Was Marx Right? The Bailout and the Auto Industry

There are two reasons we need to bail out the auto industry. The first, quite simply, is to buy time. Let's say we agree that the American auto industry is doomed, and that a $25 billion bailout does nothing more than delay the inevitable by three years. That is a perfect and entirely persuasive argument in favor of a bailout. Right now, the ripple effects of the loss of a million or two million or three million jobs (no one is quite sure of the number) would be a nuclear bomb detonated in the middle of a national recovery plan. It's not just the consequences for unemployment and health care and pension guarantees and consumer credit, it's the complete devastation of the landscape in which the efforts of the new Obama administration will have to take place. If $25 billion buys us three years for a recovery plan to take effect, that's a bargain. And there are other reasons to buy time. It is almost impossible to overstate the short-sightedness and pigheadedness of the management teams at the Big Three automakers. In the past few years GM executives have repeatedly derided the idea of a business model based on building fuel efficient cars and have pinned much of their hopes on selling luxury vehicles in China. But there are, finally, signs of improvement, including the development of the Chevy Volt. And there are a whole series of changes in the terms of employment under UAW contracts that are described below. But these things will take time to have their positive effects.

That's the first reason we need a bailout: it might turn out to be enough to save the industry, and even if it doesn't it buys us time that we desperately need. But there is a second reason for a bailout that has to do with nothing less than the question of the current economic age: was Marx right?

Was Marx right? The usual answer is "no" with respect to his predictions in the Communist Manifesto. In some ways, to be sure, his arguments seem quite prescient, as in his warnings that capitalism's ever-expanding desire for markets that would lead to the creation of a globalized economy, his predictions that sovereign political systems would come to serve primarily as managing entities for multinational wealth, and his emphasis on the equation of market liberalism with free trade. On the other hand, the standard wisdom is that he was wrong about the consequences of these developments. In particular, it simply was not true that industrial capitalism resulted in ever-downward pressure on the living standards of workers, that the cycle of crises of capitalism continued to get worse and worse (after the global depression of the early 1930s), and above all that the middle economic classes disappeared as industrialization and corporate capitalism expanded. In the U.S. as in all western democracies, some combination of government intervention in the market and/or organization of labor produced counter-pressures that ensured that the immense wealth being created was shared. As a result, contrary to Marx's prediction of society devolving into two opposing classes, these western nations' economies were marked by the appearance of strong and stable working middle classes, a category Marx did not envision at all.

But was Marx wrong, or was the creation of a working middle class merely a temporary exception? It is not news that the American working middle class, especially in the manufacturing sector, has taken a beating over the past two decades, nor that the increase in the gap between rich and poor has been accompanied by a progressive weakening of organized labor. The Europeans and Asians proved Marx wrong by using political authority to reshape capitalist markets. In the U.S. we have tried to do the same thing by turning labor into a market participant. Then we started busting the unions. Which brings us to current discussions about the auto industry.

One type of comment that has become typical among both opponents and supporters of a bailout achieves fairness by blaming both labor and management. On the management side, it's hard to come up with a worse set of executives than those at GM. But the unions, we are told, are also to blame by virtue of their demands for health care and retirements and unrealistically high wages. The auto industry cannot solve its problems until Something Is Done about the unions. Richard Shelby of Alabama has been out in front on this argument, declaring "we have a viable auto industry in the South" in reference to non-union Honda, Toyota, and Mercedes plants located in his home state of Alabama. In a New York Times editorial on November 12 Thomas Friedman called for "tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company."

Amity Shales, writing in the Wall Street Journal (Nov. 29th) warns of ominous pro-labor possibilities:

"Lawmakers are considering new labor legislation containing "card check," which would strengthen organized labor and so its wage demands... employees continue to pressure firms to spend on health care, without considering they may be making the company unable to hire an unemployed friend."

(Strangely, Shales' column goes from arguing that New Deal policies were not completely effective in solving the Great Depression -- unemployment rates were only cut in half -- to concluding that a repeat of such policies would cause a new depression, but I gave up expecting logic from editorial pages years ago.)

