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Subject:  Re: OT: Man in the White Suit Date:  2/11/2009  9:16 AM
Author:  ziggy29 Number:  25937 of 35397

>> The way capitalist economic theory gets out of this contradiction is by assuming the increased productivity will be accompanied by the creation of new goods and services that will provide better jobs, so labor can keep buying. The problem is, this is not really an economic law, just wishful thinking, and the attempts to prove it using historical evidence are bad history. <<

I'd say it's not some "law" of capitalism, but in a closed system, the theory worked pretty well. Once you "opened" the system -- primarily with the introduction of a huge amount of available low-cost labor in less developed nations -- things were turned on their head to some degree. Because at that point, even if workers in this formerly closed system were more productive, they had to suddenly start competing with labor that was one-tenth the cost.

#29
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