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The Alternative To Long-Term Austerity: Less Work, Higher Wages, No Mere Utopian Dream

Alan Nasser

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April 7, 2015

“A spectre is haunting the treasuries and central banks of the West – the spectre of secular stagnation. What if there is no sustainable recovery of the economic slump of 2008-2013? What if the sources of economic growth have dried up – not temporarily, but permanently?” – preeminent Keynes scholar and economic historian Robert Skidelsky, “Secular Stagnation and the Road to Full Investment,” Social Europe Journal, May 22, 2014 

Both Karl Marx and J.M. Keynes concluded that the trajectory of capitalist development placed a radically emancipatory possibility on the political-economic agenda. For the first time in modern history work time could be dramatically reduced with no reduction in our standard of living. In fact, if living standards are measured not merely by money wages but also by increased leisure, i.e. increased time available to develop and exercise our broad range of gratifying capabilities, the reduction in work time would elevate our standard of living to a degree hitherto unimaginable.

In what follows we’ll see that less work with higher wages is at this historical juncture not merely economically possible, but desirable as the only practical alternative to the secular stagnation grimly forecast with much flurry by such luminaries as Paul Krugman, Larry Summers and Robert J. Gordon, and by the IMF in its April 2014 World Economic Outlook. Both Marx and Keynes saw their prescriptions as not merely a “better idea,” but as the alternative to severe ongoing crisis, understood as dramatic reductions in real production, employment and wages.