President Bush and Senator McCain, during his campaign, blame unions for "Cadillac" healthcare plans that encourage frequent doctor visits and preventive care rather than being restricted to late, emergency-based interventions. Are Shelby, Shales, and Friedman right? Is the most or one of the most important things we need to do to break the stranglehold of organized labor so that we can reduce health care benefits and bring down industrial wages?

The basic fact that are presented in favor of these arguments are simple: the average GM worker earns $72 an hour in wages and benefits while a worker in a non-union Toyota plant gets $42 an hour. Except that that's not really true. What is true is that the cost to GM of an hour of work averages $72 per hour. But that's not because GM is paying such high wages. In 2006, for example, GM's research division reported that the top pay for a GM hourly employee was $27 an hour; another $13 per hour comes from night-shift premiums, overtime, holiday and vacation pay. The rest is health-care, pension and other benefits. Now, an hourly wage of $25 per hour at 40 hours of work per week comes to $1,000 per week. So if a person works 48 weeks out of the year with no paid vacation, that's a salary of $48,000, which is an awful lot higher than anything Marx was envisioning but not quite the kind of figures that one hears bruited about.

Line workers in Toyota and Honda plants do not earn less. In 2007, the Center for Automotive Research in Ann Arbor, Mich. found that for the first time a non-union plant, Toyota's largest U.S. plant in Georgetown, Ky., paid better than plants with UAW contracts, averaging $30 per hour with bonuses, and estimates that wages at Toyota's other plants as well as at Honda and Nissan plants in the U.S. were comparable. The source of the difference in labor costs comes in the costs of benefits, especially "legacy costs." It is critical to recognize that the $72/hour figure does not just include benefits to the workers being paid, it includes benefits to retirees. GM, the largest private purchaser of healthcare in the U.S., spent $4.75 billion in 2007 on retirees' medical coverage. Those legacy costs -- including benefits for a lot of workers who went to work as teenagers and took 30-year retirement while they were still young -- is a primary reason that GM is $48 billion in debt. So the "cost" of an hour of labor for GM may be $72, but that does not mean that $72 is going to the worker performing the hour of work.

Those health care and legacy costs are a tremendous burden on American industry. It is estimated that health care and retiree costs add $2,000 to the price of each American vehicle. Toyota, Honda, and Mercedes don't face those kinds of costs. Their American plants are too new to have large numbers of retirees. As for their plants back home... welcome to the competitive benefits of government pensions and single-payer health care. In this country we chose to rely on a market model in which labor and management would negotiate for the most advantageous deal they could obtain from one another. That adversarial system of negotiated social policy has broken down in the face of competition from nations whose social policies are driven by, well, policy-makers. Interestingly, Walter Reuther warned the Big Three about this danger back in the 1940s and urged them to join the unions in supporting national health insurance.

Rep. John Dingell of Michigan began introducing bills for single-payer health insurance in 1933. His son, John Dingell, Jr., introduced a version of the same bill ever year since he took over his father's seat in 1955. But the owners preferred to keep the system private and purchase industrial peace with ever-bigger promises rather than surrender their role as national policymakers. Toyota USA has fewer than 300 retirees; it will not see its first 30-year veteran workers start to retire until 2018. 25 years ago GM had 425,000 employees. Today it has fewer than 80,000 employees... and 500,000 retirees.

