Re: [OPE] If anyone watched my video tonight, I would appreciate your comments

On 2010-08-04 22:28, Michael Perelman wrote:
> Very interesting. Thank you. Could you tell me more about how the
> strategy was successful on its own grounds but ultimately hit the limits
> predicted by Marx and Kalecki?
>
>
The 'Rehn-Meidner model' was successful in that it compressed wage
differentials and induced higher growth rates of productivity and
output. This created furthermore a basis for an expansive universal
welfare state without entering into explosive opposition from the
capitalist class. It did however require an active labour market policy
by the state precisely because the goal was to push out low-productivity
firms, which would result in unemployment unless the state helped
re-deploy displaced workers either by skill or geographic relocation.

This accounts for the rapid maturation of the capitalist economy in
Sweden---resulting in very high levels of concentration of capital---as
well as its high level of socialization with a relatively large
proportion of the workforce in the public sector.

Now this highly productive trajectory has ultimate limits that one would
predict on the basis of Marx's insights on profitability and Kalecki's
insights on full employment:

It implies a high investment ratio but the workforce was stagnant and
the growth rate of productivity could not counter-balance these two
factors. Hence the steady-state rate of profit mentioned before fell,
and therefore the average rate of return on capital. At the same running
the economy at full employment strengthened an already strong labour
movement, winning evermore ground. The adoption of the 'wage-earner
funds' was the ultimate expression of this political danger from
capitalists' point of view. The public sector was also a significant
part of the economy. In other words, the rule of capital was gradually
being challenged. In addition it seems like there were strong
inflationary pressures in the economy which would undermine the rentier
interest.

In my view these were the ultimately limits that sealed the fate of the
'Rehn-Meidner model'. Meidner's own, somewhat different, account is
attached in this e-mail.

I disagree, however, with Jerry's assessment that
> [t]he fate of the Meidner Plan could be seen as a case study in what happens when one tries to reform one's way into syndicalism.
Rather I think the fate of the propsed 'wage-earner funds' showed the
serious strategic limits of the reformist labour movement, in
conjunction with the international context of neoliberalism in the early
1980s.

//Dave Z

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