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Original Content at
http://www.opednews.com/articles/opedne_thom_har_061031_killing_the_middle_c.htm--------------------------------------------------------------------------------
October 31, 2006
Killing the Middle Class; How the Corporatocracy Sets the Rules of the "Game" To Create Peons
By Thom Hartmann
Excerpted from Thom Hartmann's newest book, Screwed; The Undeclared War Against the Middle Class -- And What We Can Do About It
One of the most pernicious claims the corporatocracy makes is that business flourishes best in a perfectly "free" market. And when business flourishes, they say, all of society does better. It's the old trickle-down philosophy that inevitably produces a nation of peons.
Always get suspicious when you see the words free market. Let's go back to the story of Mrs. Flores, whom you met in chapter 2-- the woman who lost her job at Levi Strauss when that venerable American company closed all of its factories here in the USA and moved them overseas.
Cons argue that "productivity" is responsible for the loss of American jobs. They love to quote nineteenth-century economist David Ricardo (1772�"1823) as saying in his 1817 work On Wages, "Labour, like all other things which are purchased and sold, and which may be increased or diminished in quantity, has its natural and its market price."
Thus, they say, it's natural that American wages should have been in a free fall ever since Bill Clinton signed NAFTA and GATT: America's roughly 100 million workers now have to compete "on a level playing field" with 5 billion impoverished people around the world. Offshoring is simply the normal extension, they say, of Ricardo's classic view of economics.
What they conveniently forget is that Ricardo didn't say the market price was the natural price. On the contrary, he wrote, "The natural price of labour is that price which is necessary to enable the labourers, one with another, to subsist and to perpetuate their race, without either increase or diminution."
In other words labor is part of the game of business, and one of the first goals of the game of business is to "perpetuate" the existence of the laborers themselves. That's the natural price. If businesses want to keep their workers, according to Ricardo, they must make sure that the market price of labor is at least as much as the natural price of labor. And the natural price is the "subsistence" price-- just enough to survive-- which brings us back to Dickens's world.
On the other hand, when in 1914 Henry Ford raised his workers' pay to $5 per day (about double what other manufacturers were paying), he said he was doing so in part because he wanted his employees to be able to buy his cars. If the American workforce can't make a decent living, they'll stop buying products made in America, which will lead to fewer people making a decent living-- this death spiral for an economy and a nation's middle class that we are now seeing as a result of Reagan/Clinton/Bush trade and economic policies.
Authors Website:
http://www.thomhartmann.comAuthors Bio:
Thom Hartmann is a Project Censored Award-winning best-selling author, and host of a nationally syndicated daily progressive talk show carried on the Air America Radio network and Sirius. www.thomhartmann.com His 17 published books include "The Last Hours of Ancient Sunlight," "Unequal Protection," "We The People: A Call To Take Back America," "What Would Jefferson Do?" and "Ultimate Sacrifice." His most recent book is "Screwed: The Undeclared War on the Middle Class and What We Can Do About It."
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