Now what? Is the solution simply for the unions to stop being so greedy, stop demanding luxury wages and health plans? We have already seen that the wages paid to unionized U.S. auto workers are not actually any higher than those paid to non-union workers, but that is only part of the story. The other part has to do with the steps UAW has taken to help out the companies in their last periods of crisis: 2005 and 2007. Bob Herbert (New York Times, November 29th) points out that in 2007 the UAW agreed to a contract that froze wages for existing workers for the four year life of the agreement and cut wages for new hires to $14 to $14.61. Herbert could have said a lot more about that contract. Under its terms new hires would also not receive traditional company pensions; instead they would be given access to a 401(k), face hither co-pays on their health care, and give up paid holidays and other benefits that had previously been negotiated in earlier contracts. Money that would have gone to cost of living adjustments; those increases would be diverted to help the company pay for rising health care costs for active workers. In other words, the workers accepted declining salaries in order to help pay for health care. Most importantly, the agreement provided for the union to take over employee health care through a privately managed trust fund to be called the Voluntary Employee Benefits Agreement (VEBA), starting with $29.9 billion in seed money from the company and to be transferred entirely to union control -- and responsibility -- in 2010.

In return, the union got what its members cared about most: continued benefits for current retirees, and job security. More than 3,000 temporary workers were given permanent jobs with traditional wages, and the company committed itself to a moratorium on outsourcing and plant closings. In other words, the UAW did what the U.S. government and GM management has thus far refused to do: insisted on long-term planning, emphasized security over short-term profitability, found a way to relieve an automaker of a significant portion of its health care costs, and demonstrated a willingness to make sacrifices for the sake of the overall enterprise.

That's also the difference between union and non-union plants. Unions have acted as policymakers and created a working middle class. Non-union plants operate for the benefit of current workers only, and cycle those workers at will. Marx called this the "commodification of labor"; his essential point was that the transformation of labor into an abstract commodity subject to competitive markets would be the engine that destroyed the middle class and divided society into rich and poor. Not that Toyota and Honda and Mercedes are heartless capitalists; they are just not used to operating in an environment in which society at large has disclaimed all responsibility for the care of the sick and aged and left the design of national social policy to the outcomes of adversarial negotiations between labor market participants. But what happens when those workers get old, or sick, or become disabled, or are laid off? We decided to rely on union negotiations rather than government policy-making to secure the working middle class, then we let foreign car companies enter our markets without having to carry a share of that burden.

We need a bailout of the auto industry to give the new contracts and the new automotive products a chance. And then we need to address the larger question about the auto industry, and about American industry in general: Was Marx right?

Comments

[HMDMSR]

Marx needs no vindicationMarx needs no vindication. The writings of Marx center around an historical explanation
of capitalism. Marx made no blueprints for a communist state. What we do with the world is in many ways up to us. We have no control over the relative abilities of nuclear power and wind power, for example, to produce electricity. We're kind of just stuck with their inherent possibilities. The economy is really just a giant engineering operation. It's time just to accept that the economy, within the constraints of physics and chemistry, is just what we make of it. I don't know why anyone would want to idle millions of people. Down with the liberal/ protestant work ethic! Many Americans are jealous of union workers. Members of unions tend to have better deals than the rest of us. More important, unions provide protection for what might be considered belligerent attitudes by owners/managers. The same kinds of people that attack unions laugh at the impractical Europeans for having too many vacation days, holidays, or benefits. Americans get a crappy two weeks vacation every year, if they're lucky. After many years, usually five or so, they're begrudged a meager third year. The social climate in the U.S. is hostile. Americans are over-worked, over-anxious, and embittered because of that. To an earlier point by AndrewInToronto, much of our work is unnecessary. Benefits should track productivity increases, which are made yearly, but not taken advantage of in a social sense.

[AndrewInToronto]

I have just formally become "a fan of HMDMSR." :-) Well put. Marx offered a critique and not a blue-print.

Surplus labour is a useful tool and an accepted fact within capitalist economics to keep a downward pressure on unspecialized labour within society as a whole. It is explained as 'workers in transition' -- I remember this all to well from first-year macroeconomics.

