How the History of Class Struggle is Written on the Stock Market

How the History of Class Struggle is Written on the Stock Market
Fix, Blair. (2020). Economics from the Top Down. 5 October. (Article - Magazine; English).

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[Second of a two-paper series]

Class struggle, Bichler and Nitzan observe, is a part of all hierarchical societies. But capitalism is the first social order to quantify this struggle. It does so through prices, which Bichler and Nitzan propose indicate power. Stock prices, Bichler and Nitzan argue, indicate the power of owners to earn income. If we’re interested in class struggle, we want to compare this capitalist power to the power of workers. Here’s a simple way to do so. We compare the price of stocks to the price of wage labor. Bichler and Nitzan call this ratio the ‘power index’.

My goal here is to test Bichler and Nitzan’s thesis. Does the power index quantify US class struggle? Although a simple ratio of two prices, the power index, Bichler and Nitzan claim, tells us about class conflict at large. When the power index falls, workers are winning the struggle. When the power index rises, capitalists are winning.

Is Bichler and Nitzan’s claim true? In this post, I look at the evidence. I test how three different indicators of class struggle relate to the power index. Here’s what I find. When workers strike more, win a living minimum wage, and get government to progressively tax the rich, the stock market declines relative to wages. My conclusion is that Bichler and Nitzan are onto something. The history of class struggle does seem to be written on the stock market.

[The first paper, 'Stocks are Up. Wages are Down. What Does it Mean?' (September 4,, 2020), is here:]



Publication Type

Article - Magazine

Commentary on

A CasP Model of the Stock Market
Bichler, Shimshon and Nitzan, Jonathan. (2016). Real-World Economics Review. No. 77. December. pp. 119-154. (Article - Journal; English).


capital as power distribution stock market


BN Money & Finance
BN Power
BN Region - North America
BN Value & Price
BN Business Enterprise
BN Capital & Accumulation
BN Class
BN Distribution

Depositing User

Jonathan Nitzan

Date Deposited

14 Oct 2020 01:02

Last Modified

14 Oct 2020 01:11


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