Global wage suppression was engineered to boost dollar profit rates

Evidence

A cynic will tell you, quite accurately, that large quantities of money are attracted to countries where the profit rate is higher. For Wall Street to exercise fully its magnetic powers over foreign capital, profit margins in the United States had to catch up with profit rates in Germany and Japan. A quick and dirty way to do this was to suppress American wages: cheaper labour makes for lower costs makes for larger margins. It is no coincidence that, to this day, American working-class earnings languish, on average, below their 1974 level. It is also no coincidence that union busting became a thing in the 1970s, culminating in Ronald Reagan’s dismissal of every single unionised air traffic controller – a move emulated by Margaret Thatcher in Britain who pulverised whole industries in order to eliminate the trades unions that inhabited them. — Yanis Varoufakis, Technofeudalism, 199

Categorization

• SEED: Angles toward a piece on how dollar hegemony was purchased with union busting and wage stagnation.
• SHARE: The 1974 wage-stagnation benchmark is a sharp stat for someone tracking US inequality trends.
• corroborated: 2 independent passages support this claim — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 199
• XREF: connects to: Export-led growth structurally demands wage suppression and anti-inflationary monetary dominance — Mark Blyth, Austerity: The History of a Dangerous…, 368; Global South elites also profit from Federal Reserve rate hikes — Clara E. Mattei, Escape from Capitalism, 340; Floating exchange rates preconditioned the rapid liberalization of global capital — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 448 (+18 more)

Broader Connections

• Stabilizing currency deliberately imposed the costs on workers. #corroborates (1.00) — Clara E. Mattei, The Capital Order, 983
• Higher unemployment suppresses wages and dampens inflation. #corroborates (0.95) — Clara E. Mattei, Escape from Capitalism, 271
• Working-class sacrifice was the price of Italy’s integration into global capital #corroborates (0.95) — Clara E. Mattei, The Capital Order, 1445
• Service economies rely on wage suppression because productivity gains are limited #complicates (0.90) — Clara E. Mattei, Escape from Capitalism, 116
• Capital accumulation drives the profit rate down by reducing human labor per unit #contradicts (0.90) — Yanis Varoufakis, Technofeudalism, 1031
• Floating exchange rates preconditioned the rapid liberalization of global capital #qualifies (0.85) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 448
• Capital raises exploitation by shrinking the paid share of a fixed workday #qualifies (0.85) — Clara E. Mattei, Escape from Capitalism, 114
• Currency devaluation causes import inflation and cuts real wages #complicates (0.80) — Mark Blyth, Austerity, 210
• The dollar’s global dominance is defended by creditor nations, not only Washington #complicates (0.80) — Yanis Varoufakis, Technofeudalism, 584
• Fixed exchange rates force austerity when competitiveness declines #qualifies (0.80)
• International competition forced down profit rates ending the postwar boom #expands (0.80) — Perry Anderson, The Origins of Postmodernity, 237
• Wage regulation destroyed the cheap-labor advantage of developing countries #complicates (0.75) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1324
• International trade led to the need for a global currency. #complicates (0.75) — Neil MacGregor, A History of the World in 100 Objects, 1221
• Rising wages reflect monetary conditions rather than union coercion causing inflation #complicates (0.75) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 976
• A fixed exchange rate regime forces member countries to resort to internal devaluation #qualifies (0.75) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 125