21.1. Status inflation and deflation: Prestige, the essence of status, permits broad alliances

Is status a positional good?

As the concept of social status itself attains higher status (through employment in evolutionary psychology), class struggles over the material conditions of life are recognized as impregnated with status aspirations. The conclusion may be drawn or implied that these conflicts are inherently wasteful: we’d be better off if people accepted their lot, because status is a positional good—a zero-sum game—what is won by some is lost by others. (See, for example, Robin Hanson’s Inequality talk is about grabbing.) But it also seems that a society beset with severe status inequality will suffer status deflation.

One approach to the question of whether status is a positional good is whether status is (implicitly) measured using an ordinal scale of measurement or a higher scale, interval or ratio, where ordinal scales express only rank, whereas interval and ratio scales express degrees of difference. An example of an ordinal scale expressing social status is military rank. The status of the rank of major depends on the mass of soldiers a major outranks and the number who outrank the major, so, if half of the captains are promoted to major, the major’s status declines.

Social status can seem similar to military rank, but (I contend) this is a confusion: the social status of an entire population can rise or fall (inflate or deflate), because the main component of social status is prestige, which has ratio properties. The confusion results from conflating prestige with dominance, more primitive and prototypical, but prestige is a ratio scale, not an ordinal scale like dominance, because it results from summing over weighted dominance relations. Consider our major in contrast to a lieutenant under his command. The lieutenant may have received higher grades in the military academy, he may come from a wealthier family, and he may be the president of a nonmilitary club in which the major participates as an ordinary member. Which has more prestige? The point is that the question makes sense; we combine information about position in various separate dominance hierarchies with other information about their potential power to determine their prestige, the information’s additivity implying that prestige is at least an interval scale (probably a ratio scale), not a mere ordinal scale like dominance. Concern with prestige (as distinct from dominance) is a human-specific trait, with few roots other than dominance in our primate psychology.

Why prestige?

Evolutionary psychologists propose that prestige (usually referred to simply as status, a convention I will abide) reflects a person’s value as an ally: a high-status person is a powerful ally. (The person with the highest prestige is God, the most powerful ally.) Other primates appear to have only dominance, which suffices for simian calculations because apes, living in a single hierarchy, don’t need to sum over different hierarchies. Humans live embedded in multiple social hierarchies—at root, dominance relations—which must be weighted and added to appraise an individual’s value in alliances.

If primordial alliances were exclusively alliances pitted against other allied humans, prestige could still be a zero-sum game despite its ratio scaling. But the alliances formed primordially weren’t exclusively competitive alliances: alliances were presumably formed for foraging and child care. Ratio-scaled prestige, a currency spanning dominance hierarchies, allows more and broader alliances.

Two distinct explanatory tasks regarding prestige concern its evolutionary function and its individual motivation. Evolutionary psychologists hypothesize that status derives from the differential value of persons as allies. The quest for prestige aligns the individual’s efforts with adaptation: by pursuing prestige, one becomes a more powerful ally, deriving the corresponding social (and reproductive) advantages. But the mechanism is more complex and itself provides additional clues about function. Prestige is a reaction formation against envy. This agrees with the observation that we accord prestige to those we would otherwise envy. (See Theodor Reik, Love and Lust: On the Psychoanalysis of Romantic and Sexual Emotion regarding the idealization process—rooted in unconscious envy—in romantic love. “Reaction formation” is a psychodynamic mechanism involving experiencing the opposite of certain thoughts, to deny them conscious access.)

Since status is commonly perceived value as ally, status deflation means decreased willingness to rely on—to ally with—others. In 11.3, I discussed opinionation as a pathology of belief-opinion confusion: we are opinionated when we fail to rely sufficiently on the opinions of experts. Status deflation causes irrational opinionation (as well as other adverse societal effects, including some relating to macroeconomics). The modern expression of the tendency toward excessively narrow alliances is lack of regard for the opinions of most others, including experts. At the same time, (one's own) status deflation increases the experienced envy. In societies where status is most deflated (typically, traditional agrarian societies), this two-pronged attack on the sublimation of envy results in the bullheadedness of the peasant.

Countering status deflation and generating inflation.

