Capitalism has developed two strategies for accumulating wealth and power. First, the system of wage slavery - or exploitation - where it daily robs the working class of the product of their work. Secondly the system of 'primitive accumulation' - where it employs direct robbery, mass slavery, pillage or war. If we begin our study of capitalism by asking how it develops then we find ourselves looking at a series of events called 'primitive accumulation.'
Its main results are two- fold. On the one hand gigantic amounts of wealth are concentrated into a few hands - the capitalists. On the other, an epidemic of life and death poverty spreads among the masses. That is how modern capitalism is born. Capital is not just wealth or a huge sum of money. Capital is the social relationship between the wealth of a few and the poverty of the vast majority who are forced to work for the wealthy few. At one pole sit a handful of capitalists; at the other, masses of wage slaves.
At its birth capitalism grabbed by terror the tribesman, the clansman, the peasant and the child. It grabbed them in Africa, Europe and the Americas. And it forced a new existence upon them. It created a new social relationship between the toilers of the world and the wealthy elite. It created the international working class. At its very birth it created the seeds of its own death.
Marx hated capitalism and he hated it all the more clearly because he understood how it worked. Its no wonder Marxist Political Economy isn't taught in any of our schools or Universities. If knowledge and ideas lead to action, then communist knowledge leads to communist revolution. Understanding how it began and what social conditions it needs helps us struggle to end it.
"Capital," Marx wrote, " comes into the world dripping from head to foot, from every pore, with blood and dirt."
It dominates everything in our lives from the music we hear to the relations between the sexes. It is so far reaching it seems 'natural.' But it is far from 'natural.'It took wars, terror, slavery and determined greed for capitalism to emerge as the controlling force in our lives.
Whereas capitalist historians and Hollywood films paint this period as one of swashbuckling pirates and brave new navigators, Marx - over 100 years ago - was already writing of it with utter contempt.
"The discovery of gold and silver in America," he wrote, " the uprooting, enslavement and entombent in the mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren ( a game hunting preserve) for the commercialised hunting of black skins, signalised the rosy dawn of of the era of capitalist production. And Marx's bitterness was well placed. Take just one example. In the 17th Century it is estimated that over $400 million worth of gold was robbed from the mines of Brazil by Portugues capitalists. How many Indian slaves were murdered in this process is unknown, but Argentinian researcher Jorge Ledesma estimates that 90 million Indians have been murdered or died fighting Spanish and Portuguese colonisation of the Americas since 1492. Anyway, because of England's domination of Portugual the biggest share of that gold from Brazil ended up in the hands of about 200 families in England!
IS CAPITALISM NATURAL?
These same families threw themselves into unbelievably profitable schemes. For example between 1680 and 1688 the Royal African Company (in which King Charles II of England had shares) paid dividends of 300% on slaves - even though only 46,000 out of 70,000 slaves survived the infamous 'middle passage' from Africa to the the New World. Millions slaughtered or enslaved to create a few hundred millionaires - that's the birth of capitalism. So much for the 'pious' idea that capitalism is natural.
But gold or wealth by itself means nothing. It only has value if alongside it there lives a mass of people so destitute that they have to work for wages or die. This the feudal system could not supply. True, under feudalism millions of peasants were oppressed, exploited and impoverished but local traditions allowed them to subsistence farm on small plots of land. Capitalism, in order to work, needed a class even poorer than the peasants. It needed a working class without access to farm land. And capitalism got it. New State laws bought capitalist law and order - or poverty and repression to the once peasant class. In Britiain they did this by driving the peasants off their small plots and converting the land into pasture for sheep. This in turn bought huge profits in the wool trade and created a strong state.
Land began to become profitable. It became 'property.' Henry VIII's famous fight with the Pope robbed the Catholic Church of all its landholdings - amounting to 7/10ths of all the farmland in England. The King's cronies got it for next to nothing. Later, in King George III's reign, there were 3,554 "Acts of Enclosure" whereby 51/2 million acres of peasnt farmland was 'legally' handed over to the capitalists.
Alongside this hounding of peasants, the emerging capitalist state began passing more and more laws. The Vagrancy Act outlawed homelessness. Wage laws forbade high wages. Others lengthend (!) the hours of work and forbade the formation of trade unions. Taxation and 'national debt' were developed to further impoverish workers. The aim was to drive the unemployed to the cities where the factory system awaited them. And so the once self suficient peasant - bonded to his Lord - became a worker - or wage slave - completely dependent on the capitalist and his wage system to pay for shelter,food and family. It is this forced dependency of the worker on the wage sytem for everything that is one key feature of capitalism. The other is that the State isn't neutral. Its laws serve the needs of the capitalist.
And it was these features that were mercilessly exploited during the Industrial revolution in Britain. Thousands upon thousands of child laborers were transferred from the parish poor house to the factories. Where one shift operated they were worked 15 to 18 hours a day. Where two shifts operated, they worked 12 hours. They had a saying in these 'youth' camps that"..the beds never get cold...the day set getting into the beds that the night set had just quitted." Joshia Wedgewood, himself a big industrialist, estimated that the factory system cut the average life- span of the worker by 1/3!
PRIMITIVE BUT MODERN
It is perhaps concentrating on these features that leads some people to think of "primitive accumulation" as a thing of the past. That's a mistake.
Check out how William Hinton describes the dismantling of socialist China. The Co- operative farm - owned by the village - had formed the backbone of the People's Republic of China. They were serviced by programs like the Barefoot Doctor which gave extensive primary health care to rural workers who in fact made up some 80% of the nation. It was Deng Xao Ping, Time Magazine's Man of the Year, who engineered China's headlong race into full blown capitalism. In 1983 the so- called Communist Party of China passed the key capitalist law. It was called "Central Document Number 1." Its effect was the same as the "Enclosure Acts" of King George III in Britain.
"Most people do not know or simply ignore the scandalous rip- off that dominated the liquidation of collective property and helped create those so- called "specialised families" with the requisite "money, strength and ability" to get rich first. When the time came to distribute collective assets people with influence and connections - party cadres, their relatives, friends and cronies - were able to buy, at massive discounts, the tractors, trucks, wells, pumps, processing equipment and other productive property that the collectives had accumulated over decades through the hard labor of all members. Not only did the buyers manage to set low prices for these capital assets (often one- third or less of their true value), but they often bought them with easy credit from state banks and then, in the end, often failed to pay what they had promised. It is doubtful if, in the history of the world, any privileged group ever aquired more for less. The scale of these transactions and the depth of the injury done to the average coop member boggles the mind."
No wonder then that the McNeal - Lehrer News report (12- 28- 93) claimed there were some 140 million migrant workers in China to- day - growing at a rate of 20 million per year! These migrant workers are displaced farm workers and crowd the cities around the new enterprise zones in search of work. No wonder programs like the Barefoot Doctor have been abolished. No wonder V.D. and prostitution have re- appeared. No wonder Business Week (Oct 31 '88) could report about the present industrial boom there: "Chinese investigators recently discovered children as young as 10 making toys, electronic gear, garments and artificial flowers. They work up to 14 and 15 hours a day at salaries ranging from $10 to $31 per month. Often workers sleep 2 or 3 in a bed in dormitories." It's like the England Joshia Wedgewood described. But it is not just developing capitalism that needs primitive accumulation. Fully developed capitalism needs it as well. In periods like the present, when the falling rate of profit helps drive capitalism into crisis, wars and civil wars give the victors gigantic profits.
Below is an excerpt from Kuczynski's "Germany - Economic and Labor Conditions under Fascism." "On March 12th, 1938, German troops marched into Austria and in their wake followed the German industrialists or their representatives - with the exception of those who had arrived during the weeks preceding the attack. Krupp and Poensgen, Voegler and Henschel, all the big men of heavy industry, came to Austria and grabbed what they wanted. The United Steel Works and some other concerns had already considerable interests in Austria before Fascism came. Where they had a minority share it now beame a majority one, and , where they had no share , they often took the whole. Not a single Austrian heavy industrial undertaking remained outside German- Fascist control. Accumulation by seizure took place on a gigantic scale. Within a few weeks the the whole of Austrian heavy industry had, for all practical purposes, become German property. Iron ore production rose by one third through the aquisition of Austria, manganese ore production by one quarter............. " The aquisition of the Austrian economy brought two things of special interest into the hands of the German monopolists: Firstly,the patent rights, and, secondly, the foreign shares which the Austrian economic institutions (industrial companies, banks, insurance companies, ect.) held, that is, Austrian capital investments in other countries. The aquisition of Austrian patents helped to rationalize and improve the technique of production in all plants and mines dominated by German heavy industry. The aquisition of Austrian capital investments in foreign countries helped German heavy industry to gain partial or complete control over some foreign concerns, chiefly over a number of Czechoslovakian firms. Through the internment of the Austrian Rothschild, for instance, until he handed over all the shares he held in the Czech Vitkovice Iron and Steel Works, the Germans were able to gain an important position in Czech heavy industry, even before the conquest of Czechoslovakia." Understanding this proces of primitive accumulation, then, brings to- day's world into focus. Capitalism in crisis (which later lessons in this series will expand on) is capitalism on the brink of war and fascism. Civil wars like those raging throughout the former Soviet Union, Yugoslavia and parts of Africa, like Rwanda, Somalia and so on are attempts by groups of local capitalists to replace their dwindling profits from exploitation by winfall profits from primitive accumulation. But no capitalism - whether Yugoslavian Moslem or general in the Rwandan Patriotic Front - can lead the working class to liberation. Capitalism is a social relationship that means a handful of super- rich capitalists dominate masses of more or less impoverished wage- slaves or workers. Capitalism is not, to twist a phrase, 'worker friendly.' Ask the Chinese workers how liberating Central Document Number 1 has been. The fact is working class liberation can only come from working class revolution and working class revolution can only come from building a communist party - the Progressive Labor Party.
Basic Economic Cycle
Economic survival requires every society to Produce the things they need by their own labor, using tools and machines, to Distribute the products of this labor among the society and to Consume their products. To accomplish this every society answers three questions: "What to produce?", "How to produce it?" and "For whom to produce?" Capitalism's answer to these questions is cold-blooded and deathly. For example, some restaurant owners in Los Angeles, Ca, throw unsold food into dumpsters; to prevent hungry people from eating this food, the owners cover it with bleach. If you can't buy it, you can't use it -- that's the principle of private property and commodity production of capitalism.
In a capitalist society, the answers are determined by class division, commodity production, private property, and wage labor. Primitive communism in prehistory and the Communism that will replace capitalism show that not only can these questions be answered in a much different way, but that changing these answers and society's organization is critical to our very existence. Under capitalism, farmers plow up fields of melons and allow "undersized" nectarines to rot, bakeries throw away unsold bread, and contractors build 15,000 square feet mansions, all while millions go hungry and homeless. These seemingly irrational acts are in fact the cornerstone of capitalism -- and the reason that capitalism is doomed as an economic system.
What is a Commodity?
Commodities are goods created for sale
Goods are those "things" that humans produce for their survival. If I bake a loaf of bread for my family to eat, that loaf is just bread. But if I bake a loaf of bread to sell, that loaf is bread, but also a commodity.
Commodities have a dual aspect
1. Use Value: You will eat the loaf of bread that you make and the loaf of bread that you might buy at the store. They both are used as food. Like all goods that society produces, commodities will have use. Or why bother?
2. Exchange Value: In commodity-producing society, the distribution of goods (or products) takes place as an exchange. This exchange occurs in a market system and requires money. Bread produced for sale comes with a price tag and if we don't have the money, we don't get the bread. What the commodity can be traded for represents its exchange value.
Contradiction of Capitalism
Commodity production doesn't exist in isolation. Three economic features of capitalism combine to create a structure in which commodity production can thrive. Private Property, division of labor and exchange are basic to commodity-producing society and arrange the production and consumption for the individuals in a capitalist society. Because of private property, individuals own the commodities that were produced by their labor-power or their means of production. The products made by private producers are produced for exchange from the very beginning. They are not consumed by their producers but by those who purchase them through exchange. Because of division of labor, individuals do not produce everything required for their livelihood and the exchange of products becomes necessary for keeping everyone alive within this society.
In capitalism there are two classes : capitalists and wage laborers.
1. The capitalists own the "means of production," such as factories, mines, farms, railroads, airlines, bakeries and computer corporations. The laws of private property allow them to own all the commodities produced by people they hire to do the work.
2. The workers do not own any means of production and as a result must work for the capitalists, in exchange for wages. This work creates the commodities, but the capitalists get to own (and sell) the commodities.
In commodity production, exchange value rules over use value.
The product of human labor must satisfy some human want. Without use for someone, even as decoration or entertainment, it won't be bought, so it would not be worth producing. This property is its use value. The use value of a coat is that it allows us to stay warm. In both natural production and commodity production, products have use value. The apple from the tree in my back yard has use value because it will satisfy my need for food.
But the apple produced for sale by the corporate farm in Washington is a commodity. This apple continues to possess use value because it satisfies the human need for food; but if it should lose this property for some reason (if it should rot, for instance, and become unfit for eating), no one would buy it. As a commodity, the product must be sold to be used. Without exchange, there's no use; no matter how hungry you are, without the money, you can't use the apple.
