the attitudes we've seen
>> from employees at United Airlines (an airline that's been under
>> financial pressure for quite some time). When my wife once asked a
>> "customer service agent" whether or not she'd be late to her plane,
>> the agent tartly said "how fast can you run?" This is just one
>> example.

I see no evidence that airline deregulation is leading to either (1) centralization that will permit monopoly pricing, or (2) ruinous competition that results in the absence of service.  I see a very competitive market in which there are winners and losers, but the essential functionality of the system continues unabated.

Your criticism of Southwest and JetBlue of driving down wages assumes that there is a certain "just" wage airline employees are entitled to.  The problem is that the "just" wage they were used to was a result of the pre-1978 regulated oligopoly situation, so in my book that "just" wage was a fiction.  Like I said, it is taking a generation for expectations to coincide with reality.

>> Since bankruptcy laws simply slow down the trend, maybe we should
>> follow the libertarian lead and get rid of them. To Marx, they delay
>> the development of capitalism, while to libertarians it prevents the
>> attainment of the True Efficiency that the Invisible Hand blesses us
>> with. Further, it seems to me that the bankruptcy lawyers have been a
>> coddled caste at the expense of the public. In return for exalted
>> salaries, they help ameliorate the allegedly savage conditions of the
>> fang-and-claw social struggle. In this new Gilded Age, this is at best
>> an anachronism: only those who are well-connected and noble should be
>> protected from their creditors. The unemployed lawyers could easily
>> get jobs as wardens or guards in debtors' prisons. ;-)

Your rhetoric is mixing personal and business bankruptcy.  However, thank goodness for bankruptcy law.  If it didn't exist, I would simply be another overeducated underemployed intellectual ready to refashion the world.

David Shemano