"I predict we will see a return to the theories of Karl Marx" writes John Cassidy in a recent New Yorker article. He goes on to say that Marx viewed economic growth to be dark and complex. "In his model, capitalist were a beleaguered species, constantly under pressure from competitors tryng to enter their markets and steal their profits. Given such pressure, firms had to cut costs by investing in labor saving machinery, forcing their employees to work harder, and developing new products. This process, which Marx called "accumulation" was the main reason that capitalism was so much more productive than previous social systems. In feudal times, the nobles consumed the economic "surplus" created by the peasants, but in the industrial society capitalists were forced to invest the "surplus" created by the empolyees or risk being swept aside by their rivals. "Accumulate! Accumulate! Accumulate! That is Moses and the Prophets" Marx declared.
Marx's version of free enterprise chimes with the views of may contemporary businessmen, who would rather be flogged than labelled Marxists. Jack (Neutron Jack) Welch, Jr, the highly respected charman of GE transformed the company, closing down dozens of plants and firing tens of thousands of employees. The reasons he did so would be familiar to any reader of Marx. "The events we see rushing toward us make the rough, tumultuous eighties look like a decade at the beach, " Welch said at a 1989 shareholders' meeting. "Ahead of us are Darwinian shakeouts in every major marketplace, with no consolation prizes for the losing companies and nations."
Marx believe that the fundamental divide in any society is between the people who own the machinery and the factories and the people whose only marketable assets is their capacity for work ("the proletarians"). The trend towards making yet bigger winners continues. In 1978 the typical chief executive at a big company earned about 60 times what the typical worker earned; in 1995 he took home about 160 times as much.
According to Edward Wolff, prof of ecomoics at NY Univ., half of all finanical assets in the country are owned by the richest one percent of the population, and more than 3/4's of them are owned by the richest 10 per cent. A federal reserve board survey show that six in ten American families still own no stocks whatever, either directly or via 401(K)pension plans. And most families who do own stocks have total holdings worth less than 2000 dollars.
This suggests that Marx's most controversial ideas, the "theory of immiseration," may be making a comeback according to John Cassidy.
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