The communist argument against commodity production (production for exchange value or profit) is not an academic one. A short study of African agriculture shows how deadly is commodity production. Forced by debt pressures African economies have had to rip up crops traditionally used to grow food for local people and replant that land with "cash" crops. Cash crops -- like coffee or cocoa -- are grown for export. During the 1980's, the overall export prices of primary products (i.e. coffee, cocoa, tea, etc.) fell by one-third. Africa lost $5.6 billion from the fall of commodity prices in 1991 and the United Nations World Food program estimated that 20 million Africans faced famine. This is the triumph of commodity production!
Exchange value is a relative thing
The apple as a commodity acquires a vital property -- it can be exchanged for any other commodity. Often we think of the value of an apple as its price -- 50 cents. However, money is just the means of circulation of commodity exchange. The purchasing power of 50 cents can change wildly over the years and is in no way tied to the apple. In speaking of the exchange value of a commodity, we mean the proportional quantities in which it exchanges with all other commodities. Today, one loaf of bread equates to around three apples. This was true ten years ago, even though the price of the loaf of bread today is $2 instead of $1. The critical question is how is the exchange value of commodities determined?
Labor Theory of value
How are the proportions in which commodities exchange with each other regulated? Taking one single commodity like an automobile and you can imagine infinite exchange combinations. A loaf of bread has the exchange value equal to three large apples, or one pen or a week of newspapers or 1.5 gallons of gasoline. The reason for this is that these commodities can all be reducible to a common measure. In Value, Price and Profit, Karl Marx explained
"The common social substance of all commodities is Labor. To produce a commodity a certain amount of labor must be bestowed upon it, or worked up in it...If we consider commodities as values, we consider them under the fixed or crystallized social labor. In this respect, they can differ only by representing greater or smaller quantities of labor."
For example, the labor required to produce a silk shirt will be greater than the labor required to produce an apple. The exchange value (and prices) will reflect this difference. Marx continues "How does one measure quantities of labor? By the time the labor lasts in measuring labor by the hour or day." In other words, the relative values of commodities are determined by the relative amount of labor fixed in them.
Aren't Prices Determined by Supply and Demand?
There is much evidence that a sudden change in supply can change prices of a product (thereby altering the exchange value). For example, a head of lettuce and a pound of tomatoes are generally of equal exchange value. Then, two years ago, California had a deep winter freeze that killed most of the lettuce in the fields. Suddenly, the stores doubled the price of lettuce and the exchange value was now equivalent to 1/2 pound of tomatoes instead of 1 pound. When supply increased as lettuce from Chile was shipped in and a new lettuce crop was planted, the exchange value between tomatoes and lettuce was gradually restored to 1 head to 1 pound.
There are many examples of how fluctuations in supply and demand cause short-run changes in the prices of commodities. Capitalist economists analyze these at great lengths because capitalists can make a quick buck playing this "shortage game." But supply and demand does not determine the ranges in which these prices changes occur. A new Toyota Camry in the U.S. might vary in price from $20,000 to $23,000 during the a year while a gallon of gas might vary in price from $1.25 to $1.39 during the same year. But, supply and demand does not explain why the Camry costs about 18,000 times what a gallon of gas costs. The only way to explain that is comparing the quantity of labor last employed and the quantity of labor previously worked up in the raw materials and the labor used in constructing the tools, machinery and buildings.
The market prices may fluctuate with supply and demand, but the "natural price" based on exchange value between products will change only when the amount of labor required to produce those products changes. For instance, farming less fertile land would required more labor (possibly contained in the extra fertilizer or extra plowing) to grow lettuce; as a result, the exchange rate between lettuce and tomatoes (and all other commodities) would change. The exchange value of oil might increase if there is a need to use oil with a high sulfur content requiring more processing and the exchange value of computers might decrease if new machinery allowed computers to be assembled with less labor.
As Marx wrote "the value of a commodity is determined by the quantity of labor expended upon its production based on the quantity of labor necessary for its production in a given state of society, under certain social average conditions of production, with a given social average intensity, and average skill of the labor employed."
Labor Power is a commodity
Under commodity economy every commodity is sold at its value. As workers, we sell our labor power to the capitalist to conduct his production. We sell in a market place and receive only our exchange value (which is determined by the quantity of labor expended upon its production)
So what is the value of our labor power which is sold to the capitalist? We can only work when we can maintain our existence: feeds and clothes ourselves, and have a place to rest our head. We can perform work only when we satisfy our requirements, our most elementary needs. If we are hungry, if we have no clothes, we become unfit for work and lose our labor power. Thus, the production of labor power consists in the satisfaction of the most elementary needs of the worker.
All the things that are used to satisfy the needs of man (food, clothing and shelter) are commodities and cannot be obtained free of charge. A quantity of labor is spent producing them and this determines their value. Thus the value of the commodity called labor power is equal to the value of those commodities the worker must consume in order to maintain his existence and that of his family, in order to recuperate his labor power and to secure labor power for the capitalists.
At its most basic level, everyone who works for a living understands this because it seems that we can't ever get out of a hole. Just when bills are paid off, the roof leaks; fix that and the car breaks down; pay for that repair and you need new shoes. Credit cards frequently allow us to delude ourselves but then the finance charges slap us awake again. The irony of receiving a "cost of living" adjustment to your salary lays bare just this idea -- that "we are simply living to work" and receive in exchange for our work just enough to live so that we can work another day.
Look at the chart and we can see where 40 hours work for 40 hours pay gets us. Year after year, working for wages produces the same result. Although the "price" of our labor power appears to increase, this increase is due to inflated dollars. Maddeningly, all we get is staying 30% above the barest survival income. The exchange value of a commodity expressed in money is its price.
Wages are the special name given to the price of the commodity called labor power.
Because labor power is a commodity, workers cease to be human to the capitalist and are treated as a commodity - used and discarded like any other commodity once its labor power is used up and can't be a source of profits. The Ford Motor Co. assembly plant in Milpitas, California is a good example of this. People worked for years in this plant. The plant was never un-profitable as hundreds of workers spent their labor power assembling automobiles. But, Ford had a "Better Idea"; they and other capitalists found that the factory could be even more profitable if moved to Mexico where subsistence wages were lower. As a result, Ford discarded the machinery and the workers with equal to disdain. Ford did hold on to the building and recently turned it into the largest super discount mall in California.
Profits represent stolen labor
Workers produce commodities for the capitalists. For their labor power they are paid wages. The capitalists take the commodities produced and sell them in the market place. The wages paid to the workers are less than the selling price of the commodities they produced. The difference between the selling price and the wages is profit, which the capitalist pockets and some of the difference includes the costs of production (raw material, rent, etc.)
In effect, then, workers receive only part of the value of the commodities they produced. Wages represent that part of the work day that workers labor to provide for their own subsistence. Profit represents that part of the work day that the worker labors for free for the capitalist. Profits, therefore, represent the value of the labor stolen from the workers by the capitalists.
Let's use an example from Challenge of December 8,1993, based on a real garment factory in Los Angeles. A group of 25 workers --sewing machine operators plus the cutter, and those who wash it --produces 1100 pants each day. The workers average $48 per day in wages -- a total of $1200. The boss spends an additional $2293 on material, electricity, and wear and tear on machines. On selling the pants, the boss receives $5500, which is $3207 above the non-labor production costs. The workers added a total of $3207 in exchange value to the pants. Of that $3207, the workers received $1200 for their labor power, the boss got the surplus value, $2007. Surplus value is the value created by the worker that is not paid to the worker.
Corporate Profits in 1993 totaled $225 billion -- and this doesn't include the billions and billions of dollars consumed by capitalists in write-offs for executive salaries, business lunches, country clubs, inane advertising, fancy offices and other "expenses". All of this represents wealth stolen from you and me -- our class -- and distributed to a small number of capitalists -- less than 1% of the total population.
As Marx said "In order that he may be able to receive surplus value, the capitalist must find in the market a commodity whose use value posses the peculiar property of being a source of value - a commodity whose use creates value. Such a commodity exists -- it is human labor power. Its use is labor and labor creates value. The owner of money buys labor power at its value, which is determined, like the value of every other commodity, by the socially necessary labor time requisite in its production (that is to say, the cost of maintaining the worker and family). Having bought labor power, the owner of money is entitled to use it, that is to set it to work for the whole day (say 8 hours). Meanwhile in the course of 4 hours (`necessary' labor time) the worker produces sufficient to pay back the cost of his own maintenance; and in the course of the next 4 hours (`surplus' labor time) he produces a `surplus' product or surplus value, for which the capitalist does not pay him."
This is the essence of capitalist exploitation. The drive for profit is ruthless. Because its chief motive is making money, it does not matter how it makes money, what it produces and what happens to workers in the process. Sweatshops, down-sizing, minimum wage, no benefits, layoffs, moving to lower wage rate countries, are all the result of this exploitation. When the capitalist talks about productivity, efficiency and increasing profits, he is talking about trying to change the ratio of this wage / surplus value proportion of the work day.
This is also the key to revolution. The working class is central to capitalism, workers produce all the surplus value. The capitalists can't admit that they get all their profits and capital from working class; it is politically vital to hide this fact and the consequent power from workers. When workers understand and feel this power, they will organize to destroy capitalism.
Communism is the abolition of exchange value
Karl Marx pointed out and history has proven that the development of modern industry must progressively turn the scale in favor of the capitalist against the worker and that capitalistic production will sink the average standard of wages, or to push the value of labor more or less to its minimum limit. Marx acknowledged that workers must fight to keep the capitalist from driving down that standard of wages, but at the same time, the working class ought not to exaggerate the ultimate working of these everyday struggles. Instead of the conservative motto, "A fair day's wage for a fair day's work" the working class must adopt "Abolition of the wages system" and work for the final emancipation of the working class, that is to say, the ultimate abolition of the wages system.
There is no choice in the world today but to fight for higher wages. But, "winning" such a fight simply maintains the price of our labor power for that moment. It does not eliminate the constant and grinding theft of the value produced by our labor. It does not eliminate racism and sexism used to justify a marginal subsistence level for a huge percentage of the working class. It does not eliminate the unemployment, the wars and the irrationality of capitalism. Only the revolution in which the working class takes power can destroy the wage system and the rest of capitalism. The capitalists need the working class to create its profits; the workers need the revolution to create communism and eliminate the capitalists.
THE ABOLITION OF THE WAGE SYSTEM AND
THE END OF CAPITALISM
At about 5.50 a.m., Monday thru' Saturday, a guy named Bob enters the crowded locker room of a waste disposal works in Detroit. And from his burly frame a deep voice hollers out his trade-mark greeting: "Good morning, wage-slaves!"
This lesson is dedicated to Bob and workers like him in the hope that more of us will adopt his agitational techniques and expand on them. In the last lesson we explained the economics of exploitation and exposed what a lie the wage system was. In this lesson we want to deepen our understanding of wages and the role they play in propping up this rotten capitalist system.
APPEARANCE AND ESSENCE
The heart (or essence) of the realtionship between workers and capitalist is exploitation. The capitalist exploit (or grab the surplus value from) the workers. But this relationship appears in real life as a fair relationship between more or less equals. The workers sell their labor-power, but it doesn't appear that way. It seems as though they sell their labor or work. "I work 40 hours and get 40 hours pay." And so the wage system like a great con game hides the theft of surplus value that the capitalist class steals form the working class day in and day out.
At the turn of the century a socialist organising among coal miners explained it this way. "We find the coal. We sink the shaft. We open the seam. We hew the coal and, with great expenditure of energy, we haul it to the surface. Yet, by some magic, the capitalist owns it!"
This 'magic,' then, is the primary service the wage system delivers to capitalism. By hiding the mechanics of exploitation, it deadens the revolutionary class conciousness of the workers. And this, in turn, sets us up for even more intense exploitation.
PART-TIME AND OVER TIME
Take part-time work. If workers see wages as the price of labor (which they appear to be), then there is nothing troubling or threatening about part-time labor. The part-timers work 30 hours and get 30 hours pay (often though 2 jobs). However, that's the same treatment that the full timers get although they work 40 hours and so get 40 hours pay.
But communists have discovered that wages aren't the price of labor. They are more or less equivalent to the price of labor-power. They are the costs of subsistence (the price needed to house the worker and family and reproduce them healthy enough to work the next week). They are the cost of subsistence divided into 40 hourly increments to disguise their real nature.
Now the capitalist - by introducing the part-time work - is cutting the cost of subsistence. Because the part-timers show up to work week after week like the full-timers, the capitalist concludes that workers can subsist on a lump sum equal to 30 hours work rather than 40 hours. Part-timing thus has the general effect of driving down the subsistence pay of all workers. This cuts down the share of surplus value allotted to the workers (in wages) and so raises the share (in profits) the capitalist grabs for himself. In short it intensifies the exploitation of the working class.
Likewise with overtime. It increases the competition among workers and so worsens the general conditions of labor. Eventually overtime means lay-offs. The increase in unemployed, in turn, creates pressure to cut wages. Workers seek overtime because their wages are too low. But the net effect of overtime is to increase the capitalists ability to lower wages even more. Overtime,too, intensifies the exploitation of the working class.
Listen to author J.Schor in her 1991 book, "The Overworked American:" The average employed person is now on the job an additional 163 working hours (compared to 1969), or the equivalent of an extra month a year. Meanwhile the proportion of the labor force who cannot work as many hours as they would like has more than doubled." Quoted from the PL pamphlet "Communism and the Fight for Jobs."