In terms of much work being unnecessary, for me this is a very complex issue which really is at the heart of capitalism, ironically so given that the Friedman's say that it offers the most rational use of resources. This really is the crook of the matter: with capitalism producing for exchange-value and workers required to continue production for that wage to re-purchase that which is already collectively theirs, the economy is mired by having to ever-produce; find new markets or generate new markets for un-needed products. The latter was termed by Stalin to be the "trivial economy" and in large measure, I am inclined to agree but contingent upon a shift in the measure for resource utilization from the profit motive to the social opportunity cost of allocation. That is, away from profiting shareholders and corporate management salaries to evaluating how those resources (material and social) can be used to produce a school or a hospital or whatever. The shift to use-value is of primacy in this instance for me as is a bio-regionalism.

[julianne]

Just the healthcare aspect shows the blind, relentless greed of American economic elites whose idea of an economy is to feast on the majority with no sense of balance, foresight, or fair play. Look at the grotesque disparity of income they have created. Their pathology is also reflected in the sick characters inhabiting the Congress and Senate that the financial and industrial elited carry around in their pockets like the Godfather. In the healthcare industry, including the pharmaceutical industry, trillions of dollars have been (allowed) to be stolen from the mass of people by a relative handful of their fellow citizens who have undermined the nation's security, economy, and physical and mental health. Whatever the particulars of our industrial economy or what is left of it, would Marx foresee a significant minority in the U.S. (vs. Europe) as totally dead-souled theives and killers? Sorry to all the flag wavers, but did Marx or any other historical economists envision a nation with a political and economic leadership so sociopathically manipulative, arrogant, traitorous, and corrupt?

[AndrewInToronto]

I think it was called imperialism. ;-)

[twistedboomer]

Agreed. It was Marx, Engels, and Lenin especially who defined the role of Capitalism in the Imperialist epoch.

Their descriptions are remarkably close to those of your own well-stated posting.

[CactusTom]

Capitalism depends on endless expansion of every sort. It depends on ever expanding profits, which depends on ever expanding markets, which depends on ever expanding populations. There will, indeed, come a time when the ultimate expansion of population on earth will have reached saturation. But of course doom sayers have been predicting such a saturation point for centuries.

Still, when 25,600 children die every single day, one wonders if we are not currently beginning to bump up against the limits of human expansion. And thus the end of the core element that supports capitalism has arrived, making it possibly a dying system.

So far technology has been a two edged sword. It has bailed out capitalism, but as it says on the side of the box there can be serious side effects. Technology has enormously expanded food production and distribution, saving billions of lives, while at once it has polluted the earth in ways still not fully understood.

Some say it is a race to see if we do ourselves in by nuclear weapons or other man made lethal devices before some routine cosmic event wipes us out. Perhaps we might add the possible end of capitalism, and make it a three way doomsday race.

[AndrewInToronto]

In terms of the death of children each day, this for me is more a statement on access and not production. It is about how a global economy has been geared over the post-war years to feeding a buyer society in North America, Western Europe and Australia and New Zealand, although the emerging nations along the Pacific Rim have entered the picture too.

[AndrewInToronto]

A short note: it has been a good number of years since I read it, but there was a book by Wayne Thorpe -- "The Workers Themselves" -- which included a discussion of Marx and the International Workingmen's Association, particularly in association with Bakhunin's position on worker organization and political agitation. It may be of interest to bloggers here.

[AdamKoeppe]

I'm sorry, but it seems pro-big auto supporters and writers will use any argument available to convince the general public that bailing them out is the right thing to do. I've heard "legacy arguments": my dad/grandad was a auto worker so we need to keep his 40 years of work alive. I've heard the "destroy Big Auto and you destroy the country" argument (the one used most often). Now we have "destroy Big Auto and you vindicate parts of Marxism."

What's next, "Destroy Big Auto and you let the terrorists win?"

It is obvious most Americans do not want a bailout for Big Auto. It is stated on blogs and comments on HuffPost and all over the country (except for Michigan). Everyone knows they have acted in collusion for years to produce similar products with little advancement. Compare the electronic industry to Big Auto for the last 20 years. Scary stuff

If they are given money with no strings attached, they'll blow it. Now please, start telling me a new bedtime story; maybe "Hansel and Gretel go to Circuit City"

[AndrewInToronto]

I will also add the basic fact that nations of the North have in part created their wealth upon the backs of workers in the Developing World. Having said that, it is still appalling, for instance, that one in six children in Canada lives in poverty or that the number of those in poverty in the States exceeds the entire population of my country.

