That reminds me about a question that I've thought about for some time.
Typically it has been assumed that working-class families spend all of
their income so their savings = -0-.
Now assume instead that working-class families spend one part of their
income and save another part. Once this happens then that portion of
workers' income received from savings is heavily dependent on interest
rates on their accounts. Further, their real income is tied to the
disparity at any moment in time between interest received and real income
including savings lost to inflation. Thus, if the rate of interest
received on savings accounts was 2% when the rate of inflation was 4% then
real income for working-class would decline not only due to the
inflationary affect on their wages but also on their savings. Is everybody
with me so far?
On the one hand, the whole issue of working-class savings seems to me to
be underdeveloped and largely unexplored in Marxist literature (perhaps
due to the belief by some Marxists that workers are paid a subsistence
wage and workers' savings is assumed to = -0-). Does anyone know of any
attempts by Marxists to incorporate savings by the working-class into any
theoretical models?
I also believe, on the other hand, that this is an issue of contemporary
relevance. In the US, for instance, it is no secret that many
working-class families have seen their savings squeezed by the fact that
interest rates on savings accounts have declined more sharply than
inflation. As I recall, there are even higher rates of savings by
working-class families in Japan due, in part, to the lack of corporate
pension plans. One response by many families is to take more of their
savings and buy government bonds and/or corporate stocks. Hasn't this
infusion of money from the working-class been a major force driving
changes in international stock markets in the last two decades? Indeed,
one might even argue that these savings (especially if one also adds the
funds from pension funds invested in stocks) has been a major source of
funds for investment by private capital. Is this a scenario that others
see happening as well?
Then, there is the question about how this affects the division of income
among social classes and the level of aggregate demand. (Not that I am a
"disproportionality theorist", but), if workers' income is being squeezed
by decreasing interest rates, then won't this then affect the level of
demand that their have for "means of subsistence"? How would this
shortfall in demand by made-up -- by additional consumption by
capitalists?; by increasing sales to working-class families abroad?
I, of course, realize that there are many parts of the world economy where
the assumption that workers' savings equals zero is a pretty close
approximation to reality. In those areas of the capitalist world economy,
though, where workers' savings is significant, how does it affect (and how
is it affected by) crises?
Any thoughts?
In solidarity, Jerry