So, the answer is yes, and the explanation for the failure of
the welfare-state was far from adequate...
We might as well go for something new if we have to
go against the tide... We are running out of time, we
cannot repeat past mistakes.
Eva
>
> >
> > the suggestion is to go back to keynesian economy, isn't it?
>
> Dar Eva:
>
> Far be it for me after reading one difficult book to answer this question
> definitively. And yet, you have hit the nail on the head. Galbraith argues
> that it was movement from a Keynesnian economy to a monatarist policy that
> removed the goal of full employment from the economic equation. The
> monetarist with their Nairu which made unemployment a deliberate part of
> economic policy effectively destroyed the concept of full employment, one of
> the main planks of the Keynesians. With that decision, came the following
> consequences, high transfer payments to the unemployed, lower wages because
> of surplus workers and income transfers from the middle class to the
> capitalist class which had capital to loan.
>
> > But that came to an end in the 70s due to unsustainable public borrowing
> > and cuts in profits/recession, didn't it?
>
> Thomas:
>
> I don't know. Which came first, the chicken or the egg. Did we borrow more
> because unemployment went up and new social services were put in place to
> alleviate and compensate those who were unemployed. Was it because the
> lords and masters of government didn't follow Keynesian Theory which said
> stimulate in downturns and pay back in good times and they just forgot to
> pay back? Was it macroeconomics in terms of the basic price in energy in
> 1973? Was it the elimination of work because of computerization? Think,
> would we still have full employment if we had not invented the computer?
> Possibly.
>
> > Now we reached the same "result" through a re-hashed
> > monetarist and then neo-liberal avenue.
> > What would be the new feature in this
> > suggestion of renewed state intervention in re-distribution?
>
> Thomas:
>
> If the governments (plural) had constantly raised the minimum wage, for
> example, in Ontario were I reside, it is $6.85 Canadian which is about $4.25
> American to try and get a baseline number. In 1968, Galbraith states the
> minimum wage was equivalent to $6.50 American in 1994 - probably about $7.00
> American in 1999 giving us poor, a shortfall of approximately $3.75 less for
> every hour worked than I would have made in Ontario in 1968. This amounts
> to a shortfall of $150 a week or $600 a month for a person working for
> minimum wage.
>
> Now, if all the working poor were working making an extra $600 a month, this
> would constitute a "state intervention". My logic says that would make a
> considerable difference from the current situation.
>
> > How come the word "capitalism" was not mentioned?
> > Non-virtual profits are falling - there is not enough to
> > re-distribute. Is the mechanism - markets/profits is working?
> > The global markets are limited - there is, I'm afraid, the
> > classic contradiction.
> > Do you really think it can be fixed?
>
> Thomas:
>
> Well of course there is another answer to the comment "not enough to
> redistribute" and that is there is no demand because 50% the people have
> very little disposable income. And Galbraith argues, to me quite
> successfully, it is because the working poor after rent, grocery's and
> transportation costs are broke. And of course all those on welfare,
> pensions, disability, etc have in most cases not seen any COLA increases
> while small quarterly inflation figures constantly add up over the years.
> My mother who is on governemt pension got her COLA increase for the last
> year, I think it was $.52. That is not realistic, is it?
>
> Galbraith also argues that it is not just full employment that is necessary
> but that prices should also be managed to some degree. Part of the problem
> of low profits is that competition - that highly touted good - has taken all
> the profit out of goods production. With little or no profit in the
> production of goods, then the corporate tax contribution is almost nil,
> which leaves governments to make up the shortfall through borrowing or
> taxing labour income even more. I am not against profits, as long as
> profits are taxed fairly. In the 60"s, government income was roughly equal
> with 50% coming from labour income and 50% coming from corporate profit
> income. The ratio is now, 80% labour income and 20% corporate income.
>
> As to virtual profits earned by speculation, when times are good, they
> reinvest and do not declare any profits and when they lose, they claim their
> loses and do not pay any taxes or greatly reduced taxes. One of the
> thoughts I had was that labour should have the same option. If I get laid
> off a good paying job and take a lesser paying job, why can I not deduct my
> loss of income as a valid income loss just like business and speculators do?
> >
> > Eva
> > [EMAIL PROTECTED]
>
> Respectfully,
>
> Thomas Lunde
> >
>
[EMAIL PROTECTED]