Overtime is up. Part-timing is up. Unemployment is up. Capitalism has launched a full scale attack to lower the cost of subsistence it pays the U.S. working class. Whereas the wage system especially hides the co-ordination and target of the attack, the communist science of political economy exposes it. The under employed partimer isn't the lone victim. The unemployed youth isn't. And niether is the over worked, overtaxed, and underpaid full-timer. They are all collectively the target. This is class war and it cannot be fought in a piecemeal fashion. The communist Progressive Labor Party organises the whole working class. It raises the immediate demand of 30-for-40, a shorter work week with no loss in pay. That cuts the hours of work, forcing more hiring. But it doesn't cut the price of subsistence (the total wage of the full timer). 30-for-40 unites the whole working class.
THE WAGE SYSTEM AND SOCIALISM
Yet just exactly how crucial it is for communists to raise their co-workers awareness of the wage system didn't become apparent until the reactionary forces led by Kruschev restored capitalism in the former Soviet Union and began demolishing the gains of the communist led revolution for socialism. And this realisation was confirmed when the same scenario unfolded in Mao's China after the defeat of the Great Proletarian Revolution. The lessons from these events are discussed in more detail in Road to Revolution III and IV. However the general charge is that by failing to abolish the wage system the communist parties over the years deadened the revolutionary conciousness of the workers and so prepared the way for the overthrow of workers power. The particular reactionary features of the wage sysytem under socialism were:
* The wage system reinforced individualism and undermined collectivism. If I don't work only I and my family suffer because my wages are lower. In reality we all collectively suffer since your labor is a part of our collective effort.
* Wage differences (professionals were paid more than industrial workers) reinforced commodity production - production for sale rather than use. Goods could never be distributed according to need because some workers had greater purchasing power than others.
Abolishing the wage system after the revolution builds a collective and communist conciousness. Retaining it - even in modified form - builds an individual and capitalist conciousness.
"GOOD MORNING, WAGE SLAVES"
For workers this 'individualism' is really a false conciuosness. Far from being 'an individual' or 'free,' workers under capitalism are slaves - wage slaves. The capitalist pays the workers' wages. But where does he get the money? From the surplus value previously created by the workers. (Originally, as we saw in the lesson on Primitive Accumulation, he stole it outright). A portion of that surplus value is allotted to the workers in the form of wages. And the wages amount to the sum needed for the 'subsistence' of the workers. The difference, then, between Ancient Slave societies like Egypt and Rome and modern capitalist societies can be summed up by saying:
* In Ancient slavery all the slave's labor appears unpaid.
(Although the owner actually pays for the slave's subsistence).
* In wage slavery all the worker's labor appears paid.
(Although the owner only pays the worker's subsistence).
Yet, it could be argued that workers only slave for the capitalist from the time we punch in to the time we punch out. However, the question must then be asked what do we do with our free time? The answer is consume. And what do we consume? The necessary means of our subsistence. We pay, to the landlord or bank, the house note. We buy food from the Super-market. Clothe the kids with brand names. Make the car payment to the bank. Then we get some sleep (sweet dreams - no capitalist). In short we replenish the labor power that the capitalist will use next day at the point of production. Wage slavery is full slavery.
"Capitalist production, therefore, " Marx wrote "..produces not only commodities, not only surplus value, but it also produces and reproduces the capitalist relation; on the one side the capitalist, on the other the wage-laborer." Or, as Bob in Detroit says every morning, "Good morning wage-slaves!"
Understanding the extent of our enslavement helps us resist schemes like 'Team Production' or 'Industrial democracy' that in reality only promote speed-up or productivity. Understanding too that the surplus value we workers create supports - as we just saw - the landlord, agribusiness, the merchant, the banker and the industrialist makes us realise there can be no liberation for the working class short of communist revolution. We - the working class - support the whole capitalist class. Our enslavement is absolutely critical to their 'freedom.' Either the capitalists have freedom or the workers do. Its either capitalism or communism.
UNEMPLOYMENT AND RACISM
Now we see that wages are the cost of subsistence for the worker, we can ask what determines the actual level of subsistence, the actual wage? The answer is two fold: capital accumulation and class struggle. At first capital expansion (or accumulation) meant putting more and more people to work. But as unemployment shrank, the bargaining power of workers grew. Wages took a greater share of the surplus value and left the capitalist with less and less surplus with which to expand.
To overcome this capitalism developed a new strategy. It based expansion on technical improvements in production. One worker in a modernised plant out produces several workers using older methods of production. Capitalism modernises and creates unemployment which now becomes a permanent feature of social life. And this "reserve army of labor," as Marx called it, acts as a weight pulling down the wages of the employed workers.
This 'reserve army' is not determined by the movement of peoples (legal or illegal immigration) nor by overpopulation and high birth rates (as the UN Conference on population and birth control in Egypt claimed). It is created solely by the needs of capitalism. Full employment would make exploitation unprofitable for the capitalist and therefore must never be allowed.
However a huge pool of unemployed, while necessary, is politically volatile. In fact with a mass communist conciousness it would be impossible. The employed and the unemployed would clearly see how the one is being used to keep the other down. Class unity would be as obvious as ABC. Therefore capitalism pays great attention to the political situation it has created. By all accounts it wants to blunt or stamp out class struggle.
It invests in an enormous anmount of anti-communism while going to extreme lengths to promote racism. If the 'reserve army' of the unemployed is overwhelmingly of one race, then it can appear that its not the class needs of capitalism that causes unemployment, but rather the racial characteristics of the unemployed. This racism then deadens the class conciousness of the workers. Racists among the 'majority' and nationalists among the 'minority' try to tear the working class apart. Its the job of communists to defeat both trends and forge a revolutionary class unity among the workers. Our understanding of exploitation, surplus value and the slavery of the wage system will prove key tools in that struggle.
FASCISM
Fascism is a deliberate policy. As we have seen, capitalist ideology (set of ideas or philosophy) generally aims to deaden working class consciousness. The way the wage system is set up, for example, makes it seem as if we are paid for each hour we work. In this way the actual exploitation of the working class is hidden and our class anger more easily diverted. Fascism, on the other hand, sets out not just to deaden our class consciousness but to destroy it. It aims to replace it with some combination of racism or nationalism that actively supports capitalism. Fascism is a political policy aimed at getting the working class to actively promote capitalist programs.
We have seen that capitalism in general always aims to pay workers (in the form of wages) at, or slightly below the actual subsistence level. This way the capitalist can keep a larger share of the surplus value the workers have created. And this, in turn, translates into higher profits for the capitalist.
But when modern capitalism develops a deep crisis, due to the crisis of over production, it means that the rate of profit from regular exploitation is too low and that capitalists have to resort to extraordinary measures to protect their profit margin and survive. This is what we call fascism. It is a desperate attempt by the capitalists to regain profits. It has a two pronged strategy. First to prepare for war - from which to gain windfall profits (see the lesson on Primitive Accumulation). Secondly, to drive down wages as far below the subsistence level as they can possibly go. This means terror and mass imprisonment must accompany the ideological movement.
Nazi Germany provides us with one of the most complete examples of fascist 'achievements.' Therefore its worth looking at its results.
"In 1937 (4 years after Hitler came to power and before the deportation of Jews to the Concentration camps) unemployment was lower than in the year of 'prosperity,' 1928, when it was 1,391,000, and during September, 1937, unemployment reached the low figure of 469,053, less than half the 1928 low figure for the best month.......
(Yet) the average worker received real wages which moved around the lowest level reached during the crisis of 1929-32 and for these wages had to work more intensively and for longer hours....
The average gross weekly earning per week amounted to about 26.50 Marks. If we deduct 15% for taxes and other payments we arrive at an average of 22.50 Marks per week...This means that the wages of workers, on average, had to be increased by about 80% in order to reach even what the Fascist statisticians regard as a minimum standard of health and decency."
(From "Germany: Economic and labor conditions under fascism." by Kucynzski).
Never in its history had capitalism been able to combine full employment with wages lower than the level of Depression unemployment. This "achievement" has not been lost on to-day's capitalists. Back in 1975 while contemplating the development of the present crisis, the U.S. magazine, Business Week (Oct.12th) said;
"Yet it will be a hard pill for many Americans to swallow - the idea of doing with less so that big business can have more.....
Nothing that this nation or any other nation has done in modern history compares to the selling job that must now be done to make people accept the new reality. And there are grave doubts about whether the job can be done at all. Historian Arnold Toynbee, filled with years of compassion, laments that democracy will be unable to cope with approaching economic problems - and that totalitarianism will take its place."
Signs of Fascism
Some of the signs of fascism are essential to fascism itself. They are part of the structure of the capitalist system in crisis. Some of the signs are ideological. As we said they are developed to try and destroy class consciousness.
Some of the structural signs are: 1) increased monopolization of the economy, 2) intense driving down the wages of the working class so the bosses can hold on to their shrinking rates of profits, including increased racist and sexist exploitation, 3) cuts in social services, that part of the government budget that goes back to the working class in social programs such as health care, transportation, education, social welfare programs, and so on; 4) Realignment of the capitalist political parties i.e. disappearance of differences between Democrats and Republicans, proliferation of splinter parties, legislation by initiative, "reform" of the process etc.; 5)increase in that part of government that enforces social control, such as police, prisons, centralized record keeping, forced conformity, and especially the merging of business and government, (the corporate state);6) increased international competition and nationalist policies, protectionism, anti-immigrant policies, and the drive towards war; 7) increased political repression against groups that oppose or criticize the government, and especially, the outlawing of communist parties.
The ideological aspects of fascism vary more because the capitalist class will say anything to stay in power. Therefore, their ideology is often contradictory. The Nazis opposed abortion while they murdered children and pregnant women by the tens of thousands. Today, in the U.S., the politicians talk about the sacredness of children, especially "unborn" children, yet they cut food and medical aid to children and to pregnant women! But in general, there are certain ideological aspects of fascism that often become dominant as fascism develops. These include: racist ideology; extreme nationalism; an attack on scientific reason and the idea of progress; and a culture of dehumanization. As capitalism's crisis gets worse the bosses have to resort to unbelievable brutality to crush working class resistance and justify the declining standard of living, e.g., the slaughter in Ruwanda.
Some people think that these ideological aspects of fascism are the essence of fascism. That mistakes fascism for some kind of psychological illness instead of the material, political-economic structure that it is. The ideological aspects are very important. They determine how weak or strong the fascist movement can be and have a big effect on the power of the working class, including the communist leadership, to smash fascism. The ability of the Nazis to use racism enabled them to murder half the Jews in the world and millions of other victims. Without that ideological weapon of racism, the Nazis would have been much weaker. But the essence of the Nazi system cannot be understood in terms of a kind of "mentally ill racist philosophy". That analysis lets the real villain - capitalist class -escape responsibility.
Fascism Is Growing - Capitalism Is Weaker
Fascism is growing throughout the world. Ethnic massacres are common, as the bosses try to solve their crisis by getting workers to kill each other by the millions. These wars are intensifying all over. But these conflicts do not come from cultural or ethnic roots; they are tied to the world-wide economic crisis of capitalism!
(1) CONCENTRATION OF WEALTH. Wealth is being concentrated into fewer and fewer hands. By 1989, the top 1% of households in the U.S. had more net worth than the total of the whole bottom 90%! While the year 1993 had the second largest numbers of mergers (big companies taking over smaller ones) in U.S. history. This concentration of wealth actually weakens capitalism politically. It destroys the base of support that is built when wealth is more evenly distributed. It threatens the weaker section of the capitalist class with extinction. This leads to sharp conflicts among the capitalists themselves, which can threaten the stability of the State itself unless the dominant section can react with decisiveness.
(2) INTENSE EXPLOITATION. As to the drive to lower wages below subsistence, a 1989 UNCTAD (U.N.)report gives comprehensive evidence. They divided the population of the world's so called market economies into three categories.
(1) People living in countries that were gaining in GDP per capita compared with the Organization of Economic Cooperation and Development states (industrialized countries)
(2) People living in countries where the per capita GDP is gaining, but they are still falling behind when compared to the OECD countries.
(3)People living in countries suffering an absolute decline. In the late 60s, the population of the catching up countries was 530 million. There were only 60 million in the 'absolutely declining countries. In the 80s , the population in the catching up countries was down to 167 million and the population in the 'absolutely declining group' was up to 774 million. A similar picture is reflected in the U.S. "By 1991 real weekly earnings of workers were 19.5% below the 1972 levels and trending downward...
This prolonged downward trend in real wages over at least 19 years far exceeded any previous periods of sustained drop in U.S. post Civil War history. Even during the deepest cyclical crisis of the 1930s, real wages of employed workers declined for 'only' three years." (Central Perspectives in Sociology - Victor Perlo).
Of course, central to this attack on wages has been the attack on Unions - or at least the militancy of Unions. All over the world the bosses have made eliminating "work rules" their main goal. All contractual safeguards have been attacked: absentee controls; seniority; sick leave; discipline (firings are up); scab replacement.
When times are profitable, the bosses don't mind unions so much. For a slightly higher wage, they are given more stability and less danger of unpredictable outbursts of working class rebellion. But in bad times, the bosses must cut, and union busting becomes commonplace. Contracting out labor to non-union companies has severely weakened the unions, and the top union leadership has allowed them to get away with this tactic peacefully, which makes it much more difficult to fight that tactic later! In 1970 over 70% of U.S. production workers were unionized, but by 1991 only 26% were. Yet perhaps the most treacherous role the Union leaders have played has been an ideological one, promoting the dangerous lie that capitalists and workers have the same class interests! This is the same notion Mussolini, the founder of fascism, pushed in the 1930s in Italy. When peaceful sellouts don't work the big companies have the government to use force for them. In the U.S., the crushing of the air traffic controllers' strike in the 1980's was a sign that the government would intervene even more directly against the working class. Governments have worked together with business to destroy unions directly, as well indirectly by changing work rules and using part-time and non-union labor. Government, which is the enforcing arm of the capitalist class at all times, is more openly taking the side of the capitalists against the workers---a strong sign of developing crisis and fascism.
