Monday, 4 March 2013

Marxism and stability
Marx thought there was an inherit unsuitability running through the history of capitalism. One of his ideas was if bosses got their way and paid their workers less and less, then those workers would have less and less to buy what the bosses are selling, driving a decline in the economy. But a squeeze in workers earning doesn't always mean there will be a decline in the economy.


In the past workers got the money and bought the products as well as making the product, so a decline in wages meant a decline in demand. But when bosses have a larger share of the profits to spend they have more power on demand, so they can sustain the demand.

Housing
This effect can be seen in certain saturated housing markets, where the landlord is the boss and the tenant as the worker. 
So even when less people have buying power to own their own home, there are enough landlords to own the majority of the homes in the area and they are the ones who keep the housing market prompt up. And if home building is slow enough any new homes that are build will be consumed by these landlords.

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