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.
Would you like to march to the White House with thousands of other workers, students, and youth, black, Latin, Asian, and white, men and women, foreign and American-born, employed and unemployed, with the message of working class unity and turning back the rising tide of cutbacks and racism? March on May Day with the Progressive Labor Party and the International Committee Against Racism to:
- Fight Layoffs
The bosses' economy is in crisis because of increased competition with other capitalists. Their solution is to make more goods with fewer workers, so they lay-off workers by the tens of thousands. The workers that remain are forced into overtime and speed-up, while millions of others are forced into low wage, part-time jobs. This increased competition leads to layoffs and ultimately to war, as it has already in Haiti, Somalia, and Kuwait.
- Fight growing fascist cutbacks
The politicians of both parties say they can't afford social programs, but they cover-up where most taxes come from and where they really go. Since 1964, the bosses have reduced the tax rate for the super rich from 70% to 36%. Corporate taxes now account for less than 10% of Federal revenue, down from 25% in 1960. The politicians tax the workers, and spend our money on the banks, the army, cops, prisons, and pay raises for themselves.
- Smash "Welfare Reform"
Both the Republicans and Democrats are blaming the victim by claiming that poor people on welfare, especially minority women, are "lazy" and don't deserve benefits. Cutting-off benefits and forcing welfare recipients to work for slave wages will only create more homelessness and poverty. It will also drive down wages for all workers, as the bosses gain another source of cheap labor.
- Smash Proposition 187
Proposition 187 in California is cutting services, like schools and hospitals, from undocumented immigrants, including 40,000 children. Like the welfare cuts, this racist scapegoating is then used to justify cutbacks and layoffs of teachers and public workers. It tries to get American-born and legal immigrants to turn in their working class brothers and sisters, instead of us all uniting to fight cutbacks.
- Smash The Bell Curve
On college campuses all over the country, this book pushes the racist and anti-working class lie that the rich deserve their wealth and power because they are supposedly "more intelligent". The politicians are using these lies to justify their cutbacks. These same kind of lies fooled many Germans into passively supporting Nazi atrocities in the 1930's.
March for Power to the Working Class
The solution of the Progressive Labor Party and the International Committee Against Racism is radically different, because we have no profits, no property, no national interest to protect. We fight to protect the future of our class.
Fight for jobs: Fight for 6 hours work at 8 hours pay
This is the only way to create millions more jobs at the expense of the bosses, not the working class. We don't have to settle for constant layoffs and wage cuts. May Day was born from the struggle to get the 8 hour work day.
Build Internationalism, smash all borders
Borders exist only to divide the world for profit making. Patriotism and nationalism are used to get workers to side with the bosses in their country instead of uniting with the working class throughout the world.
Fight for Communist Revolution
The public disputes between the Democrats and Republicans are meant to divert us from building a working class movement that could liberate us from the profit system. Both parties are pushing the attacks on workers. Elections and working within the system cannot change capitalism. We need to eliminate this system. Workers produce everything of value, not the parasite bosses. We can build a society where the collective wealth is shared and the working class makes the decisions.
March on May Day
For over 100 years, all over the world, workers have marched on May Day for their class demands. Naturally, the bosses in this country have tried to keep us ignorant of this holiday, which started right here in the U.S. They use conditions in the Soviet Union, Eastern Europe, Cuba and China to make us cynical about fighting capitalism and building a true communist system. We don't have to accept this greedy and corrupt system. We can fight back. Reject capitalism's unemployment and misery. March on May 6.
May Day March
Saturday, May 6, 1995
Washington, D.C.
December, 1995 Progressive Labor Party
This pamphlet is based on the experience of leaders and members of the Progressive Labor Party over the last 50 years. It reflects the struggle to learn from but not repeat the mistakes of the old communist movement. It is a modest contribution to the ceaseless development of the science of dialectical materialism.
- You don't know it, but you're in jail!
- PHILOSOPHY AND BOSSES' DICTATORSHIP
- APPEARANCE AND ESSENCE
- PHILOSOPHY: THE STUDY OF SOMETHING REAL
- LAWS AND UNIVERSALITY
- IDEAS COME FROM THE REAL WORLD AND FROM PRACTICAL EXPERIENCE
- MATERIALISM vs. IDEALISM
- THE MORE THINGS CHANGE, THE MORE THEY CHANGE
- LIMITS
- POLITICAL PRACTICE BROADENS THE PARTY'S LIMITS
- NOTHING'S SIMPLE
- SAMENESS AND DIFFERENCE
- SOCIALISM LOST - COMMUNISM FOUND
- BOSSES' IDEAS AND ONE-SIDEDNESS
- BOILING WATER, FRYING THE BOSSES, AND THE UNITY OF OPPOSITES
- RESOLVE CONTRADICTIONS BY SHARPENING THEM
- THE INTERNAL IS PRIMARY
- CONTRADICTION IS EVERYWHERE, BUT FRIENDS AREN'T ENEMIES
- QUANTITY AND QUALITY
- TWO LAWS...WITH MORE TO COME
- THE THIRD LAW: NEGATION
- OUR PARTY IS LENIN'S CHILD
- FREEDOM: A CLASS QUESTION
You don't know it, but you're in jail!
Not a jail with bars, but another kind, in which our minds are imprisoned by capitalism. Capitalist ways of thinking surround us. The schools, the cultural outlets, like TV, the press, books, music, movies, you name it, bombards us with the wrong ideas. All ruling class media push anti-communism, racism, patriotism, male chauvinism (sexism), and a host of other rotten ideas. But as bad as it is, the toothpaste ad culture is not the worst. The worst is not so obvious.
Basically, the system trains us to think very little, superficially, or not at all. Capitalist training leads us to have a shallow view of things, to make one-sided, subjective, narrow judgments, and not to understand the essential nature of developments or processes. Therefore, the best of us make too many mistakes and don't necessarily learn from our mistakes or others'.
The drug culture and, of course, drugs themselves are more weapons in the rulers' arsenal in case we act to break the chains that bind us to capitalism. Even if we recognize the evils of capitalist society, we are often not prepared to fight it on a long-term or life-long basis.
Religion remains one of the rulers' primary weapons for controlling our minds. Taking advantage of people's desire to understand what society and life are all about, religion tells us we can control our own destiny through prayer and ritual. This mystical idea is the kernel of religion. Religion's role is to make sure that we respect the status quo. What is belief in the status quo? The ruling class holds power and should keep it. Basically, the bosses want us to accept our fate and not question it. Surely, they don't want us to do anything about it, like take matters into our own hands. The rulers and their Holy Men want us to console ourselves with the prospect of a better "hereafter."
PHILOSOPHY AND BOSSES' DICTATORSHIP
All ruling class philosophy, whether it be religion or anything else, works to maintain ruling class political power. Most college students who are forced to study philosophy in school think it's bullshit. Many students know that what they are taught in school under the heading of philosophy has little if any relation to the real world. The bosses don't want us to understand the real world.
They don't want us to realize that the wrong class is in power and should be destroyed along with its state apparatus. The last thing the rulers want is for us to understand that workers should hold power through the Dictatorship of the Proletariat. The bosses want us to believe that the misery of capitalist oppression is our own fault, that something is wrong with us and not with their system of profits and exploitation.
The rulers do everything they can to keep things as they are. Consequently, they work overtime to prevent workers from developing an objective outlook and seeing the real world. By "objective," we don't mean neutral. As the old song about striking coal miners, "Which Side Are You On?" says, there are no neutral ideas.
The ruling class opposes changes and resorts to mass terror in order to keep things their way if all their horseshit fails. Fascist terror is the logical consequence of capitalism. In the final analysis, the mailed fist is all the bosses have to offer. But they try to keep us hooked as long as possible on their philosophical drugs.
APPEARANCE AND ESSENCE
Over thousands of years, many people have learned the hard way that things aren't always as they seem. What is the first thing you see when you look at an object, a person, any process? You got it! You see the outer, the surface. Now the outer appearance of a thing is very important. However, if you stop at the outer, you haven't seen the whole. Most often, you haven't grasped the most important truth about a person or an object. So you must go further. Where? You know the answer. To the inner.
What do some people say? "You can't judge a book by its cover." Or occasionally, "I'm going to get to the bottom of this." Have you ever heard someone say: "I'm you going to see what makes that person tick"? Many of us have learned from hard experience that appearance is not total reality.
In the food industry, the packaging often costs more than what's in the package. Packaging is a multi-billion dollar industry. Now, it's nice to see a shiny new or used car. Naturally you want the car to be nice looking. But if you don't evaluate many things, like the springs, the shocks, and of course the engine, you probably won't end up with the car of your dreams.
Yet don't the movies and other cultural forms train us to view the superficial? In the past it wasn't unusual to hear the expression: "Clothes make the man." It's good to be neat and clean, conditions permitting. But the fashion industry has emerged into the relatively big time. Fashion is another step along the road of superficiality. The fact is that clothes don't make the person. What really makes people is not their looks but their ideology and the ways they apply it. So appearances have some importance. But we must learn to go from the outer to the inner. Don't take things on face value.
PHILOSOPHY: THE STUDY OF SOMETHING REAL
If capitalist philosophy is bad, what then is philosophy? We say capitalism trains us not to see the social basis of the real world, not to be objective. So a simple definition of philosophy from our point of view is the study of any process in its depth, its inner nature. This definition at least plucks philosophy out of the clouds and puts it in the real world. The study of any process. Now we are addressing real things. A process, ranging from shoemaking to making revolution, is real. That is what we want to examine. Not the superficial outer, but the inner, the basics.
If philosophy is this kind of study of any process, then what the hell is dialectical materialism? Do you put it on your cereal? You are in PLP. You're at work. You are eating lunch with friends. You have told some of them you believe in dialectical materialism. One of them -- the nasty one -- asks you, "What is dialectics?" Now you may be in trouble.
LAWS AND UNIVERSALITY
Let's see. By studying many processes, you begin to understand that certain things are common to all of them. Ultimately you begin to see that there are LAWS governing all developments. In your limited experiences, you have noticed that when you drop a ball it goes down, not up. We know this is the law of gravity. By studying many processes we can begin to understand that certain laws are UNIVERSAL to all processes. Universal is the magic word to know. It helps explain dialectical materialism. For example, is there any similarity between boiling water and making a revolution? What are the laws in each process? Later on in this booklet we will go into the laws and try to explain them. But before that we will cover a few more things.
IDEAS COME FROM THE REAL WORLD AND FROM PRACTICAL EXPERIENCE
A popular love song in the 1950s was called "I Get Ideas." We all get ideas. The question is how do we actually get them? Sometimes you hear people describe someone as the smartest person alive, a "genius." Usually this idea is followed by the explanation: "He/she was born that way." Occasionally we hear someone describe a person as "cerebral" (brainy). Or people exclaim: "What a head on his/her shoulders!"
You don't just dream up ideas. Obviously, you are not born with them. Genes or genetic traits don't produce ideas. Ideas come from practice, from the world around us. All our ideas come from our own experiences, our friends' and family's experiences, other workers' practice; from those who lived before and their books. A scientist can make a breakthrough, but the breakthrough by an individual effort comes as a result of tons of efforts, good and bad, by others in the field. You may be smart, but you can't do it on your own. So your ideas come not only from what goes on in your head. They mainly come from the real world, which exists independently of your own mind.
MATERIALISM vs. IDEALISM
While theory is important, very important, practice is primary. Theory is dependent on practice. Practice always precedes theory. You may have heard someone say: "You can't suck it out of your thumb." Practical experience takes place. It has to be evaluated. Lessons should be drawn from practice. Based on evaluation, theory then advances until further practice is done and evaluated, and so on.
The ruling class basically practices idealism. We don't mean in the moral sense. Obviously, generosity and selflessness are the last things on the bosses' minds. We mean idealism in the philosophical sense, the belief that the real world is determined primarily by ideas and the mind. Why are the rulers' idealists? To maintain things as they are. Often we are told: "Don't rock the boat." Or "This is the best of all possible worlds." The logic of all this capitalist claptrap is that you can't improve things, so why try? Depending on circumstances, reforms are put forward to make the system better. The bottom line is: don't try to make revolution, because it is futile. The demise of the old international communist system has given the rulers another tool in their idealist philosophy. Now they can say, and they do, that even if communist revolution is possible, it doesn't work anyway.
The ruling class is not materialist. Here again, we're not talking about moral materialism. No one is greedier or more selfish than the big bosses. We mean materialism in the philosophical sense, the belief that the real world exists independently of the mind, and that ideas ultimately depend on and come from reality outside the mind. The ruling class is idealist because it seeks to do the impossible. The rulers want to stop the wheel of history. Holding power is their goal, and they will tell us--and themselves--all sorts of lies to keep it.
THE MORE THINGS CHANGE, THE MORE THEY CHANGE
Despite the cynical rulers' notion that the more things change the more they stay the same, things do change. The bosses want us to believe that fighting for change is useless. But what is the fact? First there was communalism, or primitive communism. Then there was slave society. This gave way to feudalism, which was superseded by capitalism.
Then there was socialism, which was reversed, but which set the stage for communism, if we draw the correct lessons from socialism's failure. Society has made fundamental changes. So, of course, has technology. Things don't change? Let's see you live in a cave or take a covered wagon to California. All changes take place based on the cumulative practice of masses of people. Perhaps you would like things to move faster in a revolutionary direction. Who wouldn't? That is not the point. Often fundamental change takes a long time when viewed from an individual slant. That's why a long range perspective is crucial. We must be able to combine urgency with patience. But from such a perspective, we can see that the Russian Revolution, the most profound development of the twentieth century, occurred only 75 years ago. This is just a wink of history's eye. As they say, practice makes perfect. Previous changes of social systems have taken centuries, in some cases thousands of years. The opportunities for our Party for more vigorous practice and Party growth increase as the boss's system becomes increasingly sick and decadent.
LIMITS
"Well now, that's the limit." Have you ever heard someone say that to a naughty child? Or have you ever heard that idea expressed about someone who has done something beyond the norm? Years ago Bill Klem was the chief umpire of baseball. Klem drew the original line in the sand. When a player argued with Klem about a call and started to get porky, Klem drew a line in the dirt with his foot between himself and the angry player. If the player crossed the line, Klem threw him out. The player had gone beyond the limits.
So what? Lets take another example. If you weigh over 400 pounds, you will probably drop dead or at least get very sick. If you're an adult over six feet weighing 75 pounds, you will suffer the same fate as the heavy person. Too fat, too thin. The human body develops within strict limits. Did you ever hear of someone living to three hundred? Of course not. All human life is circumscribed by limits.
Not too long ago, only maximum speed limits were posted on highways. Over the years those concerned with highway safety realized, based on statistics, gleaned from practice (driving), that overly slow drivers were also dangerous. So too fast and too slow were the limits put on highway driving. What are the political limits within which our Party operates? Take a guess!
Our Party line is based in part on the revolutionary development of millions of workers. We think in terms of building a mass party. Presently, our Party has under a million members. Well, now you know our size. Suppose the next Central Committee meeting calls on every Party district to take to the streets, capture City Hall and thus seize political power. You don't like that one. Why? Because this would be suicidal, because we are too small, and our base is still very limited. An action like this could be characterized as left adventurism, even though in a general way this is one of our strategic goals. Tactics too far to the left of our base's size and quality would lead to our termination. To the end of our Party as a process.
Let's change the scenario. The Party really has millions of members and tens of millions in its base. The CC then calls on its members and base to go to the polls and elect Luis, the editor of Challenge-Desafio, as president. A bad idea. It would also end the process of our development as a revolutionary party. Parliamentary strategy would be too far to the right, beyond the limits, of a revolutionary party. Too left, too right are both dead ends for the Party. But these errors have brought about the demise of many revolutionary groups. Thus we oppose terrorism and we attack right opportunism.
POLITICAL PRACTICE BROADENS THE PARTY'S LIMITS
But do the limits stay the same? The limits of a small party are different from those of a large party. The Party now circulates about 10,000 Challenge-Desafios. This can't be the limit forever. It shouldn't be the limit even now. But let's say for argument's sake that this is the best we can do at present. However, continued Challenge-Desafio sales and Party growth will expand the current limits. Every time we carry out political work, our practice changes the limits of what we can do next, and consequently influences the limits of the entire Party. We have to be ever on the alert, scrutinizing, investigating circumstances internal and external to the Party, keep ourselves rooted in basics, so that we can take advantage of a situation and expand our limits. Sometimes the opportunity can be right under our noses. Often events off the job can be used to widen our work on and off the job in a revolutionary direction.
