Are things getting better?

Jose G. Perez jgperez at
Mon Oct 18 23:18:06 MDT 1999


    Absent more of a context, I'm not sure what to make of this post, but
there's one pitfall that I think people should be conscious of.

    The relatively higher US percapita GDP from before, say, 1890, reflects
a different economic reality than the one today.

    Throughout the 1800s, it proved impossible to drive down average
American wages to "European" levels because of the existence of the
agricultural frontier. The capitalists constantly had to compete with what
one might make as a farmer to retain labor. Of course, this was not an
absolute, there were different wage levels in different areas depending,
among other things, on how far the agricultural frontier was from your
location and the number of newly arrived immigrants.

    Even after the closing of the frontier, that historical, socially
established minimum real wage continued to have a powerful impact on U.S.
society. There was once a school of economic thought -- I don't know how
reputable it is anymore -- that U.S. manufacturing was FORCED to be much
more efficient due to the higher prevailing wage rates here compared to
other capitalist countries, i.e., that contrary to what Greenspan thinks,
higher productivity does not lead to higher wages, but the other way around:
higher (real)  wages leads to higher productivity.

-----Original Message-----
From: Louis Proyect <lnp3 at>
To: marxism at <marxism at>
Date: Wednesday, October 13, 1999 11:19 AM
Subject: Are things getting better?

>Max Sawicky wrote:
>>It boils down to this, if you're serious:
>>Is it really the case that there is a lack of summary
>>measures that indicate a widespread lack of development
>>in the periphery over the past 50 years?
>Following your strictures not to question GDP as a measure of
>development, I guess it comes down to a matter of relative vs.
>absolute. There's no question that real per capita incomes -
>bracketing for now all distributional and qualitiative considerations
>- have risen in almost all peripheral areas - even Africa, according
>to Maddison's numbers, a continent that is in dire dire shape. But by
>relative measures, global polarization is wider now than in the 19th
>century. Here are some summary stats - at purchasing power parity -
>based on Maddison's estimates:
>              southern  eastern    Latin    Asia ex-
>               Europe    Europe   America    Japan     Africa
>       1820     64.5%     58.3%     55.5%     42.1%     35.0%
>       1870     45.2%     41.9%     32.6%     23.3%     19.5%
>       1913     33.0%     29.3%     28.6%     13.3%     10.8%
>       1929     31.2%     22.8%     27.9%     11.4%      9.6%
>       1950     21.2%     27.2%     27.3%      6.7%      8.3%
>       1973     36.3%     34.6%     28.6%      6.9%      7.7%
>       1992     36.0%     20.4%     24.3%     11.0%      5.8%
>So, "southern" Europe - by which Maddison means peripheral Europe
>(Greece, Ireland, Portugal, Spain, and Turkey) have done reasonably
>well since 1950, though they're still further behind in relative
>terms than they were in the 19th century; Eastern Europe did ok
>during its "socialist" period, but it too has fallen behind again;
>Latin America was flat for most of the century, and has fallen behind
>since the 1970s; and Africa is a disaster. The only region to close
>the gap with the U.S. since the 1970s was Asia, and it had a spot of
>trouble recently.
>By the way, the years are the breakpoints of Maddison's periodization.
>Doug Henwood
>Louis Proyect
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