The G-20, Global Stagnation and the Option of Wage Led Growth
Here is the link to a short piece I wrote for Economy Lab.
It borrows from and includes the link to an important paper co-authored by the PEF’s own Marc Lavoie and recently published by the ILO , which I highly recommend. The overall conclusion of that paper is that a shift from profits to wages would be a positive for the global economy as a whole since higher wages are more likely to be spent and would raise productivity by forcing business to invest surplus profits.
There is an important debate to be had between left economists as to whether we could have sustainable wage led growth via higher productivity combined with rising demand, or whether this would result in a profits squeeze and low investment as argued in the Kalecki tradition.
I say give wage-led growth a good trial run!
I second that one-
one of the keys to understanding this is not the level of investment or motivation for investment as suggested by some commentators in response to your article and the ILO document- my thoughts after recently finishing Volumes 1,2 and 3 of Marx’s capital with the help of David Harvey lies deep in nature and transition of capital- basically it focuses on the longevity of machinery and its amazing ability to last for so long without incurring enough economic activity in terms of upkeep and expenditures related to depreciation. It is the shoulders we walk on in terms of gigantic leaps of economic outputs, but also its crisis ridden inside, given the incessant push for more profits – it has brought even more efficiency and more long life of dead labour without a virtuous level of expenditure- so we are trapped in a declining wage spiral on a global level. So given the austerity and the destructiveness that is brought about an unbalanced approach to profits and investments, and the longevity of capitals outputs and the nature of the circuits of circulation and flows through that dead and living labour- a more balanced approach that pushes wage lead growth could keep these variety of capitalism (voc) somewhat more stable and functional and more socially optimal. sorry just a quick comment- got to go flip though dogs on the BBQ