medium wages?

wow, this video is getting around!

Right now, profits are high, not low. I think the original audio version of the talk was fairly old, from the early stages of the recession.

The lack of understanding of economics in these statements is appalling.

First of all the statement "capitalist want to pay low wages" presupposes that capitalists do the employing and employees work for them, which is absurd. All the people involved in the capitalist system are presumed to be self-interested. Employers seek to pay the lowest wage that is acceptable to employees, who seek to obtain the highest wage that is acceptable to employers.

High wages, by which I mean wages that artificially exceed the value of labour to employers, are equally problematic for the economy. Diverting capital towards high wages means that fewer people can be employed. The high wages are good for those who have them, but there are certainly many people who would like to be earning a low wage rather than nothing they are making. Capital could also be diverted towards non-labour investments, i.e. "buying stuff", thereby improving the economy.

The idea that it is "low wages" (according to some subjective definition of low) that are the cause of the economic crisis does not make any sense. This demonstrates again that Marxism is a social theory and not an economic theory.

Actually, I believe it's geography, not sociology, that can claim David Harvey. Trust me, we're awfully proud of him.

Thanks for the correction on Harvey's background!

- SocImages

Disciplines shouldn't matter since understanding the human condition requires transcending discplinary boundaries and putting an end to the compartmentalization of knowledge. Nevertheless, it is important to acknowledge Harvey's theoretical genesis in geography since, space, resource distribution, time and motion are all integral to understanding the economic order. Interesting that critics of Marx, and "touchy-feely" sociology, are ignorant of the fact that Marx was an economist, not a sociologist.

Oh, and love this site!

There are a lot of problems with a Marxian analysis, but the foremost one seems to be the assumption that what we have is a capitalist system. We do not. Capitalism implies freedom of prices to move with the market, but the one price which is necessarily included in every form of productive planning, the interest rate, is controlled by central banks.

Prices constitute a form of information about the world. In the case of interest, the price contains information about the time preference of society, which is to say, the degree to which people prefer present consumption over future consumption. The lower the interest rate, the more people are willing to sacrifice present consumption for future consumption. This is normally reflected by an increase in the proportion of production devoted to capital goods rather than consumer goods.

It can then be seen how artificially lowering the interest rate can cause economic catastrophe. A reduced interest rate at once causes society as a whole to try to borrow more and save less. Normally this would be self-correcting by a rise in the interest rate, but no such correction is possible. People just keep borrowing at the same time that there is less and less real wealth to actually borrow. Businesses try to expand their production of capital goods at the same time people are trying to buy more and more consumer goods. Eventually, economic realities manifest themselves in one way or another, and people realize how little real wealth they actually have, resulting in a massive shift of production and the associated economic hardships.

Distorting the interest rate is like distorting any other price, except that the interest rate affects the entire production structure. Hence the periodic and overall failure to perform rational economic calculation in nations with artificially low interest.

Sigh. David Harvey claims at the end of the video that we need debate and discussion. My immediate thought is that this is impossible in any concerted way for two very clear reasons. 1) powerful interests do not want us to have this discussion, or more accurately, powerful forces are invested in obfuscating the issues in order for them to keep raking in the dough, which contributes to 2) that everyone is so ideologically wrapped up in this whole thing that no one can even agree on where to start a meaningful discussion. So, things just keep on keeping on.

And then, I look at the comments here, and see #2 confirmed quite nicely. I assume if people comment after me, they may try to refute #1 as well. Which reconfirms #2 again. As Bender would say, "We're boned".

Here is the critique of David Harvey's lecture based on census data:
http://www.youtube.com/watch?v=NJGAs2KwoWk

Wtf is "currumba?" If the illustrator wanted to caricature Spanish speaking people, zie could've at least spelled the word correctly.

Interesting presentation by geographer David Harvey titled, "Marxist Analysis of the Global Recession."

I would be interested in hearing your opinions on this presentation and your overall opinion on the overall recession in general. Thanks and enjoy.

This is really good!
KUDOS!!!!

Excellent analysis going to use it tomorrow in AP Euro class