December 29, 2012

WHAT'S LEFT OF MARXISM...:

Policy Implications of Capital-Biased Technology: Opening Remarks (Paul Krugman, 12/28/12, NY Times)

So, if the recent plunge [in labor share in GDP] is the shape of things to come, what difference might it make?

The short answer is that it will pose problems for the current mechanisms by which we fund social insurance programs; but it will not undermine our ability to afford those programs, and it would in fact be cruel and basically irrational to slash social insurance in response to a declining labor share.

OK, maybe that was too quick. Let me take it more slowly: a substantial part of our social insurance system -- Social Security and the hospital insurance portion of Medicare -- is funded through dedicated payroll taxes. If payrolls lag behind overall national income, this will tend to leave those programs underfunded given the way the laws are currently written.

But America as a whole won't have gotten poorer: the money is still there to support the programs, it's just coming in the form of capital rather than labor income.


....when the reality of the labor theory of value is that labor has no value?  
Posted by at December 29, 2012 8:14 AM
  
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