Usually imperialist war or nationalist war are among the biggest influences that can move our efforts forward. Sometimes we get unexpected opportunities. Take the O.J. Simpson trial. The emergence of the Mark Fuhrman tapes, proving him to be the fascist monster that he is, opened up political possibilities for us. We could show that Fuhrman isn't unusual, that capitalist police departments and cops are by nature racist killers. The rulers realized what had happened and moved fairly quickly to say that Fuhrman isn't the average cop. Even the LAPD police ran full page ads disassociating themselves from the fascist Fuhrman.
Did we move quickly, vigorously, and in unison to draw the lesson for the masses that, among others, the police are a significant force for the rulers? The police help the bosses hold power. While some people realize this, most don't, even if they hate the police. The cops represent an important part of the rulers' armed forces. They police are capitalism's shock troops. They confront the workers on a day to day basis. Anyway, did we expand our limits by taking advantage of the Fuhrman opportunity?
NOTHING'S SIMPLE
By now it may be a little clearer that all processes are complex. The political process is especially complex. Complexity is a universal feature of all developments. When I worked in a machine shop some years ago I operated a Blanchard Grinder. My workmates and I were required to use a micrometer. This measuring device helped us determine sizes invisible to the eye and too small to be measured by a ruler. Every job had a tolerance. The tolerances were always above or below the final size of the object being ground. So every job had its specific limits of "plus" or "minus." We were required to check many times the object we were grinding to see if it remained within the tolerance-limits assigned to the job. Usually, we were given a blueprint of the object with the tolerances noted.
To the naked eye each piece looked the same. But if the objects went beneath or beyond the limits, they would be thrown away. In other words, the process had to be terminated. But, gee, each piece looked exactly the same. The machine was the same. The initial pieces were the same. The grinding stone seemed the same. But things were not the same. Every time the grinding stones engaged the object, the stone wore down a bit. Every grind, in the most minute way, changed the size of the piece being ground. Those of you who have operated a punch press know that every time a die in the press bangs out another piece, it wears the die. If the job lasts long enough, you know that the die will eventually change in size, that the new piece will come out the wrong size.
SAMENESS AND DIFFERENCE
No two processes are exactly 100% the same. So what? What does this mean to you and me? You are in a PLP club. Everyone is somewhat committed to fighting for communist revolution. But we all know from experience that eventually some of the older members or even some of the newer members will drop out. So while all the members seem the same, in reality they are not. Sometimes too many battles will wear out a person. In some cases certain members will weaken in the course of various struggles, while similar experiences will strengthen other members.
In other cases, things don't move fast enough for some members. Occasionally a member will draw the conclusion that the reason for sluggishness in the class struggle is that the workers are bad, the bosses too strong, the Party weak or wrong. In other words there can be a myriad of reasons for a member to drop away.
You can never take anyone for granted. In saying this we want to point out that there is a thin line between reality and cynicism. We should always carefully and thoroughly evaluate the many aspects of any process we are involved in. And we should never draw one-sided conclusions.
SOCIALISM LOST - COMMUNISM FOUND
For example, when our Party published Road to Revolution IV, some members and friends said that the old international communist movement had always been rotten. One essential difference between RRIV and the old movement was that we advocated skipping the socialist stage and going directly to communism. Important? Sure! However, like the old movement, we advocated the Dictatorship of the Proletariat and the need for mass armed struggle. We understood the crucial role of the working class and other key concepts of earlier Marxism-Leninism. While we are different in many important ways from the old movement, ours is not entirely different. We say our Party is primarily like the old movement. We have learned from previous experiences, as well as from our own, that communism should be the sole goal of the revolution.
No matter how you evaluate the relative development of sameness and difference, our Party is not totally changed from the old movement. We have tried to learn from the strengths of earlier communists and to discard their weaknesses. This knowledge comes from a combination of practice and evaluation. We don't want to throw out the baby with the bathwater. Things are usually neither all good nor all bad. Snap judgments typically lead to wrong, often dangerous conclusions.
BOSSES' IDEAS AND ONE-SIDEDNESS
The ruling class trains us, with some success, to be one-sided. One way of dividing and weakening the working class is to make differences among workers appear primary. For example, the bosses push the concept of race. This is one way they compartmentalize us. The racist bosses say: "Black is bad; black workers can never unite with white." "Immigrants (unless they are white) are robbing us blind." Thus, we should hate them all and go along with the rulers' attacks on the immigrants. More importantly, we are supposed to believe that immigrants, rather than the bosses, are our enemies.
And, of course men and women are so different that they have different outlooks, emotions, and values. The bosses use this lie to foster male chauvinism and to exploit women workers even more than men. Then the bosses try to convince women to view their exploitation in a non- class way, to view men, not the ruling class, as their main enemy. To the extent that workers and others go along with the rulers' racism and male chauvinism, capitalism rakes in huge profits. The bosses are laughing all the way to the bank as we are suckered in by their racism, nationalism, and male chauvinism.
Regardless of sex, color, and national origin, all workers are more alike than different. As far as their interests are concerned, all are objectively pitted against the boss. Only communism can fully and permanently end divisions within the working class and smash capitalist oppression!
"The Times They are A-Changing" was a popular song in the days of the movement against the Vietnam war. But the bosses don't want real change that would strengthen the working class. They say: "Don't rock the boat; don't make waves." They always throw these ideas at us so that we don't resist their oppression and make revolution. On the other hand, as we pointed out above, the rulers tell us that the more things change, the more they stay the same. By using this cynical notion, they are just coming at us from another side, but the goal--to prevent us from rocking the boat--is the same. All the rulers' philosophy is based on keeping power. Keeping things as they are means the rulers continue to hold power.
However, we all know, often from bitter experience, that things do change. Under capitalism they go from bad to worse. You think things are bad now? Well, they will get worse, much worse. This trend sums up workers' lives under capitalism.
But the bosses have some smarts. They know that many workers are fed up with capitalism or at least very much disgruntled with their daily lives. So then the capitalists say things will get better if only we allow them to dictate the change. In the last election, Bill Clinton ran as the apostle of change. All the bosses want is to keep power and maintain the status quo. They understand that sometimes they have to pander to our desire to see change for the better. Often they disagree with each other over the best tactics for doing this. Many of us have come to understand that these arguments between bosses' factions have to do only with how to make things better for the bosses and their class.
BOILING WATER, FRYING THE BOSSES, AND THE UNITY OF OPPOSITES
Well, let's go from these heavy ideas into the kitchen. You want to boil water. You put water in a pot and place the pot over a flame. The water boils. What we have here is the unity of opposites. Or the interpenetration of things. Obviously, the water boils after the heat has penetrated it. What's boiling water got to do with the Party and the class struggle? Plenty!
The workers and bosses are locked in class struggle. Objectively, this is a fight to the death, whether we recognize it or not. The workers can win only if they destroy the ruling class, its armed power, its state apparatus, its culture, its philosophy, and so on. How can we talk about unity within a fight to the death? Workers and bosses are not united on a philosophical or political basis. They're two opposing sides of the same battle. They are locked in battle. We talk about unity in this sense, and only in this sense.
The Party understands the objective nature of the class struggle and brings into this struggle the idea that revolution is necessary. The ideas of Marxism-Leninism do not fall from the sky, nor do they arise all by themselves from the class struggle. Workers never wake up one morning saying: "We need the dictatorship of the proletariat. We need to build a new state apparatus that serves our interests." Communists bring these ideas to the working class because we know that only the working class has the need and power to do away with capitalism. In this sense we are the fire under the water. The hotter we make it for the bosses, the sooner the revolution will prevail. The class struggle is a contradiction.
There are contradictions in every process. These contradictions make change. The rulers seek to suppress change, the making of waves, revolution. While there is some truth in a personal or coincidental way to the notion that opposites attract, the fact is that opposites, while united in struggle, create change or motion.
RESOLVE CONTRADICTIONS BY SHARPENING THEM
Thus, we can begin to understand that the way to resolve a class or antagonistic contradiction is to intensify it. Increasing the flame makes the water boil faster. Building the Party through increased class struggle leads to revolution.
But things are far more complex than they seem. For example, if we place flame under a rack, the rack will take far longer than the water to change in composition. You can snap a twig with your fingers, but you can't snap the branch of a tree bare-handed. You can break a wooden pencil with your fingers but you may not be able to break a pen that has the same pressure and thickness.
THE INTERNAL IS PRIMARY
While everything has contradictions, everything isn't the same. Some things are stronger than others. In other words, their internal make up is stronger than the external contradictions. Why did the pencil snap under pressure, while similar pressure didn't affect the pen? As Mao Zedong said, "Put a rock and an egg in the sun. In one case, you get a hot rock. In the other, a chick." We conclude that the internal contradiction is primary. At this stage of the struggle the ruling class is stronger than our Party. The bosses are currently dominating the working class. We could decide from this example that because the ruling class is too strong, we should give up. Some people do give up, and many more think about it, falling for the idea that you can't fight City Hall.
If you can't fight City Hall, then what are we doing? We are trying to make ourselves stronger so the bosses cannot defeat us or break us. While the external pressures from the ruling class are important, these attacks are not primary. The Party will go under only if it is too weak to withstand attacks. A recent look at history might convince you. The Soviet Union went under, but not mainly because of U.S. imperialism. The decline of the international communist movement and ultimately the total collapse of Soviet socialism can be traced primarily to ideological weaknesses. Soviet imperialism went down to defeat without ever taking a shot from the other side. For the first time in a history, a state peacefully gave up power and went off the stage of history with its tail between its legs.
Of course, there were pressures from the outside. But the demise of the Soviet Union was due essentially to weaknesses within the old communist movement and, ultimately, to contradictions within Soviet capitalism itself.
The question sometimes arises: can you eventually win when you appear to be in an overwhelmingly adverse position? Well, it was done in Czarist Russia, when a small group of communists and advanced workers overthrew a seemingly invincible enemy. It happened in China under similar circumstances. History has proved it can be done.
As Mao said, you must slight the enemy strategically but take him into full account tactically. You might say that our line reflects the real world because it coincides with the wheel of history. Societies do change, and when they are ripe for change, it cannot be prevented by the people in power. The rulers try to stop the advance of history and society. As we pointed out, this is the height of idealism.
CONTRADICTION IS EVERYWHERE, BUT FRIENDS AREN'T ENEMIES
One word of caution. Contradictions arise not only between opposing classes but also among friends. All contradictions have to be intensified in order to resolve them and move on to a new set of more advanced contradictions. However, different tactics must be used in struggling with friends and fighting an enemy. Different goals must be sought. In struggling with one another we want to reach a higher degree of unity. In fighting the bosses we seek the opposite. Determining these tactics is very difficult and complex. All contradictions are antagonistic. However, every contradiction isn't primary. Abandoning the Dictatorship of the Proletariat as a goal leads to a more intense contradiction than arguing over the choice of a street corner for a Party rally. There are differences and differences. A good deal of judgment must be used to determine the tactics for all internal struggle. In the final analysis, the collective decides what is right or wrong. Most of the time, the collective is correct. The old saying is right: two heads are usually better than one.
Capitalist society trains us to believe that what an individual thinks is always true and that "my" ideas are identical to the real world. In most cases the real world can best be seen by the many, not the one or the few. Individualism, in the capitalist sense, is negative.
Collective practice and time will eventually determine the best way of doing something. We must evaluate as we practice, and try to come up with the right path to follow.
One final note on contradiction. It used to be thought that inanimate objects had no life or contradictions of their own. The development of inorganic chemistry showed otherwise. Book collectors or libraries have learned that books and papers will disintegrate with age. So they preserve them by encasing them in glass. Paper is now being treated chemically to last longer.
Everything changes. Even a desk in an office has an inner life. The desk has its own molecular composition. The molecules constantly collide with one another. The desk is vulnerable to the atmosphere, which will also influence its deterioration. There are contradictions in everything, not just in some things. There are no exceptions. If we understood this law of motion, we would not only be able to do better political work. We would also be able to handle our so-called personal life better.
QUANTITY AND QUALITY
Suddenly it's spring! (Sounds like the title of another popular song.) Yesterday there wasn't a bud on the bush. Today the buds are all over. Some parents worry that their child is older than two and hasn't yet said a word. Instead of worrying, they should count their blessings. Then, miracle of miracles, the speechless two year-old suddenly starts spouting sentences. What about the parents who have been trying for months without much success to toilet train their two year-old? Then one day, the kid suddenly starts jumping on the potty. Have you heard the one about how young someone looked recently, and suddenly that person now looks very old?
Get the idea? Often we see only the big change but can't or don't see the small, cumulative change that appears to arrive full-blown, or least seems unaccountably larger. It's somewhat the same way in the Party and in making revolution. Just prior to the large anti-Vietnam War movement the media and pundits characterized college students as the "silent generation." Within a short time the "silent" ones were marching by the millions against the war. Unless you are very careful, you risk writing off millions of allies and potential members. If you make judgments based on superficial temporary evidence, you can easily miss chances to build the Party. Or, as many have done and continue to do, you may drop out of the Party because you make subjective, wrong estimates of what is possible.
Often we don't appreciate our own efforts or the efforts of the Party. Admittedly, international communist movement's demise has slowed down the class struggle everywhere. That's the real world! But we can't cry over spilt milk. We can only draw lessons from the collapse and apply these lessons, both positive and negative, to our own work. Giving up flies in the face of objective reality. Like all other processes, class struggle ebbs and flows. Persistent efforts around the line of Road to Revolution IV will sooner or later weaken and smash capitalism.
Sometimes you hear people are say: "So I sold another Challenge. So what?" Or you know this is what they're thinking. On the face of it, the thought's not unreasonable, especially if you have been mis-trained by capitalist ideas. But suppose every comrade and many friends sold one more C-D. This quantitative development might become a qualitative (important) step towards reaching the next crucial goal.
For the most part, our present recruitment efforts are too few, given the true potential for party growth. When we do recruit we still tend to do so by the ones and twos. But if we didn't recruit more of the ones and twos, we might not reach the stage at which mass recruitment could become possible. When you recruit someone, that development is probably qualitative for both you and the new member. However, it probably has just quantitative importance for the Party. On the other hand, if you evaluate your recruitment efforts, you will probably note that along the way, certain qualitative developments eventually led the person to join. In other words, there were turning points in your quantitative efforts.
TWO LAWS...WITH MORE TO COME
We have, very briefly, covered the first two laws of Dialectical Materialism. The first is contradiction, the unity of opposites; and the second is quantity into quality. This is only wetting your whistle. Be careful, don't get carried away. Things are not so simple. They become more complex. Every time a contradiction is resolved, further contradictions arise, or the nature of the contradiction changes. Every new member that the Party recruit expands the limits of what the Party can do.
New members for the Party intensify the contradictions between us and the ruling class. We want new members, but they bring their own contradictions into the Party with them. Like ourselves, their commitment must always be examined and strengthened. More members must lead to increased political struggle in the Party. We must combat their political weaknesses, and continue our efforts to overcome political weaknesses amongst the veteran members. We could go on, but as you can see the struggle for communist ideas constantly goes on within and outside the Party. As we said before, struggle with our friends can't be the same as struggle against our enemies.
Every time we do something positive as individual members or as a Party, we produce new quantity leading to new quality. Although the process of building communism isn't like a dog running around in circles chasing its own tail, it is endless, and we have to train ourselves to see it in this way. Fighting for communism can't be a short- term fad; it must be a lifelong pursuit. No important commitment--marriage, children, friends, the Party--can be for the short term. If our efforts are to succeed, they must be for the very long haul. Think of another old saying: "In for a dime, in for a dollar." Remember, in every process there are contradictions. Karl Marx said that the essence of life is struggle. Nothing happens by itself. The unity of opposites sets things in motion. Conflict with the class enemy can bring victorious revolution. A different type of conflict with those near and dear can bring positive development.
As we wrote above, people often say: "Don't throw out the baby with the bath water." People always learn the basic truth of these homilies by experience, sometimes the hard way. Our Party has learned many things from the efforts of past revolutionaries. We also learn from one another and from a great deal of experience in the class struggle. In other words, we learn virtually everything from other workers, dead or alive. The class struggle is our schoolroom and without being too corny, we can say that the working class are our teachers.
Each society learns from previous societies and uses this knowledge to improve upon them. Technology is one of the things carried forward and then advanced from one society to the next. We are already evaluating capitalist society. Was capitalism an advance from feudalism? If nothing else, capitalism created the working class. Capitalism brought together large groups of workers who had to learn to work together in a somewhat disciplined way. Above all, they learned with ups and downs that they had to figure out how to fight together in order to improve their circumstances. As in other processes, development is highly uneven. You can say this with a vengeance about capitalism.
This unevenness stands out like a sore thumb in the U.S., which is supposedly one of the most developed of all capitalist countries. A vast gulf divides the rich from the poor. However, in many parts of the world, capitalism has produced little forward development over the last two centuries. If you think there is poverty in the U.S., Japan, and the industrialized countries of Europe, just look at many places in Asia, Africa, and Latin America. Hundreds of millions of workers lag behind the poor of U.S. and other imperialists. Imperialism, the highest stage of capitalism, has impoverished much of the world.
