USA: The Crisis of Capitalism by the Numbers

We republish here a graph that was originally published in the New York Times, based on figures from “The State of Working America” by the Economic Policy Institute. It covers the period from 1913 to the present, with a focus on the period after 1947. This is significant because 1947 can be considered the starting point of the post-Word War II economic boom, a period during which the capitalists were extracting so much profit from the workers that they were able to throw them a few extra crumbs. The mass workers’ movements in the 1930s and the strengthening of the unions after the war had taught them a few lessons about how to try to maintain relative class peace.

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But the “good times” ended with the 1973–75 recession. Capitalism was able to limp along for a time with the help of a massive expansion of credit and the Information Technology and housing booms (and busts). But as the Marxists have always explained, credit is a very precarious foundation on which to build an economy. By 2007 and 2008, it was clear that the fictitious “prosperity” was hanging by a thread.

As this chart clearly shows, starting around 1980, worker productivity skyrocketed. But the share going to those who actually produce the wealth stagnated. Profits went way up, and so did income and wealth inequality. Today, with millions unemployed, fewer workers are creating more wealth  than ever—for lower wages, in real terms, than in the 1970s. This is an absurd situation. 

This is not socialist “propaganda.” The numbers speak for themselves. More importantly, millions are learning about the reality of life under capitalism, not from numbers, but from bitter experience. No wonder the youth and workers have started to rise up in the U.S. and around the world. 

If the capitalist economy were rational, this increased productivity would be translated into more take-home pay, a reduction of the workweek, and an end to unemployment. All the work that society needs doing could be divided up rationally and everyone would be paid a living wage. Some of the surplus wealth could be invested in improving schools, housing, public transportation and infrastructure, to provide universal health care and education, and to research renewable energy and cures for diseases like AIDS and cancer. 

But capitalism is based on the anarchy of the market and the blind scramble for profits. The capitalists have been pocketing super-profits for decades now, and are not about to give that up without a fight. This is why the only answer the capitalists and their political parties put forward is that the working class must bear the brunt of this crisis. In their relentless quest for more, they put the futures of literally billions of people at risk. We think there is another, more rational, humane, and democratic way: socialism.

Graphic credits: Bill Marsh/The New York Times. Sources: Robert B. Reich, University of California, Berkeley; “The State of Working America” by the Economic Policy Institute; Thomas Piketty, Paris School of 
Economics, and Emmanuel Saez, University of California, Berkeley; 
Census Bureau; Bureau of Labor Statistics; Federal Reserve