[AndrewInToronto]

A key statement, variations of which run through the articles, is:

"In the U.S. as in all western democracies, some combination of government intervention in the market and/or organization of labor produced counter-pressures that ensured that the immense wealth being created was shared."

The ability of workers to organize to collectively improve workers' lots is in direct opposition to the interest of capitalism. Where this not so, there would be no need for unions, collective agreements, work slow-downs or strikes. Additionally, when the author speaks of political 'authority's' response in Asia, it is far from correct to imply that this has been helpful, say, in some sort of Keynsian manner: witness the constant authoritarian actions, say, by former ROK President Chun Doo Hwan's crackdown on attempts of workers to organize during the 80s as well as the ban on trade unions in Export Processing Zones and Free Trade Zones. Similar was the response of the Chinese Communist Party's response to the formation of Autonomous Workers Federations which spontaneously arose during 1989 while thereafter permitting foreign capital the right to fire workers. Such are examples of the way in which Governments and associated organs cooperate to promote the interest of capital over labour, against which workers have to struggle, particularly as capital becomes more mobile, say, through bilateral and multilateral free-trade agreements or actions of extra-governmental bodies such as the WTO or interpretive bodies set up within such agreements to enforce them.

[HMDMSR]

For Marx, the fundamental life-blood of the economy is value. Marx identified value with labor time expended to create socially necessary products and services. This forces the following distinction to be made with regard to all participant in the economy: some expend socially necessary labor, some do not. These are the two classes we mean to speak of when we're discussing a two class society.
Regarding the middle-class, many of them are "working class," in other words, contributors to society.
Many would not be working class or capitalist, but more of a mutant class. The term petty-bourgeoise has been used to classify these people. Individuals who work as managers, marketing professionals, or accountants would be petty-bourgeoise. The term middle class seems to be meaningless as it is commonly used: as a way to categorize people based ontheir yearly incomes.
From the marxist point of view, value is used to explain the source of economic growth (and decay).

As far as the Soviet Union is concerned, it would be useful to see it as an experiment--perhaps as the fifirst airplane--your know, one of those which didn't fly. The fact that the first planes couldn't fly did not prove planes would never leave the ground. With declining natural resources (e.g. peak oil), a collapsing environment, and a growing population, does anyone believe we can continue to let the economy run out of control?

[AndrewInToronto]

HMDMSR makes an important point here: distinguishing between the term "class" as forces of production -- i.e., bourgeoisie and proletariat -- and as social (based upon relative standards of living within a given society). Additionally he points out the difference between production based upon use-value and upon exchange-value, with capitalism tending to the latter while "use" may be a component.

I also appreciated your ability to succinctly express the Soviet experience. It was one which arose under specific historical conditions which in part still exist today (for instance, the tendency of corporations to influence governments to selectively utilize their militaries or proxy forces to undermine the stability of so-called "hostile" governments (Cuba, Venezuela). The particular Russian experience though in terms, say, of then making the beginnings to move away from serfdom and towards industrialization or a political structure which was highly centralized and authoritarian would not apply to an industrialized nation such as Canada or the United States. Nor did either nation experience the ravages of occupation under German fascism including the death of more people in four years than is the current population of Canada.

[peterg76]

Marx believed that if the exploitation of people with lesser economic bargaining power was taken too far, then people would rise is revolution against their oppressors, which is really not that profound since most revolutions happen that way. Marx failed to understand that (1) changes in technologycould alter the bargaining power of workers and capitalists, and that (2) reform was not all-or-nothing but could be achieved incrementally by democratic rather than revolutionary means, or by unionization which is halfway between those two options. Marx was correct that (3) superstition-based belief systems like religion or economics would be used by the powerful to disguise the exploitation.

