Ben Stein and Karl Marx

Ben Stein, the basset-faced rightwing economics professor who has appeared in dozens of movies and TV commercials, has an article in today’s business section in the NY Times titled “My Country, Right and Wrong (but Why So Wrong?)”. It is noteworthy for its frank acknowledgement of how working people are being screwed, especially these paragraphs:

A puzzle: we have all heard corporate executives say that American workers are paid too much; that our industries cannot compete with foreign makers because our labor costs are so high that if we used American union labor, we would see profits evaporate.

And yet, hourly wages in this country, adjusted for inflation, are below what they were in 1972 (when my pal, Richard Nixon, was president) by a substantial amount. But to hear corporate leaders tell it, this is still far too high to allow competition with foreign entities.

Now, you would think that if this high-priced American labor were in fact pressing corporate backs to the wall, profits would be stagnant or falling. But in fact, in the last several years - and especially the last few quarters - corporate profits as a percentage of sales were the highest they have been since 1965 - roughly 9.6 percent before tax and roughly 7.4 percent after tax.

In total, profits are by far the highest they have ever been, running at a rate of very roughly $1.38 trillion in the first quarter of 2006. As a percentage of gross domestic product, profits are also the highest they have been since the statistics began being kept in 1959 - roughly 12.7 percent.

Don’t get me wrong. I like profits, a lot. They are what the capitalist society is all about. But why are we outsourcing, why are we moving our work overseas, if our corporations are so profitable? And if our corporate world is so profitable, how come so little of the growth goes to workers’ wages? How come - as an average number - basically none of the growth goes to the ordinary worker’s wages? I am not saying this to encourage strikes. I am genuinely puzzled about it.

Could it be that just the threat of moving jobs overseas (very few have in fact actually been moved as yet) keeps labor cowed? Is the vast labor force of Asia and the Third World in fact something like “the reserve army of the unemployed” that Karl Marx described in his critique of capitalism?

I hate and detest Marx and everything he stands for, but he was a shrewd observer. In any event, what’s going on? How can retail stores keep wages so low? All service jobs that have to be done in person are not going to be shipped to Guangdong or Mumbai. Then why don’t their wages rise?

To answer our actor/economist: Yes, Virginia, there is a “reserve army of the unemployed.” Furthermore, Karl Marx was not just a shrewd observer. He also understood the driving force behind the capitalist system, namely the need to maximize profits. When wages rise, it is not because the boss takes mercy on his workers, but because they combine into trade unions that can organize strikes. The main explanation for lowered wages in the recent past is erosion of the American trade union movement.

When the AFL-CIO was formed in 1955, there were 15 million members. Today there are 6 million. Considering the population growth in last 50 years, the drop in membership is even more precipitous. Basically, the weakness of the trade union movement has allowed the ruling class to dictate the conditions of struggle, which are more favorable for the capitalists at any time since the 1890s.

Professor Stein wonders why the wages of workers in the service industry have not risen, since their jobs cannot be exported to Mumbai. This is not exactly true across the board. When these workers have powerful unions such as Andy Stern’s SEIU, wages have gone up. When they lack a trade union such as in the case of Walmart, wages and benefits are poor.

If you go to Ben Stein’s website, you will find the same sort of folksy rightwing nonsense that appears in his NY Times article (the style is stolen, of course, from Sixty Minute’s Andy Rooney):

As to the people who work at Wal-Mart, they seem to me to be bright, alert men and women who work there because it’s the best they can do in their town or at their age. Plus, they seem happy. The usual clerk at Wal-Mart gives a lot better service than the clerk at Tiffany. I would like it if they were paid more, but they are in a competitive labor market. And what about those greedy stockholders? A lot of them are those same Wal-Mart clerks, many of whom got rich from their stock.

In the real world, Wal-Mart is as much of a boon to the American shopper as the Sears catalogue was long ago.

Jeer at it all you want, all you cool people, but, it’s progress, big time.

I’d love to see this Ben Stein get a job at Walmart for six months and try to live on the wages and benefits he gets, just like fellow NY Times writer (albeit briefly) Barbara Ehrenreich did. I wonder how long this multimillionaire actor and rightwing pundit would “seem happy”.

In fact, he might discover that the wages are beneath the poverty levels set by the government. Many Walmart employees have wages so low that they are entitled to Medicaid as the Florida St. Petersburg Times pointed out on March 27, 2005:

Attention Wal-Mart shoppers: The retail giant that supplies you with everything from orange juice to camping gear is using your tax money to underwrite its bottom line. Wal-Mart has more workers enrolled in the state Medicaid program - a medical insurance program for people living in and near poverty - than any employer in Florida. That’s in addition to the millions of dollars in financial incentives Wal-Mart receives from state and local governments for creating jobs in the state.

Florida taxpayers are subsidizing the largest employer in the country, with the effect of holding down the state’s wages and adding to the strain on state social services. Wal-Mart employs 91,000 workers in Florida and, according to a company spokesperson, its hourly workforce earns an average per-hour wage of $9.36. In 2003, Florida’s median wage was $12.52 per hour. Moreover, 12,300 of Wal-Mart’s workers are eligible for Medicaid, and another 1,375 are enrolled in state programs that provide health coverage for the children of low-income families.

I imagine that an educated man like Ben Stein must be aware of all this. But that doesn’t prevent him from extolling Walmart and, for that matter, the trajectory of an American capitalism that has him citing Karl Marx, even though he detests him. One can understand why such an ideological hack for the capitalist system would quote Karl Marx since these words are just as true as they were 158 years ago:

Hitherto, every form of society has been based, as we have already seen, on the antagonism of oppressing and oppressed classes. But in order to oppress a class, certain conditions must be assured to it under which it can, at least, continue its slavish existence. The serf, in the period of serfdom, raised himself to membership in the commune, just as the petty bourgeois, under the yoke of the feudal absolutism, managed to develop into a bourgeois. The modern labourer, on the contrary, instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth. And here it becomes evident, that the bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an over-riding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him. Society can no longer live under this bourgeoisie, in other words, its existence is no longer compatible with society.