Economic inequality is a manifestation of status deflation as well as one of its causes (as I maintained in 21.0.) In modern capitalist societies, the main ways of reducing inequality have been restricted immigration (to reduce the supply of labor and increase its price) and progressive taxation. But these policies have been applied sporadically and are only practiced weakly in most advanced countries. Within Europe, the Common Market has opened borders, and in the United States, wealth inequality is so high it rivals some third-world countries. The reason stringent immigration control and progressive taxation are only sporadically applied is that these methods don’t correspond to any humanly valued relational model—which as Alan P. Fiske (Structures of Social Life (1991)) shows, enable the moralization of social practices and, as John Bolender elaborates (The Self-Organizing Social Mind (2010)), correspond to the four scales of measurement. (Communal/Sharing is nominal, Authority/Ranking is ordinal, Equality/Matching is interval, and Market/Pricing is ratio.) A flat tax employs a ratio scale, a fact that helps account for its ideological popularity despite its practical infirmity. To human intuition, progressive tax rates are arbitrary. As to immigration control, absolute restriction would correspond to Communal/Sharing, but like the flat tax rate, mere reduction of immigration rates doesn’t form an intuitively compelling public policy. (This is not to disparage the instrumental use of either immigration control or progressive taxation.)

State socialism, on the other hand, can be grounded in intuitive metrics: equality matching (interval scale) embedded in communal sharing (nominal scale). It has proven not only to provide a greater degree of status equality (thus status inflation) but also to be more durable.

21.0. The dismal employment picture: A social-status-theory explanation

Most economists agree automation costs jobs, but the reason it does is unclear. Economists had theorized that automation would create more jobs than it eliminates. This essay sketches a novel theory explaining why, today, automation costs jobs, whereas introducing machinery into production once created jobs and continues to create them in some economically backward countries, particularly China. I’m not an expert on the subject, and I confine myself to basing my theory on a few facts and principles of economics that are widely accepted, to which I apply the nascent social-status theories from evolutionary psychology. (Economist Robin Hanson’s blog, Overcoming Bias, which has influenced my thinking regarding social status, contains numerous novel applications of social-status theory.) This explanation is independent of my previous theorizing that the tendency of rate of profit to decline is a source of economic decline. The point of this essay is to propose that social-status theory is relevant to macroeconomics.

Aggregate demand and the industrial revolution

The concept taken from economics is aggregate demand. Rising aggregate demand allows the economy to grow in the long-term, furnishing the reason economists had believed automation would create jobs. By creating wealth more efficiently, automation permits the employment of more workers, whose increased buying power supports their employment.

This logic can collapse if workers doing the new jobs are paid less than the workers replaced in the labor force. Profits will then rise, and while profits contribute to aggregate demand, they do so less than wages because the profit-takers are wealthier than workers and spend less of the increase than workers would spend. Investments in machinery increase aggregate demand, but the profitability of these investments depends on unreliable technological opportunities. Every modern society that has been economically expansive long-term has raised the standard of living of the masses of people.

The fundamental reason the industrial revolution allowed vast expansion of the economy is that expansion of the labor force occurred primarily by turning peasants and farm workers into manufacturing workers. Workers were paid low wages and worked as much as 14 hours a day before they organized into unions, but still, at least in long historical perspective, their income was better than that of the peasants they had replaced. Even today, agricultural workers throughout the world get much lower wages than do manufacturing or personal-service-sector workers. The creation of an urban working class meant an expanding economy with expanding employment. The process is observed today in fast-motion in China, where an expanding economy is powered by converting very poor peasants into better-off workers, creating rising aggregate demand. This isn’t the only tendency in the early and middle industrial revolution. In a countervailing tendency, much emphasized in the popular imagination, skilled workers are replaced by unskilled workers. The first tendency is stronger.

During the past hundred years, another trend came to dominate: the growth of the personal-service sector. “Personal-service sector” (from which I exclude the “producer services,” which aren’t “personal”) is an amorphous term  including well-paid occupations, such as physicians, but most advanced-country workers not employed in manufacturing goods are employed in distributing goods (wholesale and retail sales), restaurants and hotels, and the nonprofessional health-care sector, and these workers are everywhere paid more poorly than those employed in manufacturing. Hence the worry about the “disappearing manufacturing jobs.” Replacing manufacturing jobs with service-sector jobs entails slower growth in aggregate demand.

