Economists are calling the US economic 'turnaround' a 'jobless recovery' – a term that makes sense only to economists. Shouldn't people's ability to find work be central to any economy? Isn't the point of an economy all about fulfilling human needs, one of which is meaningful work? Not according to today's monetarist economists who only three years ago were warning of the dangers of the unemployment rate dropping below four percent. Then the business community and their economists were fearful that lower unemployment rates would increase labor's bargaining position, which would drive up wages and inflation. Unfortunately full employment was never reached.
Alan Greenspan, with the backing of the other monetarists who dominate today's economic discourse, increased interest rates to deflate the economy. It worked. Unemployment rates began to climb. Officially it's now at 6.1 percent but that number masks the huge number of people whoíve simply given up looking. In August, 93,000 jobs were lost and there are 2.1 percent fewer workers on payrolls in the US than there were two years ago, which doesn't even take into account the needed job growth to keep up with population increases.
Yet as GDP rises again, at a rate of five percent this quarter, the economists are talking about a 'jobless recovery' - the meaning of which was explained in a recent Financial Post article. 'The total net worth of Americaís richest people rose by ten percent to US $995 billion this year from 2002, according to Forbes magazines annual ranking of the countries 400 wealthiest individuals.' Over the two years prior to 2002 the 400 wealthiest people saw a slight decline in their wealth (as was the case for most of the population). And now the rich - if you're talking to economists, the essential part of the economy – are recovering.
No matter that the dole lines and the number without medical insurance are increasing. This combination of GDP growth and increasing unemployment is no longer out of the ordinary in the context of the de-industrialized US economy. According to Patrick Barkey in the East Central Indiana Star Press, 'jobless recoveries have become normal recoveries, at least for the US economy. There is no 'bounce-back' in hiring in the aftermath of recession because employers have made adjustments to permanently eliminate the need for the lost jobs. At least that is what the data for the last two recessions, in 1991 and 2001, tell us.' And, the past 20 years of neo-liberal attacks against social entitlements such as welfare (the non-corporate kind), unemployment benefits and social housing has made this unemployment crisis that much more painful. Homelessness and hunger are increasing.
Still, the recent cutbacks to social entitlements have benefited the capitalist class. Reductions in social spending make it easier to cut corporate and high income taxes. A reduced safety net also weakens the bargaining position of labor. Times have seldom been better for the richest capitalists - the four hundred richest US residents now own nearly a trillion dollars in assets (about the size of Canada's economy, the eighth largest in the world).
While in practice this increasing amount of wealth (capital) in the hands of the super rich translates into broader control over society from their (and corporate) funding of universities, politicians, think tanks, the media and almost every other aspect of society, in theory capitalist power is nothing more than a well orchestrated illusion. Bill Gates, the WalMart Waltons and the rest of the capitalist class serve no useful function (outside of any managerial role they may perform). Sure, within a system of capitalist property relations one usually needs some capital to generate productive capacities. Likewise, the ownership of capital usually generates a return on investment. Nevertheless, in principle capital has no productive function. In Economic Democracy: The Alternative to Capitalism Allan Engler explains that 'capital has never been able to expand on its own. No share, no bond, no dollar has ever been observed to spontaneously reproduce. The real value of capital only increases when the surpluses produced by social labor increase.'
Since human labor and ingenuity, not capital, is the basis of productive value we should start to talk and act like that's the case. And if post-World War II history is any indication, once a sufficient number of people begin to believe capitalists have very little, if any, utility there will be a whole slew of changes, mostly for the better, in the economic realm. At a minimum this scares the capitalists into allowing working people some more rights. Suddenly mainstream economists will once again create graphs that show how full employment policies benefit the economy. A little inflation won't throw the economic departments into despair. The economists may even notice the absurdity of a term like 'jobless recovery.'
However, to put the necessary scare into capitalism, there must be a mass organized, and always organizing, working class (this includes most of those US citizens who identify themselves as middle class). This movement will combat race, gender and other hierarchies but will also move forward with a sense of its commonality and righteousness. It will be a movement that is internationalist both out of a fundamental moral conviction and for its own self-interest.
This movement may decide, like it did in the 1950s, to stop once it has won a policy of full employment and some other social gains. Or perhaps it will continue on and demand the replacement of capitalist entitlements with social entitlements and social ownership; insist upon democracy in the workplace and an end to production for private profit. Finally, we could remake the world to one based upon human cooperation and equality.
--Yves Engler is a Montreal-based writer and activist.