THE THIRD LAW: NEGATION
Most technology developed under capitalism has some use. But it is still technology for profit. Communists will use technology not to benefit the few, the bosses, but rather to improve the living conditions of all workers.
Communists are not going to throw out the hammer, airplanes, telephones, etc. We will use them so that we can increase production and distribute it in an even way. We may throw out PCs and private automobiles but we will not eliminate computers or mechanized transportation. Capitalism produces to enrich the bosses, not for the needs of workers. Today, there more profits to be made by Windows 95 than by building homes for the workers all over the world who live in hovels or on the street.
Using what is beneficial in previous processes to bring forth and improve new ones and discarding what is outworn or harmful is called, "Negation." The bosses would love it if we said: "The lesson from previous revolutionary movements is that they were rotten; there is nothing good to be learned from them." Hence, the unrelenting barrage of lies about Stalin, 50 years after his death. Present bourgeois estimates of Stalin's crimes now exceed those of Hitler's. I think the current figure for the deaths the bosses attribute to Stalin's leadership is up to 90 million. Before long, it will be said by the rulers that Stalin killed all the Russians, as well as millions of others.
The rulers want to distort and obscure the important advances made under socialism. They don't want anyone else to travel that road. They want to conceal the most profound development of the 20th century, the Russian Revolution.
The rulers want to hide the positive lessons of the Revolution. The rulers don't attack Stalin to help us get it right the next time. Their slogan is: "Never again." Our goal is: go forward to the communist revolution, based on Marxism-Leninism. Thus, you might say, as a result of investigation and practice, that our Party, the PLP, is the negation of international communism. This is when an old process ends and a new one begins or is born out of the old process. We say: "Workers of the world, unite; abolish wage slavery!" We didn't invent this slogan or the ideas behind it. We got them studying Marxism-Leninism.
If you wanted to apply this law to this booklet, you would have to read, study, and apply the ideas presented. After evaluating the pamphlet, you would have the use the evaluation to write a better one. The only direction for communists to go is forward!
The three laws of Dialectics can help us. But they can't give us a blueprint. A brief look at the ruling class's views on death and the "hereafter" may help us understand the negation of the negation. A quote from Shakespeare's Julius Caesar comes to mind: "The evil that men do live after them. The good is often interred with their bones." We might say simply that people's deeds live after them. The rulers' religious men say: "Look, you are here for only 70 or 80 years, if you are lucky! So be a good person." When the preachers speak of being good, they don't just mean be nice to your spouse, children, or neighbors. "Goodness" to them is a class question. Being "good" means: don't rock the boat. "Goodness" means especially being nice to the ruling class. Don't fight them; accept your lot in life. You are only here a short time, but you are dead forever. That is the bosses' frightening specter.
To force us to be good to them, the rulers use their holy roller con artists to give us the dual outlook of heaven and hell. If you are good, you go to heaven and live a beautiful existence forever. If you are bad, that is, if you fight for communism or even less, you go to hell. Hell or purgatory is a horrible place that you occupy for eternity. So what is putting up with class oppression for a brief 70 or 80 years, when the alternative is either eternal joy or eternal horrors?
OUR PARTY IS LENIN'S CHILD
But what you do on earth is the only life you have. It can have a lasting impact on the future, as well as on the present. A striking example is Lenin. Lenin has been dead about 70 years. But his deeds, his vision, live on forever. Our Party could never have come into existence without Lenin.
Children represent one of the more common examples of the link between the present and the future. The future of life on earth isn't mystical. In large measure, it has to do with children. Children are the future. The hereafter endorsed by the rabbis, priests, preachers, etc. leads to maintaining hell on earth. Fighting for the Dictatorship of the Proletariat means fighting for the needs and aspirations of the working class, now and for the future. Communism is the future of all workers. The time to start fighting for it was yesterday!
FREEDOM: A CLASS QUESTION
Like the OJ trial, which seemed to go on forever, this pamphlet is nearing its end. At some point in dialectics' classes, the question often arises: what is freedom? In almost every case, with some variations, the answer is: doing what you want. One young person in a recent class said that freedom to her meant the absence of responsibility to anyone else. Doing what you want. The absence of responsibility. These ideas put you in jail, much like solitary confinement, and keep you there.
These common ideas are the ultimate expression of selfishness. Freedom, in fact, is acting on your class needs. It is the opposite of selfishness and individualism. Knowing what you and your class need are a big step to gaining freedom. Freedom is one thing for the bosses and something altogether different for workers and communists. The bosses know that they need us to keep producing profits and fighting wars for them. To the extent that we swallow their rotten ideas and remain passive in the face of their crimes, the bosses are free to go on ruling over us.
The working class needs communism. Without communism the workers are at the mercy of the greedy rulers and their profit system. So how do you get communism? The answer to that one is by building the Party, in this case, the PLP. The next step is fighting for communist revolution.
Introduction (Citations at the end)
California residents are facing a medical emergency, caused by the greed and anarchy of capitalism in health care. There is a dangerous shortage of emergency and critical care beds because of massive closings of hospitals over the last five years. These hospital closings, job eliminations, and patient care cuts were deliberately done to increase profits. The cuts have produced untold misery for patients and healthcare workers. They have also produced obscene profits for health maintenance organizations (HMOs). But healthcare is no longer profitable. Capitalist healthcare has produced its own downfall. Hospital closings, job eliminations, and patient care cuts are one-time-only savings that cannot be repeated, and other healthcare costs have continued to rise. At the same time, the HMOs are in a dog-eat-dog struggle to steal each other's members, so they have kept their premiums down to undercut each other. The result is that after six years of record-breaking profits, HMOs have had two years of huge losses.
Their immediate solution will be simply to raise premiums, but this is already causing a crisis. HMOs and employers are refusing to pay hospitals higher rates, and hospitals are refusing to cover patients without the higher rates. The health industry's long-term solutions will be more consolidations, a new round of massive hospital closings, a whole new form of managed care with more "teeth" to severely ration patient care, and abandoning the poor and the old.
As international financial crisis spreads and worsens, and as war over oil and world resources approaches, a major battle over healthcare is developing between two groups of capitalists. Some capitalists in private healthcare want to renew their profits by cutting their own costs more. But the more dominant capitalists have a more long- term outlook, and are more concerned with reasserting the US as a world power. These capitalists need overall health care drastically curtailed "in the national interest," and don't trust the marketplace to do this.Hard as this may be to believe, it is quite possible that the rulers of this country will move healthcare away from the for-profit HMOs, and turn it over to "non-profit" health care like Kaiser, which will become centralized and quasi-governmental. This sounds progressive, but it is not. "Removing profit from health care" will mean the rulers have decided real healthcare is too expensive and should be abandoned so they can make greater profits elsewhere or rebuild their factories and military. "Single-payer" will mean the rulers have decided to use the government to enforce healthcare rationing.
Like so many of the "reforms" offered by capitalism in crisis, this restructuring of health care will actually be fascism with a liberal cover. Any attempt to make meaningful improvements in healthcare directly challenges the needs late-20th century capitalism. Capitalist healthcare cannot be "fixed" without challenging capitalism itself and finally smashing it.
PROGRESSIVE LABOR PARTY envisions a communist future where workers control society. We would work to supply each other's needs, not to make profits for an elite. Health care will exist to improve the quality of our lives rather than making money. This would make our work and our lives much richer and more integrated. There would be no reason for the horrors of racism, sexism, poverty, or managed care. Our fights against our downward spiraling wages, working conditions and standard of living can develop into a movement to unite, to act, and take power as a class. That is the purpose of PLP.
Read our newspaper CHALLENGE/DESAFIO about the day-to-day struggles to make this dream a reality.
a dangerous shortage of emergency and critical care beds ...
- In the second week of January, there were times when no critical care beds were available from San Francisco through San Jose. The shortage of pediatric critical care beds was so severe that one Oakland hospital prepared backup plans to transport pediatric patients to Los Angeles. (personal communications)
- At San Francisco General Hospital (SFGH), the Nursery was closed to new patients for the first time in years. Non-emergency surgery was canceled because no beds were available for recovering patients. (Personal communication) Severely ill patients could spend 12-24 hrs in the Emergency Department, waiting for critical care beds. Emergency Room (ER) workers were having to care for both gunshot or heart attack victims and critical care patients waiting for beds. In the first two weeks of December '97, SFGH diverted critical ambulance patients to other hospitals 56% of the time. (SF Examiner, 12-17-97)
- For half of the month of January '98, city officials in San Francisco told Emergency Rooms that, no matter how busy they were, they could not divert new patients to other ERs, because all the other ERs in the city were just as busy. (SF Examiner, 1-27-98) In the last year, diversions were suspended in four of the last 12 months, more than in the last 10 years. (SF Examiner, 12-16-97)
- Kaiser Richmond's stand-by emergency department had thirteen-hour delays in transferring critically ill patients; a patient died there waiting for a critical care bed. At Kaiser Walnut Creek's ER, a child with extreme fatigue and shortness of breath waited more than 5 hrs to be seen. "I saw people lying on the floor in the emergency room; it was disgusting," the child’s mother said. (SF Examiner, 1-27-98) Kaiser was giving its ER patients fliers saying they would wait an average of six hours. (California Nursing Association,CNA, press release, 1-8-98)
- For the first two weeks in January, Washington Hospital in Fremont pitched a tent outside the ER for families of patients waiting for treatment. (SF Examiner, 1-27-98)
- Los Angeles County already is facing a serious undersupply of ER capacity, which will worsen by 2005. According to a May 1997 report by the National Health Foundation. In the mid-1980s there were 102 acute-care hospitals with basic ERs. Now there are 81 basic emergency rooms, and not all of those provide the full range of services for ambulances responding to 911 calls. (Modern Healthcare, 7-20-98)
- The San Francisco Emergency Services administrator said hospital and ER patients are 25-50 percent above projections. (SF Examiner, 1-27-98) Kaiser is seeing 10 percent more ER patients than this time last year. Davies Medical Center is seeing 25 percent more. (SF Examiner,12-16-97) This increase in ER visits is a reflection of fewer people having medical coverage.
- Emergency Room patients are much sicker than before. Thousands of people have lost medical coverage. 30% of San Francisco residents who were eligible for Medi-Cal managed care a year ago are no longer on the rolls, either because of intimidation of legal immigrants or because of losing welfare. (SF Chronicle, 11-18-97) Those who have lost Medi-Cal now have no coverage at all. They must use county hospital ERs when they get so sick they can no longer postpone care. By then, they are seriously ill, and often come into emergency rooms needing critical care.
hospital cuts deliberately done to increase profits ...
This crisis is the result of a policy of increasing profits by closing beds, units, and entire hospitals, and by laying off thousands of hospital workers.
- In Contra Costa County, Kaiser refused to open an ICU in their newly built hospital in Richmond. In February 1997, woman with chest pains drove there, was transferred to Kaiser Oakland, which had no free beds because it was being closed, and died in transit to a third hospital. (Modern Healthcare, 7-20-98) Kaiser also closed its emergency room (ER) and critical care beds in Martinez in late January 1998, and plans to close its standby ER in Richmond in April 1998. (CNA, 1-8-98) All Contra Costa Kaiser patients will be diverted to Kaiser Walnut Creek, whose ER can already barely handle its patients. An 84- year-old man died there on December 30. He had come to the hospital with shortness of breath and was not seen until almost 4 hours later, when he stopped breathing completely. (SF Chronicle, 1-10-98) In late May 1997, 12% of Walnut Creek ER patients left without being seen. (CNA Kaiser Pamphlet) Walnut Creek Kaiser’s 24-bed critical care unit is already operating at capacity. (SF Chronicle, 1-10-98) At Kaiser Martinez a man waited in the emergency room for eight hours, untreated, after suffering a stroke because the hospital’s CT scan was broken. Emergency room waits were so long that at one point, 19% of registered patients left without being seen. (CNA Kaiser Pamphlet) Contra Costa County lost 282 beds between 1994 and 1996, while the population grew. (SF Examiner, 1-27-98) Contra Costa County, in particular, has some of the lowest per-capita rates of health resources of any state. The U.S. average is 3.0 acute-care beds per thousand residents, Contra Costa's is 1.7, the third lowest in the US. Where the U.S. has 3.4 hospital-based registered nurses per thousand, Contra Costa has 2.1. Where the U.S. has 13.7 hospital employees per thousand, Contra Costa has 8.1. (Modern Healthcare, 7-20-98)
- In Alameda County, Kaiser plans to close its 167,000 member Oakland Hospital this year; it saw 61,000 ER patients per year. (SF Chronicle, 1-10-98) Kaiser is also investigating transferring hospitalized patients at Kaiser's Redwood City and Santa Clara hospitals to a rented floor at Stanford University Medical Center. It is investigating similar arrangements for Kaiser Hayward and Kaiser Fremont. (SF Chronicle, 12-15-95, 1-25-96, 2-12-96) Planned closings of Oakland, Richmond, and Sacramento Kaisers, plus the Martinez closing, means 9,880 licensed beds closed. (CNA webpage, "Empty by Design")
- Kaiser Permanente eliminated 1,600 RN positions (14% of the total) in Northern California over the past three years and is pushing to eliminate one in eight physicians. (California Nurses Association, "Medical Strip-mining and the New Nursing Shortage") Between 1991 and 1994, Kaiser reduced its overall hospitalization rate by 25%. Kaiser Hawaii reduced its average length of hospitalization by a full day within a single year. (SF Chronicle, 2-15-96) Kaiser's 1994-1997 Southern California business plan called for a 30% decrease in days of hospitalization per member. (The Link, CNA Kaiser Interfacility Newsletter, 9-95)
- In San Francisco, Kaiser and French merged, and then French closed. Garden-Sullivan, Pacific Presbyterian and SF Children's were merged into CPMC, which closed Garden-Sullivan and three ERs. (SF Examiner, 12-16-97) Letterman also closed. UCSF and Mount Zion merged closing the Mt Zion nursery. UCSF and Stanford have merged, probably leading to closings in pediatrics, OB, and radiology. In addition, UCSF and CPMC merged their OB-GYN, pediatrics and radiology services.
- California hospital closings reflect a pattern of racism and anti-working class bias that the California Nurses Association aptly calls "Medical Redlining," which it defines as "abandoning communities where ill people are concentrated in favor of communities where healthy people predominate, with a goal of increasing overall profits and revenues." (see the CNA Kaiser Pamphlet for really excellent documentation)
In the San Francisco Bay Area, Kaiser's new Richmond hospital, where the ICU was never opened and where the ER was recently closed, is located in a predominantly black industrial city, with four times the poverty rate of Walnut Creek, where Kaiser is keeping its hospital open. The now-closed Martinez facility, where the stroke victim waited eight hours because of a broken CAT machine, is in a working-class part of Contra Costa County with 1.5 times the poverty rate of Walnut Creek. The flagship hospital in Oakland targeted for closing is in the middle of a majority black city with low average family incomes and four times the poverty rate of Walnut Creek.
In Los Angeles County, the May 1997 report on emergency room access by the National Health Foundation divided the county into 10 hospital regions. It found a shortage of emergency capacity in seven regions largely working-class and minority. It found a surplus in middle-class San Fernando, and Glendale areas and the wealthy West Side. (Modern Healthcare, 7-20-98)
- According to SF Emergency Medical Services Quality Control officer Mark Forrett, " We have discovered that staffing for critical care beds is the major determinant factor when hospitals go on critical care diversion." (internet news group letter) SFGH is short 13 critical care RNs and the three Catholic Hospital West hospitals in San Francisco are short 32 ER and critical care RNs by their own admission. (SF Examiner, 12-16-97)
- New York City Hospitals closed 1,000 beds and got rid of 5,000 workers in 1995. (NY Times, 10-26-95) At least a dozen New York City hospitals closed during the 1970's.
- At Los Angeles in May 1966, after the federal "bailout" of the county healthcare system, 6 county clinics had already been privatized, 20 county clinics were being privatized, 2,400 health workers were already laid off, 3,500 positions were being cut, and officials were in the process of closing 1700 County beds, a one-third reduction. (LA Times, Modern Healthcare, 10-2-95)
In November 1997, the LA County Supervisors voted to decrease County-USC Medical Center from 960 beds to 600 beds. County-USC Medical Center is the biggest public hospital in the US, in the midst of the biggest unsured population in the US, 2.8 million and expected to grow by 25,000 per year. Nearly a third of the population under age 65 is uninsured. (LA Times, 10-30-97) The former head of the LA County medical Association said "They are going to be dying in the hallways, dying waiting to get into the operating room." (LA Times, 11-13-97) A family practice doctor predicted that private hospitals in the vicinity of County-USC would close their own ERs, rather than risk begin "stuck" with indigent patients who could not be transferred out because County-USC had no room to accept them. (LA Times, 11-12-97)
- Nationally, hospitals are still operating at 60 percent of capacity, but many of the unused beds are "mothballed," adding little to costs, so most hospitals have been able to generate profits or, in the case of nonprofit hospitals, surpluses. (NY Times, 1-5-98) Kaiser Permanente has about 2,000 licensed but unstaffed beds in California. (CNA webpage, "Empty by Design"
. untold misery for patients and healthcare workers ...
