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New Western Capitalism Rooted in Dickensian Economics

Western CapitalismCapitalism has come a long way since Karl Marx wrote Das Kapital. And so has the language in which it’s spoken: economics. Left behind are those early languages by Adam Smith and John Maynard Keynes that for a while were lingua franca… branching out in many languages now transformed into cults followed by schools of economists which comprise a spectrum ranging from high liturgy to voodoo rituals, the latter better described as trickle-down economics, the language of choice for Ronald Reagan and every conservative in American politics since his inauguration in 1981.

In the last three decades, Western capitalism has adopted its own lingua franca in the language of Dickensian Economics. But it has only been in the last year that the term has caught on after Alan Binder, a Princeton economics professor, gave us what many feel is a summary quotation as to the economic unfairness present today. Binder wrote – applicable only to the United States – “Since 1978, productivity in the non-farm business sector is up 86 percent but real compensation per hour is up just 37 percent.  Is that fair?” And that has been the call to arms by the political Left.

In contrast, there have been a couple of studies which contradicted in essence Binder’s conclusions, basically stating that although workers had not had substantial wage increases in the last three decades, they were able to buy more goods due to the decline in prices in those things they bought while higher income earners had very substantial price increases in the goods they bought. Translated, the studies lead you to believe that the Consumer Price Index (CPI) overstated the cost of purchases by the poor (lower incomes) and understated the cost of purchases by the rich (those in higher incomes).  These are blatant and outrageous lies well proven by the ever growing income inequality, and the greater concentration of wealth, in the top 20 percent of the population; however, they have become the defensive call to arms by the political Right.

Binder’s argument, although remaining valid, loses much of its luster when gains in productivity have been achieved to a great extent by obtaining the same output from a lesser input (via cost-cutting, shipping jobs overseas and downsizing) and not the old traditional way of getting greater outputs from the same inputs. That always brings us to the problem we fail to address: short-term, globalization is detrimental to nations at a high level of industrialization. And that brings us to the totally unfair fight between labor – which is handicapped by a lack of mobility and re-training capability at the semi-skilled level – and capital (singular, unchangeable and mobile).

Up to this point Dickensian Economics has resulted from asking the question as to whether the United States, or any other Western nation for that matter, has become mean-spirited, the Mr. Scrooge in Charles Dickens’ A Christmas Carol. My contention is that Dickensian Economics is far more comprehensive than that most famous work by Dickens… and into his total literary work.

In Little Dorrit I.xxiii, Dickens writes “A person who can’t pay, gets another person who can’t pay, to guarantee that he can pay.” That particular passage sold me on the idea that Dickensian Economics extends far beyond the idea of avarice and meanness towards a fellow human being.  It is today’s reality; the reality of predatory capitalism whose aim is to have the poor pay for the needs of the poor. And that is what Charles Dickens’ work is all about.

We just had in this last decade the biggest scam portrayed by business in the realm of surety. Wasn’t that what Dickens was really talking about?  Just replace the word person with that of your favorite financial institution… or, carrying it a little farther, with the name of many capitalist nations.  Papandreou and Berlusconi just stepped down leaving the poor in Greece and Italy to take care of the other poor with austerity programs that revive the pages in Dickens’ poor taking care of the poor. And will likely happen in Spain and Portugal as tourism adds its woes to a ridiculously insane, and now certifiably dead, real estate market.

Christ told his disciples that the meek would inherit the earth; and, for all intents and purposes, they already have… before the Day of Judgment; not the earth’s wealth, as it remains in the hands of a minority, just its problems.  Dickensian Economics pretty much define the type of economics we are living under these days in the West.
 
© 2011 Ben Tanosborn


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