Stephan Resnick and Richard Wolff, "The Economic Crisis: A Marxian Interpretation. This research paper frames the discussion about capitalist crisis in the United States around the matters of exploited workers, wealth distribution, the injustices arising from the issues and the consequences they have on the economic system. Resnick and Wolff (172) have linked stagnating wages and an increase in the labor share as some of the main contributors to economic crisis. Resnick and Wolff (180) pointed that in the early 1890s to 1970s the real wage of the employees in the manufacturing industry recorded an increase of by approximately 1.8% per year, and in other productivity line, the rise was even higher, about 2.3% per year. The employees’ productivity during this time increased. Roughly understanding this trend in the lens of Marxian Value theory, it can be concluded that the rate of surplus value steadily rose for almost a century. In the Marx’s point of view, that period of time saw the United States capitalism provide surplus to her capitalists that increased faster. While workers were extremely labored, they were also remunerated better. Saez (3) supports this assertion and doubts whether there is any other capitalism era ever that has produced such a result in the U.S. the paper will argue for the need to eliminate exploitation of workers, unequal wealth distribution, and the injustices arising from the issues.
Various bodies of literatures have, over the time observed that beginning 1970s and thereafter, real wages of the company workers in the U.S. stopped to increase. This change was observed from the records of the past century where the wages of the industrial workers constantly rose. It is unfortunate that while the real wages of the workers during this period of time remained constant or even fall, the manufacturing productivity continued to record a rise. The employers continued to reap more and more output in their workers, yet they no longer increased workers’ pay. The employees never shared in the productivity gain, which raised surpluses. In Marxian language, the rate of exploitation exercised by the industries and other employers rose steadily to extraordinary heights.
The effect of rising rate of exploitation to the economy
Wolff (22) argues that the rising rate of exploitation of workers first put them in to debts and living them with less money in circulation. However, key to debts nexus that existed between the employees and the capitalists was debt securitization. Because employees to not have money in circulation because companies continued to pay them less, the only collateral that they could give were their mortgages and homes. After banks and agents pushed for the payment of the loans back, they would then resale mortgages and homes to the investors. The process called for corruption. The same is still evident even in the present society.
One can never talk about stability in economy with looking at the socio-economic background of the citizen. A country whose citizens are struggling to live can never said to be stable economically. However, the life style is dedicated by the amount of income, like salary and wages (Skocpol 155). If companies continue to exploit citizens, then it is obvious that their lives will be miserable.
Marxian solution to effect the change.
The Marxian solution to steady rising rates of exploitation that pushed workers into debts was first to eliminate class exploitation. The Marxian way of pursuing this proposed change would strongly distinguish the solution in the view of today’s Keynesian or past neoclassical policies. A Marxian point of view of the recommended solution would not aim at reforming capitalism through increasing or decreasing the intervention in the state of economy, but the strategy would focus on eradicating capitalism in the view of changing the structure of the class in production. That is the key proposal in the Marxian point of view that would be achieved and people might prefer it.
The change advocated by Marxian would put employees inside every industry organization in the position of a receiving end. That, also would possible place employees as the first beneficiaries of surplus value. This is what Marx mean by doing away with capitalist class structure. This strategy could, however be a unique move of class democratization of economy.
In addition to this recommendation, another significant change is to give each employee in the companies, equal roles in deciding where, what and how to distribute surpluses. The subsequent move would mean enlarging economic democracy by including societal stakeholders in the production processes. Hence, employees and employers would both take significant role in distributing product surpluses.
According to Castells (45) changing the class structure and previously outlined will not only eradicate the crisis in the economy or contradictions, but the post -capitalist crisis in the economy will be different or they will be understood in a different perspective. For instance, there will be reduced chances of emergence in the surplus crisis, as it happened in the first one. This will be because workers will form part of the Board of Directors in the enterprises. However, in case there will be a crisis, the response will be more equitably and humanly.
There is another consideration that can be borrowed from Roosevelt’s New Deal, who advocated for imposition of a mass regulations that would prevent another depression in the future. Roosevelt’s New Deal regulation taxed and constrained the means that the capitalist pursued their goals. However, Lapavitsas(177) does not fully support the measure, because the regulation in most cases stopped short in their bid to change the capitalist class structure.
Thee major concern presented by Resnick and Wolff (2010) that need to be calls for change in elimination of exploitation of employee through either reducing or keeping constant their real wages when employers continue to reap of them. If this changes are implemented, it would mean that the employers will be increasing the wages of their employee proportionate to the income in production. As such it would mean that employees may have a lot of money in circulation, which can lead to inflation. Over, the time, economists from various countries have advocated for keeping minimum wages as a means of keeping check the rate of inflation in the economy. While, the researcher of this paper strongly agrees with the proportionality in paying the employees appropriate to the companies’ income, it is significant to monitor the circulation of money in the economy.
Conclusion
After repeated capitalist crises, it is now time for the perpetrators of the capitalist crisis to join those who have come to oppose the vise on the premise of ethics and moral. That is, we have to acknowledge that a change to restore the economy is urgently needed ad it should start with the capitalist who have over the time exploited the employees.
Works Cited
Castells, Manuel. The economic crisis and American society. Vol. 797. Princeton University Press, 2014.
Lapavitsas, Costas. "Financialised capitalism: Crisis and financial expropriation." Historical Materialism 17.2 (2009): 114-148.
Peck, Jamie. "Pushing austerity: state failure, municipal bankruptcy and the crises of fiscal federalism in the USA." Cambridge Journal of Regions, Economy and Society 7.1 (2014): 17-44.
Resnick, Stephen, and Richard Wolff. "The economic crisis: A Marxian interpretation." Rethinking Marxism 22.2 (2010): 170-186.
Saez, Emmanuel. "Striking it Richer: The Evolution of Top Incomes in the United States (updated with 2012 preliminary estimates)." Berkeley: University of California, Department of Economics. http://elsa. berkeley. edu/~ saez/saez-UStopincomes-2012. pdf et The World Top Incomes Database. http://topincomes. gmond. parisschoolofeconomics. eu (2013).
Skocpol, Theda. "Political response to capitalist crisis: Neo-Marxist theories of the state and the case of the New Deal." Politics " Society 10.2 (1980): 155-201.
Wolff, Richard. "The Keynesian revival: a Marxian critique." Alternate Routes: A Journal of Critical Social Research 22 (2011).