The effects of these hospital closings, job eliminations, and patient care cuts have been catastrophic. They have produced untold misery for patients and healthcare workers.
- The US has the worst infant mortality, highest percentage of low-birthweight babies, shortest male life-span, second-shortest female life-span, and second-lowest visits to doctors per person of all industrialized countries.
- 41 million of us across the country have no health coverage (17%), including 6.5 million of us in California. (SEIU Unity, Feb./March 95) Over 100,000 people die yearly in the US from lack of health insurance, 11 per hour. (Vincent Navarro, 1993, quoted in Don DeMoro, Restructuring Health Care, SEIU 250 publication, J-3) An additional 29 million people with private insurance are underinsured, "risking out-of-pocket expenses in excess of 10 percent of family income in the event of a catastrophic illness." (SF Examiner, 10-25-95) Medicaid covers only about 47 percent of the poverty population. (Nation, 1-9-95)
- Most people without medical insurance have jobs. Nationally, 40% of jobs have no health benefits, including one of three healthcare workers. The General Accounting Office says of the 9.3 million children lacking health insurance during 1993, 89% had at least one parent working full-time. (Don DeMoro, Restructuring Health Care, SEIU 250 publication, p. I-3) 80% of the 2.6 million medically uninsured in Los Angeles either have jobs or are dependents of someone with a job. (L A Times, 10-30-95)
- Institutional racism has made these cuts particularly devastating to minorities. New York City's black and Latino communities have five times the national average number of TB cases, and comprise 80 % of cases in the state. (Nation 2-28-94) Survival rates among blacks for several common cancer are half those of whites, also from lack of early detection. The leading causes of death among black women 15 to 50 years old are breast and cervical cancer, mainly for want of early detection. Only 22 percent of women diagnosed with breast cancer at Harlem Hospital live five years, compared with 76 percent of white women and 64 percent of black women nationwide. Between 1989 and 1993, black women in their fifties had only one ninth the drop in breast cancer death rates as their white counterparts. (SF Chronicle 5-8-96) A recent DPH study in San Francisco showed that in Bayview-Hunters Point, the rates of cervical cancer and breast cancer for women under 50 are twice that of San Francisco as a whole, due to lack of gynecological care and pap smears. (SF Examiner 8-18-95, SF Chronicle 9-22-95) Black infant mortality is twice as high as white infant mortality, largely due to premature birth and low birth weight, which are largely preventable by pre-natal care. Low-birth weight infants are known to have forty times the risk of dying in the first month of life. (NY Times, 1995) Blacks have proportionately fewer heart bypasses even though heart disease is the main killer of black Americans.
- Figures of Latinos are similar. Over one-third of Mexican-Americans under age 65 lack health insurance. Latinos represent half of California's approximately 6.4 million uninsured. Stillbirths among California Latinos increased by 45 percent between 1987 and 1989 while infant mortality rate improved in the state as a whole. The average waiting period to obtain a prenatal appointment in a Los Angeles County clinic is more than 16 weeks, past the critical first trimester . The average life expectancy of Latino farm workers in the U.S. is 49 years, compared with a national average of 75 years for non-Latinos.
- Beyond race, the disparity of health between rich and poor is appalling: A recent report from the National Center for Health Statistics shows people with less money and less education die younger and suffer more from virtually every health problem. For people of the same race and gender, lack of money or education was associated with: a seven-year gap in life expectancy, 2.4-fold more babies dying in their first year, a 5-fold increase in teen-age pregnancy, a 6-fold increase in toxic blood-levels of lead, and a greater probability of dying from heart disease (2.5X), lung cancer (2.4X), diabetes (3.0X), and suicide (3.7X). (LA Times, 7-29-98 and 7-30-98) These statistics are a mirror of a society where the current disparity of wealth is greater than ever recorded starting in the early 1930s, and the richest 1% has more wealth than the poorest 90% combined.
obscene profits for health maintenance organizations ...
The cuts have also produced obscene profits for health maintenance organizations.
- From 1989-1995, healthcare was the most profitable industry in the US. (NY Newsday 4-17 95)
- The profits of the 7 largest providers jumped 700% in one year. (California Nurse, 5-96)
- In 1994, the top 21 HMOs, hospital chains, and long-term care providers made over $3 billion profits (LA Times, 5-4-95) and California's six biggest HMOs made $1.13 billion. (SF Examiner, 3-10-96) Northern California Kaiser alone made over $813 million. (SF Chronicle, 2-12-96)
- Kaiser’s 1993 profits were so high that dozens of pages of memos were exchanged between high-level administrators discussing how to explain these profits to its workers whose jobs were being cut, and to its patients whose hospitals were being closed. One sample: "As much as possible, present 1993 financial results in context so that they don’t conflict with current budget/layoff imperatives." (California Nurses Association)
- The CEOs of the 7 largest HMOs earned an average of $7 million in 1994. (California Nurse, 6-95) The stock holdings of CEOs of the top ten are worth $2.4 billion. (Ralph Nader, speech to SF conference on managed care, 8-95) Columbia/HCA’s CEO owns $249 million in stock. The CEO of PacifiCare, SFGH’s one-time HMO partner, owns $35 million in stock in addition to $1.2 million salary. (California Nurse, 3-96) The value of stock owned by just the top 25 health care executives by itself could provide medical insurance to 14% of the nation’s uninsured. (California Nurse, 3-96) With the merger of US Healthcare and Aetna, among the largest HMOs and insurance companies, US Healthcare’s CEO Leonard Abramson received a cash and stock bonus of $929 million, more than enough to fund LA County’s 1996 healthcare budget deficit (California Nurse, August 1996)
But healthcare is no longer profitable..
With all respect to Ms Moon, it's not "the period" that's wacky. It's the greed and anarchy of capitalism that's wacky. The savings from hospital closings, job eliminations, and patient care cuts, are one-time-only savings that cannot be repeated, meanwhile healthcare costs continue to rise, particularly pharmaceuticals. At the same time, HMOs have been in a dog-eat-dog struggle to capture each other's members, and have had to keep their premiums down to undercut each other. The result is that after six years of record-breaking profits, HMOs have lost large amounts of money for the last two years.
The tendency to self-destruct is built into capitalism; there is no way it can escape. On one hand, capitalists must expand their business and get more customers, because if they do not, their competitors will force them out the market: it's grow or die. On the other hand, in order to grow, capitalists, must sink more and more money into buildings and machinery, and interest on the necessary loans, so their profits-per-dollar-invested decrease. Inevitably, the system crashes. Because workers are enmeshed in capitalism's machinery, our lives become part of the wreckage. What's happened to healthcare is an illustration of this.
- Kaiser Foundation Health Plan, the biggest HMO in the country, lost $270 million in 1997, its first loss in its 50 years. Only last year its profits were $265 million. Its first quarter 1998 losses were $92 million. (SF Chronicle, 5-2-98) Kaiser traces its problems to its own success in attracting new members in California. Kaiser was then unprepared to handle additional members and had to pay to have them treated elsewhere. Standard & Poor's credit-rating service placed Kaiser's debt on "credit watch with negative implications." (LA Times 2-14-98) Kaiser had a 20% growth in membership last year. It has 8.9 million members nationally, including 1/3 of Northern California residents with coverage. It has $12 billion in assets. (SF Chronicle, 2-14-98)
- "HMO (patient) ranks continue to grow, while profits continue to sink. ... Profits at the nation's HMOs fell 60 percent last year, from $1.8 billion in 1995 to $700 million in 1996," according to a recent report by Weiss Ratings Inc. in Palm Beach Gardens. The rating agency looked at 344 managed care companies nationwide, which insure nine out of 10 HMO members. "This was the second year of declining profits after six years of steady profit growth," said Martin Weiss, the agency's chairman. "The reason is health care expenses went up, but HMOs were unable to raise premiums accordingly, due to increasing competition in the managed care industry." As a result, Weiss believes that HMOs now are under pressure to either raise rates, cut services or do both. (South Florida Business Journal, 9-1-97)
- "Many other health care organizations and major insurance companies like Aetna, the Cigna Corporation and the Prudential Insurance Company of America are suffering losses this year or acute erosions of their profits." (NY Times, 10-19-97)
- "Despite a 3.2 percent increase in enrollment during the second quarter, overall profits for Florida's health maintenance organizations plummeted by 72 percent, with more than half of the health plans losing money." (Orlando Business Journal, 9-23-96)
- "Combined first-quarter net income for the 10 health plans with the largest local enrollment was down 21 percent from the first quarter last year. PacifiCare Health Systems saw its stock tumble in June after preliminary reports that second-quarter earnings will come in far below initial projections." (Sacramento Business Journal, 7-21-97) PacifiCare's fourth quarter 1997 profits dropped 53% from a year before. PacifiCare blamed losses in the Utah operations of FHP International, which PacifiCare acquired last year. PacifiCare said it would close the Utah operations down if it could not sell it. (LA Times, 3-5-98)
- "Shares of Oxford, the biggest health maintenance organization in the New York area, fell 62.4 percent in Nasdaq trading. Oxford's announcement was only the latest in a string of disastrous financial reports in the managed health care industry, as Aetna, Cigna and other companies said that higher costs would reduce their profits, too." (NY Times, 10-28-97)
- "Six of the seven largest HMOs in Georgia saw their profits plunge in the first half of 1996. The six companies' net incomes dropped anywhere from 28% to 95%. Three of the seven -- Cigna, United and U.S. Healthcare of Georgia Inc., registered losses in the second quarter, according to the filings." (Atlanta Business Chronicle, 9-2-96)
- Some critics of managed care say the savings from restrictions like limiting access to specialists and tests can be realized only once. "We may have squeezed what we can out of the health care system," said Assemblyman Alexander B. Grannis, a Manhattan Democrat who is chairman of the Insurance Committee. (NY Times, 1-11-98)
- "Many analysts in New York state say the primary reason (for HMO losses) is that managed care companies had kept prices artificially low for years to encourage reluctant New Yorkers to sign up and are only now coming to terms with the actual cost of care." (NY Times, 1-11-98)
- "The competitive landscape has shifted. There are a lot of HMOs competing for a finite amount of business. The upshot has been that HMOs have not been able to raise premiums like they used to." (CNN financial services 1-17-97)
- HMOs are complaining that Kaiser deliberately undercut rivals' prices to grab market share, then found itself unable to make money on the new business. California Nurses Association Executive Director Rose Ann DeMoro claimed that Kaiser has diverted funds from patient care to pay for advertising and marketing, management consultants and mergers and acquisitions "for the sole purpose of dominating the HMO market." (LA Times, 2-14-98)
- Stuart H. Altman, a Brandeis University professor who is chairman of a council studying changes in the health system for the Robert Wood Johnson Foundation said it all: "In the early days, the HMOs extracted fairly substantial profits. Those days are over." (NY Times, 1-5-98)
The HMOs' immediate solution will be simply to raise premiums. ...
- Increases in health premiums are endangering employee's medical coverage. A law firm with 20 employees in Kenilworth, NJ, was recently notified by Aetna U.S. Healthcare that monthly premiums would rise 19 percent for single employees and 28 percent for families with children. Benefits experts expect big employers to see rate increases of 9 percent to 14 percent in most parts of the country. (NY Times, 4-24-98) Kaiser won 12-14% rate increases from the Health Insurance Plan of California, which purchases health insurance for about 8,000 California companies with fewer than 50 workers. (LA Times, 4-25-98) Kaiser, has demanded a 12% 1998 rate hike from CalPERS, the nation's second largest purchaser of employee health benefits, which purchases health benefits for more than 1 million state and local public employees. (CalPERS press statement: April 14, 1998) CalPERS members on Kaiser's Medicare plan would have a 27% increase. (LA Times, 4-15-98) Sources familiar with the negotiations say Kaiser may try to phase in rate increases of up to 30 percent over the next three years. (SF Business Times 3-27-98) CalPERS has warned Kaiser that it may freeze further enrollment unless it cuts its rate request by half. Kaiser has warned CalPERS that it may withdraw from the state health plan entirely if it doesn't get what it wants. (LA Times, 4-15-98) 340,000 CalPERS members belong to Kaiser.
- Sutter Health, with 26 hospitals in Northern California, planned to cancel its $60 million contract with California Blue Cross, which refused the rate increases Sutter demanded. 180,000 Blue Cross enrollees would have been without non-emergency care. Blue Cross covers 4.4 million in California, and its CaliforniaCare has contracts to cover Medi-Cal recipients in several counties. (SF Chronicle, 5-16-98, Modern Healthcare, 5-18-98) After a three week standoff, Blue Cross relented, agreeing to Sutter's increases. (SF Examiner, 6-6-98)
- In the wake of Blue Cross's capitulation to Sutter, Catholic Healthcare West, with 30 hospitals in California, has cancelled its contract with Blue Cross as of July 7 1998, over clashes on reimbursement rates. No new non-emergency care will be available for Blue Cross members. (SF Bay Guardian, 7-8-98)
But the HMOs' long-term solution will be more consolidations and ...
The long-term solutions will have to be more consolidations, a new round of massive hospital closings, and a whole new form of managed care with more "teeth" to drastically restrict patient care. This will include abandoning Medicaid and Medicare coverage for expensive or unprofitable paitents such as the poor and the elderly. The devastation of health care over the last five years is not enough!
- There will be even more hospital consolidations as bigger HMOs with more cash reserves can hold out and undercut smaller HMOs and then raise rates higher than the smaller HMOs did. "The fierce competition for customers has driven out some contenders, leaving those remaining freer to seek higher rates. For very small programs with disproportionately high numbers of chronically sick members, increases of over 30 percent are expected." (NY Times, 10-19-97) Robert Hoehn of Salomon Brothers said half of the HMOs in the country aren't viable. While many will be acquired, others will disappear. In Dallas, for example, recent mergers, plus one in the works, will eliminate four of the nine biggest health plans, which cover 80 percent of the patients. After a merger in western Pennsylvania, Highmark Blue Cross and Blue Shield provides coverage for more than 60 percent of the population of Pittsburgh and 29 surrounding counties. (NY Times, 6-29-98)
- There will be a faster pace of hospital or bed closings as HMOs that develop monopolies in their areas will now be free to close "excess capacity." "It's clear we have overcapacity," said Thomas H. Crenshaw, senior vice president for strategic planning for Health Midwest, the largest hospital chain in the area. "This continued building is counterintuitive from a community-need perspective." (NY Times, 11-22-97)
- "In general we have probably twice as many physicians as we need," said Kathryn A. Paul, president of the Rocky Mountain Division of Kaiser Permanente, which oversees the big health maintenance group's Kansas City services. The surplus, Ms. Paul said, generates excess demand, with underemployed doctors hustling for patients. (NY Times, 11-22-97) People are dying in Kaiser's Emergency Rooms, and 100,000 people a year die from lack of health insurance, and yet health care capitalists say there are twice as many doctors as we need!
- There will be a tougher form of managed care than in the past, one which will directly restrict patient care as opposed to the "failed" managed care which was a mixture of restricting patient care and holding down premiums.
- Standard and Poor's Financial service said of Kaiser: "More conservative financial practices, strategic and operational restructuring initiatives, and higher premiums are expected to yield improved earnings by 2000. Lasting prosperity, however will depend on the unified efforts of management and their independent Permanente Medical Group partners (the doctors) to align the system's capacity with demand and effectively manage costs." (S&P Creditwire, 6-24-97)
- As HMOs are realizing they cannot make profits off elderly, sick, or poor patients, they are dropping their Medicaid and Medicare plans. "Market woes are so severe that experts wonder if any MediCare HMO can prosper indefinitely" (NY Times, 9-9-98) The July 6th New York Times says: "Citing losses and cuts in government payments, the nation's biggest health maintenance organizations are quitting managed care programs for the poor and elderly ... advocates for patients say they fear the retreat will bean a return to crowded Medicaid mill clinics delivering inferior care." Managed care organizations like Aetna U.S. Healthcare, Pacificare, Oxford Health Plans, Kaiser Permanente and Blue Cross and Blue Shield Associations have shut down some of their Medicaid (Medi-Cal) services in at least 12 states, including New York, New Jersey, Florida, Massachusetts and Connecticut. (Also see NY Times, 9-9-98) The withdrawals have spread to Medicare managed programs for the elderly, primarily in rural communities with few patients and where clinics and doctors are scarce. In May, Anthem Blue Cross and Blue Shield said it was pulling out of Medicare plans in 19 Ohio counties. Last month, Health Net, a large California HMO, said it would end its Medicare service in 10 counties.