Social-status theory from evolutionary psychology

The question seldom addressed is why service-sector workers, such as retail clerks, food preparers, and nursing aides, are so poorly paid. Lower skill requirements may be part of the reason, but the fact that service-sector jobs remain unskilled may itself be best explained by their inherently lower status, which is the answer I propose. Socially stratified societies allocate social status to the various occupations based on criteria rooted in instinct. The personal-service occupations are accorded lower status because these occupations carry indicia of servitude and servility.

Modern social-status theory derives from evolutionary psychology, which emphasizes our continuity with chimpanzees, whose social life is characterized by dominance hierarchies. But evolutionary psychology also recognizes that bands of hunter-gatherers were usually egalitarian: “primitive communist” societies resisting any attempts by strongmen to dominate them or establish material or other status-based inequalities. With the agricultural revolution, the accrual of social surpluses and the need for large-scale social coordination both intensified and unfettered the striving for social dominance—power, prestige, wealth—from the group control that held them in harness throughout 90% of humankind’s span of existence, producing societies divided into social classes.

Allocation of status depends on instinctual triggers, including the marks of servitude: all else being equal, one who serves has less status than the one served.

Indicia of servitude aren’t the exclusive basis for awarding status to occupations, as demonstrated by the vast range of incomes among occupations in the personal-service sector. Anything associated with power increases status. Status theory can explain the higher incomes of manufacturing workers compared to peasants and farm workers by the prestige of cities, associated with urban power. The link between status and power might also explain why economists of the early industrial revolution, such as Ricardo and Marx, underestimated the ability of manufacturing workers to sustain wages higher than the price of bare necessities: the economists could not foresee the consequences of the comparatively high social status of workers in manufacturing, or perhaps, the relative status of manufacturing workers wasn’t evident to them. Even today, farm workers have far lower incomes than either manufacturing or personal-service workers. Physicians have high status because they command medical technologies that afford power over life or death. Consequently, the large incomes of physicians are a new development: 19^th century physicians weren’t affluent and highly respected, since they didn’t command the powers of modern chemistry. Occupations that require considerable skill and demonstrate intelligence are high status. But the trend is proliferation of personal-service jobs in retail sales, hotels and restaurants, and health-care, where workers have low status based on bearing indicia of servitude.

Status inheres in making useful goods that does not inhere in providing useful services. Dwell, for a moment, on the concept “the dignity of labor.” Even unskilled work has a dignity that is absent in personal service; think of the fake smile a sales agent or nurses’ aide must present. Insincerely agreeable affect is demeaning, compared even to unskilled manual labor, which may be boring but isn’t humiliating. This is only an example—and not the most obvious example.

The whole of society may conspire to bring about the low wages of service-sector workers. Laws protecting full-time workers often don’t extend to part-time workers, who are more common in the personal-service sector. But since wages are set primarily by market pricing, the assertiveness of the workers, especially their collective assertiveness, is probably the main proximal mechanism by which status influences income. High status produces confidence and sense of entitlement, a collective refusal to accept conditions below their due, because of their station in life.

Prospects

These trends paint a bleak picture: rising inequality, growing unemployment, and social-status deflation. Not only are the macro-economic trends unfavorable, but the means to resist them politically diminishes as the assertiveness of the downtrodden declines with their loss of self-confidence and sense of class entitlement. The analysis does point to a public policy that might slow or reverse these trends. Although no great cause for optimism in the absence of any practical means of effecting change, I’ll end on that note of relative optimism: we must ask how the social status of personal-service workers might be raised. 

If the triggers for low status are inevitably the signals of servitude inherent in these occupations, upgrading their status entails adding high-status signals. Statizing personal-service industries would accomplish this. Government, being powerful, is high status, and all else being equal, workers employed by government will enjoy higher status than those working in the private sector. The evidence includes the strength of unions in the public sector despite their obliteration elsewhere. Statization of personal services, regretably, isn’t today’s trend.                     

11.6. Belief–opinion confusion and the contradictions of capitalist investment markets: Fictional-market socialism

(Part 7 of Belief-versus-opinion series.)

Economic recessions, like the one we hope we’re recovering from, have varied causes, but any causes inhering in capitalist markets are fundamental in that they won’t be eliminated without basic systemic change. My theory of belief-opinion confusion explains a fundamental cause of business cycles: investment markets necessarily rely on beliefs at places in social-decision processes where opinions are appropriate.

