• Part 1: How changes in capitalist cycle have impacted workers
• Part 2: How changes in capitalist cycle have impacted workers
• Part 3: Today’s capitalist crisis in light of Marxist theory
• Part 4: Does present crisis compare to Great Depression
• Part 5: Artificial forces of capitalist revival are exhausted
• Part 6: Capitalist impasse and socialist future

Following is the fifth part of an excerpt from the introduction by Fred Goldstein to an upcoming reprint of the groundbreaking work “High Tech, Low Pay,” written by Sam Marcy in 1986 during the early stages of capitalist restructuring. Goldstein is the author of “Low-Wage Capitalism: Colossus with Feet of Clay.” Read parts one through four in the Aug. 13, Aug. 20, Aug. 27 and Sept. 3 issues, the last referring to various schemes like credit bubbles to stimulate the economy.

In the present crisis, none of these measures is available to restart the system in any significant way.

The two wars now underway in Iraq and Afghanistan are draining the coffers of U.S. imperialism. Overall militarization has largely been accomplished. New rounds of military development are technology intensive, such as laser-guided bombs, satellite-guided missiles, Predator drones, high-tech missile ships and fighter planes. Current imperialist wars are limited and heavily dependent on air power. The hundreds of billions of dollars spent annually on militarism are essential to the system, but, at best, military spending can only help to slow down the economic crisis. It cannot restart the capitalist economy and generate prosperity.

The long period of creating a regime of low-wage capitalism, with a working class in debt and living closer and closer to the poverty level, has intensified. As this trend deepens it only aggravates the crisis of overproduction by further reducing the buying power of the masses. Driving down wages any more will only intensify the contradictions of the system.

Further use of credit on a major scale is a vanishing option. Credit has been stretched to its limit as a mechanism for reviving capitalist accumulation. The government’s handout of trillions of dollars in financial bailouts to the banks and other financial institutions has stretched the credit option even beyond the limit.

Capitalism has reached a point where, even if the trillions of dollars that the ruling class is spending in an attempt to mitigate the crisis were to result in a revival, it would be weak and short-lived, leaving many millions unemployed as jobs continue to be lost even as capital accumulation expands. Capitalism is entering a period of permanent and deepening crisis for the masses.

In the present crisis the historic methods of reviving the profitability of capitalism, of restoring capitalist accumulation and prosperity, appear to have run their course, as they did leading up to the Great Depression. This is what has the ruling class running scared.

Marx’s proposition about the inevitability of social revolution, already quoted, bears repeating here. It was phrased in the most general way:

“At a certain stage of their development, the material productive forces of society come in conflict with existing relations of production or—what is but a legal expression for the same thing—with the property relations within which they have been at work hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an epoch of social revolution.”

This is a summary of the broad contours of history. The specifics can only be filled in by analyzing the concrete development of the productive forces of capitalism at each stage.

Sam Marcy in his foreword to this book gave an economic characterization of the period that pointed clearly in the direction of the present profound crisis of capitalism.

“The justification for each new social system as against its predecessor is that it raises society to a higher level. It has done so in each succeeding social order by raising the productivity of labor. The great achievement of capitalism was that it not only promoted a tempestuous development of the productive forces, of science and invention on an unheard of scale, but it raised the productivity of labor. Over a period of centuries it laid the basis for raising the material standards of society and the wage levels of the working class as a whole.

“The distinctive feature of this particular phase of capitalist development, the scientific-technological phase, is that while it enormously raises the productivity of labor, it for the first time simultaneously lowers the general wage patterns and demolishes the more high-skilled, high-paid workers. It enhances the general pauperization of the population.”

But Marcy looked beyond the crisis to the future of the struggle. He discussed the changing character of the working class from a revolutionary, optimistic point of view that was firmly rooted in a materialist analysis.

He spoke at that time of the fundamental trend arising out of the objective changes in the capitalist economy: the vast expansion of lower-paid workers and the decline of the higher-paid, which he regarded as one of the most significant and profound developments to emerge in the history of capitalism.