[timm0]

Probably the best answer given so far.

I will only add that superstition-based belief systems have been used for centuries to disguise (and/or enable) exploitation - making it about as non-profound as predictions of revolution. Still works exceedingly well today, though... doesn't it?

[AndrewInToronto]

For me, that which underpinned much of Marx's thinking on the notion of exploitation was not just the basic concept that the commodification of labour and simultaneous creation of a wage-labour system with a more highly specialized division of labour was not in the long-term interest of the worker, it was his understanding that the alienation intrinsic to capitalism was there to stay. That applied to the worker as well as to the capitalist in a dialectical way but obviously weighed more heavily upon the latter as s/he was singularly at the mercy of the latter for the means (wages) to acquire the fruits of labour from an exchange-value system of distribution. Specifically, he spoke of alienation from species being and species powers -- that is the ability of humans to uniquely produce beyond our needs in areas of literature, art, music, other cultural expressions as well as finding specific expression in the workplace. The inability to the worker to control the current means of production specific to him or her or the trends which developed within industry which in part would determine the viability of a company to maintain its cost-effectiveness, say, as well as market share, would persist and as a result, so too would alienation. Employee-sharing schemes and such could not undo that and would rather simply give the worker a seeming vested interest in maintaining a loyalty to the wage-labour and privatized-capital systems.

[peterg76]

Very good point. Marx appreciated the loss of independence and self-sufficiency that occurred with the shift to wage-earning compared with, say, the peasant farmer who was more or less self-employed.

[AndrewInToronto]

I would disagree, though, with your statement on religion with examples such as Buddhist monks' supporting Thai farms in the fields protesting expropriation of their lands; the role of Jesuits in Latin America with Liberation Theology; or creating just communities through lending without interest in Islam and Judaism. In Christianity it is quite easy to see the figure of Jesus as someone who opposed social injustice with statements such as "when you did this for the least of my brethren, you did this for me;" "it is easier for a camel to pass through the eye of a needle than a rich man to enter heaven;" or with James, "show me your faith by your words and I will show it by my works," while referring to clothing the cold and feeding the hungry. Such are both calls and actions to create justice and, as such, have led to critiques of the roots of oppression and injustice.

[peterg76]

Marx probably should have said 'church'.

[JoeBlows]

No one, I think, has mentioned the idea of retraining the autoworkers and retooling their business. Perhaps money would be better spent training these people to work in new fields, such as mass transportation or bridge building or nursing.
Why must America continue to have an auto industry? The answer I get from reading the above letters is that America cannot afford the consequences of not having an auto industry. So, we subsidize it.
IBM sold their computer business to China. Why not sell the auto businesses to China or Japan or Korea or India and go forth with something new, something without the legacy costs? Competing with China in the manufacture of cars is a losing proposition.
Our medical system continues to drag us down and now we see how it is causing our industries to lose their competitive edge. American workers may be the most productive (for now) in the world, but the fruits of their edge rot in medical costs.
Perhaps if we "supported" the (American) auto industry for five years and, during this period, the industry agreed to retool for non-automotive products, and if we actually achieve universal health care during this period, the problem would be mitigated.
Final point: If Detroit continues, with taxpayer assistance, to pursue production of the electric car, how does the $72 vs $42 an hour handicap go away so Detroit's cars are competitive? It doesn't.

[zamiel]

Give them $500 billion, so they can stay in business for another 100 years, making $80k Hummers that get 6 mpg. Rush says Americans should be able to buy the cars they want.

[senevada]

brilliant article. part of the victory of the right in this country over the past 30 years or so has been the successful confusion of such terms as "Marxist" and "Fascist" and "Socialist" into a jumble of "bad" ideas into which they can now more easily lump in "liberal" and "green", entirely ignoring the fact that the terms define extremely different ideas, which leads to ridiculous moments like Bill O'Reilly calling the left "fascist".