Belief and opinion: Two kinds of judgments

With mild regimentation of ordinary language, belief and opinion name two distinct entity types—dispositions versus occurrent mentation—derived from two perspectives on reality: abstract construal and concrete construal. This chart summarizes the differences between belief and opinion:

Belief and opinion ideally correspond to ways of participating in decisions in groups, including entire societies: action and deliberation; deliberation concerns figuring out what ought to be done, and action concerns doing it. Confusion is rife in electoral democracies with deeply opposed interests, since one forum serves both purposes.

“Deliberation” by capitalist markets defectively supplants opinion with belief

But if the political arena is the scene for opinion-belief confusion, the investment markets are where belief completely supplants opinion. Markets are mechanisms for societal decision-making: in a democracy of the dollar, your purchases figure into the determination of what is produced. In markets for use, the buying decisions follow from the buyer’s opinion, which—being personal—translates smoothly into belief, without deliberation. Whose opinion but your own should you consult? Markets for commodities and other easily comparable items effectively combine the opinions of buyers, since they can decide independently.

Investment markets are fundamentally different because investors must rely on the past financial performance of an enterprise; usually that’s the most important information available, so they must mainly extrapolate from an investment's past market results. In the societal deliberative process, investors express their beliefs rather than opinions, and these beliefs are heavily laden with others’ judgments (although from a personal standpoint, they express their opinions, since they value most what is original in the judgment).

The investment process can be viewed as forgoing opinion formation prior to deliberation, where the decision to invest should be based on independent opinion if the “deliberative process”—consisting of the “decisions” issued by the market—is to function properly.

The cost of this type of dysfunctional substitution of belief for opinion in deliberation is conformism, and when decisions are made sequentially, a consequence is information cascades, where random variations are amplified into large swings. This results from extrapolation, the result of investors using the previous judgments of other investors—expressed as stock or bond prices—as guide. Judgments by investors are essentially expressions of investors’ beliefs, primarily based on others’ judgments previously given. Obscuring the role of extrapolation is the apparent paradox that profits are made on the market by betting against the consensus, but extrapolating from investment-market gains is to extrapolate based on outperforming the crowd.

Purified fictional markets under socialism

Conceptualization of belief-opinion confusion suggests that the solution is to obtain independent opinions, which investments don’t reflect because investors know their beliefs are more veridical than their opinions, which are based on very limited data. Opinions can be obtained only if personal gain is divorced from investment decisions. Not only can’t capitalist investors be expected to invest according to opinion; they won’t even disclose their true opinions because they benefit from the ignorance of other investors.

Opinions could be obtained in an economy where capital is state owned—probably in such an economy exclusively. The model suggested is a fictional market where numerous government functionaries make investment decisions based on their opinions but don’t lose or profit because of their decisions: those incentives would cause them to “invest” based on beliefs. The fictional investments regulate the economy, which is state owned despite being controlled by a market purified of cascades and the other distortions due to correlated judgments.

Such a society requires a high level of material well-being and a high level of social consciousness, so the functionaries will afford concern with following instructions for which they won’t be rewarded or punished. These requirements may illuminate the ultimate failure of the socialistic experiment that was the Soviet Union, where slow growth set the stage for a pro-capitalist coup. In a society still materially poor, fictional use of the market would degenerate into a real capitalist market.

17.1. Societal implications of ego-depletion theory and construal-level theory: Ignored transaction costs and proliferation of electoral events (Part 2 of "Philosophical and political implications of ego-depletion theory")

From ego-depletion theory, we should conclude that making choices is far costlier than what’s told by common sense, this conclusion the source of the theory’s societal implications. Nobody expected that decision fatigue at the day’s end would cause judges to deny almost all petitions they heard. According to common sense, the main cost of decision-making is the time it consumes, but ego-depletion research shows that there’s a much greater unnoticed cost:

Decisions become remarkably harder and less competent with each succeeding decision.

Two societal implications are that 1) accepting or declining economic transactions is costlier than we think and 2) electing numerous officials curtails democracy.

Ignored transaction costs

The housing mortgage crisis exemplifies the first implication: commentary has failed to take account of the toll imposed on people who want to buy homes, when pseudo-opportunity taxes their willpower. The structure of “opportunity” is central here: an open offer from varied offerors isn’t subject to once-and-for-all decisive rejection. Instead, a potential borrower may have to wrestle with impulse for months, so that finally accepting a loan becomes a desperate response to the constant drain on scarce willpower.

