The Great Recession and Economic Security: Democratizing the Workplace (2014)

AbstractThis article is an introduction to this symposium. How does a great nation avoid another Great Recession or worse? In today's macroeconomic heated debate, conducted in a hyper political context, the answer is either a pure capitalist system with minimal government or a market system with strong government that intervenes with large programs and regulations of capitalist markets. This introduction sets-up the case for the latter.IntroductionAll for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind (Smith 1776, p. 448). Even the father of modern capitalism, Adam Smith, understood the dangers of greed and its potential to destroy peoples lives (Rae, 1895). This is why Smith, and the progressive social policies that he supported, in the Theory of Moral Sentiments (1759), and Wealth of Nations (1776), must be understood within the context of his economic theories. In fact, Smith's views may have presaged some of the greatest radical thinkers, such as Marx and Engels (The German Ideology 1846), and C. Wright Mills (The Power Elite, 1956) when he states, Wherever there is great property, there is great inequality ... civil governmen t, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all (Smith, 1776, pp. 770, 775).Smith's policy solution to the excesses of the market are exactly the same as those of the Progressive Era when he states, The subject of every ought to contribute toward the support of the government, as nearly as possible, in to their respective abilities, that is in to the revenue which they respectively enjoy under the protection of the state (Smith, 1776, p. 892). Smith continues, It is not very unreasonable that the rich should contribute to the public expense, not only in to their revenue, but something more than in that proportion (Smith, 1776, p. 991). Smith then argues for a defense of a living wage and a labor theory of value (worker's rights to the profits they create) when he states, It is but equity ... that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerable well fed, clothed and lodged (Smith, 1776, p. 32; Ricardo, 1817).So then if the father of modern capitalism can argue for social policies to help those left out or marginalized by market strategies, that Smith himself has originated, then why are progressive policies so verboten in today's neoliberal climate? I think the answer is that the ideological apparatus at work in the United States and among the global elite, and the propaganda machine that accompanies this apparatus, cannot afford to vet Adam Smith as a liberal or progressive, or perhaps evan in some cases a radical, since this would undermine the neoliberal strategies that have benefitted those same elites, aka the 1%.From another perspective, it might be helpful to understand some of the complexities of the current Great Recession in terms of Schumpeter's description of capitalism as creative-destruction (Schumpeter, 1942). In fact, Schumpeter agrees with the Marxist notion that the accumulation and annihilation of wealth under capitalism, would eventually lead to capitalisms own self-annihilation (Marx & Engels, 1848; Marx, 1857; 1863). Even capitalisms success in GDP growth according to Schumpeter, would not be able to save it from its own internal dynamism for destruction. So to mitigate the negative outcomes of capitalism, or save the system from its own devices, some argue for the implementation ofvarious economic policies and regulations (Smith, 1776; Marshall, 1890; Keynes, 1936; Samuelson, 1946; Rawls, 1970; Stiglitz, 2012; Krugman 2012). Others would argue the opposite to deregulate the economy in order for the economy to fix itself (Hayek, 1960; Friedman, 1962; Nozick, 1974; Gilder, 1981). …