Harvard Business Review: The ‘liars can figure’ edition

by Jehu

According to Justin Fox, a paid apologist for capital at the Harvard Business Review, the difference between the Great Recession and the Great Depression can be summarized in a single chart. Fox explains his perverse reasoning:

“Basically, if you think this downturn was comparable in origin and inherent severity to the other recessions since World War II, then we’ve been the victims of economic-policy bungling of epic proportions. If, on the other hand, you think the proper comparison is the Great Depression, the last U.S. downturn brought on by a severe financial crisis, you’d have to say the White House, Congress, and most of all the Federal Reserve have done an absolutely brilliant job relative to their early-1930s counterparts. I’d lean toward explanation No. 2 — we did actually learn something from the Great Depression, although probably not enough.”

recessiondepressionSo, apparently, we have a choice of standards by which to measure the severity of the present crisis: the official unemployment data provided by the Bureau of Labor Statistics. Unemployment during the Great Depression, which involved a greater percentage of the wage labor population than the present depression. Or the level of unemployment in the post-war period, including the depression of the 1970s, when employment actually increased over the whole of the depression.

Guess which one Justin Fox, of the capitalist mouthpiece the Harvard Business Review, wants to use.

Leaving aside the fact that the term, unemployment, has itself been redefined by Washington, what can be learned comparing unemployment during the Great Depression to unemployment in the Great Recession? Based on the evidence offered by Fox, apparently we can learn that the White House, Congress, and most of all the Federal Reserve figured out how to keep most wages slaves happy and busy at work through a relatively severe economic contraction. Even during a depression the likes of which has not been seen since the 1970s and the 1930s total hour of labor has fallen only marginally.

This is the only difference. On this basis the present depression, beginning in 2001, is considered ‘milder’ than the Great Depression, although Fox admits it is ‘more severe’ than the 1970s depression.

Justin Fox does not explain to his readers that there is, in fact, no definition of what constitutes a depression nor does he admit that the definition of unemployment has been completely changed since the 1930s. Finally he never reveals that there is no definition of what constitutes depression for purposes of comparison that includes any definition of unemployment as an indicator.

So, in fact, Fox has no way of knowing whether the Great Recession is a depression or not, nor can he judge the severity of this depression, compared to any previous depression, by any standard known to him or provided by any independent measure. He is, in fact, bullshitting his readers — blowing smoke in their faces, providing talking points for the talking heads of cable television financial networks.

Since a depression is not actually determined by the level of employment, Fox can quietly ignore the fact that the present depression — which, again, began in 2001, not 2008 — has lasted almost as long as the previous two 20th century depressions combined. Although unemployment is not as severe as the Great Depression, the actual contraction seen in this depression has lasted three times as long.Still, writers like Justin Fox call the moderation of unemployment in the present depression, compared to the 1930s, an improvement — and he states this seriously, apparently with a straight face.

Working through a depression is not an improvement, folks. During a depression there is a fall in the demand for labor power. When this collapse in demand for labor power occurs you can simply reduce hours of labor to offset the fall. The only argument for not doing this advanced by economists is that material wealth can be increased by not reducing hours of labor, but this is a completely false argument.

Reducing hours of labor not only absorbs the unemployed back into the labor force, it forces capitals to become more productive by adding improved machinery to production to offset the higher costs of labor power. Replacing existing fixed capital with improved technology thus forces capitals to produce more real wealth with less labor.

This simple concept has been deliberately concealed by ideologues like Justin Fox who always want to shift to focus to counterfeiting currency. They take advantage of the fact most of the working class is completely ignorant of the way production of wealth actually works. If the way the economy actually works remains a mystery, capitalism cannot be abolished.

No communist can afford to be ignorant about how the economy actually works, because you will not be able to explain it to anyone else.

This is the way capitalism works: improved machinery produces more real wealth with less labor. Everything else is bullshit. If you want more real wealth, you have to reduce labor and force capitals to replace raw labor with machinery.

Most communists could not tell you how real wealth is produced if you held a gun to their head. Communist know nothing about how real wealth is produced, they only know about labor and its reflections in prices, profits etc. They take these reflections for reality and get so caught up in trying to understand them they forget what they are about.


Free time requires the replacement of labor by machinery, technology and science. It has nothing to do with jobs, money, wages or profits. Communists run behind economists trying to explain wages or profits, trying to explain money or interest rates — what nonsense. Economics focuses on these reflections not because they are necessary for the production of material wealth, but because they are necessary to keep wage labor going, to keep wage slavery necessary for the mass of society. Every time an economist talks profoundly about GDP, money, wages and interest rates, he is talking about how to extend compulsory labor for the majority of society indefinitely.

The sooner we figure this out the sooner we can replace this bullshit with communism.