Michael Taft is an Under-Consumptionist

national | anti-capitalism | other press

Tuesday September 07, 2010 22:00

by Paddy Hackett

maxanger at live dot ie

Under-consumptionism is a bourgeois ideology

The problem is that profit cannot, by its very nature, increase continuously. It must fall leading to falling investment. Demand or consumption is a function of this process.

Michael Taft and others are forever telling us that if the poor are taxed more then demand will fall leading to companies going to the wallentailing rising unemployment. He argues that if the better off are taxed this will not happen.

This is an underconsumptionist theory that suggests that increasing wages means increasing demand and consequent economic growth. Basically it means that capitalism is a progressive system and that there is no need to replace it with a communist society. It suggests that if demand is increased sufficently consumption correspondingly rises thereby eliminating unemployment.

But capitalism does not work like this.

It is profit, not demand, that determines whether capitalist companies stay in business or not. Increasing profitability means increasing investment. The problem is that profit cannot, by its very nature, increase continuously. It must fall leading to falling investment. Demand or consumption is a function of this process. Falling profit is a product of the overaccumulation of capital. Too much capital chasing too little profit at a given rate of exploitation of labour power. The solution to the problem is found by squeezing more profit from the workers which is tantamount to an increased rate of exploitation. Michael argues the opposite reducing the rate of profit by giving increased real wages to the working class.

Falling demand among the poor has not been the cause of the rising unemployment. The reverse is the case. Rising unemployment has led to falling demand among "the poor". Otherwise capitalists would have no vested interest in supporting measures that lower the living standards of "the poor". Incidentally the non-poor can mean highly skilled workers who have been relatively affluent. Is Michael suggesting that they are have more tax imposed on them to sort out capitalism's problems.