Part of this is due to government cutbacks to Medicaid and Medi-Care. The 1997 Balanced Budget Act reduces federal Medi-Care spending by $115 billion over the next five years. (NY Times, 9-9-98) "The economics of serving people on Medicare make it virtually impossible to make money," said Karen Korn, a health care services analyst at Putnam Investments in Boston. "The government has approved rate increases for Medicare managed programs of about 2 percent while medical costs are rising at 4 percent or higher. "There's no way that translates into OK margins," Ms. Korn said. (NY Times, 7-6-8) Meanwhile, Washington is still pushing to force even more Medicaid and Medi-Care recipients into managed care plans. (NY Times, 9-9-98)
Most of the withdrawals from Medicaid care have come in the most populous states with large pockets of urban poverty. The Massachusetts Blue Cross and Blue Shield Association and the Tufts Health Plan dropped out dropped out of the Massachusetts Medicaid program. (NY Times, 7-6-8) Oxford Health Plans has canceled its contract to cover 33,000 Medicaid managed care recipients in Connecticut, raising questions about its commitment to cover 42,220 more in New York City. In early February 1998, U S Healthcare withdrew from the New York City Medicaid managed care program, where it was to cover 24,000 recipients. In August 1998, U S Healthcare announced that it was absorbing a $900 million charge to be able to back out of Medicare plans in 35 counties, an announcement that made Wall Street wonder whether any profits could be made off Medicare patients. (NY Times, 8-7-98) Over the past year, eight organizations, including Aetna U.S. Healthcare and Prudential, have dropped Medicaid programs in New York state. Both states have cut back their Medicaid reimbursement to participating HMOs. (NY Times, 2-26-98) In March, Kaiser Permanente, the biggest HMO, quit Medicaid care in Charlotte, N.C., and last year Humana did so in St. Louis. Pacificare, the nation's third largest HMO and which was supposed to have been SFGH's partner in Medi-Cal managed care, has decided to drop all Medicaid services, closing programs in California, Oregon and Utah. In California, Blue Cross, the designated private HMO for half of the Medi-Cal managed care population in San Francisco and Contra Costa counties, does not want the business any more, since California's Medi-Cal rolls have been greatly reduced. (SF Chronicle, 11-18-97)
In a similar way, economic pressures force HMOs out of Medi-Care markets where old and sick people are concentrated. On the average, managed care companies get $5,700 per year per Medi-Care patient. 90% of these patients are healthy and cost about $1,200 per year. 10% are not healthy and cost about $37,000 per year. This should make it easy to make profits, but the problem is that healthy patients live in non-urban areas where there are fewer hospitals, and therefore less incentive for hospitals to cut rates they charge to the managed care companies. (NY Times, 9-9-98) The only HMOs that have made money from Medi-Care are PacifiCare and Humana, which pay doctors a fixed amount of money per month per patient (physician payment on a capitation basis), thus passing the financial risk onto the individual provider. (NY Times, 9-9-98, LA Times, 8-12-98) Despite this, even Humana is dropping some it its Medi-Care markets. (LA Times, 9-16-98)
Instead, public and county hospitals are taking over Medicaid and Medi-Care patients. This is a recipe for disaster. On one hand, federal and state reimbursement for these patients is dropping, up to 20% since the mid-90s. On the other hand, public and county hospitals are already drained by serving indigent patients, and have no rich patients to shift Medi-Cal/Medicare patients’ costs onto. As the Times says, "Advocates for patients say they fear the retreat will mean a return to crowded 'Medicaid mill' clinics delivering inferior care." (NY Times, 7-6-98)
A major battle over healthcare is developing between two groups of capitalists. ....
In respnse to this crisis in healthcare, an intense struggle between two different modes of managed care has developed.
In one corner are the free-market, for-profit HMOs, typified by the giant hospital chain Columbia/HCA.
In the other corner are the giant "non-profit" HMOs with their own chains of hospitals and doctors, typified by Kaiser-Permanente.
One sign of the struggle between the giant for-profit HMOs and the giant non-profit HMOs is their positions on federal regulation of HMOs. Let's be clear on this: neither the Democrat or the Republican plans challenge the basic premise that the rich and powerful have the right
to restrict our medical care.
All of these plans are restricted to workers with health benefits from their jobs, an estimated 168 million. But 40% of jobs has no health coverage; these workers are excluded. Medicare and Medicaid (Medi-Cal) recipeints are excluded. Indigent people with no coverage at all are excluded. The Senate Republican plan is further limited to workers in companies that self-insure their employees, an extimated 48 million. (SF Examiner, 7-20-98)
In fact, as we saw above, both for-profit and non-profit HMOs are abandoning care of Medicare and Medicaid patients.
As Bill Clinton says, "Our job ... is not to abolish managed care. Our job is to restore managed care to its proper role in American life, which is to give us the most efficient and cost-effective systems possible," (LA Times, 7-16-98)
Nevertheless, the non-profit HMOs and for-profit HMOs still have radically different outlooks about government regulation:
The non-profit HMOs are for government HMO regulation: Approximately 18 Kaiser HMOs and HMOs and Kaiser affiliates (9 million covered) and an equal number of other HMOs that are also non-profit and have their own hospitals and staffs of doctors have formed THE HMO GROUP to lobby and promote their interests. This group is pushing to have HMOs governed by all of the federal regulations proposed by the Clinton and the Democrats, with the important exception of allowing HMOs to be sued. (See below.) (NY Times, 7-14-98)
In fact, as we will see, the non-profits helped draft the regulations.
The for-profit HMOs are vehemently against government regulation: Eight of the largest for-profit HMOs, many offshoots of insurance companies, have united with business lobbiests like the US Chamber of Commerce, the National Federation of independent Business, and the National Association of Manufacturers to form the Health Benefits Coalition. The HMOs are Blue Cross/Blue Shield Assn (18 million), United Healthcare/Humana (10 million), Cigna (6million), Aetna-USHealthcare (5 million), New York Life/NYLHealthCARE, Premier, and Prudential HealthCare. Other members are The American Association of Health Plans (1000 managed care companies, 140 million covered) and Health Insurance Association (commercial health insurers). (HBC webpage) (Coverage figures from Modern Healthcare, 6-1-98) The Health Benefits Coalition is pushing to have no federal regualtion of HMOs at all. (NY Times, 7-14-98, SF Examinier, 7-13-98)
What are these plans for HMO regulation?
As of mid-July 1998, there are three major legislative HMO reform plans: a Democrat Senate/House proposal (Kennedy,Mass/Dingell, Mich), a Republican House proposal, (Gingrich, GA), and Republican Senate proposal. These are the highlights:
Health plan liability in case of death or injury:
DEMOCRATS: Allows plan members to sue under state malpractice laws by removing ERISA shield.
HOUSE REPUBLICANS: Expands penalties for health plans for inferior care, $250,000 cap on medical malpractice awards.
SENATE REPUBLICANS: No provisions
Appeals process for patients denied particular care by an HMO:
DEMOCRATS: Requires an internal appeals process and a government-certified company for external.
HOUSE REPUBLICANS: Requires internal appeals process through HMO-appointed arbitrator, non-binding.
SENATE REPUBLICANS: Requires internal appeals process and external appeals board selected by the health plan, for "medically necessary" procedures over $1000..
Patients' access to specialists:
DEMOCRATS: Allows the chronically ill to consult specialists to get adequate care. Allows women to choose an OB/GYN as primary care provider.
HOUSE REPUBLICANS: Allows children to choose a pediatrician and women to choose an OB/GYN as primary care provider.
SENATE REPUBLICANS: Allows women to choose an OB/GYN as primary care provider and children to see a pediatrician without a referral
Continuity of care if patient or doctor is dropped from health plan:
DEMOCRATS: Requires up to 90 days of coverage after primary care doctor is dropped from plan or coverage is ended.
HOUSE REPUBLICANS: No provisions.
SENATE REPUBLICANS: Similar to Democrats' plan
Coverage of services by Emergency Rooms not part of patient's HMO:
ALL PLANS: Must be covered if a reasonable person would have concluded such care was needed. Doctors right to discuss treatments not covered by HMO ("gag rule")
ALL PLANS: gag rules prohibited
Length of hospital stay following mastectomy
DEMOCRATS: Allows 48-hour hospital stays.
HOUSE REPUBLICANS: No provision.
SENATE REPUBLICANS: No provision.
Medical Savings Account
DEMOCRATS: No provision.
HOUSE REPUBLICANS: Some expansion of medical savings accounts.
SENATE REPUBLICANS: Vast expansion. Allows tax-deductible contributions to medical savings accounts instead of comprehensive insurance.
Disclosure of information to patients and potential patients:
DEMOCRATS: includes drugs covered and patient outcome/satisfaction information
REPUBLICANS: limited to what is covered and appeals process.
(data from LA Times, 7-15-98, 7-16-98, SF Examinier, 7-13-98, SF Examiner, 7-20-98)
Part of this struggle between the for-profits and the non-profits is a simple dogfight between two competing groups of capitalists. But this is not simply a struggle over immediate profits. These two competing groups of capitalists have completely different sources of money and power, and completely different national agendas and needs. Increasingly, they cannot co-exist.
- Columbia/HCA is controlled by a newly-rich group of Texas capitalists. Richard L. Scott started Columbia/HCA in 1987 by buying two El Paso hospitals with Richard Rainwater, a Texas investor with big holdings in Texas natural gas, oil drilling, Marathon and Texaco oil companies, Texas real estate, and Walt Disney. This money has fueled the growth of the Columbia/HCA empire. At its height, Columbia/HCA controlled 340 hospitals, nearly half of the for-profit hospital beds in the country, 200 home health care agencies, and 135 outpatient-surgery offices. It was the nation's 10th largest employer, with 240,000 employees. Columbia acquired in-trouble hospitals at the lowest possible cost, closed or consolidated facilities which duplicated services, and cut staff. At one point, it was acquiring a new hospital every ten days. (texasmonthly.website, Modern Healthcare, 5-15-96)
- Kaiser, on the other hand, was founded as a health plan for workers in Kaiser steel, cement, and shipbuilding industries during WWII. These industries are financially tied to older Rockefeller money and the corporate banking system of the US, particularly Chase-Manhattan.
- The "new-money", "oil patch" Texas capitalists tied to Columbia/HCA get their money from domestic oil production and high-tech industries. They do not have the interest or the money to compete in the world-wide market, particularly in foreign oil. Their interest is in amassing as much money as possible, as quickly as possible, domestically. They do not want to pay taxes to support world-wide armies to dominate other countries. They therefore are associated with isolationism, anti-NAFTA, anti-taxation, anti-government rhetoric, and highly speculative financial dealings for quick profits. They are generally portrayed as "reactionary," and are tied to the militias, the Promise Keepers, and the anti-abortion movement. They are not as rich and as powerful as the "old-money" Rockefeller capitalists, but in the last three decades their position has risen enough that they now challenge the "old-money" Rockefeller interests.
For example, in healthcare, the Health Benefits Coalition (see above), representing the largest for-profit HMOs and insurance company related HMOs, also contains Citizens for a Sound Economy (CSE), which called managed care reform "the road to socialized medicine." (American Federation of State, County, and Municipal Employees, AFSCME, bulletin, 1-23-98)
Citizens for a Sound Economy is associated with Congressman Dick Armey, who promotes Steve Forbes' flat tax, and with Congressman BillyTauzin, who promotes a national sales tax.
CSE received $9.3 million from foundations of the Koch family, the largest family owned business in the US, from domestic oil, gas, coal, and chemicals. The Koch foundations considered CSE "an important weapon in the assault on government interference in business." (Nation, 8-26-96, and the CSE webpage)
- The more dominant "old-money" Rockefeller interests tied to Kaiser get their profits from foreign countries, chiefly oil from the Mid-East. Their interest is in trying to maintain the US's weakening hold on the rest of the world, because capitalists in Germany, France, Russia, and even China are threatening this domination. Therefore the Rockefeller interests are in maintaining a strong US military force, pursuing an aggressive foreign policy to maintain US interests abroad, and building up the World Bank and International Monetary Fund to promote world-wide financial stability. The "old money" also wants to regain the loyalty of a bitterly cynical working class, particularly minorities, so they will fight in foreign wars to regain US domination abroad. They therefore are associated with internationalism, a longer-term national outlook, and are pro-taxation and pro-central authority. They are generally portrayed as "liberals," and support affirmative action, abortion, and unions, if kept sufficiently subservient. This is the group that is leading the US into war in the Mid-east and eventually into world war.
For example, in healthcare, The HMO Group (THMOG), representing non-profit HMOs with their own hospitals and staffs of doctors, has as a goal "to coordinate national health priorities through collaboration between public agencies and private sector HMOs," THMOG has close ties with the Robert Wood Johnson Foundation, the largest US think tank and philanthropy devoted to health care issues. Much of the Johnson Foundation's work has been helping states get "waivers" from the federal government, excusing states from federal requirements of providing medical and welfare assistance to poor people. Even before the Clinton/Gingrich welfare reform program, Clinton's Health and Human Services Department granted waivers to 2/3 of the states in the country. Many of the Medicaid waivers put together by the Johnson Foundation involved public/private partnerships in the sense of forcing Medicaid recipients into private HMOs.
THMOG recently received a 5 year multi-million dollar contract from the federal Centers for Disease Control and Prevention's National Centers for Chronic Disease Prevention and Health Promotion (NCCDPHP) to assess the linkage between private providers of health care services and the CDC and other Public Health Service agencies. According to THMOG;s press release, "The HMO Group shares CDC's vision of fostering bridges between public and private health partners that benefit the entire community."
- In fact, both groups of capitalists are equally workers' enemies. The agenda of the dominant "Rockefeller" capitalists calls for extracting gigantic sums of money to rebuild the US manufacturing base and infrastructure, and re-arm the military for war. This is why the "liberal" Clinton passed "Workfare" (Welfare Reform), forcing welfare recipients to work and replace millions of "regular" workers who will go on workfare themselves, tremendously lowering all worker's wages.
- For more information on the struggle between the the dominant "Rockerfeller" capitalists and the "new-money" domestic oil-based capitalists, see the Progressive Labor Party article "Fascists versus Fascists," in the January, 1998 issue of Communist.
The Rockefeller agenda of extracting billions for rebuilding the manufacturing base and the army means limiting the profits of their domestic rivals, and severely limiting the amount of money that workers get for healthcare. The Rockefeller capitalists cannot afford to spend as much heath care money as the for-profit HMOs use, and they cannot afford to let profits go to their "new money" rivals. The stakes are huge, health spending accounts for one-seventh of gross domestic product. As international financial crisis worsens and as war over oil and world resources approaches, many economists are deciding health care costs must be drastically slashed "in the national interest," and free-market economics cannot be depended on to do this.
- "Some economists have begun to question whether, over the longer term, health maintenance organizations can deliver on their promise of keeping health costs under control. "Oxford joined the long list of HMOs that lost control over costs," said Kenneth S. Abramowitz, an analyst at Sanford C. Bernstein & Co." (NY Times, 10-28-97)
- "As for the HMO's, their job is getting more difficult," said Mr. Altman, consultant for the Robert Wood Johnson Foundation. "They have to push harder on one side, against doctors and hospitals. On the other side, buyers are more demanding; they want higher quality, lower prices, greater access and more choice of doctors and hospitals." (NY Times, 1-5-98)
- "United Healthcare's woes also raise the question of whether managed care works as a model for the future of health care in keeping costs under control. While the company's difficulties are limited to caring for the elderly, it is unclear how successful any managed-care company will be once it covers more people. The backlash from consumers, who are increasingly demanding more from their plans and want more choice of doctors and hospitals, adds to the difficulty of containing costs. 'You can't make huge margins in this business long term,' Feinberg argued." (NY Times, 8-7-98)
The rulers of this country may well move healthcare away from the for-profit HMOs ...
A recent NY Times article (6-1-98) shows how trying to reform healthcare through the proposed Patients' Bills of Rights will strongly favor large HMOs with their own doctors, so-called Group Practice HMOs, like Kaiser. The reform legislation mandates that HMOs must publish extensive and detailed statistics about their quality of care. In theory, the patient can then choose HMOs and doctors with good statistics. But this theory ignores the reality of who controls health care. Only the large HMOs with their own doctors charting on their centralized computer patient records will be able to meet the requirements of the reform legislation. In this way, patients' justifiable demand for accountability will speed up the monopolization of hospitals and insurers, and open up patients to more coercion and worse medical care in the future. In more detail, the article says:
Patients' rights have broad support among health policy experts who say they will make insurance companies accountable for the quality of care they provide. The idea is that if every plan reports clear data on mortality, morbidity and patient satisfaction, consumers can reward the best plans with their business.
