cj#318> Schniad: Govt & Corps (1/n)


Richard Moore

Date: Mon, 13 Nov 1995
From: Phil Agre <•••@••.•••>
To: •••@••.•••
Subject: editorial by Sid Shniad

Date: Thu, 28 Sep 1995
From: D Shniad <•••@••.•••>
Subject: My editorial in the TWU Transmitter


     "...The very nature of work, of
     institutions, of society, and even of
     capitalism itself, are mutating...the
     utopia promised by science and
     technology has turned into a
     nightmare for the 'common man'.
     Poverty, unemployment, pollution,
     overpopulation, mass migration,
     global plagues, etc., have left us
     with a world full of frightened
     people....The future is
     inequality...western societies are
     already witnessing the emergence of a
     rapidly expanding underclass."

     -- From Winners and Losers in the
        Information Age, by Ian Angell,
        Professor of Information Systems,
        London School of Economics

   Professor Angell captures the growing sense
that something is radically wrong in our society.
After describing the problem, however, he doesn't
lay out a plan to alleviate the suffering of
society's victims.  On the contrary -- this
professor believes there is little that society
can do in the face of these developments.  Despite
the list of horrors that he recites, Angell
believes that our most important social decisions
should nonetheless be left in the hands of the
"free market".
   It isn't surprising that these views are
popping up everywhere.  Universities and the press
have stopped playing their traditional roles as
social critics.  Over the past ten or twenty
years, we have witnessed an unprecedented series
of corporate media mergers, combined with vastly
increased corporate funding to cash-strapped
universities.  As a result, these institutions --
which traditionally served as more or less
independent sources of information for society --
have effectively come under corporate control.
   So it's no wonder that we now hear endless
propaganda from professors, columnists and
announcers, all repeating the view that government
should renounce any attempt to regulate the
private sector; that because of globalization and
free trade, economic activity is no longer
susceptible to social control; and that government
cannot play an active role in influencing economic
outcomes even it wants to.
   The message corporate wouldn't be so
outrageous if a de-regulated and privatized
economy yielded positive results.  But there is
little doubt that the results have been a social


   It's not surprising that the corporate sector
likes what's happening and defends it at every
opportunity.  Globalization, free trade, de-
regulation and privatization is having the desired
effects: profits are rising and wages are
   The Washington, D.C.-based Economic Policy
Institute (EPI) recently released a report called
Profits Up, Wages Down by economists Dean Baker
and Lawrence Mishel, showing that profits are
increasing and wages are decreasing across the
American economy.
   In the 1990s, income has been redistributed
from labour to owners of capital as profitability,
the economic return to capital, has reached
historically high levels.  The increasing wage
inequality that began in the 1980s and persisted
throughout the 1990s has forced middle- and low-
wage earners wages to accept reductions in their
real wages, as earnings failed to keep up with
   Specifically, Baker and Mishel show that:

   -- After-tax profit rates in 1994 were the
      highest in 25 years. Profit rates have
      increased even further in 1995.

   -- In the 1990s, increased profitability has
      not resulted in growing investment or
      increased productivity.

   -- During the "recovery" that began in 1991
      and continues today, inflation-adjusted
      hourly wages of the vast majority of the
      workforce have stagnated. For the bottom
      80% of men and the bottom 70% of women,
      real hourly wages have declined.

   --Education and training doesn't help much.
      Men with four years of college as well as
      those without college degrees and women
      with less than a college degree are also
      seeing their real wages decline.

   -- The average male worker has seen his or her
      hourly wage decline 1% per year over the
      1989-94 period, continuing the downward
      trend that began in the 1979-89 business
      cycle.  The wage of the average female
      worker also declined over the 1993-95
      period, in contrast to the modest 0.5%
      annual growth that was experienced over the
      entire 1979-93 period.

   -- Increased profitability in the 1990s is the
      result of cost restructuring.  This has
      increased the economic return to capital,
      but has not led to greater efficiency. If
      profit rates in the 1990s had remained at
      their 1952-79 average, wages in the U.S. in
      1994 would have been $120 billion -- 4.0%
      higher for all workers and 6.1% higher for
      workers without a college education.

   -- Higher after-tax profit rates are due in
      part to lower tax rates on capital.  If the
      tax rate on capital had remained at its
      1952-79 average, government revenue would
      have been $40 billion higher in 1994 -- an
      amount equal to 25% of the 1994 fiscal
      deficit in the States.


INSTALLMENT 2/N to follow

 Posted by      Richard K. Moore <•••@••.•••>
                Wexford, Ireland (USA citizen)
                Editor: The Cyberjournal (@CPSR.ORG)

See the CyberLib at:
See Cyber-Rights library:

You are encouraged to forward and cross-post messages and online materials
for non-commercial use, provided they are copied in their entirety, with
all headers, signatures, etc., intact.