[OPE-L:6998] [OPE-L:490] Re: Brenner/NLR

Allin Cottrell (cottrell@ricardo.ecn.wfu.edu)
Tue, 23 Feb 1999 20:41:47 -0500 (EST)

On Tue, 23 Feb 1999, David Laibman wrote:

> Brenner begins by stating his opposition to what he takes to
> be the dominant explanation for the long downturn in the
> world capitalist economy beginning around 1965-73: this is
> the supply-side, profit-squeeze theory, according to which
> the crisis reflects the rising power of the working class,
> expressed both at the point of production and in the
> political support for the welfare state, which caused wages
> to press upon profits, thereby depressing the profit rate.
> Brenner s discussion of the limitations of this approach is
> quite apt... The power of labor or capital-labor accord do
> not explain why wage growth was able to exceed growth of
> labor productivity.

As a student of Andrew Glyn's, I'm inclined to give this theory
its due. Full employment (underwritten by a cross-party
consensus in the UK at any rate) would surely provide a powerful
lever for erosion of profit share.

> The theory does not address the numerous possibilities for
> capital to evade wage pressure on profits, through the
> negative effects this would have on investment and demand
> for labor, and through capital mobility (including its
> ability to emigrate to low-wage areas abroad).

We should remember that full international mobility of capital
is a relatively recent phenomenon. It is anachronistic to raise
this in relation to the late 1960s.

> Finally, the profit-squeeze approach rings increasingly
> hollow in the light of evidence of the erosion of
> working-class economic power, wage repression, and
> dismantling of the welfare states, especially in the period
> after 1979-80.

Eh? This is _after_ a major political turnaround, with the
election of Reagan in the USA and Thatcher in the UK, and a
publicly trumpeted abandonment of any political commitment to
full employment, quite explicitly in _response to_ the previous

Allin Cottrell.