The patients' rights bills would demand substantial record-keeping. how many of its youngsters receive vaccinations,... how many diabetics are checked for high blood pressure and how many coronary patients take beta blockers ...How many of the plan's asthmatics return to normal work schedules without repeated visits to hospital emergency rooms?... How many of the plan's diabetics successfully control their blood pressure?
HMOs can handle demands for extensive data collection, typically by steering patients to a small roster of doctors and by using "gatekeepers" to intervene between patients and specialists. They also provide the plan a single place to find any patient's complete medical record. That makes tracking outcomes possible. By comparison, looser forms of managed care, like Preferred Provider Organizations, allow patients to see nearly any doctor, but require them to pay more for those who are not members of the plan. There is no one place to find a patient's complete record so plans must sift through claims submissions to figure out which treatments their patients received.
The bills would tighten the grip of managed care because they impose elaborate record-keeping requirements on the health plans, aimed at making them publicly accountable for how well they prevent, treat and cure illness. What the politicians won't yet admit is that accountability clashes with something else something else patients prize: choice.
This restructuring of health care will actually be fascism with a liberal cover ...
When we talk about turning health care over to quasi-governmental "non-profits" for a much tighter, more centralized rationing of patient care, we are talking abut fascism. Fascism can exist years before world war, or concentration camps. Capitalism inevitably leads to periodic crises of decreased profits. And when this happens capitalism switches from "democratic" mode to fascist mode to regain its profitability at any cost.
"Removing profit from health care" will mean the rulers have decided real healthcare is too expensive and should be abandoned so they can use the money saved to make greater profits elsewhere or rebuild their factories and military. "Single-payer" will mean the rulers have decided to use the government to enforce healthcare rationing.
Fascism involves (among other things) three elements, all of which can be seen in the US and US healthcare:
- Fascism is using force and threat of economic ruination to wring more profits from workers, through huge cuts in wages and services, especially health.
- Fascism is increased monopolization of the economy to capture profits for the dominant capitalists, and the merging of business and government to assure that business and government serve the dominant capitalists. (The merging of government and business is an attempt to rebuild the decaying factory system and infrastructure and prepare for war to regain international power.)
Fascism is using force and threat of economic ruination to wring more profits from workers:
- In the mid-1970s, US rulers realized that their defeat in Vietnam had broken the US stranglehold on the world's economy. They realized there would be serious problems for US capitalists in the coming decades, and that they would have to greatly reduce the living standards of the working class. Business Week (10-12-75) wrote :"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 now must 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" (Setting the stage for using force to impoverish workers and enrich the capitalists.)
- In the same period, a leading hospital management magazine wrote, "Though some corporations make money as (health care) costs increase, the majority (of corporations) lose money because costs for health benefits, which they share with employees and unions, cut into their profits. Given the competition for markets with foreign firms, US corporations can no longer afford to leave health care politics to the usual participants -- professors, bureaucrats, physicians, and hospitals. .... Whether or not a hospital cost control bill is passed, or is passed but found inadequate, the big corporations are here to stay. They will work for federal and state attempts to control costs, preferably keeping the impetus in the private sector, but controlling costs by all means, at all costs. (Hospital Progress, 12-77 p 49-50). (Setting the stage for major cuts in health care, possibly using the government. Also setting the stage for increased monopolization, by suppressing health-care corporations whose interests conflict with the dominant corporate interests of the US.)
- The head of the Robert Wood Johnson Foundation, the most powerful medical think-tank in the US, is Steven Schroeder. In 1890, as a member of the UCSF Health Policy Group, Schroeder organized a Cost Containment Conference, where he said "the main culprit in the high cost of medical care is our current inability to make and enforce decisions about what medical services we need and can afford." (Personal observation) Schroeder popularized the notion that "low-cost, high-utilization technologies such as lab testing create more of a regulatory problem than do the ‘high-fliers’ (high-tech CAT scans etc.)." He deplored the increased use of lab tests in maternity care, and in diagnosis of appendicitis, breast cancer, and heart attack at the Palo Alto Clinic, a primary-care based clinic serving the East Palo Alto ghetto as well as Palo Alto. He also deplored an increase in lab tests among a New Mexico Medicaid population. (Address to Sun Valley Forum). (Setting the stage for enforcing the rationing of healthcare, particularly healthcare of the poor.)
- Another speaker at the same 1980 Cost Containment Conference described a 3-year program at UCSF to discourage residents (doctors-in-training) from ordering mechanized blood tests, blood clotting time tests, stat orders, X-rays, vital signs, weights, fluid Intake-and-Output tracking, and medicines administered four times daily. He advised doctors not to worry about malpractice suits, because residents, as students, were not legally liable. When asked why the program trained residents instead of doctors, he explained that there are two levels of healthcare. There is private health care, used by the wealthy, where decisions are made by doctors, and there is public health care, used by the poor, where decisions are made by the residents. "Therefore, it is the residents who need to be taught cost-containment, not the doctors." (Personal observation) (Again, enforcing the rationing of healthcare, particularly healthcare of the poor. Also justifying inequities in healthcare)
- Medical journals started publishing items like these:
- At Children's Hospital of Oklahoma, secret "quality-of-life" experiments on children born with spina bifida were conducted between 1977 and 1982. Twenty-five parents were advised by doctors not to have their babies treated; 24 of these babies died. 36 parents were advised by doctors to have their babies fully treated; all 36 lived. The decision to advise for or against treatment was based on a formula devised by the doctors, involving the baby’s functionality, the parent’s financial resources and education, and how little public resources would have to be used for treatment and rehabilitation. The US Supreme Court refused to hear a lawsuit filed by the parents of children who were allowed to die. (Progressive, 10-94)
- More recently, in 1995, the Pew Health Professions Commission at UCSF, one of the most influential medical think tanks in the US, issued a report advocating closing 60% of the beds in the nation, half the hospitals, and 20% of the medical schools in the nation. It predicted "surpluses" of 100,000 doctors and 200,000 nurses by the year 2000. (NY Times 11-17-95) The San Francisco-based Pew Commission includes former government officials, medical educators including University of California San Francisco (UCSF), public health professionals and insurance company executives. The commission is headed by Richard Lamm, former governor of Colorado, who became notorious for speeches in 1984 declaring that old people had the DUTY to die and free up scarce national resources. (SF Chronicle, 3-29-84, NY Times, 11-17-95, and SF Examiner, 11-17-95)
- Very recently, many economists are deciding that the marketplace cannot be depended on to adequately ration health care. "The HMO industry has lost a lot of clout," said Uwe Reinhardt, an economist at Princeton University. (NY Times, 10-28-97) "Managed care companies do not manage care," said Kenneth E. Raske, president of the Greater New York Hospital Association, a trade group. "Instead they manage price, the prices they pay to providers. There are really few good examples of any sound managed care in New York." "Medical costs are going up," an HMO representative said. "Utilization is going up. They are not managing care." (NY Times, 1-11-98) (Calling for more severe rationing of care. This passage also sets the stage for increased monopolization, by suppressing health-care corporations whose interests conflict with the dominant corporate interests of the US.) This bring us to the next characteristic of fascism: monopolization.
The federal government has allowed, and even encouraged, monopolization on the part of "non-profits," particularly Kaiser, which are associated with the dominant Rockefeller-based capitalists. It has allowed them to form bigger and bigger conglomerates. At the same time, the government has attacked for-profit HMO conglomerates associated with the "new" capitalists, forcing them to break up.
- So-called "non-profits" especially Kaiser, have been allowed to swallow up each other rapidly. In the third quarter of 1996, 95% of all acquired hospitals were non-profits, and 80% of the buyers were non-profits as well. From late 1996 to September 1997, Kaiser acquired or merged with: (1) Group Health Cooperative of Puget Sound (675,000 members), the largest membership-run non-profit HMO in the US, (2) Health Insurance Plan of Greater New York: (1,100,000 members) originally a state-run health plan for New York State employees, (3) Community Health Plan (350,000 members, and (4) Humana Group Health Plan (118,000 members) (CNA Kaiser Pamphlet, available on the CNA website) In June, 1998, Kaiser announced an alliance with AvMed, Florida's largest non-profit, with 400,000 members. (CNA communication) What is important is not only the size and pace of the acquisitions, but also that they were non-profit, with a tradition of membership service and/or involvement. Kaiser wants a patient base more involved with its HMO, more likely to identify with it, and more willing to accept its cuts.
- On the other hand, Columbia/HCA has come under huge attack from the government, allegedly for Medi-Care fraud. Federal agents seized thousands of documents, have indicted high-ranking officials, and have forced a complete reorganization of Columbia/HCA in which they are losing a third of their hospitals and their entire home care operation. No one doubts that Columbia/HCA committed massive fraud, but Medicare fraud is very widespread, practically built into the system. (NY Times, 12-18-97) What's behind the attack on Columbia/HCA is an attack on new money. (Direct attack of the upstart capitalists by the dominant capitalists, which will lead to more monopolization.)
Kaiser and other "non-profits" have made moves to integrate themselves with government-supplied health care. They have involved themselves in movements to federally regulate healthcare delivery by HMOs, and in a federal initiative to extend healthcare to more children. The money for these "non-profits" comes largely from bonds issued by state health facilities financing authorities, which charge no interest to the HMOs.
- In September, 1997 Kaiser's three non-profit arms (Kaiser itself, Group Health Co-operative of Puget Sound, and Health Insurance Plan of New York) announced an agreement with the American Association of Retired People (AARP) and Families USA (a health reform advocacy agency) on instituting standards in 18 areas of health consumer concern. According to Kaiser's 9-24-97 Press release, "the (joint) group will urge policymakers and President Clinton's Advisory Commission on Consumer Protection and Quality in the Health Care Industry to consider the 18 principles for national standards in their recommendations."
The Presidential Advisory Commission itself was tilted toward non-profit HMOs including representatives from Service Employees International Union (SEIU) and the AFL-CIO, which have entered into a partnership agreement with Kaiser (see below), Henry Ford Health Systems (another non-profit HMO on the Kaiser model with its own hospitals), and Families USA.
- Many of the same Presidential Advisory Commission members are forming a pubic/private coordinating group charged with "ensur[ing] that consumers have a consistent set of standards so they can choose health plans based on quality--not just cost", according to vice-President Gore. (LA Times, 6-18-98) Several of the HMO reform bills being debated require HMOs to divulge detailed information on their programs of patient care. (NY Times, 6-3-98)
- Another Kaiser move toward becoming a government-mandated managed care provider is its initiative to subsidize health coverage for children from low-income families in California. It doesn't begin to solve the problem, paying an average of only 50% of Kaiser's premium for only 50,000 children in California. (An estimated 1.8 million California children lack health insurance. The overwhelming majority are in working families whose employers either have plans the parents can't afford or do not have health coverage at all.)
But if Kaiser's children's healthcare initiative is only a token remedy, it is a significant foot in the door to becoming an official provider of health care. Kaiser is pushing legislation to increase coverage of children by Medi-Cal and simplify enrollment. It plans to work with schools to identify 630,000 children presently eligible for Medi-Cal, but not enrolled. It also plans to work with schools and the California Managed Risk Medical Insurance Board to identify uninsured children. It plans to form a coalition with other health care providers, insurance plans, and employers get them to make financial contributions. (Kaiser press release, 6-23-97 and SF Chronicle 6-24-97) Kaiser plans to have its initiative go nation-wide in 1999.
The Kaiser initiative is part of a network of public-private partnerships to provide children's health insurance coverage. The largest is the Caring Program for Children, which operates in twenty-six states and pools Blue Cross and Blue Shield administrative services and matching funds with private and philanthropic donations. The Colorado Child Health Plan receives funding through corporations, pharmaceutical companies, private donations, and Medicaid teaching funds to the University of Colorado Hospital. (National Governors' Association Fact Sheet, on world wide web) These three-way partnerships between non-profit HMOs, state governments, and corporate donors are the mainstay of many state's plans for extending children's' healthcare.(Movement toward merging business and government.)
- Kaiser's financing is largely governmental. It currently has almost $1.5 billion outstanding debt to various state and municipal agencies, such as health facility finance authorites, community development authorites, state departments of budget and finance, etc. The money from these bond issues is interest-free to Kaiser, and the interest to the bondholders is paid from taxes. (PRNewswire, 6-24-98) This includes a recent $400 million bond issue by the California Health Facilities Financing Authority, their largest ever to a health facility, a week after Kaiser forced a ten percent rate increase for California Public Employes Retirement System (CalPERS) members. (California State Controller's office press release, 6-25-98)
- These public/private partnerships are almost like a flip-flop optical illusion. If you look at the partnerships one way it's privatization, because corporate donors finance children's healthcare, and "non-profit" HMOs co-administer it. But if you look at the partnerships the other way, it's "socialization": because there is a federal initiative for children's healthcare, and state governments are co-administering it. This simultaneous nationalization and turning national programs over to corporations is what the Nazis called national socialism, a term they devised in an attempt to get workers to support it.
- Robert Kuttner, of the Economic Policy Institute (EPI), attacked profit-making ventures in healthcare, and called Kaiser itself and Kaiser affiliates Group Health Cooperative of Puget Sound and HIP of New York, "the most consumer-oriented nonprofit plans," praising them for supporting mandated health consumer rights. Single-payer healthcare is one of EPI's programs. (http://epn.org/kuttner/bk971126.html) The Economic Policy Institute is a Massachusetts think-tank behind the Richard-Gephardt-for-president campaign, and calls for a strategy of forming alliances with unions to regain the loyalty of workers. Gephardt: says "If you don’t temper capitalism, it’s a race to the bottom. Capitalism left alone will defeat itself…" (Boston Globe, 12-5-97). EPI's "anti-capitalist" funders are the Rockefeller Foundation, the C.S. Mott Foundation (General Motors money), and the Russell Sage Foundation (Cabot gas and banking money). Gephardt himself is a strong supporter of the "old money" strategy of getting money from international domination. He backed Clinton’s invasion of Haiti. In 1995, he voted to keep U.S. troops in South Korea and Japan. Last year, he voted for a $245 billion 1997 military budget—$10.6 billion more than Clinton had requested. (Challenge, 1-7-98, at http://www.plp.org) In addition, Gephardt is the leading member of Congress pushing for $18 billion for the International Monetary Fund (IMF) to bail out crashing economies in Asia. (NY Times, 4-5-98) Gephardt's ally Defense Secretary Cohen emphasized that American economic and security goals are interlocking, especially in countries like Thailand and South Korea: "We need to move on the IMF funds as quickly as possible." (NY Times, 3-19-98) (Merging of business and government, and a realization that free-market capitalism cannot be left to its own devices. Also, capitalists posing as anti-capitalists, trying to obliterate class-consciousness of workers.)
Fascism is collaboration of unions and co-optation of opposition groups ...
The third hallmark of fascism, particularly in its early stages, are collaboration between unions and the dominant capitalists, co-optation of opposing groups, and manipulating things to confuse and obliterate class consciousness of workers.
- Kaiser and the AFL-CIO leadership have recently concluded a partnership agreement, which stipulates that AFL-CIO officials will participate in all levels of Kaiser's strategic decision-making, including hospital closings, hospital and clinic downsizing, restructuring the workforce, and policy questions on the quality of patient care. Kaiser agrees to co-operate with AFL-CIO (chiefly SEIU) in areas where its employees are already unionized, and to co-operate with AFL-CIO moves to unionize Kaiser employees in hospitals Kaiser plans to take over. AFL-CIO agrees to market Kaiser as a health plan to all union members nationally. As part of their marketing obligation, the signers accept a pledge not to engage in activities that might damage Kaiser's image or reputation. The agreement contains a "confidentiality" gag clause, requiring the unions to remain silent about information on Kaiser's plans obtained through Partnership activities. Unions will have to conceal adverse data about Kaiser's poor record on patient care and treatment of employees while promoting Kaiser as the union health care plan. (CNA letter to international union presidents) (Collaboration between unions and rulers, Also confusing and obliterating class consciousness of workers by getting them to identify with Kaiser as a "non-profit" so they will sacrifice their jobs and living standards .)
- SEIU has been preparing for this partnership for years. Years ago, SEIU International wrote in its pamphlet Keeping Public Hospitals Competitive:
"In order to maintain a patient base, public hospitals will be forced to compete with private hospitals. ... Implication: Many public hospitals will need to change to survive/prosper in the new marketplace. These changes will involve cost cutting often in the staffing area ..."
