Thursday, 18 September 2008

Would stronger unions have prevented the crisis?

There's an interesting argument developed in this book by this bloke that I'm currently reading, that part of the explanation for the current crisis is labour's loss of power. The shift in power between... err... labour and capital has allowed business to increase profit ratios (not just profit levels), particularly by off-shoring jobs. However the declining share of income accruing to working people in countries like the US & UK would have had an impact on demand, so governments allowed the explosion of debt to counteract this.

Dunno to what extent I buy this, especially as I still see the labour/capital divide as a bit of a arbitrary one. But it's interesting that a book on the credit crisis argues that the decline of organised labour is a contributory factor. I think I might go back and re-read Capitalism Unleashed.

4 comments:

Charlie Marks said...

You "still see the labour/capital divide as arbitrary"?

Please explain.

Tom P said...

Most of the capital belongs to labour

Charlie Marks said...

Yes, but if you don't have full control of something, you can't be said to own it...

Tom P said...

So let's have a go at getting control.

http://grayee.blogspot.com/2008/09/why-we-need-capital-stewardship-forum.html