Tuesday, October 20, 2009

The Philanthropy of Financiers: excerpt 2

head coach Clinton should have a session with the classics - supposedly a heavy reader, he could have begun an interesting journey with a hint recently dropped by the Wall Street Journal - to open an article on how the battle over NAFTA was polarized along class lines, the Journal used this quotation from Karl Marx's 1848 Brussels speech on free trade: "the free trade system is destructive - it breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point - it is in this revolutionary sense alone, that I vote in favor of free trade" - Marx was never one to seek a middle way.

had the president dispatched an aide to retrieve Marx's full text, he would have found an argument far different from his upbeat exhortations to win the war of each against all - as borders fall and the globe becomes a single market, Marx argued, "productive capital grows, [but] competition among the workers grows in a far greater proportion - the reward of labor diminishes for all, and the burden of labor increases for some."

in his speech, Marx quoted David Ricardo, who enumerated the virtues of free trade with a clarity beyond that of modern economists - Ricardo said: "if, therefore, by the extension of foreign trade, or by improvements in machinery, the food and necessaries of the labourer can be brought to market, at a reduced price, profits will rise - if, instead of growing our own corn, or manufacturing the clothing and other necessaries of the labourer, we discover a new market from which we can supply ourselves with these commodities obtained at a cheaper price, wages will fall and profits rise" - Ricardo, like Marx, held that wages tended toward the minimum necessary to keep the average worker alive and reasonably functional; anything that depressed the costs of keeping the worker alive would help drive wages down, and profits up - that the immiseration of the worker might cause the system to implode, because of a contraction of buying power or the degradation of the workers or the fraying of society, was not a problem that troubled Ricardo, though it did trouble Marx.

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