 This is Professor Resnick again. What I'd like to do is present you a summary of what we've done in the course. And I'm going to do that in terms of telling you a story about the US economy over the last, let's say, four decades, roughly from the middle 1970s up until the present. So I want to kind of review the course, exploitation, the business cycle, and so forth, contradictions, over-determination through this story that I'm going to tell you about capitalism in the United States. Let me start out. We start out the 1970s with a, more or less, regulated capitalism. I'm going to use the term that's popular now. That wasn't the term of the day. In the 1970s, we still had, in many ways, the heritage of the 1930s in the United States, in which the state played a very important role in the economy. And what the state did was intervene in a variety of different ways to maintain capitalism, to regulate it. That was partly the lesson of the 1930s in which, under FDR, Franklin Delano Roosevelt, the state intervened in order to try and get us out of that business cycle. It didn't succeed. It took World War II to do that. But there were major changes which occurred at that moment in time that the state would play an active role in trying to offset the depression that was occurring in the United States and was threatening the survival of the United States. Secondly, the state played a very, very obviously key role in World War II. The third is that a new notion arose in the United States in which people looked more to the state, in part because of what it did in the 1930s, in a part because of this kind of collective action during the war, that the state had a role in providing, and let me again use a term popular today, a safety net for the society. And in so doing, the state would be kind of an employer of last resort, would regulate various key markets, including the labor market, and so forth. So the people understood, and people accepted and wanted the state to have this kind of role in society. And Congress reflected that and as did the various presidents, both Republican and Democrat. In the 19s, okay, so we got on an economy in which the state is playing a major role. And by the way, it's also reflected in economics, Keynesian theory, which is a theory that explains the why the state should play this role. Keynesian theory was more or less hegemonic, and neoclassical economic theory had been demoted. So macro theory was a key understanding in economics profession around the land, and that's what was taught in most universities. It wasn't just as if micro theory wasn't taught, it was taught, but the macro theory and the Keynesian theory had a dominant place. The 1970s also starts, oh, certainly the 1970s is also characterized by the following problem, a major problem. And I'm gonna put the problem on the blackboard. The surplus value in American industry was less than the demands on that surplus. So look what we've done here. We've gone right to the Marxian entry point where I began this course, and we're saying, okay, let's make sense of this problem in the United States from a Marxian perspective, which is that the surplus that was being pumped out of the workers was less than the demands on it. Basically, in non-Marxian terms, people understood the mid-1970s, late-1970s as a severe crisis in American society. It looked as if American capitalism was nearing its end, and people were worried, deeply worried that our investments in plant and equipment and so forth was falling, our productivity was falling, we weren't able to compete in a variety of different industries with our competitors, the Japanese, the Europeans, the Brazilians, and the Koreans, and so forth. There was a real problem. We were losing our edge in a variety of different industries in which we had a superior position after World War II. It was a problem, okay? In Marxian terms, the problem is such, okay? And I wanna now look at the first, the right-hand side and the left-hand side to explain exactly what this problem was in these valued terms. So, on the right-hand side, one. The subsumed-class payment to workers via the workers' unions was very large. So maybe I should just add it over here. Helping this inequality on the right-hand side were these payments that the capitalist had to make to the workers. So what this was all about was that the price of labor power was greater than its unit value in industry after industry after industry. And you can ask, okay, why? Well, in many ways, this was the heritage of what happened in the 1930s, the presidency of Franklin Delano Roosevelt, and the various presidents thereafter. It was a period of time in which unions were looked upon favorably. They were strengthened under federal law. There was a culture which was supportive of unions and all that helped the AFFL and CIO in the United States to assume a strong bargaining position in a variety of leading industries, automobile industry, rubber industry, electric industry and so forth, transportation industry, in which those strong unions were able to get a price, a wage for their workers higher than the unit value. And that was supported by the federal government, okay? So this is bad news for the capitalist. The bad news is this inequality. This is part of the crisis, okay? The bad news is you had to pay these workers more than what they're worth in value terms, and that puts a strain on the surplus. But that wasn't the end of it. By the way, let me be consistent. That's the bad news for the capitalist. Is there any good news? Yes, there is good news. The good news from this extra payment to the workers