Thursday, October 7, 2010

Soaring profits made possible by austerity for working people

U.S. companies are rebounding quickly from the recession and posting near-historic profits, the result of aggressively re-tooling their operations to cope with lower revenue and an uncertain outlook.

An analysis by The Wall Street Journal found that companies in the Standard & Poor's 500-stock index posted second-quarter profits of $189 billion, up 38% from a year earlier and their sixth-highest quarterly total ever, without adjustment for inflation.

Read the WSJ article here.

The long and short of it is this: the U.S. ruling class is eeking out near-record levels of profit amidst the worst recession since the Great Depression. As unemployment soars, social misery increases, and savage cuts are made to vital social institutions like education... the capitalist class is finding ways to make record profits.

These two phenomena are not unrelated. The list of blows to working people above are the condition of possibility of this corporate bonanza. That is, the surplus appropriated by corporate elites in the form of profit, amidst a global recession when profits are generally low, is coming from downward pressure on wages, cuts to benefits, layoffs, austerity, and so on. In other words, the "aggressive re-tooling" (i.e. the punishing blows to working people discussed above) is the cause of the bonanza.

In the Marxist tradition, there is a word for this process: exploitation. And more exploitation means higher profits. A just society would be one in which this process ceased to be the basis on which production is founded. A just society would be one in which the vast social surplus was mobilized to maximize human potential, rather than to enrich a small class of elites.

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