(3) CUTS IN "SOCIAL WAGE." Along with the cuts in wages, there is also a cut in "social wages", that part of government spending that goes back to the working class, such as social welfare programs, medical care, and major parts of the educational system. The growth of this trend is very obvious. What is not so obvious is that these trends directly attack the wage levels of the employed worker. They cut the previously accepted level of subsistence, creating a new, lower level. This lower level means the jobless are even more desperate to work and have even less bargaining power. Naturally this huge "army of reserve labor" is then used to cut wages and conditions of employed workers, as well as to increase the number of workers forced to join the armed forces.
(4) INCREASED SOCIAL CONTROL. The move towards more social control is also obvious especially in the U.S. where the jail population reached a record 1.4 million in 1994. That's the highest percentage of any country in the world. California is the state that leads the nation in jailings. In 1977 the prison population was 19,623 but by 1992 it was 110,000 - a 460% increase. Prisons are now California's biggest growth industry and the prison budget has grown three times faster than the school budget.
This rapid increase in the prison population is especially important. It is being used more and more as a slave labor force. In 1993 360,000 state and federal prisoners were assigned to work at average hourly wages ranging from 28 cents to $1.16 in state operations to $3.04 to $5.50 in private firms. Overall state agencies sold $1.1 billion worth of goods and private firms had revenues of $70 million, yielding $39 million in profits from prison labor.
This use of the government for control over the working class and weaker sections of the capitalist class is accompanied by the idea of a corporate state, where the government works even more closely with the largest corporations. This is a contradiction, because the corporations complain about government interference in public, but in fact, they all use the government in their war against the working class and against other capitalists! The institution of the national debt tightens the major capitalists grip on the government Marx described the debt as one of the most powerful levers of primitive accumulation (i.e. robbery). When the government runs into debt, it gets the money it needs by selling things like 'T' Bills or bonds to bankers and industrialists. The tax free interest on these 'notes' channels tax money raised from the working class by the Government directly into the pockets of the capitalists. The capitalist class complains about big government, but they LOVE big government, and in times of developing fascism, the two partners become closer than ever.
(5) RACISM, NATIONALISM AND WARS. Accompanying this movement has been the twin attacks of racism and nationalism which weaken the working class by splitting it. Internationally the most publicized examples of this are in the former Yugoslavia, Palestine and Rwanda, yet the bloodiest may well be the invasion of East Timor by Indonesia. On top of that wars are simmering or breaking out throughout the former Soviet Union.
(6) POLITICAL REPRESSION. Finally the last structural development in fascist society we need to look at is increased political repression. This is related to the economic conflict because the capitalist class must destroy the political leadership of the anti-capitalist movement. When profits are high and the mass movement seems passive, the bosses can tolerate protests or even communist activity. But political repression is always just behind the door. Indonesia in the 1960's, Chile and Greece in the 1970's all went from liberal societies to vicious fascist dictatorships overnight. Even Italy saw tens of thousands of militant workers arrested in the 1970's under the excuse of fighting terrorism but actually designed to destroy the working class movement. In the U.S. and other countries, anti-crime laws are being expanded to include more severe penalties for political activities, and some of the changes discussed above in the section on social control are also tied into crushing any serious revolutionary movement, such as the use of National Identity Cards and increased computerization of police functions.
Defeating Fascism
Fascism is the normal political response of a capitalism that is crippled by a severe, chronic economic crisis of its own making. Fascism makes capitalism appear strong but, in essence, it's a sign of its weakness. Since fascism sets out to destroy class consciousness, it means communists must energetically explain and promote a working class world view. Since fascism needs nationalism and racism (to substitute for class consciousness ), it demands communists answer the fascists with internationalism and multi-racial unity. Since fascism is preparation for capitalist war, it demands we build the movement for communist revolution.
Fascism, then, is an intensely political period, full of dangers and opportunities. The difficult task PLP has set itself in response to this crisis is the building of a mass movement led by communists for the eventual seizure of power and the trans-formation of society based on equality and internationalism. This movement for communism will start by turning reform battles - like 6 hours work for 8 hours pay, into mass battles for communist ideas and communist solutions to capitalism's perpetual crisis. Communism can only succeed if millions of people worldwide are convinced that internationalism, workers' power, equality and other communist ideas are keys to their future. Accompanying any drive to fight for jobs or other campaigns must be the spread of the influence of PLP through its newspaper - Challenge and the enlisting of the paper's readers into new members and organizers.
CAPITALIST ECONOMIC CRISIS
"The Crisis lays bare all the contradictions of capitalism, sharpening class contradictions....(and) compels workers who were indifferent to capitalism to become active in the struggle against it." LENIN.
INTRODUCTION
Since the 1970s the world's economy has been mired in a deep economic crisis - a general crisis of capitalism - which continues to generate agonies for the international working class. The most obvious aspects of this suffering are centered around wars, mass starvation, homelessness and mass unemployment. There has also been a vicious increase of the exploitation of workers internationally: for example, the International Labor Organisation reported in 1992 that "In Asia child labor reaches up to 11% of the total labor force in some countries. In India figures are estimated at 40 million." This more intense exploitation takes many forms. In the U.S., within a week of laying off 74,000 autoworkers, G.M. moved to non-stop assembly with 3 shifts operating around the clock.
In order toforestall revolts against these decaying conditions, the ruling class has shifted to more and more oppressive methods of rule, leading to an international upsurge of fascism. Also, as different national groups of bosses struggle to escape the crisis, there has been an outbreak of more and more, `small, local' wars over which section of the ruling class will control wich markets and sources of raw materials. This has led to an upsurge of nationalism and racism, as well as ethnic and racist oppression. These small, local wars are but a preliminary taste of the new international conflagration which is already being prepared in order to decide which imperialist power will emerge as top dog.
While poverty, starvation and even slavery haunt growing armies of workers, the rich get richer and richer. In Mexico from 1993 to 1994 the richest 13 billionaires increased their wealth by 40% and 11 more billionaires were created while the buying power of the workers - some 80 million was cut in half, with farmers on the brink of destruction.
CRISIS ARE LIKE EARTHQUAKES
Within this general crisis severe cyclical crises occur. These are crises of overproduction. Such "crises are not, a new experience for capitalism. Great Britain, which was the first country to establish a capitalist system of production, had already experienced a dozen of them before 1935. Whenever the capitalist system has taken a firm hold of the economic life of any country, that country has also come to know the effects of these economic earthquakes. Crises have occurred at something like ten-yearly intervals. They have differed enormously, however, in their intensity, in their extension throughout the world, and in [other details of] their character. Some have been brief and local earth tremors, while others, and above all, the crisis which began in 1929 [as well as the present one] have been [or are] seismic disturbances, shaking the economy of the world to its foundations."(Strachey, J.,1935). Beginning with 1825, crises began to embrace not one country alone but every country where capitalism was developed.
In pre-capitalist economic systems the problem that societies faced was that they were unable to produce enough goods to meet their people's needs because the means of production were not yet sufficiently developed, or because of natural disasters. Thus the dominant problem was one of under-production as during famines due either to crop failures or to an inability to produce enough food because agricultural techniques were still too primitive. The very concept of a crisis because of over-production would have been ludicrous.
In all of these earlier societies production was designed to meet direct needs. The exchange of produced goods often took the form of direct barter. In that case, production was mainly directed towards the satisfaction of local needs. Then the only source of goods offered for general sale, that is, of commodities, was anything that had been produced which exceeded these needs. And whether this excess was exchanged or not wasn't important to the productive system as a whole because this exchange was not essential for the productive process to be able to continue. However in the case of capitalist commodity production the conversion of the product into money, the sale, is an absolute condition for production to be able to continue, because, without the sale no profit can be realized. So, if, for any reason, there is no sale, we get crises. (We have here paraphrased Marx, Theories of Surplus-value, Vol. II, Part II, p 281.) The emergence under commodity production of systems of credit under which payment for a sale may be delayed complicated this problem even further. Thus capitalist commodity production, at first just made crises possible. We shall demonstrate that, capitalism's unconditional demand for profits finally makes these murderous crises not just possible, but inevitable.
CAPITALISM HIDES THE CAUSES OF ITS OWN CRISES
The causes of these crises lie close to capitalism's basic flaws. Bourgeois economists, politicians or Union leaders cannot therefore make any serious attempt to explain them because, to do so, would expose capitalism to serious attack. This reflects the fact that to the bosses crisis primarily means fallen profits. But to workers crisis means unemployment, starvation and general misery. The steps that we workers must demand to ease the burdens of the crisis for us are precisely the steps that the bosses cannot voluntarily grant because they would eat into profits even more.
A SERIOUS REVOLUTIONARY MOVEMENT MUST BE ABLE TO EXPLAIN THESE CRISES
Any serious revolutionary movement undertaking to challenge modern capitalism's hold must be able to understand and explain the causes of these catastrophes. They are an unending source of increasing misery and exploitation for the working class. They occur because more commodities have been produced than can be profitably sold: Hence `a crisis of over-production'. The key word here is "profitably".
If these crises could be eliminated through reformist changes that "fix capitalism up to make it work better" it would become difficult to argue that revolutionary change designed to dump capitalism and construct communism has become the only way for workers to win decent lives for themselves and their families. However, if these crises are actually built into capitalism's nature, so that they cannot possibly be eliminated by any reformist steps, revolutionary change becomes the only way to put an end to the misery created for workers and students by capitalism. Therefore the question of the causes of these crises stands at the center of our line of "REVOLUTION NOT REFORM". In fact, one of the crowning achievements of Marxist political economy has been its ability to reveal the real nature of these capitalist crises.
WHAT HAPPENS DURING A CRISIS OF OVER-PRODUCTION
When these crises occur, the capitalist market place suddenly reveals that, in their desperate eagerness to make higher profits than their competitors, the individual capitalists and the individual capitalist groupings who own the means of production have produced more commodities than can be profitably sold under capitalist market conditions. A glut of commodities waiting to be sold consequently appears. Since the capitalists cannot realize their profits unless their products are sold, and the first law of capitalist production is to make profits or perish, the entire system jams up: the stock market often collapses, factories are shut down, masses of workers are laid off, production decreases dramatic-ally, unsold products pile up, indeed, some of these accumulated goods are actually destroyed to get them off the market: thus we have a crisis of over-production.
The Wall Street Journal (March 9th 1989) described over production in the U.S. market in the following industries: auto, steel, computers, semi-conductors, heavy equipment, farm equipment, textiles and oil. It also listed others that were close to overproduction. Hundreds of thousands of U.S. workers were layed off as a result. Objectively speaking it would be hard to maintain there was too much farm equipment that year since in Africa alone close to 20 million faced starvation. Only in the capitalists eyes was there overproduction. Too much farm equipment, that is, to sell at a profit. It's a clear sign of the ruthlessness of the capitalist system to realise that mass starvation matters nothing compared to profits!
THE PROFIT MOTIVE CANNOT GUARANTEE THE PRODUCTION OF WHAT WE NEED
In spite of bourgeois claims to the contrary, the profit motive does not automatically result in the production of the things that people need. For example, working people today desperately need reasonably priced good medical care, and decent low-cost housing. But the profits to be made in the production or supply of these things are too low for modern capitalism. They are consequently neither produced nor supplied. Capitalism is thus unable to satisfy these needs of its own population. Production for profits instead of for need has come into conflict with the real social purpose of production: making and supplying things that people need. This contradiction lays the basis for the occurrence of crises of over-production.
PRODUCTION FOR PRIVATE PROFIT MAKES CRISES INEVITABLE
Let's take an example from one industry to see how an actual crisis develops. (Although based on fact this is a simplified example). In 1992 the world market for aircraft engines was facing a challenge. The end of the cold war produced cutbacks in military spending and this meant the market shrank. In turn, this presented each individual company with the acute problem of surviving in the downsized market. Let's concentrate on the three main companies: Pratt and Whitney, G.E. and Rolls Royce. In 1992 the percentage each had in the world market is outlined in the left hand column below.
TABLE 1
World Market for Jet Aircraft Engines
% in '92 Added 8% Lay-offs Outcome Lay-offs
G.E. 26% 34% 7,000 34%
Pratt/Whit 25% 33% 10,000 33%
Rolls R. 22% 30% 5,000 30%
Others 27% 35% bankrupt 100,000
TOTAL 100% 132% 22,000 97% 100,000
That year Rolls Royce announced its plan for survival. It would invest some $450 million in modernising. It would lay-off some 5,000 workers (All the lay-offs in the 3rd column took place). And it would increase its share of the world market by 8%. Now we can assume that the other manufacturers would not sit idle while Rolls Royce moved aggressively into first place in a shrinking market. Let's say they planned to modernise and increase their share of the world market by 8%, just like Rolls Royce.
Now we get the situation we can see in column 2. There is massive overproduction in the market. This will result in column 4 (or some variation of it). The weaker companies would go bankrupt and massive lay-offs would result.
