The writer on Marxian economics Andrew Kliman is currently do a speaking tour in Britain. The following is an extract from a talk he gave in 2009 putting the case against advocating increased working class consumption as a way out of the crisis (as frequently suggested by Left groups and some trade union leaders). It is a similar analysis to the one we in the Socialist Party put.
"...there is a revival of under-consumptionism today in the form that due to an upward redistribution of income towards the rich supposedly that’s depressed consumer demand. But, look, the rich also spend. Some of the higher profits that companies make gets distributed as dividends for rich consumers to spend and then, the profits, they invest them as well and they build factories and office buildings and small equipment. And that’s demand. OK, it’s not consumer demand but demand.
But more importantly capitalism is a profit-driven system. So what’s good for capitalism is not redistributing income to lower income people so they can buy more stuff. You go with profit, you go with the profitability of the system. It’s not good for capitalism. You’ve got to see that there’s no solution to that dilemma. Capitalism does well when it’s highly profitable not when it’s meagrely profitable. So within the confines of the system there’s no solution, and this is why underconsumptionism really concerns me so much politically. It implies that you just give the poor people, give the working people more money and all the problems are going to be solved. It’s very dangerous.
At the present moment, yes working people need to struggle for concessions to protect their incomes and homes and jobs but it’s important not to fall prey to the illusion that by struggling for themselves they’re somehow helping “the economy”, much less paving a way out of the crisis. Concessions wrung out of the capitalist class and the government do not restore profitability. They lower it. But as long as we remain in the confines of the capitalist system a new boom will require the restoration of profitability, not being paid more for that. So downward redistribution of income is going to tend to destabilise the system.
I’m not saying we shouldn’t do it. I’m just saying we should be aware of the consequences. So it’s very dangerous to sow illusions that a fairer division of the pie is going to solve the crisis. If the pie does get divided more fairly and sends profitability down further, we get into a depression. There’s renewed panic in the financial markets and there is a virulent reaction, maybe even fascism.
Working people need to be prepared to confront that but they are not going to be prepared if they’ve been led to believe that the trickle-up notion that what’s good for the working class is good for capitalist America. It isn’t. So people have to fight for concessions like hell, understanding that the only real solution that’s going to benefit them is a new socio-economic system, socialism, in which what’s good for people and what’s good for the economy are not antagonistic but are the same thing. But that’s not the system we have now. That’s where we’ve got to go..."
Andrew Kliman: "Contradictions of Capitalism's Value Production", Rethinking Marxism Conference 2009.