Alan Greenspan Admits Marxist Principle

A week ago on Sunday (yes, I know, I've gotten behind!) I was watching Meet the Press, and I saw the following interesting interchange between the host, David Gregory, and Alan Greenspan:

MR. GREGORY:  Back now with our roundtable.  Alan Greenspan, I want to talk economy writ large.  And a couple pieces of data here, from the interview with Secretary Geithner, he says, referring to private economists, he thinks that unemployment could get to 8 percent or below by the end of 2012.  And this is interesting, too.  Persistently high unemployment but look at the performance of the stock market while President Obama's been president.  Up in 2009 from 7949 to over 12,000.  We've got, as you always say on this program, that's real money, that's real wealth, and yet we have persistently high unemployment.  What, what is your view?  What is this outlook you're seeing?

DR. GREENSPAN:  Well, first of all, the major reason why the stock market, in fact, asset values in general, came off those extraordinary lows in early 2009 is that productivity improved very dramatically in the business sector.  That meant that profits and cash flows would be engendered in a very substantial amount, which pushed asset prices up to an extent that, coupled with the increased contributions, 401(k)s added a trillion dollars to the actual net worth of the individual households who hold them.  And they are very big spenders, and that has been a very important factor in keeping the economy going up.

MR. GREGORY:  But you're saying companies doing more with less.  The question is when do they start spending and creating jobs?

DR. GREENSPAN:  Well, the problem, basically, is that there was a contradiction in those who say that you want one and not the other. Increasing productivity, by definition, means that you are producing more goods with fewer employers.

MR. GREGORY:  Mm-hmm.

DR. GREENSPAN:  Now, what--employees.  What is happening now is we're now beginning to see that productivity growth flatten out, and that's where all those jobs are coming from very recently.

(Accessed from http://www.msnbc.msn.com/id/42612533/ns/meet_the_press-transcripts/; emphasis mine)

What is Greenspan saying here? In effect, he is acknowledging the fact that there is a CONTRADICTION (a favorite Marxist term) between the personal goals of individual capitalists - increased productivity - and the goals of the general population (in this case, increasing employment).  Of course, what Greenspan does not pick up on is the fact that increasing productivity does NOT, in the long run, increase profitability.  In fact, it decreases the rate of profit, as human labor is the source of surplus value, and thus increasing productivity (utilizing less human labor) decreases the rate at which surplus value can be accumulated.  Furthermore, as our current economic recession is a result of a global crisis of overproduction, increasing productivity most certainly is NOT the solution!  In this case, then, it is not a matter of wanting to have our cake and eat it too, as Greenspan suggests.  Rather, the increased productivity merely represents the determination of corporate billionaires to milk the last bit of juice from the system before it collapses.  It is self-serving and not in any way helpful for the economy as a whole.