because of the union power was that the workers had obviously higher wages via their unions. And so then the workers could take their higher wages and go out and buy all kinds of consumer goods, which helped the capitalist realize their surplus. So the workers' monopoly position on the selling of labor power earned them higher incomes. That's a disaster to the capitalist. That's the blackboard. But then the contradiction is there's a good side to the capitalist, which allows the capitalist to realize their surplus because now they can sell the cars and the boats and the homes and so forth to all the workers. So it's always contradictory. For example, you can drive this home. The unions were very strong in certain cities in the Northeast that were produced, Pittsburgh, for example, that were producing all kinds of steel in that particular very famous town. So the workers there had a higher, via the steel workers union, had a higher price of their labor power. That gave them higher incomes. That higher incomes in turn allowed those workers to have something which they hadn't had before, to buy a small house in the suburbs, buy a small house, to buy a car, to commute from the suburb to work and bend back, to outfit the house with all kinds of consumer goods, including a little boat that you would put in the driveway, which you would use on the weekends, and also to purchase something which became very valuable and reflected this, which is tickets to the National Football League, which is a multi-billion dollar industry in the United States, which grew rapidly after World War II. So the bad news is this, but then there's the good news for the workers and the capitalists. Next, there was another demand on the surplus, which was very large, which was in the form of corporate taxes, okay? So the second one was the subsume class payment that had to be paid by the capitalist to the federal government in the form of corporate taxes. So what that meant was that the capitalist had to take a significant share of their gross profits, the surplus, and pay them to the federal government. How high? If I remember correctly, I think the tax was 0.52, so more than half of the surplus had to be given in terms of a tax payment to the state. That was a disaster, okay? So not only do you had strong unions, but you had a strong state putting demands on this surplus. So that's bad news for the capitalist. Any good news? Yes, there too, it's contradictory, because it is true that the state took a hefty cut of the surplus, but then the state provided an environment in which the capitalist could produce and sell their goods, not just nationally, but globally. That is, if you think about, what is the state providing the capitalist? Well, the state is providing the capitalist, which is good news for the capitalist, is enormous defense expenditures after the war, to fight the Cold War, okay? And so that means that the capitalist are producing and selling commodities to the state. It's kind of a guaranteed contract that the state is providing by saying to the capitalist, look, you produce the tanks, the weapons, the tanks, the airplanes, and so forth, et cetera, we buy, okay, and therefore the capitalist has less risk than would otherwise, because you're kind of a guaranteed market by selling to the state, and then the capitalist can produce these commodities and realize their sale to the state. So that's a great benefit to the capitalist, but of course the capitalist are paying a tax on that, number one, number two. The federal government, the US government provides a kind of, I don't know what to call it, kind of a protective network around the world, enabling the capitalist to sell their goods, not just in the states, but every place, because the United States becomes increasingly a hegemonic power after World War II, and so the defense expenditures are not just for a defensive army, but they're for bases around the world, which helps our exports around the world. Third, the state is providing all kinds of new research and development, which helps capitalists. Everything from computers and chip, computer chips and polio vaccine, jet airplanes, it's endless. The state is funding research and development in a variety of universities around the United States and other places as well, and out of some of that research comes all these new products which enable the capitalist to produce new use values embodying surplus value. So make a long story short, sure there are costs, but there are benefits as well. Third, a new subsume class payment emerges towards the end of the 1970s, which is OPEC. What happens now is that the oil company, the oil producing state companies organize, they get together, as I think I mentioned to you in Geneva, they set a higher price for the barrel of oil. They allocate how many barrels their members will produce, but all of a sudden, that's a oil shock to America, because now we have to pay higher prices for that on those important secrets, and hence that's another kind, you can think of it that way, as a kind of another tax, besides the corporate taxes, there's a tax to OPEC. So a new subsume class payment arises to OPEC. And so you can see in terms of the right hand side, this is a kind of crisis these others, but I'm gonna just focus on these, the workers via their unions, the corporate taxes via the state, the higher prices for energy via OPEC. And the final one, on the left hand side of the equation, we have a problem which I mentioned to you, is that American industrial capitalists are losing surplus value to their competitors. So this is a loss of surplus value.