- At a time when San Francisco General Hospital was faced big cuts, SEIU brought the leadership of their Local 285 to San Francisco, to explain how Local 285 accepted the idea of the merger and the privatization of Boston City Hospital and supposedly made it work for them. The Boston local did a monumental job of mobilizing the people of Boston to vote for a Public Health Commission to direct the merged hospitals and insure that they fulfill their public health mission. Labor was guaranteed a seat on the seven-seat Commission. However the final contract that emerged called for cutting 1,200 workers (31% of the staff), and closing half the beds, and even this plan was dependent on attracting new business from community health centers and private insurers. (Boston Globe 6-30-96 and 4-21-96)
- To appreciate just how close SEIU's leadership is allied to old money and its global oil companies, consider a recent article on Nigeria from the SF Bay Guardian (7-8-98).
Nigeria's economy is based on oil; it is one of the richest deposits in the world, producing $12 billion/year, 40% of which goes to the US. Five companies rule the roost: Shell (Dutch), AGIP (Italian), Elf-Aquitaine (French), and Mobil and Chevron (old-money US, aligned with Citibank and Bank of America.) The country has been ruled by a succession of military dictatorships for 28 years, which gets half the oil profits in the guise of the state-run Nigerian National Petroleum Company.
In 1994 Nigeria's two oil workers unions led a strike trying to force the military to recognize an election the year before. The strike paralyzed the oil industry, and the leaders of the unions were arrested. There were worldwide protests, emphasizing the collaboration of the US with the military dictatorship.
At Mobil's May 98 annual meeting, the Oil, Chemical, and Atomic Workers union (OCAW) forced a resolution onto the floor demanding Mobile review its investments in Nigeria. The resolution was quashed by institutional shareholders Franklin Research and Development, New York City Pension Fund, and SEIU.
- We can see the effect of the Kaiser-SEIU partnership agreement already:
Kaiser has already opened a hospital in the Los Angeles suburb of Baldwin Park where the entire theme of the hospital is physician-union co-operation. "Kaiser said the opening will involve an unusual degree of union-management cooperation. Nursing, technical, maintenance and other employees will be closely involved in the planning." (personal communication and LA Times, 2-6-98)
Northern California Kaiser is planning to open its long-vacant Roseville Hospital in Fall '98, with SEIU Local 250 and 535 participation in planning of staffing models, health care delivery and other aspects of hospital operation. (union-corporation collaboration)(from SEIU Local 250 press releases, 3-5-98 and 3-23-98) (Kaiser seems to have changed its mind and decided not to close all its hospitals.)
- The main body of physician opposition to managed care is now taking the position that for-profit HMOs are the enemy, not managed care itself. Describing The Ad-Hoc-Committee to Defend Health Care, composed of some of the leading critics of managed care in the past, Managed Care Magazine (8-29-97) says: "The physicians are not anti-managed care per se, but critical of what they view as undue corporate influence in medical care. Their most specific goal is a moratorium on for-profit takeovers of hospitals, insurance plans and physician practices."
While acknowledging that, in practice, there often is little difference between not-for-profit and for-profit organizations and hospitals, Steffie Woolhandler, M.D., one of the physicians spearheading the group, said, "The problem is profit-driven health care." Woolhandler said non-profits are forced to compete with, and behave like, for-profit companies. (Ad Hoc Committee's state in JAMA, 12-3-97) (#3, co-optation of opposing groups and confusing the class consciousness of workers.)
PROGRESSIVE LABOR PARTY: a communist future where workers control society.
Under capitalism, the 1% that rules society has more wealth than the rest of us put together . They have built an entire apparatus to legitimatize, legalize, and secure this system of theft. This apparatus includes the government, the schools, the media, the universities, and the police and prisons. You can add many more parts yourself. Communists call this apparatus "the state".
These capitalists are not about to hand us control of society on a silver platter. Quite the contrary, the disaster of capitalist healthcare is a reflection of the entire economy. Capitalism is now in a world-wide crisis of inability to sell its goods; its high-flying global economy is rapidly crashing into depression and conflicts of major capitalists over markets, cheap labor, and raw materials, chiefly oil. The fascism we see being imposed on us in health care, the murder and massive jailing of our youth by the "justice" system, the forced labor of welfare recipients and prisoners, all this is being imposed to force more work out of us for less money, to take away our services, and to gear up to fight in world war. We seem very weak.
On the other hand, the rulers’ hospitals, factories, schools, and armies are all staffed by workers like us. We have no interest in killing ourselves for our bosses on the job or in battle. And we have every interest in overthrowing our bosses. We believe that inspired by a vision of a communist future, we can fight all the aspects of fascism in a way to develop our ability to unite, to act together, and to forcibly take power as a class. That is the purpose of Progressive Labor Party.
What would healthcare be like in a communist society? Here is some of what we want:
Healthcare would exist to improve the quality of life, not make profits. This means we, the working class, would make healthcare decisions based on OUR needs. For example:
WE will decide when our patients need to see specialty doctors.
WE will decide our staffing levels.
WE will decide when our patients are ready to go home.
WE will decide how much training was necessary for our different activities.
WE will decide whether it's better to treat a particular condition at home.
But would "WE" always agree with each other on what's best for all of us?
Probably not! Our existence has both collectivity and individuality; we all have our individual strengths and weaknesses to contribute. What's important is that the basis for making decisions would be our collective good, and that a mass communist party would exist as a framework to discuss questions and carry out our decisions.
For example, in the mid-60's, when millions had communist aspirations in China, some providers and patients preferred traditional medicine while others preferred western medicine. People argued over which form should be the medicine of the new society, until they realized there weren't enough practitioners of either type, and they needed to use everyone that was available. The communist party developed a plan to integrate the two disciplines. Traditional and western providers worked together in each clinic and hospital, discussed patients together to make sure all were getting the best care possible, learned from each other, and often devised new treatments based on both methods. (Joshua Horne, Away with All Pests)
There would be equality . No one owning hospitals, food stores, or housing, to enrich themselves.
Mental and manual labor would not be separated as they are now. Each person's work would involve both mental and manual labor. Elitist stratification would not be allowed.
During the mid-60s striving for true communism in China, a local reporter looked for the captain of a Chinese ship docked in Canada. The captain was found setting tables in the dining room. The reporter asked the captain why he was setting tables. The captain said, yes, it is true he had navigational and nautical skills and was the leader while the ship was at sea, but those skills were no longer needed in port so he was just like everyone else.
We would do our work for free, and get our needs free also.
The room was filled with stainless steel and hard tile, but the nurses
had dimmed the lights, and were moving quietly and speaking in soft voices.
A delivery was in progress.
"When you feel a contraction coming, press against my hand."
"That’s good. Now breathe deeply, and let’s get ready for the next one."
"Very good! Each time, you’re opening up a little more."
What quiet intensity!
What incredible focus!
What a privilege to work where life is being born!
No matter how much they try to make us forget it,
WE ARE THE ONES WHO HELP LIFE HAPPEN!
The administrators, with their power suits and spreadsheets and efficiency reports,
are completely foreign. They haven’t a clue. They’re just feeding off us.
My friend works at a different hospital.
She nursed a preemie as small as a Cornish game hen into a thriving baby.
She worked with the whole family.
Later, she called the parents at home to see how the baby was doing.
They read her the letter they’d sent the hospital about her.
It was very touching.
Later, my friend got a letter at work on midnight blue stationery with gold stars:
"Thank you for co-operating with our Customer Relations program."
"Please accept this coupon for a free yogurt in our cafeteria."
How dare these parasites think they can bribe us with yogurt!
Plying us with trinkets for what comes from our best nature!
But isn’t the whole wage system like the yogurt?
No amount of money can equal the work we do,
whether it’s resuscitating a baby,
or stopping the spread of disease by collecting infectious waste.
As far as we’re concerned, we work for each other.
The nurses don’t pay me to fix their machines.
The parents don’t pay the nurses for delivering their babies.
Why can’t we run all of society like this?
Finally, we would like to include a letter from Progressive Labor Party's newspaper, Challenge. It is the grandmother of a baby who was born at the hospital where a reader works.
"She is the lay-midwife in a village near Guadalajara Mexico. She told the Labor and Delivery nurses how she takes women into her house for three days, delivers their babies, feeds them, does their laundry, takes care of the baby, helps the mom with breast-feeding, collects baby clothes from neighbors if the mom has none, and often treats them with medicines she makes from barks and leaves, or if necessary transports them to the hospital, about ninety minutes away. Her small house has two beds; if more than one woman is in labor, she and her husband sleep on the floor. She has been doing this for about twenty years, having learned from giving birth to fourteen children herself, taking a month's formal training, and continued reading.
At first it seemed an amazing co-incidence that we met this woman the same week as Challenge published an article on how humanity worked for free for much of history. But as an earlier article had pointed out, examples of working-class heroism are all around us. We have good reason to trust that our class can create a society where money means nothing, it's all for love.
UNITE WITH WORKERS, NOT RULING CLASS LIBERALS, TO BUILD MILITANT, MASS, COMMUNIST WORKER-STUDENT ALLIANCE NEEDED TO SMASH HARVARD’S BOSSES
Table of Contents:
Harvard: Key Instrument Of U.S. Imperialism
Kennedy School Professors Help Draw Blueprint For Bosses’ Wars
Harvard And "Community Policing" Fascism
Unholy Trinity: The University, The Banks, And Killer Police
Racism: Harvard’s Major Field Of Concentration
Hitler Loved Harvard Eugenicists
"Genes Über Alles" Takes On A Modern Crimson Hue
Herrnstein And Banfield Pave Way For Clinton/Bush Assaults On Workers
William Julius Wilson: How Liberal Ideology Assists The Growth Of Fascism
"Sociobiology" Once Again Puts Harvard At Center Of Racist Stench
Harvard Can’t Be Reformed. Join PLP!
On May 8, 2001, Harvard students ended a long, spirited sit-in protest demanding that the university pay its employees a living wage. Hundreds of workers, students, and faculty supported this action. Progressive Labor Party members played an active role in the campaign. Despite many political weaknesses, the sit-in has exposed an obscene inequity behind Harvard’s genteel facade. Harvard is sitting on an endowment of nearly $20 billion. The university paid Jack Meyer, the fund’s top manager, $45 million in 1998. A typical Harvard janitor, however, takes home barely $309 a week, not enough to feed his family.
Protest against low wages at Harvard should continue and grow. Our Party applauds the student’s desire to ally with workers. Such unity is crucial to our common aspirations for a decent life. However, it is important to recognize that neither Harvard nor the profit system it serves can ever be reformed in a lasting, meaningful way. Unfortunately, the Living Wage Coalition led by AFL-CIO president John Sweeney fosters just that illusion. The paltry raise it calls for will not end Harvard’s exploitation of its workers. In fact, they would remain wage slaves at several times their current salary. Sweeney’s job is to promote the falsehood that capitalists and workers are ultimately on the same side and that no alternative to capitalism exists. That’s why the Ford and Rockefeller foundations donate heavily to the Living Wage Coalition and why the New York Times has printed multiple op-ed pieces in praise of the Harvard protesters.
HARVARD: KEY INSTRUMENT OF U.S. IMPERIALISM
Harvard is far worse than an unfair employer. Funded by the owners of the nation’s biggest corporations, Harvard leads the academic establishment in providing the ideological underpinnings of U.S capitalism’s deadliest crimes. For centuries, research, theorizing and teaching carried on in Harvard’s ivy-clad halls has justified and enabled genocidal U.S. wars of imperialism abroad and racist assaults on workers at home.
In other words, Harvard’s arrogant contempt for the workers it employs is no aberration or mistake. Communists in the Progressive Labor Party make a class analysis of institutions. Harvard serves specific interests. It’s not neutral. It is the instrument of the class that holds state power. It can be nothing else. The interests of billionaire capitalists can never coincide with those of the working class. The Harvard campus workers should get as big a raise as they can. However, no pay hike can change Harvard’s character. The university’s long, murderous history proves the point.
Harvard bears a large measure of guilt for the killing of 3 million Vietnamese workers and 55,000 U.S. troops in the Vietnam War. As a key advisor to Kennedy and Johnson, Harvard Dean McGeorge Bundy insisted on building U.S. forces to over 500,000 and on escalating attacks on North Vietnam. Harvard Professor Samuel Huntington devised the "strategic hamlets" program, under which the U.S. set up concentration camps to imprison Vietnamese workers and peasants. Anyone not in them was considered an enemy, worthy of assassination by death squads like Bob Kerrey’s Navy Seal Unit. When it became clear that U.S. rulers were losing the war, former Harvard professor and Rockefeller protege Henry Kissinger improved the U.S’s bargaining position by orchestrating the infamous Christmas bombing of Hanoi. Napalm, the U.S.’s most barbaric weapon in the war, had been invented by Harvard chemist Louis Feiser who was assisted by Harvard president James Conant, an early apostle of the A-bomb.
The bloody tradition continues. In the past few years, Harvard has transformed its Kennedy School of Government from a refuge for washed-up liberal politicians into a major policy factory. It focuses on retaking the Middle East’s oilfields by force and on helping U.S. imperialism prevent the rise of Russian and Chinese rivals as threats to its world supremacy. Robert Zoellick, a research fellow at the Kennedy School and senior advisor to George W. Bush throughout his campaign, "proposed seizing control of parts of Iraq as a way of undermining President Saddam Hussein" (AP, 5/19/00). General Bernard Trainor uses his status as a Kennedy School fellow to broadcast his disappointment that "we didn’t beat up the Iraqi army enough [in the Gulf War]" (WBUR radio, 2/20/01).
The Rockefeller family and its allies (i.e., the Eastern Establishment) cemented their ties to Harvard in the 1930s. These owners of the Standard Oil companies were then consolidating their position as the dominant bloc of U.S. capital. To ensure that the economy and other key aspects of society would work in their interests, the Standard Oil heirs acquired Chase Manhattan and other big banks and made massive donations to major universities like Harvard. Standard Oil money actually transformed Harvard’s physical appearance in the 1930s, when Standard heir Edward Harkness plunked down $13 million to build the undergraduate residence houses. Harvard became a prime recipient for the philanthropy of the Rockefeller family and its various foundations.
But, however powerful, oil companies, banks, and universities were not enough. The Rockefellers and their allies in the Eastern Establishment had to employ military might against foreign rivals. At this time, their faction gained control of the Council on Foreign Relations (CFR), the single most influential think-tank formulating U.S. foreign policy. Often working jointly with Harvard, the CFR has helped guide U.S. imperialism from World War II to Kosovo. David Rockefeller, a generous Harvard benefactor, long-time Harvard overseer and the CFR’s chairman emeritus, recently headed a CFR delegation to Havana to begin figuring out ways to put U.S. business investment back in now-capitalist Cuba.
If anything, the Rockefeller-Big Oil-CFR forces have only tightened their grip on Harvard, as the old Standard companies have reunited into Exxon Mobil and Chevron Texaco, and Chase has swallowed up its old nemesis J.P Morgan. Incoming Harvard president Larry Summers, when he was Clinton’s Treasury Secretary, praised these mergers as "Darwinian, with the fittest surviving." Of the seven members of the Harvard Corporation today, six, including Summers, belong to the CFR. The seventh, Robert Stone, is married to a Rockefeller. One member, James Houghton, sits on the boards of both Exxon and Chase J.P. Morgan. Another, Hanna Gray, was a Morgan director.
KENNEDY SCHOOL PROFESSORS HELP DRAW BLUEPRINT FOR BOSSES’ WARS
Another commuter from Cambridge to the war-rooms of Washington, Kennedy School professor Richard Falkenrath, has recently joined Bush’s National Security Council. A CFR member, Falkenrath’s research covers all the main threats to U.S. imperialism. He studies nuclear proliferation, Russia’s influence in Europe, Europe’s military readiness and the balance of power in the Persian Gulf. Falkenrath writes extensively about the growing possibility of massive terrorist attacks on U.S. soil. As the reports of the government’s Hart-Rudman Commission reveal, U.S. rulers fear such assaults in the near future but are also counting on them to mobilize the nation, Pearl Harbor-style, for a major war.
Oil looms large on the Pentagon’s radar screen and Harvard’s. The Kennedy School has begun a Caspian Studies Program, which "analyzes the geopolitics of the Caspian Basin border states as well as their strategic importance to the U.S." A consortium of companies led by Exxon Mobil and Chevron "makes the program possible." Harvard’s goal here is clearly to stem Russia’s growing influence in the oil-rich region. The current International Security, a joint MIT-Kennedy School publication, has a lead article focusing on "the assessment of China’s overall future military power compared with that of the United States." China is building a "blue water" navy to challenge the U.S. Navy’s control of increasingly strategic oil routes from the Persian Gulf to the Far East.
HARVARD AND "COMMUNITY POLICING" FASCISM
Through its hand-in-glove support of MassInc, a relatively new but highly influential think-tank, Harvard fosters racist police terror in Greater Boston. Needing tighter control of the urban working class, Boston’s bigger capitalists have employed MassInc to develop a fascistic "community policing" system. In it, churches and other community groups funnel information to the cops on "criminal activity" in their areas. The arrangement has reduced street arrests because it allows cops to haul off "criminals" directly from their homes and workplaces. Most of those jailed are young black and Latin workers suspected of petty, non-violent offenses.