The harm never considered is how much willpower is drained from those who refrained from borrowing, who successfully resisted the impulse to take a home loan; how the drain on their willpower paralyzed them in making other decisions—having been forced to squander their willpower on resisting loans that should never have been offered. Willpower is a scarce resource, and it is far more costly than almost anyone realizes. It’s the great hidden societal cost of market transactions. And while researchers assume willpower is replenished with a night’s sleep and breakfast, I suspect that longer frames also operate—this is the reason we need weekends and vacations.

The faux-democratic proliferation of electoral events

Like proliferating consumer “choices” that kill happiness and productivity while seeming to enhance them, the proliferation of elections has an analogous paradoxical effect on democracy. Since every choice offered diminishes our ability to make choices, elections for judges and dogcatchers or for the multiple offices required under the U.S. federal system weaken democracy by detracting from the effort citizens devote to any electoral contest.

Although dramatically reforming the American political structure is neither feasible nor high priority, it is well to have a vision of what kind of structure is or isn’t effectively democratic. Ego-depletion theory tells us that the fewer offices for which a citizen votes the better, but construal-level theory offers additional standards. It proposes that

“Seeing the forest” and “seeing the trees” involve integrated mental sets, dubbed far-mode and near-mode because distance of time, place, and person makes us think in terms of forests and nearness in these respects makes us think in terms of trees.

Outcomes will depend on whether the decision is construed in far-mode or near-mode. The theory might be invoked to support a system of checks and balances like the U.S. system, where elections staged at different intervals and over different-sized constituencies induce varying construal levels. At the federal level, elections to the House of Representatives are relatively near-mode, due both to small districts and frequent elections, and presidential elections may be most far-mode, although Senate terms are longer. Near-mode fosters resistance to change, so it is theoretically consistent with construal-level theory that the House has taken so strongly to saying no.

But if the system succeeds in eliciting different construal levels in different government branches, this has come to seem a defect rather than merit. If government is to deal in broad purposes, far-mode should dominate in formulating policies. If policies are to be implemented intelligently, near-mode should dominate in their local application. How to square this with ego-depletion theory’s moral that the number of contests in which any citizen votes be limited, preferably to a single office? One way to try to accomplish this might be a unicameral parliament with local bureaucracies appointed top down, but this produces an effect opposite to the intended. Appointments to distant career posts are based on far-mode processes, unlikely to lead to effective near-mode reasoning by the appointees.

Another little used but in-theory effective means of unifying local government with national government could better secure the appropriate allocation of near and far cognition: indirect election of progressively higher levels of government by local bodies, so the choices are minimized and each delegation is progressively more far-mode. It may be objected that this was part of the defunct scheme originally adopted under the U.S. Constitution, which provided that local government bodies elect U.S. Senators and delegates to the electoral college, but the U.S. Constitutional scheme insubordinated local power to national by limiting the power of the federal government, whereas in the (unitary rather than federal) system here envisioned, the higher levels dominate the lower despite being selected by them, to subordinate near-mode to far-mode while economizing human willpower.

18.0 Capitalism and socialism express conflicting reciprocity norms: A reinterpretation of Marx’s theory of capitalist decline

Capitalist stagnation

U.S. workers’ wages stagnated in the last three decades, state-driven China almost alone internationally in substantially improving popular living standards. While other political economists in Marx’s day had observed a tendency for profit rates—driving production under capitalism—to decline, Karl Marx claimed the decline is inevitable, this forming the conclusion of Marx’s three-volume magnum opus, Capital.

Marx’s central argument is counterintuitive but simple. Value consists of labor hours embodied in products. Employers (capitalists) profit by paying laborers for their time, the amount of value paid being less than the amount of socially necessary labor the workers add. With capitalism’s evolution, a declining proportion of the value produced is constituted of labor directly employed, an increasing proportion of labor already concretized in capital goods, since mechanization of production is the fundamental means to increasing economic efficiency, where capital goods contribute to the value of a product to the extent they are consumed in its production. With the increasing organic composition of capital—as proportionately more value is created through capital goods—rate of profit must fall, since it is based on exploiting labor and that already embodied in capital goods has been sold and accounted for.

Despite its centrality to Marx’s analysis of why capitalism eventually comes to retard economic progress, the tendency of the rate of profit to decline is far from universally accepted as true even by Marxian commentators. Marxian academics have even questioned it mathematically, but the real issue isn’t the almost-trivial mathematics but its mapping to reality: does the declining Marxian rate of profit entail a declining actual rate of profit?