If we can say that for every job in aircraft engines 5 more are created in the economy at large (steel making,trade schools, transport ect.) then we can see the lay-off of 122,000 workers (column 3 + column 5) would result in 610,000 unemployed. When similar scenarios are repeated in industry after industry, unemployement grows and the markets shrink even further. This brings us back to the beginning. The crisis of overproduction is in full swing.
This crisis then develops a dynamic of its own, creating several clear features.
(1) Concentration of capital: In our example only 3 companies survive the crisis. Furthemore, because of all them borrowed to 'modernise,' bankers are now more firmly entrenched in the industry. And as this takes place in industry after industry, they are more central to the economy. The richest get richer.
(2) Mass unemployment: as the crisis sharpens, workers cease to be a resource (the source of future profits) and become a threat. Capitalist society now imprisons rather than educates, expells (inmmigrants) rather than attracts, lets die rather than treats, makes homeless rather than shelters. The working class get poorer.
(3) Destruction of the productive forces: In addition to attacking the working class, capitalism in crisis also destroys excess plant and machinery - first by economic means, then by war.
(4) Increased exploitation: The huge growth of the unemployed is used as a direct threat to the employed. Work faster, longer and harder or be gone! This is one reason building a movement for a shorter work week is such a crucial immediate demand for the working class.
(5) Sharpening inter-imperialist competition: Take our example in the aircraft industry. The same week Rolls Royce announced its plans increase its market share American Airlines cut back its orders for new planes by 50%. It cut all its orders for 25 European built Airbuses (with Rolls Royce engines) rather than cut 25 DC10s (with U.S. built engines). This was followed by Clinton travelling to Seattle and telling Boeing workers that Airbus was unfairly subsidized by European governments. Thus Europeans workers were expected to blame U.S. workers and U.S. workers blame Europeans for the capitalists crisis of overproduction. And this underlines the urgency of building a revolutionary party under the PLP slogan of "One class, one flag, one Party!"
(6) "Idle capital:" The shrinking market and the falling rate of profit create two conditions. The falling rate of profit makes it less attractive to invest in industry. The shrinking markets means there is less opprotunity to invest in industry. A growing army of investors then turn to speculation in real estate, foreign exchange rates, the bond market, derivatives and so on. And this increases the instabilty of the period.
THE FALLING RATE OF PROFIT
Marx and Engels demonstrated in Volume III of the Marxist classic Capital, that, as capitalism matures, its rate of profit inevitably decreases. The rate of profit is how much profit the capitalists get per "buck invested". This fall was already well known to bourgeois economists who had observed it for years ( see Table 1, below), but could not understand its cause.
TABLE 2
RATE OF PROFIT IN MANUFACTURING (U.S.)
1899 24%
1904 19.9%
1909 18.7%
1914 16.5%
But the Marxist labor theory of value, which was discussed in an earlier chapter of this pamphlet solved this mystery. The interested reader can find a more rigorous discussion of this question in the Appendix to this pamphlet. The bosses' profits come out of the surplus value created by workers in the course of their labor. However, as capitalism matures, a bigger and bigger proportion of what they must invest is devoted to the purchase of more and more of the machinery of production: bigger and more complex computers, lathes and presses, and even robots. These implements of production cannot by themselves, produce any surplus value. They can only aid living workers to produce surplus value when they (the workers) use these machines as tools. But, as capitalism matures one finds more and more machines and fewer and fewer workers involved in the processes of production. For example auto analysts critize G.M.'s Saturn car production. The ratio of people to car, they say, is too high. It should be 2.77, not 3.77!
Consequently the proportion of the bosses' invested capital which is able to produce a profit gets smaller and smaller as capitalism matures. This means that maturing capitalism is saddled with a constantly falling rate of profit.
REFERENCES
Political Economy, Marxist Study Classes, U.S. Edition, 1976, Banner Press, Chicago, Illinois., the original was published in Great Britain in 1933.
The Nature of Capitalist Crisis, John Strachey, 1935, Covici-Friede,Inc. J. J. Little and Ives Co. New York., N. Y.
Capital, A Critique of Political Economy, Karl Marx, Charles H. Kerr & Co., Chicago, Illinois.
Theories of Surplus Value, Karl Marx, Foreign Languages Publishing House, Moscow, USSR._
APPENDIX
THE FALLING RATE OF PROFIT AND ECONOMIC CRISIS
THE SOURCE OF THE BOSSES' PROFITS
For greatest clarity, this discussion demands the use of some very simple and easily understood equations. I realize that many of our readers have been conditioned to be afraid of even simple mathematics. Terrified that its young people will learn to think for themselves, the capitalist ruling class has contrived to guarantee that knowledge of mathematics, which can be a powerful aid to clear thought, will be so poorly taught in the public schools that young people will run from it. But a thorough understanding of the economic questions that we are investigating in this article is difficult without this tool. I appeal to our readers to make the effort to follow our line of reasoning. It really is not difficult. The insights achieved will be worth it. Like all sciences, Marxism also has its quantitative aspects.
Capitalist investments in the productive process can be viewed as consisting of two primary parts. Firstly, there is the investment in land, buildings, and tools. This part has been called "constant capital", and denoted by the symbol `c'. Secondly, there is the investment in workers' wages, this part has been called "variable capital". it is denoted by the symbol `v'. The total investment `C' is then given by the sum of the two, as follows:
The production of a profit demands that, in the course of the process of production, one of the two elements on the right hand side of this equation, either `c' or `v', yield more than the amount of investment in that item. The only
element capable of doing this is `v', workers' wages.Put a little differently, we are saying that only the labor of living workers can yield a profit. The amount paid to workers as wages is related to the amount that they need to live, keep themselves in working condition, and to produce and train the next generation of workers. The exact amount of money that this involves is determined both by culture and the intensity of the class struggle: how much the working class has been able to force the bosses to pay. However, standing completely apart from the question of how much we are paid in `v', is what new values we create by working. In all class societies this new creation is always more than `v'. In capitalist economies the difference between them is called the "surplus value" and is denoted by the symbol, `s'. Thus the total value created by workers in the process of production can be written as "V" where:
Profits are extracted from the surplus value `s'. Some of this surplus must be plowed back into production to provide, for example, for the modernization of tools and machines. But the part that is not directly withheld by the manufacturer for such purposes constitutes profit. The thing to notice immediately is that profits do not emerge from any "rewards to the investor for his/her charitability in investing money". Profits emerge only from the portion of the new values created by the working class in the process of its labor for which it is not paid. In short, profits come from money stolen from the working class. Of course bourgeois legality makes this theft perfectly proper and legal.
Just how much does `s', the surplus value that we produce, amount to under present conditions in the USA? Exact numbers are hard to come by. But an estimate made from recently published figures for the computer producing industry shows that, based on a 40 hour workweek, in some US industries the first two hours of work in the morning of each day is enough to pay the bosses back for the workers' measly wages. After that the workers are working for the boss for free. It follows that, during an 8 hour working day the boss gets 6 hours, or 3/4 of the fruits of the day's work for free. That is the surplus value that American workers create today.
It is important to note that the quantity that is important to any individual investor is not just his/her profit. The capitalist is also deeply concerned about how much profit can be made for each dollar invested. This is called the "rate of profit". Investors will, obviously, always tend to invest where this rate is highest, because that will give
them the biggest 'return for the buck'. The rate of profit, denoted as 'P' is then given by:
It is helpful to change the form of the above equation by dividing both its numerator and denominator by `v'. Doing this yields:
THE FALLING RATE OF PROFIT
One more new term is needed to help us see through the fog created by bourgeois economists around these questions. Marx and Angeles called the ratio of the surplus value produced, 's', and the wages paid, 'v', the rate of surplus value,or the rate of exploitation. We will denote this quantity by the symbol `E' Thus:
This `E' is precisely the productivity factor that Bush, Clinton and Perot were pushing so hard to increase during all of their pre-electoral oratory. Why is it so important?
It is important to both the capitalists and us because it is a measure of how hard workers will allow themselves to be pushed, how much surplus value can be squeezed out of us by all the speedup methods available, as well as of how low we will allow our real wages to fall. If we substitute this new factor `E' into our earlier expression for the rate of profit, things become much clearer, and the power buried in this simple mathematical treatment will be revealed. the rate of profit,'P', can then be rewritten as
The first thing we can see here clearly is that if `E' is forced to go up by the bosses, that is, if we let them exploit us more, their rate of profit will climb. That is precisely what they are after: to solve their crisis by punishing us. But that's not all that this last equation tells us. Let's look, and think, a bit more. Capitalism's constant efforts to increase its rate of profit in the course of competition leads it to incessant expansion of its means of production, It buys more and more tools devoted to large scale production. Each capitalist does this in the search for technological gimmicks which will give their first user a temporary profit-making edge over his/her competitors. As a result, their investment in 'c', the amount of capital represented by investments in machines, computers and other technology, buildings, and land, goes up much faster than 'v', the amount invested in workers. Consequently, the ratio 'c/v' that appears in the denominator (the bottom portion of the fraction) of our last expression for the rate of profit, 'P', keeps on increasing rapidly over time. This results in an inevitable decrease of 'P', the rate of profit, as time goes by.
If you can't immediately see why this is so, consider the fact that, if the denominator of a fraction increases while its numerator remains constant, the fraction itself becomes smaller. Thus, for example, 1/3 is smaller than 1/2.
The increasing ratio, 'c/v', is actually a measure of the growth of modern, mechanized, industry. We therefore conclude that capitalism's natural development drives its rate of profit down. And it turns out that all of its desperate efforts to halt this decline have succeeded only in slowing the decline.
For the sake of clarity I will redescribe the process leading to this falling rate of profit in still another way. As capitalism develops, an increasing proportion of the money it invests is tied up in machinery as opposed to workers. But, since it is only the labor of the workers that can produce the surplus value out of which profits are formed, the decreasing proportion of investment in workers leads to a tendency for the rate of profit to fall.(Note, see table 1 in the chapter on crisis.) A point is inevitably reached at which any additional investments will decrease and not increase the profits made. As soon as investors recognize that they have reached this point they withdraw their money from investment in industry by, for example, selling off their stocks, refusing to make industrial loans, etc. But the point at which this will occur can be determined only by experiment: that is, by making the investments and then watching to see what happens. This fact contributes to the panicky response that emerges when the investors discover a decline in their profits instead of a rise.
The bosses immediately launch into desperate attempts to drive the rate of profit up again. A look at our final expression for 'P' reveals the key steps that they can and do take. For example, if they can force wages down, `v' will decrease,`E' will increase, and 'P' will increase. If you look at the equation carefully, you will notice that this sort of action on the bosses part will also increase the fraction `c/v' in the denominator of the expression for `P'. That will tend to decrease the rate of profit again. Consequently they take other steps too: they close and dismantle or sell off entire plants, thereby decreasing their investment in `c'. If done properly that will restore 'c/v' to its former, or even a lower value, bringing 'P' up again. They get into big fights to decide whose investment in `c' will be destroyed, with capitalist groupings even going to war to settle this question. Similarly, if they can increase the length of the working day they can get more use of the existing `c', without investing any more money in it, and `P' will climb. If they can force a massive speedup so that `E' goes up, the same result follows. All of the propaganda directed at increasing the productivity of American workers is just an attempt to increase 'E'.
It is clear from the discussion above that all of the bosses' attempts at driving their rate of profit up again are directed at pushing us harder. They yield nothing voluntarily. But it is, after all a crisis of their profit-making system. Why should we agree to suffer more so that they can get even richer?
The bourgeoisie's fight to preserve their profits demands that they cut wages to the bone, and cut back drastically (or, better yet, entirely scrap social services, decrease taxes on the rich, etc.) So the objective basis of the Bush, Clinton, Perot, way out the crisis is now clear. Of course, these kinds of cuts drastically undermine the domestic market thereby creating a full-blown crisis of over-production. This sequence of events is involved in making these crises inevitable as long as capitalism is allowed to exist. The law of the falling rate of profit also stamps capitalism with the inevitability of war. Their desperate struggle to restore the rate of profit leads them to a relentless search for places where they can buy raw materials more cheaply and where they can also invest their money at a higher rate of profit than is available to them at home. They find the answer to both of these prayers in those parts of the world where c/v is still low because production is not yet so mechanized. But, as time goes by and the control of such areas is divided up between the big, more industrially advanced capitalist groupings, where can a newcomer fit in? Nowhere except where it can win a toehold by force of arms. So both crisis and war become inevitable under capitalism!!
The historical tendency of the rate of profit to fall was already well known to bourgeois political economists in Marx's time. But they could not explain it. Only Marxist political economy has provided the answer to this riddle.
THE FALLING RATE OF PROFIT AND THE NATIONAL DEBT
This tendency for the rate of profit to fall complicates the capitalist's problems in yet other ways. For example, in the USA today, it has been one of the factors leading to a shortage of domestically produced funds for investment. This shortage has forced the US bourgeoisie to borrow immense amounts of funds from abroad. leading to the international aspect of the USA's huge national debt.But this phenomenon is not affecting just US capitalism, it is international in its scope.
MODERN IMPERIALISM: GROWN-UP CAPITALISM
Imperialism, the modern capitalist system of war and exploitation, has grown out of early capitalism. Marx showed that 19th century capitalism ahd four laws motion, including (1) an insatiable drive to accumulate ever larger sums of money-capital (money has a "mind of its own"), (2) growing concentrations and centralization of capital, similar to what we call "monopolies" today, (3) inevitable, periodic economic crises caused by such things as a falling profit rate and relative overproduction of goods, and (4) deepening misery for the world's working class as capitalists strive for ever-higher profits. These processes were accompnied by frequent violent and deadly conflicts, both between bosses and workers, and between the capitalists themselves as they fought for bigger profits at each others' expense.
