Realist, not conformist analysis of the latest financial, business and political news

Branko Milanovic And The Dreadful Marxist Confusion Of Markets With Capitalism

Branko Milanovic has much to say which is extremely enlightening. His work on whose incomes have risen as a result of globalisation – the elephant curve – puts to the sword the idea that it is only the rich who have benefited for example.

Unfortunately at other times his thinking betrays his Marxist roots:

These new markets are fragmented, in the sense that they seldom require a sustained full day of work. Thus commodification goes together with the gig economy. In a gig economy we are both suppliers of services (we can deliver pizza in the afternoons), and purchasers of services that used not to be monetised. Taking care of the elderly, of children, cooking and delivery of food, shopping, chores, dog walking and the like used to be done within households.

This expansion of capitalism potentially opens up questions about the role, and even survival, of the family.

Agreed that there has indeed been that expansion of the market into those things which were previously household production. This is probably a good thing, given that it now allows the division and specialisation of labour. It might be a bad thing because of that specialisation which, as Adam Smith noted, could go too far and leave the man the automaton.

But it’s nothing to do with capitalism – unless you’re barking up that blind alley of Marxism.

Because, well, think about it for a moment. What is regarded as the antithesis of capitalism these days? State supplied free child care for the tots. Government provision of housing. Mao even went so far as to have all eating in state and communal dining halls, not in the domestic kitchen. That socialist dawn on the path to true communism also involves that pulling of activities out of household production. Therefore that pulling can’t be specific to capitalism, can it?

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4 years ago

Ah Tim, you make the classic mistake. Maoism didn’t lead to peace, prosperity and a brotherhood of man* therefore it wasn’t Proper Communism, so must have been Evil Capitalism.

*107 other genders available on request

4 years ago

Yup, an Uber driver uses his spare time, and that of his vehicle, to make some extra cash. There is vetting, then a payment lag, and he needs enough other money to work without pay for a few weeks. But he did not go to the capital markets to start his business. PS – The jobber abandons his numerical Occupation Code and edits of the corporate personnel manual to do the real work of moving a fare from point A to point B; until government converts this work into a defined “job” so as to gift him benefits he doesn’t… Read more »

Michael van der Riet
Michael van der Riet
4 years ago

But Germany is doing very well out of running a trade surplus, which makes your thinking suspect.

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