[feo]

First, a large percentage of auto workers are NOT UAW; most white collar workers are not covered by any sort of collective agreement. Second, if there is no money for pensions, then many former and current top executives need to go to jail. The money behind the pensions comes from deferred wages, that is wages not paid in years past. Third, why has no one pointed out that the collapse of the banking and financial industries was achieved with no unions involved whatsoever? The wages paid in those industries make the auto business seem cheap. Mark Fields at Ford made about $9 million last year for overseeing ALL of Ford's North American operations. Less than the average major league shortstop. Compare that to the $68 million Wall Street incompetents paid themselves for trying to run scams that failed.

[BuckeyeGal]

Citigroup Bailout: Feds Offer Massive Rescue Package To Financial Giant
Those financial types, they don't have a union.
posted Nov 24, 2008 at 02:30:08

Cheers.

[david6]

No one, including Marx, could have foreseen the developments in computing and information technology that occurred in the 20th century. Hasn't that changed the way the nature of labor and capital more than anything else?

Maybe what we're seeing is the 'obsolesence of middle-class labor', not its commodification. In a world of smart machinery and lean management structures, you'd expect extreme polarization - a few highly skilled managers and a mass of very unskilled labor. In a global market, what's the relative value of US labor or middle management for any economic activity that is not intrinsically geographically based? Probably not much.

My impression is that the foreign auto companies only have plants in the US to get around import restrictions. In the absence of trade barriers, does US labor have a competitive advantage in anything? Or to ask it another way, does the global clearing price for labor support a US middle-class lifestyle?

[timm0]

"Maybe what we're seeing is the 'obsolesence of middle-class labor', not its commodification."

Nonsense. Although it may look like that, it's because the design of the "free trade" and "global market" is to perpetually move manufacturing to the lowest bidder. This is not necessarily evil at face, but in practice, it frequently is. If it weren't cheaper to get 'thrown-away' kids in India or impoverished Chinese to hand stitch soccer balls, then technology might be used in the US to stitch soccer balls. It's lowest cost production - period.

Besides, if it were middleclass obsolescence, then the world's markets will soon implode. This is easily the logical result when there are only a few highly skilled (i.e. 'people making good incomes') and masses of "unskilled labor" (i.e. 'people with little or no income') in the economy. The only market that can be served by business enterprises are those few with wealth. In short, too few consumers to support an economy.

Since that can't hold, we're going to have to tip the scales back and force the wealthy away from the current parasitic (and yes, the wealthy are the parasites, feeding off the less powerful) to a more symbiotic relationship - because the rich are too pig ignorant to realize that their dream world is totally unsustainable. Not realizing this fact has led to many nation's demise.

[AndrewInToronto]

For me, TimmO's has hit the proverbial nail on the head. It is because labour has been able to organize and improve the financial lot of workers in the auto industry that there is more disposable income to be had which then helps to maintain the economies of communities in which they live. This, for example, is very much true in Ontario, the province in which I live in Canada because one is not speaking of purchasing foreign-made luxury items but things for day-to-day living.

The two questions which arise for me then are: at what point does the exchange-value basis of a capitalist economy in terms of distribution and access to the fruits of labour become untenable; and how do we transition to a use-value-based economy which may mean keeping market forces but not market relations?

Any thoughts?

[PhilipTaylor]

Our manufacturing sector was not invested in to improve its cost effectiveness but instead the Bush Administration simply decided it was smart to ship our industrial base overseas so BIG BUSINESS could make BIG PROFITS. But like everything that concept fails after a while because over time the cost in other countries catch up like Japan has and China will.

What is left in America is the Big 3 Auto makers and now the BUSH Republicans want that to be destroyed so America produces nothing to export and so we are left with NO WEALTH BUILDING EXPORTS and NO GOOD JOBS for Millions of Americans. This is extremely SHORT SITED like the PONZI Scheme Wall Street invented and will end in perhaps a worse CRISIS than the current one we are Facing.

[EattheRich]

Of course Marx was right...