In 1996, MassInc, which lists Harvard as a major sponsor - along with financial powerhouses Fleet, Fidelity, and State Street - issued a report demanding that "we build new jails and fill them." Community policing and merciless sentencing laws, it said, would bring "safer neighborhoods." State and local officials quickly got with the program. By 1999, MassInc was gleefully reporting that prison construction was booming and conviction rates more than doubling.
Harvard’s complicity in this shift towards fascism runs deep. MassInc’s founder and chairman Chris Gabrieli is both an advisor to Harvard’s Board of Overseers and a director of its school of Public Health. MassInc counts no fewer than six Harvard faculty members among its directors and advisors. Some of these, like Business School professors Michael Porter and Rosabeth Kanter, also advise giants of U.S. imperialism such as GM and IBM.
UNHOLY TRINITY: THE UNIVERSITY, THE BANKS, AND KILLER POLICE
Another, Ira Jackson of the Kennedy School, personifies the union of Harvard, the banks, and racist cop terror. While pursuing his master’s at the Kennedy School in the mid-1970s, Jackson served as a top advisor to Boston’s Mayor Kevin White. At the time, racist politicians and thugs used school desegregation as an excuse for a flood of assaults on black workers and their children. Counseled by Jackson, White punished the victims of racist violence, ordering his cops to protect the racists and attack their opponents - especially our Party and its allies in the Committee Against Racism. Harvard made Jackson a dean at the Kennedy School as soon as he left White’s employ. After a decade at Harvard, Jackson worked as an executive of BankBoston for 12 years, directing its notoriously racist community lending. Now Jackson is back at Harvard, and helping to guide MassInc’s war on workers.
Greater Boston is just a laboratory for a much wider design. Harvard plays a leading role both in developing fascistic community policing ideologically and in implementing it in cities across the nation. Harvard has bestowed upon George Kelling, community policing’s chief theoretician (now at Rutgers), the title of research fellow, as well as invaluable assistance in research and publishing. William Bratton, community policing’s best known practitioner, was also rewarded with a Kennedy School fellowship after his reign of terror as New York’s police commissioner. Bratton criminalized poverty. Under him, panhandling or failing to pay a subway fare became grounds for incarceration. Under the pretext of reducing petty crime, the Harvard/Bratton vision of "community policing" has turned growing numbers of working class neighborhoods into occupied territories, in which it’s a felony to be poor and non-white.
RACISM: HARVARD’S MAJOR FIELD OF CONCENTRATION
Harvard’s contempt for campus workers reflects its history of furnishing ammunition to generations of "Master Race" ideologues in the service of big capital. One of the earliest, a "Teutonist" named Prescott Hall, along with a Harvard climatology professor named Robert DeCourcy Ward, co-founded the Immigration Restriction League.
Official Harvard jumped on this racist bandwagon. Vice-presidents of the First International Congress of Eugenics, held in London in 1912, included Charles Eliot, Harvard president - emeritus, and Charles Davenport, a Harvard biologist who became director of the Eugenics Record Office (ERO) in Cold Spring Harbor, NY.
Under Davenport, the ERO practiced murderous social Darwinism. In addition to justifying U.S. government policies that both limited immigration and called for terror against immigrants residing in the United States, Davenport’s ERO found convenient "hereditary" explanations for various diseases of poverty. Pellagra was the deadliest example. Pellagra can be cured with a vitamin-rich diet. Denying evidence, Davenport and the ERO said the disease was caused by genetic factors affecting poor people of "inferior stock." This lie allowed the US government to justify denying food supplement programs to farm workers in areas with high pellagra incidences. Millions of pellagra-related deaths in the United States during the first third of the 20th century can thus be directly charged to Davenport, the ERO and the Harvard laboratories that helped spawn them. The ERO also played an important role in forcing thousands of U.S. workers to undergo thousands of sterilization procedures during the 1920s and 1930s.
HITLER LOVED HARVARD EUGENICISTS
All this was a mere warm-up. Harvard’s racist eugenical theorizing really came into its own with the rise of Adolf Hitler. The connection between U.S. and Nazi eugenics has been well documented. Harvard students, faculty, and workers would be well advised to read Allan Chase’s The Legacy of Malthus and Stefan Kühl’s The Nazi Connection to learn more about it. One example will suffice here. The inventor of the modern phrase "under-man" (meaning genetically inferior races) was no German, but Harvard’s own Lothrop Stoddard, holder of a Harvard history Ph.D. and Law School degree, and author of The Revolt Against Civilization: The Menace of the Under-Man. This racist babble was applauded by President Harding and used in the drive to limit integration. The Ku Klux Klan of the 1920s also picked it up and celebrated it.
So did Hitler and Co. The Führer told Stoddard’s sidekick, Madison Grant (a Yale product), that Grant’s book The Passing of the Great Race, had become his "bible." Stoddard’s ravings were particularly prized by Hans F. K. Günther, Hitler’s chief "raceologist." The Nazis freely acknowledged that Stoddard’s views on forced sterilization had inspired them to write the Nüremberg race laws. Stoddard attended a Nazi Eugenics Court as an honored guest - and proceeded to criticize it for showing excessive mercy in refusing to order the immediate sterilization of a seventeen year-old girl (Chase, p. 351)!
"GENES ÜBER ALLES" TAKES ON A MODERN CRIMSON HUE
For a few years following World War II, revelations of Nazi mass murders cramped the public style of Harvard eugenicists. By 1969, however, they had returned to a place of favor. The winter 1969 Harvard Review of Education published an article by Stanford educational psychologist Arthur Jensen which is entitled "How Much Can We Boost IQ and Scholastic Achievement?"
Jensen explained that IQ was inherited, that black people had fewer "intelligence genes" than whites, and that therefore spending money on compensatory education programs was pointless. This new version of the old Big Lie helped Nixon slash education budgets. It also sugar-coated the viciously racist police terror that big city mayors were unleashing at the time against rebellious black workers.
Jensenism found many enthusiastic advocates at Harvard. One was Daniel Moynihan, a former Harvard professor, who had made a name for himself by explaining that the main problem in black working class neighborhoods was the "matriarchal structure" of black families. Moynihan also "discovered" that poverty was no longer a serious problem in the United States and that the government’s best attitude toward it was one of "benign neglect." Moynihan approvingly stated that the "winds of Jensen were gusting through the capital with gale force." For this racism, he was rewarded by the bosses with a lustrous political career, which culminated in a New York Senate seat.
HERRNSTEIN AND BANFIELD PAVE WAY FOR CLINTON/BUSH ASSAULTS ON WORKERS
Hot on the heels of Jensen and Moynihan came Richard Herrnstein, Harvard Psychology chair, who announced in the Atlantic Monthly (1971) that America was a "meritocracy" in which socioeconomic status varied directly with genetically inherited intelligence. Herrnstein wrote a series of books to develop this drivel. The last was The Bell Curve, co-authored with Harvard’s Charles Murray in 1995, which also argued the racist lie that black people were genetically less intelligent than whites. Another was a collaboration with police-ologist James Q. Wilson which is entitled Crime and Human Nature. Herrnstein’s collected works have not only played an instrumental role in helping various presidencies justify drastic cuts in social services, they have also provided the theoretical underpinning for contemporary policing and prison policies that view crime as a genetic trait. The brutal, racist "Violence Initiative," backed by several presidential administrations and sponsored by the National Institute of Mental Health, owes a large debt to Herrnstein.
No survey of modern Harvard racism would be complete without mentioning the contributions of the late Edward Banfield, Harvard government professor and author of The Unheavenly City. This is pure Social Darwinism. Banfield called for repealing the minimum wage, as well as for reducing the age of compulsory schooling. The reason, according to the learned professor, is: "The lower-class individual…does not care how dirty or dilapidated his housing is…Features that make the slum repellent to others actually please him. He finds it satisfying in several ways."
This racist, anti-worker nonsense got Banfield a slot as advisor to several presidential administrations. Most significantly, Banfield’s policy recommendations paved the way for the Clinton White House’s "welfare reform, known as workfare," a fascistic policy that forces former welfare recipients to work for slave labor wages. New Harvard president Lawrence Summers was a Clinton Treasury Secretary intimately involved in moving Banfield’s welfare theories from theory into practice.
WILLIAM JULIUS WILSON: HOW LIBERAL IDEOLOGY ASSISTS THE GROWTH OF FASCISM
In addition to Herrnstein and Banfield, Harvard sociologist William Julius Wilson provided Clinton with useful ideological justifications for the abolition of welfare. Wilson was an influential advisor to Clinton. As an author of four influential books, including The Declining Significance of Race, and advisor to key politicians, Wilson has made the racist term "underclass" popular, legitimized liberal racism and justified the abolition of welfare, affirmative action and other "racially targeted programs." Wilson described welfare as an example of a racially targeted program that could not command popular support. He urged welfare reform and workfare as a means to rehabilitate the "underclass" by instilling in them a work ethic and other middle class values. Often misinterpreted as a Marxist because of his emphasis on class, not race, Wilson in fact is a black reincarnation of Daniel Patrick Moynihan who prescribes capitalist super-exploitation of low wage workers (i.e., racism) as the cure for ghetto related behavior.
Wilson wrote about the "Living Wage Campaign" in his most recent book, The Bridge Over the Racial Divide: Rising Inequality and Coalition Politics. On pp. 83-85, Wilson described the LWC as "an excellent example of what can happen when local leaders are able to forge coalitions to rally behind an issue that concerns all races, in this case economic justice." Wilson’s argument is that fighting racism is divisive. He claims "race-specific" or "racially targeted" demands or campaigns cannot create a basis for progressive multi-racial coalitions. Demanding a "living wage" for all workers is a good example of a campaign that particularly benefits minority workers yet makes a "universalistic" appeal.
Contrary to Wilson’s lies, the capitalist class needs racism. From racist discrimination in hiring, to racial profiling, to racist police murder, to disproportionate sentencing laws, to attacks on affirmative action, the ruling class continues to push racism. Workers of color receive the most vicious treatment under racism, and the ruling class reaps enormous profits from their super-exploitation (e.g., lower wages on average than white workers). However, racism is the bosses’ most potent and valuable ideological weapon for dividing workers. Because the systematic division of workers and students by race and nationality keeps us easily divided and exploited, all workers and students are hurt by racism. Wilson spreads the lie that racism is not a serious problem and should not be fought. However, all workers and students have an absolute need to fight to eliminate racism.
Wilson helps U.S. imperialism by advocating a multiracial reform coalition under the leadership of Democratic politicians and the sectors of the capitalist class who control the Democratic Party (i.e., the Eastern Establishment). If college students, faculty and workers enlist in the coalition Wilson advocates, they will be helping Democratic politicians and labor union leaders maintain racist wage slavery and build support for fascism and imperialist war.
"SOCIOBIOLOGY" ONCE AGAIN PUTS HARVARD AT CENTER OF RACIST STENCH
This brief, incomplete overview of racist Harvard theorists ends with the most dangerous modern version, Professor Emeritus of Biology E.O. Wilson. Wilson’s Sociobiology hit the bookstores in 1975. In Sociobiology, he revived the social Darwinian view that all human social behavior is genetically determined. Having made a living as an entomologist, Wilson applied his notions about ants to his right wing view of society. All social organization, he opined, had a biological basis. Therefore, one could find a gene for everything from "creativity" to "entrepreneurship" to "territoriality." The media went wild. Wilson became a star. He won a Pulitzer Prize for his vulgarized version of Sociobiology, entitled On Human Nature. The open racists, including the anti-busing thugs who were being allowed to run amok in Boston in 1975 - and who were stopped only by our Party - claimed Wilson as one of their own, as did the Klu Klux Klan. But his most dangerous application was, and remains, the use made of his garbage by the ruling class and its successive governments. Change a word or two, and this is "Master Race" and "Under-Man" all over again. Wilson isn’t sitting on his poisonous laurels. He has updated Sociobiology and given it a new name: "consilience."
The unifying concept of "consilience" is human nature. According to Wilson, human nature "is the_hereditary regularities of mental development that bias cultural evolution in one direction_and thus connect the genes to culture." Therefore, in all human societies we favor our own family, ethnic and religious group, impose male dominance, create hierarchies of status, rank, and wealth and rules for inheritance, promote the territorial expansion and defense of our society, and enter into contractual agreements. Recycling the main ideological assertions of Sociobiology, Wilson claims that racism, religious hatred, sexism, and war are not inevitable features of capitalism, but universal traits of our genetically evolved human nature. The natural sciences, Wilson claims, have discovered these truths, and the social sciences and the humanities must adopt them in order to achieve "consilience."
The rulers have lovingly embraced "consilience." As our Party’s newspaper, CHALLENGE-DESAFIO, reported this past spring, Rockefeller University has widely promoted it. Wilson has dined with the CEO of American Express, the President of Texas Tech and Steven Rockefeller, to plan a national promotional campaign on college campuses. If the bosses have their way, "consilience" will be the curriculum of the future, and once again, Harvard is at the center of the racist stench.
According to this racist mythology, the criminalization of unemployment is justified, because "crime is in the genes," and therefore the U.S. government is right to keep building jails to house the world’s largest prison population. If "territoriality" is in the genes, then US imperialist foreign policy has a biological basis. If social hierarchy is in the genes, then trying to eliminate capitalism’s inequalities is pointless. In this "survival of the fittest" world according to Harvard’s Wilson, it’s even bad to demand that Harvard pay its workers a living wage, because they’re earning the wage their genes deserve. In recent years, thanks to Wilson and others, the capitalists have worked, with some success, to get workers, students, and professionals to believe that the causes for poverty, mental illness, alcoholism, violence - in other words, the worst of the problems caused by the profit system - are genetic.
Racist and fascist theories and statements put forth by Harvard professors lend credibility to U.S. government policies of racist police terror and mass incarceration of mostly black and Latin workers. Blaming youth for the problems of the racist education system, and drugging them as punishment, has become standard policy. In order to get away with the massive attacks that they have launched against workers, students, and professionals, the bosses have needed to win people to believe these ideas. They serve to keep people divided and passive in the face of fascism.
As one of U.S. capitalism’s major universities, Harvard will continue to spew forth racist ideology and policy blueprints. It can never change its character as an instrument for the super-profit of billionaires. The administration’s anti-worker arrogance in the present struggle accurately reflects the university’s essence.
HARVARD CAN’T BE REFORMED. JOIN PLP!
Defeating Harvard requires an understanding of its class role in society. Harvard can’t be reformed, any more than Exxon can stop trying to corner cheap oil supplies. The fight to destroy racist ideas, racist policy, fascism and imperialist war must have the long-range goal of destroying the profit system. Only communist revolution can do this.
Harvard students have taken an important step in attempting to forge unity with workers. However, unity around a reform line and under the leadership of John Sweeney & Co. is a dead-end. Despite minor tactical differences, Sweeney serves the same liberal imperialists who need the Kennedy School, community policing and the racist ravings of Herrnstein, Banfield and the sociobiologists. Like John Sweeney, Ted Kennedy, Robert Reich and John Kerry serve the eastern establishment capitalists who need loyal, pro-U.S. workers and students. They preach support for workers’ rights in order to win students and workers to support U.S. imperialism and its wars such as in Iraq.
U.S. rulers are preparing to militarize society and to launch a series of escalating wars in defense of their increasingly shaky empire. The period ahead will see growing opportunity for struggles like the fight to win higher pay for Harvard campus workers. The litmus test for victory in these struggles is not the immediate reform demand. We are all for the highest wage hike possible for Harvard workers, and we will continue to help fight for it. However, the real test of victory is the growth of the only movement that can eventually end wage slavery and the racism that justifies it.
That movement is the revolutionary communist movement, and its organizational expression is the Progressive Labor Party. We urge Harvard campus workers, the students who support them and pro-working class faculty, to read our newspaper, CHALLENGE-DESAFIO, contact our organization and consider joining PLP and taking the long, hard but necessary road to communist revolution.
The PLP has a long history of leading militant struggle at Harvard. In the 1960s, we played a key role in organizing actions and campaigns against aspects of the university’s support for U.S. imperialism’s war in Vietnam. We led the 1969 University Hall sit-in against Harvard’s racist expansion into Cambridge and support for ROTC, an action which culminated in a campus-wide strike that closed Harvard for the spring term. In the 1970s, our members actively organized against Herrnstein and other Harvard academic racists. We also developed several militant campaigns to unite students and campus workers. Harvard continues to fulfill its mission of aiding U.S. rulers in their drive to maintain world supremacy. Our Party will continue to organize workers and students to fight against Harvard’s racism and service to imperialism.