Conflicting reciprocity norms

That owners of capital (capitalists) profit from a series of “fair” exchanges could be termed the central premise of Capital. Workers exchange their labor time for its value—that is, the laborers’ own price of reproduction. The arrangement is fair under a reciprocity norm according to which commodities trade at their market value. But it is unfair under a reciprocity norm according to which all receive in proportion to their value-producing labor. Although Marx didn’t stress the point, what’s striking is that each antagonist in the historical drama—the social classes workers and capitalists—frames its interests in terms of a simple coherent reciprocity principle, with the difference that the workers favor a ratio derived from production and the capitalists from distribution. (See Alan Page Fiske, Structures of Social Life: The Four Elementary Forms of Human Relations (1991) [“equality matching” and “market pricing,” but Fiske, while discussing Marx, doesn’t link equality matching to the labor theory of value].)

The market’s function

Attacks on the soundness of Marx’s law of the tendency of the rate of profit to decline derive from its seeming impossibility—this, in turn, due to not seeing the connection between “profit” as defined in the theory and in the ledger. We must start from fundamentals. According to Marx, civil society exists to allow human cooperation in the labor process. Civilization is built on accomplishing this by fostering the accumulation of economic resources by few; capitalism was the form economies came to take at the onset of the industrial revolution. Like other economic systems that followed the agricultural revolution, it arose and became ascendant because of its efficiency in extracting value from labor, but it accomplishes this with a progressive enlargement of the value diverted to augmenting industrial machinery rather than directly producing more products for consumption, which gradually changes the tasks presented. As the contribution of machinery grows relative to the direct contribution of laborers, the basic economic tasks besetting society change from producing value from labor to realizing the value embodied in machinery.

But the capitalist market continues to be a system adapted to extracting value from labor. Insofar as profit represents a gain in value accruing to the capitalist class as a whole, it comes from the value contributed by the laborers. As the production process has progressively less proportionate need for laborers, it becomes harder to profit sufficiently at their expense.

Limits of state action under capitalism

It might be thought that this Marxian profit is a reification. Who’s to say it is the proper abstraction for understanding capitalist motivation, rather than, say, the concept of “interest,” favored by the ultracapitalist “Austrian school.” One response that denies the centrality of Marxian profit (technically, surplus value) is that state action can co-opt the market to new ends. Since the market tends to overproduce capital, adroit government spending might redirect it to produce more consumer goods. This is the essence of Keynes’s policies. The most obvious problem is that unprofitable spending is competitively inefficient and is only sustainable in huge nation states with considerable economic autonomy; otherwise, it may cause a nation’s industries to fail against international competitors, who are free-riders on the increased buying power of the local population. International economic competition sets limits on a country’s ability to use Keynesian policies or any policies involving state subsidy. Yet periods aren’t rare when one capitalist power dominates and is subject to diminished international competition. Also, if Keynesian policies are directed to creating positive externalities or “public goods” favoring profitability, their benefit may outweigh their harm to profits.

But insuperable obstacles to using government to redirect the market keep Marxian surplus value a good first approximation to balance-sheet profit. While a government-regulated market is often thought to provide the best of capitalism and socialism, in an important sense, it provides the worst of each in that the state attempts to regulate in ignorance of the facts, a company’s plans a closely guarded commercial secret. But the more fundamental problem with government-directed capitalism is that it amounts to the government’s adding to some capitalists' profits at the expense of other capitalists. Where political power follows economic power, the political unity of the class of capitalists depends on their shared economic interests. Private property is the means of coordinating individuals into a social class sufficiently unified to legitimize government. This unity depends on allocating wealth according to the dominant reciprocity norm, based on market exchange rates.

The result is only limited government intervention can please the capitalist class. Rather than contributing to the profits of the class, government policy must use incentives which advantage parts of the class at the expense of the other parts. To create an incentive sufficient to replace the incentive of Marxian profit with balance-sheet profit, differently constituted, would involve huge wealth transfers within the capitalist class, calling the system’s legitimacy into question by undermining its broad support by the dominant social class.

Corrected on January 2, 2013: the organic composition of capital increases rather than declines. The point is purely terminological and the result of my still not grasping why machinery is termed "organic." Thanks to a correspondent, who corrected me.