How the History of Class Struggle is Written on the Stock Market

How the History of Class Struggle is Written on the Stock Market
Fix, Blair. (2020). Economics from the Top Down. 5 October. (Article - Magazine; English).

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https://economicsfromthetopdown.com/2020/10/05/how-the-history-of-class-struggle-is-written-on-the-stock-market/

Abstract or Brief Description

[Second of a two-paper series]

Class struggle, Bichler and Nitzan observe, is a part of all hierarchical societies. But capitalism is the first social order to quantify this struggle. It does so through prices, which Bichler and Nitzan propose indicate power. Stock prices, Bichler and Nitzan argue, indicate the power of owners to earn income. If we’re interested in class struggle, we want to compare this capitalist power to the power of workers. Here’s a simple way to do so. We compare the price of stocks to the price of wage labor. Bichler and Nitzan call this ratio the ‘power index’.

My goal here is to test Bichler and Nitzan’s thesis. Does the power index quantify US class struggle? Although a simple ratio of two prices, the power index, Bichler and Nitzan claim, tells us about class conflict at large. When the power index falls, workers are winning the struggle. When the power index rises, capitalists are winning.

Is Bichler and Nitzan’s claim true? In this post, I look at the evidence. I test how three different indicators of class struggle relate to the power index. Here’s what I find. When workers strike more, win a living minimum wage, and get government to progressively tax the rich, the stock market declines relative to wages. My conclusion is that Bichler and Nitzan are onto something. The history of class struggle does seem to be written on the stock market.

[The first paper, 'Stocks are Up. Wages are Down. What Does it Mean?' (September 4,, 2020), is here: http://bnarchives.yorku.ca/657/]

Language

English

Publication Type

Article - Magazine

Commentary on

A CasP Model of the Stock Market
Bichler, Shimshon and Nitzan, Jonathan. (2016). Real-World Economics Review. No. 77. December. pp. 119-154. (Article - Journal; English).

Keywords

capital as power distribution stock market

Subject

BN Money & Finance
BN Power
BN Region - North America
BN Value & Price
BN Business Enterprise
BN Capital & Accumulation
BN Class
BN Distribution

Depositing User

Jonathan Nitzan

Date Deposited

14 Oct 2020 01:02

Last Modified

14 Oct 2020 01:11

URL:

https://bnarchives.net/id/eprint/658

Commentary/Response Threads

• Bichler, Shimshon and Nitzan, Jonathan A CasP Model of the Stock Market. (deposited 10 Dec 2016 15:54)
  • Fix, Blair How the History of Class Struggle is Written on the Stock Market. (deposited 14 Oct 2020 01:02) [Currently Displayed]
  • Fix, Blair Stocks are Up. Wages are Down. What does it Mean? (deposited 14 Oct 2020 00:53)
  • Baines, Joseph and Hager, Sandy Brian Financial Crisis, Inequality, and Capitalist Diversity: A Critique of the Capital as Power Model of the Stock Market. (deposited 20 May 2019 02:24)
    • McMahon, James Reconsidering Systemic Fear and the Stock Market: A Reply to Baines and Hager. (deposited 09 Sep 2021 20:38)
      • Fix, Blair With Great Power Comes Great Fear. (deposited 09 Sep 2021 22:39)
    • McMahon, James Reconsidering Systemic Fear and the Stock Market: A Reply to Baines and Hager. (deposited 01 Jul 2020 19:56)
  • Bichler, Shimshon and Nitzan, Jonathan Can Capitalists Afford a Trumped Recovery? (deposited 30 Jan 2017 09:41)
    • Kolivakis, Leo Can Capitalists Afford a Trumped Recovery. (deposited 05 May 2017 17:52)

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