I am continuously amazed by your quality in these blogs

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What happened in 1971? It's a long story, but fundamentally what happened was that the U.S. Dollar was no longer guaranteed by the government as being worth $35.00 in gold.

Say what?

Your currency represents the wealth labour produces and that which lies in the natural resources of the borders of the political State you live in. Gold has been used down the centuries by humans as a money commodity representing a more or less stable amount of socially necessary labour time. Stick a pin there.

"August 1971. With inflation on the rise and a gold run looming, President Richard Nixon's team enacted a plan that ended dollar convertibility to gold and implemented wage and price controls, which soon brought an end to the Bretton Woods System." In other words, the value (value as understood by Aristotle, Smith, Ricardo and Marx i.e. the socially necessary labour time embodied in the commodity known as the U.S. Dollar) was not being reflected in the price set by the U.S. government. Floating the U.S. money commodity in the world market led to a big surprise for "consumers", the price of everything rose and rose a lot to meet their values as expressed in U.S. dollars. Price usually fluctuates around value with the winds of supply and demand. Today the U.S. dollar is more in tune with its market value (the socially necessary labour time it represents in wealth produced within the U.S. by workers), to wit: $ 1,846.94 per ounce of gold.

Meanwhile between 1971 and now, all sorts of hanky panky went on in repricing the value of labour power i.e. wages in a stagnant or downward way. The capitalist class saw an opportunity to deal with declining rates of profit by unhooking wages from the surplus value which was being produced by labour. You'll see this decoupling, if you pay close attention to all the graphs in the link below. Productivity is essentially measured as output per hour of labour. While real wages (wages adjusted for inflation) stagnated, productivity increased, leaving workers less and less of the social product of their labour to use, even as taxes for the capitalists were cut, along with cuts to the social wage i.e. public health, education and welfare all in order "to balance the budget".

Interestingly enough, while these graphs are mostly centred on the situation of the U.S. working class, the ACTU in Australia published a study which came to a similar conclusion about productivity of wealth and workers' share, to wit: that the Australian working class have 13% less of a share of the real Gross Domestic Product now than they did in 1975.

There are lots of graphs here, not just the one pictured below. Take a look, read 'em and weep. Workers have been taken to the cleaners by the buyers of their labour power, the employing capitalist class.


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