This is an important article because it shows many of the problems with the concentration of wealth that naturally occurs in capitalism:
The funny thing about the whole article is that it only needs to be 2 paragraphs long. Here are his first two paragraphs:
For the past few months, I’ve been trying to solve an economic puzzle: why are wages growing so slowly despite a growing economy and a booming stock market?
Workers are productive and helping the economy grow, yet unlike previous economic expansions, we are hardly seeing big increases in wages. Instead, companies are sitting on their cash or giving it back to their shareholders through dividends and share buybacks.
He poses a question, then he answers it. Why aren’t wages growing? Because companies are keeping the money for themselves. I would add that companies are also giving executives giant pay packages. That’s another place where the money is going.
What the author is missing is that capitalism is an absurd system designed to concentrate wealth, backed by an immense amount of propaganda to convince people that capitalism is OK. Therefore, the remainder of the article is a verrry long exploration of why the “invisible hand” is no longer working the way he believes it should. He comes to this place in his thinking:
Something has indeed gone very wrong with capitalism. In a competitive market, if a company is making a lot of money, other companies will get excited by the prospects of high profits and will enter the industry and compete. Eventually margins decline as more competitors fight each other. That is how dynamic, capitalist economies should be. Something is profoundly broken with capitalism if corporate profit margins do not revert to the historical mean.
He blames our current problems on “rising industrial concentration”, and he does have a point. The thing that the author is missing is that the fundamental principles underpinning capitalism are absurd. You can see the absurdity in the quote. As he explains it, capitalism is a Rube Goldberg machine of rules that are su