Today's imperialism is the logical outcome of all this. Businesses that beat out the competition became big monopolized industries spilling over national borders, like Ford and Toyota (Does anyone even remember Studebaker anywmore? That was a loser!). In 1990, the 5,000 largest corporations held over $13 trillion dollars in assets, 82% of all assets in the U.S. These "winners" cut deals among themselves over markets which last only until one of them is able to make a move for a bigger piece of the action. But developments in banking mean that the bosses are even more centralized. Banking became monopolized just like other industries. Local banks were swallowed up by the Morgan and Rockefeller banks in the mid 20th century, and further consolidation has given rise to huge centralized organizations like NationsBank. Such centralized power in this industry gives bankers tremendous power over the industrial companies, since they controlled the money that industrialists needed to expand. The bank-industrial connection (with banks placing their agents on the boards of directors of big companies as a condition of loans) created the "financial oligarchy", a tiny section of the capitalist class that unified industrial and banking capital under its control and also ran the government through its enormous financial power. This situation continues today.
So bigger bosses with bigger production capabilities get into ever-mightier clashes with each other. Ironically, it is the very technological advances and greater scale of production which could, in principle, make life better for the world's masses, that facilitate massive international conflagrations destroying millions through world war of the most devastating kind. World War I and then World War II featured such monstrosity, and the system will inevitably throw up a third and even more devastating one. Thus, the imperialist system proves itself to be extraordinarily perverted--forcibly accelerating productivity of the world's workers through breakneck competition, with the result of destroying those same workers through war!
Workers have responded to such economic and military oppression, when organized under militant communist leadership, with rebellion and revolution. The present period is no different. Even though the U.S. Soviet inter-imperialist clash has ended, new inter-imperialist battles are replacing that rivalry, and will threaten world-wide destruction yet again. And so it becomes even more important now for workers to rally around the red flag and make revolutions for communist society throughout the world.
Imperialism's Persistent Contradictions
The financial oligarchy face problems very similar to those confronted by earlier capitalist ruling classes, although at a higher, more international level. The rate of profit still tends to fall, and relative overproduction still happens, and has given rise to periodic crises in the late 19th and early 20th century. This process included the Great Depression of the 1930s and may well be returning in the 1990s. The capitalists today are frantically searching for ways to increase their profitability. Morgan Stanley noted in 1987 that $420 billion per day passes through the world's financial markets, and that less than 10% of that represents financial transactions related to trade or investment. The vast majority is speculation, as the capitalists discover that "real" profits, stolen from the labor of workers in the production of goods and services, harder and harder to come by.
Capitalists continually have found themselves in situations where domestic sales of a new product grow rapidly until the home market is saturated, at which point sales dwindle to mere replacements of worn-out units plus a small number of new sales. Such a self-limiting market has often meant disaster for particular companies, and even for entire economies, as big layoffs and bankruptcies often result. To counteract such negative outcomes, the capitalists have continually sought new places to sell their goods, and more profitable places to put their factories, an example of the "export of capital" characteristic of imperialism. Companies from major imperialists countries also have moved operations overseas to undercut the gains workers have made through decades of class struggle. The textile mills of New England moved south to a "union-free" environment, and now are accelerating their movement to low wage countries in Southeast Asia. And they use the very credible threat of such a move to force U.S. workers to accept lower wages and worse conditions of work. Companies may even manufacture the goods in overseas locations and export many of them back to the home market to take advantage of cheap labor and lax working conditions. Many economic pressures drive the capitalists to internationalize their investments, but there is only so much economic space in the world. The outcome of this world-wide export of capital is that all workers' conditions of life deteriorate.
Imperialist versus Imperialist
Other capitalist ruling classes around the world confront the same tendencies in their own home markets, and they too seek new outlets for sales and investments. Unfortunately for them, there is only so much world to go around, only so many workers on earth to exploit. The various ruling classes around the globe are therefore brought into economic conflict with each other over who is going to have the "right" to exploit a given territory and group of workers, including those in each others' countries. Such a conflict turns bloody very quickly, since for the capitalists, profits=life and losses=death.
Uneven Development and Wars of Redivision
At any moment, some capitalists are getting economically stronger at a faster pace than their counterparts in other countries, and so they have both a driving need for more territory and growing military depth to fight for it. The old lines dividing the world up among the imperialists have a certain inertia to them, though; the imperialists that benefit most from the old division of the world will defend it, and will fight wars to hold onto its valuable, if increasingly vulnerable, empire against the claims of the rising, potentially stronger, capitalist classes from other countries. And so the uneven development of imperialism leads to wars among the imperialists to redivide the world. Capitalists don't conduct such struggles to benefit the workers in any nation, however. They only seek profitable advantage for themselves, and use workers to further their interest.
The outcomes of such inter-imperialist wars are not necessarily determined by the relative economic strength of the antagonists. Germany lost two attempts this century to gain world empire, both of which grew out of a relatively strengthening economy compared to the more decadent capitalists of England and France. The world communist movement predicted as early as 1928 that the world was heading for another world war with the U.S. the rising imperialist and the U.K. the declining imperialist, and the conflict between these two would color the coming inter-imperialist war. Interestingly, the two became allies against yet another rival capitalist, Nazi Germany, but in the end, the British lost their empire to the rising U.S. imperialists anyway, while the German imperialists were smashed primarily by the red army of the Soviet Union. The post-war "American Century" with its cold war animus against the Soviet Union was the outcome of this complicated inter-imperialist battle. But this new structure of imperialism was as temporary as the previous ones, and today a new redivision of the world is on the world's capitalist agenda.
The Cost of Imperialist War and Workers' Response
Inter-imperialist wars are devastating. They cost the lives of millions and destroy billions of productive property. They are the best proof that capitalism cannot serve the needs of the many. As capitalism gave way to imperialism, the wars became ever more disastrous. World War I cost over two billion dollars (in 1920 dollars), which was 10 times the cost of all the wars of the 19th century combined. World War II in turn dwarfed this; Britain alone lost $8 billion in private capital. The tens of millions of soldiers and civilians killed in that war proved beyond a doubt imperialism's deadly and genocidal character.
The working class, angered by such wanton destruction of lives and productive resources, has often responded to capitalist wars with great boldness and occasional success. The working class in Manchester, England, rebelled against the British government's attempt to enter the U.S. Civil War in the 1860s on the side of the slaveowners, and succeeded in stopping the British capitalists from supporting slavery with their armed forces. Seattle longshoremen struck against U.S. intervention in the war against the infant Soviet Union shortly after the Bolshevik Revolution there, greatly undercutting the U.S.'s capitalists effort to strangle the communist baby in the cradle. The Bolsheviks themselves ended the Russian bosses' role in World War I as a crucial part in their march to revolution and workers' power. Even more impressively, Chinese workers and peasants turned the Japanese imperialist invasions during World War II into a communist revolution by 1949, liberating, at least for a time, one third of the world's population. So the response to imperialist war has often been workers' resistance, and when led by communists, successful revolutions.
Less Developed Countries: Plucked by Imperialism
The effect of imperialism on less developed countries (LDCs) has been virtually genocidal. Marx recounted the horrors of initial imperialist involvement in LDCs, including such atrocities as the practice of cutting off the hands of thousands of Indian handloom weavers so they could not compete with British-made textiles in their own home market. Marx thought that, despite such devastating social effect, the spread of capitalism to other countries would nevertheless hasten the development of capitalism in LDCs and, with it, technological progress and development. But it has turned out in the 20th century that this limited progressive quality of capitalism -- i.e., its ability to stimulate the "forces of production" (like new productive technology) -- has been exceptionally weak in LDCs. The imperialist countries have generally treated their investments in the LDCs as mere extensions of their own economies. Roadways are built linking mines and processing plants to ports so that the goods produced in the LDCs can be exported back to the home country. The economies of the LDCs are generally re-organized by imperialism to produce agricultural goods for export to meet the raw material needs of the imperialists, destroying diversified and balanced agriculture and causing famine and starvation in the LDCs. In some cases new capitalists have arisen in LDCs and entered into conflict with the international imperialists, but even then the human cost to the working class is severe.
A recent World Bank survey showed that the world's income distribution was 20 times more unequal today than in Queen Victoria's time, at the height of the British colonial empire in the 19th century. The economies of Latin America, the Middle East, and Africa, due to their entanglement in the web of imperialism, declined absolutely during the 1980s. In a few cases, this fall in economic output rivaled the worst wartime situations, with a 40% decline in GDP in Uganda and Zambia, and over 30% in Bolivia. Four out of 10 people in Latin America live in poverty. In another survey, the United Nations calculated the number of people in LDCs where the per capita GDP was gaining compared to industrialized countries, and those where it was declining absolutely. During the 1960s, 530 million people lived in countries where living standards, while vastly inferior to those in industrialized countries, were nevertheless gradually closing the gap, while 60 million lived where the standard of living was falling absolutely. But during the 1980s, those living where progress was occurring numbered 167 million, while 774 million lived where absolute decline was occurring. Even as Latin America has begun to grow in the 1990s, UN specialists on Latin America note that, out of the 441 million people there, 46 million are homeless, 85 million live in housing that is so bad by any standards that it should be demolished, while another 100 million live in housing lacking water, electricity, or proper construction.
The general crisis of capitalism is reflected in the fact that annual economic growth rates in the world were 2.6% in the 1960s, 1.6% in the 1970s, falling to 1.3% in the 1980s. The uneven effect of this is placing a huge share of the world's working class into ever more desperate conditions. Workers' rebellions are often the response to these developments, but without communist leadership they tend to sputter out and despair and cynicism settles in. This is why we need to build the PLP in countries all over the world, especially in the less-developed countries, to lead workers' revolution to a communist victory.
Imperialist Exploitation in Many Forms
The most common form of post-World War II imperialism was the establishment of subsidiaries of big corporations in LDCs, called "multinational corporations". This is only one way that imperialists can exploit the working class of LDCs. In the earlier part of the 20th century, much of the exploitation of the LDCs occurred via U.S. bank loans to the puppet rulers, who would in turn guarantee repayment by taxing workers. When the local bosses couldn't gouge enough out of the workers, the U.S. military would arrive to force the LDC to squeeze out the funds. In Nicaragua in 1921(?), for example, the U.S. Marines took over collection of customs duties and sent them back home to American banks that had made the loans in the first place. Such methods of ripping off LDC workers are still used, with the famous "recycling of petrodollars" from the 1970s the best example. In this case, the imperialist commercial banks loaned huge sums (at interest!) to LDCs to "help" them pay their huge oil bills that had quadrupled in the 1970s due to the oil price hikes made by the OPEC oil cartel. Then in 1982, Mexico came to the brink of default of its payments. The imperialists had the International Monetary Fund (IMF) force austerity measures on Mexico and other similarly indebted societies so they could pay back the big banks. Thus was born the notorious "Structural Adjustment Program (SAP)" that has been so pernicious to LDC workers around the globe. The flow of money back to U.S. banking centers has substantially exceeded the levels of investment money flowing into LDCs over the last dozen years, demonstrating how imperialism drains the working class internationally to swell the coffers of the financial oligarchies of the world, and uses its international institutions like the IMF and the World Bank to institutionalize this process, all the while pretending to be interested in the welfare and development of these "client".
Soviet imperialism (roughly 1960 - 1990) took on yet another form involving state-to-state trade agreements that almost inevitably contained low prices for LDC goods and high prices for Soviet goods. This was particularly true of Soviet relations with India and eastern Europe.
So the precise form of imperialism may vary from time to time and place to place, but its essence -- the internationalization of the accumulation process under the power of a financial oligarchy of a nation, with workers of all countries severely exploited -- remains a constant.
Inter-Imperialist Rivalry in the 1990s
With the collapse of the Soviet Union, the main contradiction in the world shifted from U.S. Soviet inter-imperialist rivalry to a polycentric conflict among U.S., German, and Japanese imperialists, with other rivals emerging and re-emerging, including Russia, China, and France. Japan emerged in the 1970s as a fledgling imperialist, with only a few billion dollars worth of international investments. But this leaped to $53 billion in 1983 to $106 billion five years later to over $350 billion in 1991, over 3/4 the level of U.S. direct investment abroad that year. Germany has also lifted its levels of direct investment abroad, although no as spectacularly. For the last decade, the major imperialists have concentrated on securing their own "neighborhoods" to buttress their economies. Germany has funneled huge amounts of capital into eastern Europe, with a sharp eye on investment opportunities in Russia and the other former Soviet Republics, with the goal of securing those markets and labor forces into the German imperial orbit. By early 1992, Germany had established 1,500 joint ventures in Poland and 1,000 in Czechoslovakia. These ventures accounted for over half of all foreign investments in these "newly democratic" countries. Japan has similarly expanded rapidly into southeast Asia, previously a stronghold of U.S., British, and French investment. From 1986 to 1991, for instance, Japanese capitalists invested $27 billion in Southeast Asia, while American firms there added only $7 billion to their existing investments there. These economic trends put added pressure on U.S. influence in these arenas. Germany has recently begun sending its military abroad once again, while Japan similarly considers the possibility of a Southeast Asian "military assistance" program for its neighbors, as it now has the third largest military budget in the world. With the technical apparatus in place and the political groundwork laid, it would take only a couple of years to create a modern imperial army in either country to protect investments and extend its sphere of influence.
