Re: European Union ON.EDU>

[James Devine <jdevine@xxxxxxxxxxxxxxx>]

Andrew Wayne Austin wrote: >> 	(1) Do you think that the modifications made
to the US economy following the Great Depression, and institutionalized
following World War Two, strengthened or weakened the position of the US
ruling class and the capitalist mode of production? <<

Dennis responds: >Weakened. In the Twenties unions were weak, controls over
capital nonexistent, workplace conditions were barbaric, and business could
do (and frequently) did anything it damn well pleased. After WW II,
powerful unions redistributed income from the rich to the poor, the welfare
state blossomed (though not as much as the warfare state), and many sectors
of the economy -- from home ownership to mass education -- were radically
democratized. Social Security, employer-paid health insurance, Medicare...
big biz fought like mad dogs against all this socialistic stuff -- and
lost. Now big biz is, of course, trying to destroy all these hard-fought
gains, and succeeding to a frightening degree; the political power of we
working folks has spiraled downwards in this country, just like our real
wages. The EU, alas, appears to be on the same royal road to ruin.<

Though this description is superficially plausible, I think it's simplistic
to try to understand this question on a one-dimensional weaker/stronger
continuum. One extra dimension: the New Deal (and social-democratic reforms
in Europe) weakened _individual_ capitalists while saving capitalism _as a
whole_. It thus benefited the capitalist class as a whole. Relatedly, the
1920s meant very high profit rates for the bigger US businesses
(corporations, manufacturing) but government intervention (Keynesianism,
the warfare/welfare state, etc.) stabilized the rate of profit, so that the
profit boom of the 1960s had none of the underconsumptionist side-effects
of the profit boom of the 1920s.

I think there's a possibility, under capitalism, for a social-democratic or
New Deal agreement, where the goals of both labor and capital can coincide
(i.e., the interests of labor and the class interests of capital on a
national level). But individual capitalists will alway seek profits any way
they can, avoiding unions and social-democratic regulations, acting as
"free riders," benefiting from the overall stability. Globalization
promotes this, as capitalists seek rock-bottom wages, pliant employees,
weak environmental restrictions, and bribable governments all over the
world, getting those governments to compete at being profit-friendly. This
of course undermines the stability of the system as a whole.

Jim Devine jdevine@xxxxxxxxxxxxxxx &
http://clawww.lmu.edu/Departments/ECON/jdevine.html
"The only trouble with capitalism is capitalists. They're too damned
greedy." -- Herbert Hoover