I wrote: >>I don't understand how you can go from good common sense about reskilling >>and internal labor markets to denying the role of the reserve army of labor. Tom writes: >Huh? First, it wasn't I who claimed that NAIRU is really just another name >for the reserve army. "just another name"? I'd like to see where I said _that_. Could I have the court clerk read back the transcript? But I see no reason to rehearse what I said. But my point was simply that a total slash-and-burn approach to the natural rate/NAIRU theory is wrong. It's on the logical level of "the enemy of my enemy is my friend" and is part of the standard academic disease in which all theories concerning some phenomenon are seen as mutually exclusive and competing (just as academics themselves are competing with each other), with no room for synthesis. It's this logical approach that leads Tom to think (or at least imply) that I am uncritical of the MF. Spare me. I've been criticizing the "natural rate" hypothesis for decades. (cf. my dissertation.) Just because people like the MF are very ideological doesn't mean that they're _totally and utterly wrong_. The MF applies a little bit of common sense and is very empiricist in his approach, changing the meaning of his terms and theories to fit perceived data. So, like a stopped clock, he can be right twice a day. (Even Goebbels was right about some things, such as how to employ propaganda.) It's possible that the empirical implications of his theory -- i.e., accelerating inflation at low official unemployment rates -- can be right even though the theory he proposes is basically wrong (a misbeggoten Walrasian mess) and other empirical implications wrong such as decelerating inflation at high unemploment, a constant NAIRU, the NAIRU as a single number rather than as a range (as in Lerner's original formulation), etc. I used the phrase the "rational core" before and Tom ignored it. Marx was extremely critical of Hegel's idealist, mystical, and apologetic system. But he didn't reject the whole thing but instead looked for the rational core. The rational core of the MF's theory is that there exists some low rate of unemployment below which the capitalist system will punish us with accelerating inflation. (Tom will be glad to know that Robert Rowthorn presented a leftist theory of the NAIRU in the CAMBRIDGE JOURNAL OF ECONOMICS.) This should be amended to note that it's not the unemployment rate that counts as much as the cost of job loss, which disciplines labor. Lately, the COJL has been high even though the official U rate has been relatively low, helping to keep accelerating inflation at bay in the U.S. The official U rate is only one possible form that the COJL can take. (Julie Schor and Sam Bowles deserve the credit for developing that term.) Further, an authoritarian country can use bayonets instead of unemployment, as Kalecki pointed out. > Second, I'd be very interested (and surprised) to hear where Marx argues that the role of the reserve army is to combat inflation.< Marx didn't write _anything_ about it. Tom should know very well that I am no "chapter and verse" Marxist. I try to appropriate Marx's theories critically, while modifying his abstractions for the concrete conditions of real life. Marx assumed a gold standard, which rules out inflation. Period. Instead of accelerating inflation at low U rates (or rather low COJL), Marx say a squeeze on profits and a seemingly automatic slowdown in accumulation. For him, inflation occurs only when the supply of convertible fiat money increases relative to the supply of gold (which sounds suspiciously like the quantity theory of money, BTW) but he never links this up with the profit squeeze. But today, fiat money has replaced gold. There is no convertibility of the fiat money to gold. That means that instead of cutting back on accumulation, capitalists can try to restore profits by raising prices. Thus there can be what's called "conflict inflation" in the literature (Rowthorn, Soskice/Carlin, etc.) If this persists, it can accelerate. Conversely, high unemployment (COJL) can combat inflation. >Third -- and perhaps most germaine to the above questions -- I would say that "wage inflation", to the extent that it is exists, is largely a phenomon not of the low-wage workers who do have some connection with a labour market but of the privileged "aristocracy of labour" whose employment status and wages are not determined by market conditions (mostly). < Maybe. The discussion was not about which sectors of the working class were more involved as much as whether _any_ of the working class was involved. The point of the reserve army of labor/COJL theory is that U or the COJL falls, the "low-wage workers" become more privileged, so that they are more able to raise ways. This shift in the balance of power also affects those workers whose jobs are more insulated from labor-power markets. >Admittedly, throwing low-wage cafeteria workers out of work may eventually have some braking effect on the salary expectations of tenured university professors but that's a connection I wouldn't hesitate to call "tenuous". I would expect to also see a disconnection, although perhaps less extreme, even within a particular unionized workplace between tradespeople with considerable seniority and recently hired assembly line workers -- what has been termed the "median worker representation" effect. < What this says is that the Philips Curve is relatively flat in the short run. Probably so. But neoliberal "reforms," waves of downsizing, anti-union measures, etc. have made that PC steeper. Fewer workers and management employees are insulated from the vicissitudes of the market than was true 20 years ago (at least in the US -- I don't know about Canada). >>BTW, I think that there's a difference between denying the existence of a neoclassical-type labor market and the existence of labor-power markets in which not only "supply and demand" but institutions, monopoly/monopsony power, bargaining power, etc. exist. << >So do I. And I would add that the latter doesn't walk like a duck or quack like a duck. < what is the "duck" supposed to represent here? I find metaphor to be an obscure way of arguing. (and it prompts me to quote the Marx Brothers (Groucho, Harpo, Karl, Chico, Zeppo, and Gummo): "why a duck?") sheet! I got up an hour early, having forgotten that we switched away from Daylight savings time last night. Does anyone have a reasonable argument against abolishing DST? Jim Devine [EMAIL PROTECTED] & http://clawww.lmu.edu/Departments/ECON/jdevine.html