Efforts by the (relatively) retreating U.S. imperialists to strengthen its own home base in the western hemisphere have followed. Thus, NAFTA, a program of fewer barriers to trade among capitalists in the U.S., Mexico and Canada, was pushed through despite the opposition of the U.S. labor movement and the agricultural workers in Mexico, as well as the opposition to the treaty by Japan, and the cautious, conditional support for it by the German bourgeoisie. And the U.S. imperialists are right to worry. Japanese investments in Latin America has grown rapidly, and Mercosur, a free trade agreement among Brazil, Argentina, Paraguay and Uruguay which may soon extend to Chile, is actively negotiating further trade and investment ties to the European Community (EEC), dominated by Germany. The U.S. has made clear its intention to keep control of Latin America through its military incursions in Grenada, Panama, and Haiti, which have been as much warning shots across the bow of other imperialists as they have been responses to particular threats to U.S. imperial interests.
Another center of inter-imperialist rivalry is the Middle East with its crucial oil supplies, fueling all three economies, especially those of Germany and Japan. In this arena, there has been great expansion of German influence and investment in Iran as Germany seeks to consolidate a secure source for its energy needs despite U.S. imperialist protests over German "coddling" of a "terrorist" nation. U.S. efforts to retain control of the area, long since eroded with the loss of its puppet Shah in Iran and the once-invincible but now vulnerable Israel, certainly came to a head with the war with Iraq, as the U.S. sought to demonstrate its determination to hold onto that region at any cost. Interestingly, it was largely Japanese infusions of dollars that facilitated the U.S. genocidal victory there. Similarly, the intervention in Somalia was aimed in part (and failed) at establishing a solid puppet regime Somalia to look over nearby oil routes from the vantage points of the ports of Mogadishu and Berbera. Again, this intervention saw a role for the first time of German troops, so the exclusive hegemony of the U.S., and its clout as the guarantor of energy suppliers to its emerging major rival imperialists, eroded here as well.
Thus, rivalry among the imperialists in the post-U.S.-Soviet age has become a struggle among several peers rather than a clash of two super-powers with junior partners. Additional aspiring imperialists have butted into the process further complicating the terrain. These maneuverings, coupled with the general weakness of the imperialists due to their varied internal economic crises, has opened the door for lesser bourgeois nationalists to engage the big imperialists in a quest for a bigger piece of the action, a greater share of the spoils of exploitation. Thus, Saddam in Iraq makes a play for greater revenue flows from oil by seizing Kuwait. N. Korea presses for greater international trade relations by rattling the nuclear sabre. Haitian generals try for even greater spoils from the Haitian people instead of letting the U.S. imperialists take the lion's share. Fascists of varying nationalities contend in the former Yugoslavia for domination at the expense of their neighbors. In these and other modern cases, smaller bourgeoisies are making efforts to expand their position at the expense of the apparently weakened imperialists. Yet, at the same time, the imperialists become more desperate for every exploited hour of surplus-value they can extract from throughout the globe. Thus, the imperialists may well initially fight small wars with the restive bourgeois forces around the world, but such battles will, before too long, become wars among the world's imperialists.
A preview of this conflict can be observed in what Clinton paternalistically describes the U.S.'s neighborhood -- Latin America and the Caribbean.
Inter-Imperialist Rivalry in Latin America
The core fortress for U.S. imperialism remains the western hemisphere which, through history, proximity, and economic investments remains the "last best hope" for U.S. imperialists in their dotage. Even here, the rivals have begun challenging U.S. hegemony.
The U.S. imperialists have long thought of Latin American and the Caribbean as their permanent empire. As early as 1807(?), James Monroe declared that no other major power would be allowed to work its will in the Americas. The invasion and seizure of Cuba in 1898 consolidated this viewpoint, and launched almost a century of U.S. wars and political intrigue to shape the two continents in such as way as to serve the interests of U.S. imperialism.
The U.S. has frequently confronted popular uprisings against its domination in the hemisphere, but only rarely have other imperialists made significant moves into the area in the 20th century. But this is changing as the uneven development of capitalism/imperialism leaves the U.S. a declining, if still dominant superpower while Germany, Japan, and even some relative newcomers like China and S. Korea get into the imperialist act.
The bloody effects of U.S. suppression of revolutionary risings against U.S. imperialism and its agents in Latin America and the Caribbean is legendary, from the invasion and occupation of many countries by the Marines, to the CIA and Navy support for the coup against Allende in Chile. The defeat of a U.S. invasion of Cuba, then backed by the Soviet Union, stands as the sole, long-term victory of such anti-U.S. movements. Even Cuba, however, now is rushing back into the U.S. fold with its promotion of tourism and its desperate efforts to convince the U.S. to lift its decades-long economic blockade.
But there are new players in the hemisphere. Japan and Germany have both signaled their intent to play a bigger role here, despite U.S. opposition. Beginning in the early 1980s, the flow of Japanese investment capital into Latin America has taken off from $8 billion (under 1/3 of the U.S's level) to $44 billion in 1991 (well over 1/2 of the U.S.'s level). It is clearly emerging as the number two investor and trading partner of Latin America during this decade. German investment flows into Latin America, while still somewhat low due in part to its preoccupation with securing juicy opportunities to its east, have begun to increase, especially in the major countries of Argentina and Brazil.
Much of Japan's investment is still financial and opportunistic rather than industrial. One third of Japanese Latin American investment is in Panama, where Japanese capitalists take advantage of the Colon Free Trade Zone to slip its goods into Latin American markets and avoid tariffs; it also takes advantage of "liberal" maritime law there by reflagging millions of dollars worth of ships with the Panamanian flag to avoid costly wage, health, safety requirements achieved by their own maritime industry. These initiatives do not create a permanent Japanese industrial presence, but their huge increase in financial services in Panama is a prospective financial headquarters for developing such a presence throughout the hemisphere. Most of the major Japanese commercial banks have major branches in Panama, facilitating Japanese imperialist penetration of the entire hemisphere.
Japan's industrial and infrastructure investments in Latin America are already quite impressive. In Mexico, it increased its number of maquiladora assembly plants from 19 to 70 between 1980 and 1990. In November 1992, Sumitomo Mining and Metals Company announced a $1.5 billion copper and gold mining venture in Chile in partnership with the U.S. Phelps Dodge Corporation. Mitsubishi is building a power generation plant for Chile's state copper company as well, a $150 million project.
The U.S.'s response to these financial and industrial advances has varied from partnership to intimidation. Perhaps the boldest reaction was the invasion of Panama to "arrest" former CIA agent (and Panamanian president) Manuel Noriega. One of U.S. imperialism's goals (as it incidentally slaughtered thousands of Panamanians by bombing residential neighborhoods) was to provide a cautionary tale to the upstart Japanese imperialists. The Haiti invasion and occupation similarly will warn foreign investors that any role they play in the hemisphere will be at the pleasure of the U.S. imperialists. Similarly, the Grenada invasion demonstrated that not even the smallest economy would be allowed to dally with Castro or any other force independent of the U.S. financial oligarchy.
Yet investment flows are powerful currents. Japan is adding to its base in Latin America with substantial flows of foreign aid to Mexico, and financing of basic infrastructural development, such as a road linking the Atlantic to the Pacific in Colombia and another linking Peru to Brazil's western Amazon for logging operations. Its future intentions in Brazil are reflected in its swap of Brazil's $110 billion debt for gold-mining rights in the Amazon. And with the German imperialists beginning to trickle into Latin America, the pressure against the U.S. hegemony in the hemisphere will grow, heightening inter-imperialist tensions even in the "backyard" of the U.S.
Death to Imperialism
The imperialists, of course, do not limit themselves to a particular set of territories. They constantly probe, politically, militarily, and especially economically to see where they can invest their capital for the highest return. They are very sensitive to each other's attempts. There is no "transnational ruling class". Instead, each ruling class bolsters its armed might to defend its own circle, wherever its money has gone. And so there is competition, sometimes peaceful and sometimes violent all over the globe over who will call the shots in a particular part of the world. They even fight hard to penetrate each other's national borders, as Japan has in the U.S. with many automobile assembly plants and over 350 automobile parts manufacturers.
Overlaid on this entire process is the chaos of capitalist development, the laws of motion of capitalist development. And these laws tell us that economic crises perennially break out, and that imperialist expansion is the most likely way that capitalists will seek to alleviate these problems. So the bumping of heads is inevitable, and the life-threatening character of these conflicts overwhelms any trace of human rationality that an imperialist might have. Wars result. Little wars, big wars, threats of wars, punctuated by phony, temporary, peace agreements and treaties, all of which merely represent jockeying for position in the great inter-imperialist rivalry that threatens the life of every worker on the globe.
The imperialist system is a terrible threat to workers of both developed and less developed countries, while it helps only the financial oligarchies in the major industrial countries and their junior partners in the LDCs. Small wars and world wars are the logical and inevitable outcome of the mad race of capital accumulation. Severe exploitation of workers in the LDCs is its norm, exacerbated by the mis-organization of LDC economies in line with the needs of the imperialists.
Modern imperialist expansion is not driven by the ego or personality of a Caesar, but by the impersonal but ineluctable requirements of the capitalist accumulation process. It is a system, not a nation or a person, that renders inevitable the gross exploitation of the international working class and terrible wars to re-divide the world. Thus, only the revolutionary destruction of that system by a multi-national working class can open the way for an international, rational, planned, working-class-run system of communism.
oid costly wage, health, safety requirements achieved by their own maritime industry. These initiatives do n
COMMUNIST REVOLUTION - AND PRODUCTION
FOR NEED, NOT PROFITS
We began this series by looking at the beginnings of capitalism. We end it by looking at the beginnings of communism. Revolutions put one class in power and kick another out. In 1949, led by their Communist Party, Chinese workers and peasants took State power and kicked out the imperialists and their capitalists. But, although revolution tilts the balance of power in favor of the working class, it doesn't end class struggle. After their defeat the capitalists try to grab back power through counter revolution. Since this scenario unfolded in both the Soviet Union and in China we should be prepared to face it as well.
We want the communist forces to win so we must begin now. We must learn from history - especially the history of the Great Proletarian Cultural Revolution in China during the 1960s and 70s. In fact, the precise job facing PLP is to complete the battle the left wing communists began but lost in that revolution. Accounts of the Cultural Revolution are usually confusing and negative. That's because the right wing won. However, a study of Political Economy helps clarify the issues. The battle was over two key aspects we have already studied: commodity production and the law of value. Whether a (capitalist) wage system and production for profit should drive production or whether communistplanning (production for use) and labor activism (working for society's needs) could drive it forward.
The content of the struggle might have been clear enough, but the form it took spread confusion. The main form the struggle took was 'socialism' versus communism! Three political forces took part in the battle - the capitalists, the socialists and the communists.
The dividing line, however, was their attitude to commodity production. On the one side the capitalists 'championed' it while the socialists 'tolerated' it. On the other side the communists wanted to smash it.
In China in the 1960s the capitalist roaders - Liu Shao- chi and Deng Xiaoping - were more or less discredited. They could argue that "the drive to work is stimulated by material incentives" or that "to work for money is only human" but they could rally little or no mass support around their slogans. The communists - apparently led by Chen Po- ta, argued that commodity production should be abolished along with the wage system. They urged a revolutionary attitude to labor. They quoted Lenin, "Communist labor...is labor performed gratis for the benefit of society...not for the purpose of obtaining a right to certain products, not according to previously established and fixed quotas, but voluntary labor, irrespective of quotas." There was no need for commodity production and its market place, where the 'blind laws' of supply and demand would indiscriminately favor one group of workers at the exspense of another. They quoted Engels: "The seizure of the means of production by society eliminates commodity production and with it the domination of the product over the producer. The anarchy within (capitalist) social production is replaced by conciously planned organisation."
Even Mao admitted millions wanted the abolition of the wage system. The very idea of capitalism was under siege. Humankind was on the verge of releasing unheard of forces. Society was about to organise production soley for use. Work was going to be direct - valued exactly for what it was. Relationships between one group of workers and the next would be direct too. The one would rely upon the needs and committment of the other and vice versa. The responsibilty (and with it the power) of the whole society would rest on the the will of the workers. A revolutionary, open and direct world was about to be born. Instead of being belittled and devalued by payments of subsistence (wages), the collective production of the working class was going to be recognised for what it is - the very source of life!
But, unfortunately, the battle proved more complicated than that. While commodity production could not find a 'champion' with mass support, it found a 'defender.' Socialism - led by Mao and the 'gang of four' - came to its rescue. They said direct social production (communism) and commodity production (capitalism) could exist side by side. They said the 'law of value' could operate alongside direct, planned exchange. In fact they said that this mixture of capitalist production and communist production was the definition of socialism. And socialism itself was a 'long historical period' where the gradual fight for communism was a 'step by step' process. The socialists claimed they wanted communism. They wanted direct social production, the transformation of the labor process and a new ('share and share alike') pyschology of labor. But, the socialists argued, society needed capitalism. Besides, they argued, capitalism under socialism wasn't rampant capitalism. It was a tamed capitalism. In the end they argued anything. One minute they said "..because it is commodity production bound up with direct social production, established on the foundation of direct socialist public ownership, it is quite different from commodity production that has existed historically." And the very next minute they said; "As to commodity production itself in socialist society, it is not that much different from that of old (i.e. capitalist) society." *
These arguments are worth studying because they helped weaken the support for the communists. They can be found in detail in a recently translated book - "The Shanghai Textbook." First published in 1975 during the Cultural Revolution it was part of the socialists (Maoists) attack on the revolutionary left. We can expect to meet similar arguments and so we should answer them by sharpening our understanding of capitalism and its wage system.
