Pauper wages

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I saw the video embedded below linked on Eschaton by one Avedon Carol (an Atrios confederate who lives in Merrie Olde England). I'm certain it's worth 13 minutes of time to anyone who tiptoes around an inner dread about America's future---especially the health of the economy for ordinary people and the outsized influence of excessive wealth on public policy.

The "hook" for this interview is that the marginal income tax rate on top earners during the Eisenhower administration was 90%. I'm certain that fact would shock the vast majority of Americans today, especially with a general knowledge of how prosperous America was during that era. As you watch the video, consider whether Michael Hudson's words, as alien as they are to the conventional wisdom today, are relevant to your everyday status as a wage-earner, provider, and citizen.

Take note of the term "pauper wages" to roll around inside your noodle next time you hear news about the extermination of the nation's few remaining viable labor unions. To whatever extent Hudson is correct on this topic, it should be difficult for any American worker to understand how he or she will benefit from government-driven downward pressure on union pay and benefits; or from creating trillion-dollar federal deficits by cutting taxes on the wealthiest (and most powerful) Americans.



The gist of Hudson's viewpoint expressed here is that two dominant beliefs central to free-marketeer conventional wisdom are demonstrably wrong. Those two beliefs are that (1) higher wages reduce worker productivity and (2) higher taxation of top earners hurts the economy.

For supporting evidence, Hudson refers to readily accessible data and asserts his credentialed perspective on classical economics as founded by philosophers like Adam Smith and John Stuart Mill). And further, he makes an unexpected statement (to me at least) that doesn't sound completely outlandish: that modern free-market "neoliberal" economists have falsely co-opted Smith and his successors while ignoring major aspects of classical economics that don't fit neoliberal ideology. That's an argument I've never heard or read in either corporate-sponsored news media or public broadcasting. In fact, the first hint of that idea only came to me this morning when reading this blog post by Paul Krugman.

As a wildly alternate viewpoint on the timely topic of US wages and taxation---at least compared with Beltway conventional wisdom---Hudson's words express a general and consistent logic to my ears. Nothing he says strikes me utterly at odds with either reason or observable reality, and the sources he refers to can readily be checked by anyone with the time to look at public economic data and read a book or two by the founders of modern economics. You and I don't have that kind of time or intensity, though, so we have to rely on the interpretations of others, and fair argument between alternate viewpoints.

Before this afternoon I'd never heard of Hudson. More importantly, I'd never heard this particular point of view expressed with this level of clarity on the radio or any corporate-sponsored news outlet. On the rare occasions when a genuine liberal or progressive point of view is even examined on air, a competent spokesman for that point of view may not be present in the studio. And meanwhile, the mouthpiece for the standard neoliberal viewpoint---who happens always to be present---is allowed by the moderator to rebut the alternate perspective simply by branding it as "liberal" or "socialist."

It really doesn't matter whether you and I are persuaded by what Hudson has to say here. What does matter is that content providers are deliberately shielding news consumers from important, credible ideas that seriously challenge or even explain away the conventional wisdom that happens to be failing most ordinary working people today.