A Hill Of Keynes In This Crazy World

In the era of globalization of production and employment, the reserve army of labor has drastically expanded beyond national borders. According to a recent report by the International Labor Organization (ILO), between 1980 and 2007 the global labor force rose from 1.9 billion to 3.1 billion, a growth rate of 63 percent. Historical transition to capitalism in many less-developed parts of the world, which has led to the so-called de-peasantization, or proletarianization and urbanization, especially in countries such as China and India, is obviously a major source of the enlargement of the worldwide labor force, and its availability to global capital. The ILO report further shows that, worldwide, the ratio of the active (or employed) to reserve (or unemployed) army of labor is less than 50%, that is, more than half of the global labor force is unemployed. 

It is this huge and readily available pool of the unemployed, along with the ease of production anywhere in the world—not some abstract or evil intentions of “right-wing Republicans and wicked Neoliberals,” as Keynesians argue—that has forced the working class, especially in the US and other advanced capitalist countries, into submission: going along with the brutal austerity schemes of wage and benefit cuts, of layoffs and union busting, of part-time and contingency employment, and the like. Ruthless Neoliberal policies of the past several decades, by both Republican and Democratic parties, are more a product of the structural changes in the global capitalist production than their cause. This is not to say that economic policies do not matter; but that such policies should not be attributed simply to capricious decision, malicious intentions or conspiratorial schemes. 

It might be argued: “who cares what caused the unemployment? The fact is that it is a huge problem for millions; and why not simply replicate the Keynesian-type stimulus policies that were adopted in the immediate aftermath of the Great Depression and World War II?” Indeed, this seems to be the view of most of the Keynesian economists and liberal policy makers. 

While prima facie this sounds like a reasonable suggestion, it suffers from the problem of issuing useless or ineffectual prescriptions based on inaccurate or flawed diagnoses. Not surprising, repeated Keynesian calls of the recent years for embarking on Keynesian-type stimulus packages in order to help end the recession and alleviate unemployment continue to sound hollow. For, under the changed conditions of production from national to global level, and in the absence of overwhelming political pressure from workers and other grassroots, there are simply no refills for Dr. Keynes’s prescriptions, which were issued on a national (not international or global) level, and under radically different socio-economic conditions—the solution now needs to be global.