*These two statements appear almost side by side on pages 108 and 109 of "The Shanghai Textbook."
SOCIALISM AND COMMUNISM
Capital, as we learned in our first lesson, is not just a huge some of money, raw materials or productive equipment. Capital is a social relationship. Capital sits at one pole and masses of poverty stricken (or poverty threatened) wage slaves sit at the other. The capitalist owns the means of production; the wage slave is stripped of it. The point we are getting at is that you can't smash capitalism (capital at one pole) but leave wage slavery (the essential other pole ) unharmed. We can put it another way. When Marx wrote "Capital" he began by analysing the commodity. It was, he argued, the central unit of capitalism. Wealth appears as an accumulation of commodities. Exploitation takes the form of commodity relationships, while workers produce surplus value in the form of commodities. In short the commodity is the essence of capitalism.Now put it all to- gether: capital, wage slavery and commodity production. You have the very definition of capitalism. Yet, the historical task socialism set itself was 'smashing 'capital,' retaining the wage system, retaining commodity production and advancing to communism. Some task, some contradiction!
This isn't to dismiss the achievements of the Bolshevik and Chinese revolutions. Without their advances we wouldn't understand the job we need to do to- day. The Bolshevik and Chinese revolutions showed how workers and then peasants could organise revolution and hold State power. They showed the world how vulnerable the capitalist system actually was. However, the strategy of socialism they adopted has been shown to fail. The job facing PLP is to establish the fact that an international working class can take and hold State power and organise production directly without wage labor, material incentives or profits.
What, then, would be the main economic features of communist revolution? First it would smash commodity production and with it the wage system. Production would only be for use value - for things society needed. Exchange value - or the ability for some to make a profit - would be eliminated. And this , in turn, would directly lead to 3 developments.
(a) Planned production. If the 'blind laws' of the market place are not going to organise distribution and production of goods, then society would have to plan it. Obviously there would be problems. Imbalances would arise and have to be corrected, but the 'crisis' that arise from planned production are comparatively open and straightforward. They are not irrational, like capitalist 'crisis of overproduction. And so - technically at least - they can be faced with confidence.
(b) "Every kind of capitalist production, in so far as it is not only a labor process, but also a process of creating surplus value, has this in common, that it is not the workman that employs the instruments of labor, but the instruments of labor that employ the workman." (Marx, CAPITAL). Under the wage system, capital confronts the worker as a force which dominates and exploits him or her. The pace of work, the responsibility for work, the results or rewards of work - all of these are taken out of the hands of the worker. Wages have to bribe or force us to work. Under communism the opposite is the case. The worker confronts the worker. Production is for use. That means we need or want the product. The human element is returned to its primacy in production.
(c) But workers don't confront work as individuals. We confront it as a collective. In place of wages and the indirect connection of workers in the market place where capitalism organises its production and distribution, communism connects workers directly to each other. Bus drivers would rely directly upon refinery workers for supplying the gasoline their buses needed, on maintainance workers for the upkeep of the roads and so on. In return all workers would rely on bus drivers to get them to and from work. This direct, open connection and interdependence would create a new psychology of work. Mutual respect and share and share alike mentality could develop, given concious struggle. Communist values, , not dog- eat- dog capitalist values, could predominate. "From each according to their abilities to each according to their commitment" would be the banner of this communist society.
As attractive as these ideas are, however, we need to remember we are describing communist revolution, not fairyland. Winning the masses to fight for and then develop communism will be a gigantic political struggle. Each and every failure of the new system will be advertised as a reason to retreat. A modified socialism will be promoted as a realistic alternative. Sabotage, counter revolution and a fierce ideological struggle will mark this period. And, as we have noted in Road to Revoltion 4, the ideological struggle will be primary.
Given this scenario, then, its logical that we prepare now. But the moment we start we seem to run into a contradiction that stops us in our tracks. We want to smash the wage system yet we want higher wages now. The capitalists themselves have a laundry list of schemes that cut wages - part- timing, privatising, farming out, prison labor, welfare labor and so on. Workers are desperate for higher wages. Bringing up the idea of abolishing the wage system seems irrelevant and so we end up saying nothing revolutionary about wages.
We need to be clear on this. When the capitalists cut wages they are not abolishing the wage system. They are using it! We don't work for wages because we want to. We work for wages because we have been stripped of all other means of subsistence. It is the wage system that helps make us - despite our overwhelming numbers - relatively powerless. When the capitalist cuts wages he is cutting the cost of his most problematical raw material - us, the workers. Of course we should resist such cuts, but shouldn't we also set out to destroy the system that makes us so powerless in the first place - the wage system?
And immediately we raise that question, another one confronts us. If we destroy the wage system and with it capitalism, will we, the working class, be able to organise a society that produces solely for need? We are back grappling with the issues raised in the Great Proletarian Cultural Revolution. And Progressive Labor Party's answer is clear: Smash capitalism! Smash wage slavery! Fight for Communism! evolution and hold State power.
POLITICAL ECONOMY OF SEXISM
Working class women are usually forced into the lowest-paying jobs or are paid less than men doing the same work. Women's industrial wages world-wide average only three-quarters of the wages of men. (You might call this "six hours pay for eight hours work.") Most working class women in all countries (married and single) come home from a paid job to hours and hours more of unpaid housework and/or child care. The contradiction that defines sexism in capitalist society is the dual role of women workers in the system of production as homemakers, on one hand, and wage laborers, on the other.
Women's work in the home consists mainly of the reproduction of labor power. This includes bearing and raising the next generation of workers, and feeding and caring for the present generation. In Marx's words, "The labor-power withdrawn from the market by wear and tear and death must be continually replaced by, at the very least, an equal amount of fresh labor power." Elsewhere he said, "This reproduction of labor power forms, in fact, an essential of the reproduction of capital itself." Women's work in the home is an integral part of the capitalist system of production.
Again quoting Marx, "Taking the working class as a whole, a portion of the means of subsistence is consumed by members of the family who either do not yet work or who have ceased to do so." So the value of labor power depends on the nature of the family. When more family members work for wages, the value of labor power is depreciated and the rate of exploitation increases. As commodity production spreads, more items must be bought, instead of produced by domestic labor. So the increased total wages the family receives from women's labor doesn't increase the living standard. It is capital that benefits most from drawing women into the wage labor force, since the result is greater exploitation, not liberation.
Women are expected to shoulder the lioness's share of the labor involved in reproducing the labor force. They are the primary producers of labor power. In working class families, this is not wage labor but production for individual consumption within the home. Here, women workers appear primarily as "women" and their work is portrayed as a "natural" extension of the biological functions of childbearing and lactation. But these same women form a steadily increasing part of the wage labor force and an even larger portion of the "reserve army of the unemployed." Here women workers appear primarily as "workers" engaged, like other workers, in commodity production.
These two aspects of woman's place in capitalism are contradictory and not complementary because under capitalism, commodity production stands in opposition to production for use. Women's oppression within the family is a structural part of the capitalist system. That system's main contradiction, however, is between employer and wage-worker. Therefore, women workers' participation in wage labor is the main aspect of the contradiction defining sexism under capitalism.
WOMEN WORKERS: BETWEEN A ROCK AND A HARD PLACE
How women experience sexism depends largely on their class. Tthe women most eager to work outside of the home have generally been those (1) whose class background gives them a shot at non-proletarian work, such as the private practice of medicine; and (2) who generally hire other women (mainly, in the U.S., black or immigrant women) to do the domestic work of their household, and have to cope with the results of the alienation of these workers.
But the working class woman often prefers to "do" for her own family rather than to work for some boss. A black Kentucky woman described how domestic workers in her neighborhood held "day-off-get-togethers" every Thursday. "That was hard work, but people didn't mind because they wanted to do that and they were working for themselves. ... As a matter of fact, they didn't work as hard for white people as they did for themselves."
Wage labor -- alienating in a psychological as well as in an economic sense -- can easily be seen, even by women themselves, as a distraction from "their" work in the home -- which has to be done in any case. Yet a woman who does not earn wages can become uncomfortably dependent on a man. If he abuses her, or pursues other women, she has little recourse. Either situation is especially acute if the woman has young children.
Women workers as individuals often have little choice as to how they resolve the contradiction of sexism in their own lives. They might be prohibited by their father, husband, or brother, or by law itself, from taking a job. A boss might refuse to hire them, or a union official might deny them membership necessary to work in a closed shop.
On the other hand, economic necessity or even physical brutality might force them into (low)-paying work. For example, a black migrant to Chicago around 1916 reported that in his native Mississippi, if a black woman "was found at home some of the white people would come to ask why she was not in the field and tell her she had to get to the field or else abide by the consequences. After the summer crops were all in, any of the white people could send for any Negro woman to come and do the family washing at 75 cents to $1.00 a day." Until very recently black married women in the U.S. worked outside their own homes in proportionally far greater numbers than white married women. In 1920, for example, about 33% of black wives worked for wages, compared to about 6% of white wives. Since black women were segregated into the least desirable jobs (mostly as domestic workers for white families), this was scarcely a measure of their greater "liberation."
BOSSES USE SEXISM TO CONTROL LABOR MARKET
Imperialists use sexism to make higher profits from women's superexploited labor and to divide the working class. They also use it to draw women into the wage labor force during labor shortages and force them out when economic crises demand reductions in the wage labor force.
During the international crisis of 1907-8, both the numbers of women and the percentage of women among all workers in Mexico dropped in nearly every sector of the economy. In 1910, women comprised only 25% of industrial workers and 40% of service workers, but 58% of the unemployed. Around 1.3 million women workers were driven out of the work force altogether, compared with half a million men. US capitalists used state power to drive women out of the workforce during the depression of the 1930s. The federal Economy Act of 1930 prohibited spouses from both holding federal jobs. Some city governments outlawed the employment of married women whose husbands earned a "living wage." By 1939, 26 states had such laws.
Women constitute a block of labor reservists crucial to the class struggle precisely because of their dual status within the capitalist system of production. When the bosses no longer need their wage labor, women still have their "unproductive" and unpaid (but necessary and time-consuming) work at home. Intensified propaganda that "woman's place is in the home" exploits women's own desires not to drop from exhaustion. Women are conflicted: they need the money they are losing by being laid off, but they are also glad to have more time for the work at home. This minimizes the fight-back that might be expected from mass layoffs and dismissals. This would not work nearly as well for the bosses if men and women shared the work of the home equally.
As men were drafted during World War II, US women were urged to "take the job he left behind." Once the war ended, TV pushed the stereotyped families of "The Donna Reed Show," "Ozzie and Harriet," "Leave It To Beaver," and "Father Knows Best." The "model" family of this bosses' fairytale lived comfortably on the husband's earnings, with the kids in school and the wife venturing from home mainly to go shopping. But the most oppressed women -- including black women in the U.S. and women workers in the coutries ravaged by imperialism -- still had to work both outside and inside the home. By 1980, only 6% of U.S. households matched the "model."
A long-term trend underlay these calculated short-term manipulations of the labor market. As U.S. imperialism gained access to the cheaper labor of workers (children, men, women) in Latin America, Asia, and elsewhere, it had less need of the labor of children or women in the United States itself. In Puerto Rico, for example, fewer than 10% of women worked outside the home in 1899; thirty years later, over 25% of women had outside jobs in addition to their own housework.
Women of the working class in almost every country of the world are generally worse off today than their great-great-grandmothers were a century ago. In the Peruvian highlands, for example, export industries drew male workers into wage-work and away from food production for use. Food production for individual (or community) use, in which women had a measure of control over their own work, was replaced by industrial livestock raising and mechanized agriculture, under the control of an urban-based landowning class dominated by men. Women, too, have now been drawn into seasonal and part-time wage labor. The standard of living of most Indian families has dropped. Well over a third of Peruvian families are now headed by single women, most of whom work in both subsistence agriculture and sporadically for wages, while raising their families alone.
ONLY COMMUNISM CAN END SEXISM
Because sexism is rooted in capitalist production, nothing short of communism can end it. "Notwithstanding all the laws emancipating woman, she continues to be a domestic slave," Lenin wrote shortly after the Russian Revolution, "because petty housework crushes, strangles, stultifies, and degrades her, chains her to the kitchen and nursery. . . . The real emancipation of women," he continued, "real communism, will begin only where and when an all out struggle begins (led by the proletariat wielding the state power) against this petty housekeeping, or rather when its wholesale transformation into a large-scale socialist economy begins."
This began to happen under Soviet rule, and was carried much further in China during the Commune Movement of the late 1950s. As People's Communes began to implement distribution according to need instead of according to work, the most common "free things" were food, maternity care, nurseries, kindergartens, schools, and housing for the elderly. Even more than "equal pay," this worked to equalize the positions of women and men. The complete abolition of the wage system under workers' power -- communism -- will destroy the roots of sexism.
At the same time, we must recognize that sexism divides the strength of the working class by creating barriers between men workers and women workers. It weakens the fighting ability of individual workers by encouraging stereotyped and self-destructive ways of life and thought among both women and men. The struggle for equality within the ranks of our class, including recognition of the significance of "women's work" in the home, must be intensified if we hope to create a communist world.