Its significance is ultimately political. It means that the lower-paid workers, the downtrodden and oppressed who can ill afford to be held down by a conservative labor leadership, will ultimately become the predominant voice in the labor movement and provide it with the militant and ultimately revolutionary energy to challenge capital. He showed that this transformation of the working class must ultimately have a political expression.

The consciousness of the workers is forced to catch up to their condition. A delay in this process is inevitable, but overcoming this lag is equally inevitable. Being ultimately determines consciousness. Historical circumstances have delayed this radical development among the workers. But Marcy’s projection of the pauperization of the working class has developed more fully since he wrote.

To be continued.

Labels: capitalist crisis, fred goldstein, high tech low pay, marxist theory, socialism

From Low-Wage Capitalism

"Thus, in order for the capitalist in company A to beat out the capitalist in company B, the workers in company A have to out-compete the workers in company B by allowing their wages to be cut below the others -- and/or submitting to speed up or other 'productivity' measures.
"The capitalists in company B then go to their own workers and tell them that in order to remain competitive with comapny A, which has just reduced its labot costs by cutting wages or benefits, the workers in company B have to at least match those cuts. And so it goes in the race to the bottom. This is the trap workers are in if their representatives buy into bourgeois ideology at the bargaining table and remain within the capital-labor framework imposed by the bosses." (Low Wage Capitalism, p. 264-265)

"Accepting the bosses' notion that labor must subordinate its demands to the overriding necessity of capital to remain competitive and profitable is a self-defeating ideology." (Low Wage Capitalism, p. 265)

"To hold the workers responsible for the profitability of capital is to demand that they agree to intensify their own exploitation to solve the crisis of their exploiters. This must be explained to the workers. They can easily comprehend it." (Low Wage Capitalism, p. 266)

"The question should be posed: Why must the exploited sacrifice their wages, their benefits, their working conditions, and their very jobs in order to maintain the continued prosperity of the exploiters, who have lived off the wealth created by the workers in the first place." (Low Wage Capitalism, p. 266)

Under pressure form the U.S. Treasury Department, the White House and the Ford Motor Company, the United Auto Workers leadership has taken a major backward step by making dangerous concessions that will undermine the economic conditions of their own membership.

According to the the New York Times the deal:

"...suspends inflation-related pay increases and performance bonuses, allows Ford to save as much as $6.5 billion by substituting shares of its stock for cash it must pay into a new retiree health care fund and eliminates the jobs bank, a controversial program that allowed workers to continue receiving nearly full pay after being laid off. Now workers whose jobs are eliminated will receive less pay, for a shorter period, and would lose that benefit if they refuse to take a job that opens up anywhere in the country."

The UAW leadership proclaimed that the new agreement brings hourly labor costs to $55 an hour. First of all, this does not represent the wages of the workers but rather an average of overall costs to the company for retirees pensions, health care and other benefits.

But most importantly, and most dangeroulsy, the union announcement declared that this latest agreement is a step in the direction of bringing Ford pay scales down to the level of Toyota, Honda, Nissan and other overseas companies.

In other words, the goal of the negotiations is to bring the pay scale of the organized workers down to the level of unorganized workers -- to reduce the status of union workers to the status of non-union workers.

This amounts to allowing the auto bosses to push the economic crisis onto the backs of auto workers. A leadership that represents labor should be going in the opposite direction -- the direction of struggle against concessions.

Instead of negotiating to bring the conditions of their own membership down to the level of unorganized workers, what is need is a mass fightback to raise the conditions of not only the Ford workers and the auto workers, but the broader working class.

These concessions, should they be allowed to stand, do not only affect the Ford workers, they stand as a precedent for GM and Chrysler. One antidote to the concessionary drive of the profiteering auto magnates would be to shut down Ford, Chrysler, GM and all the parts plants that supply the auto industry. That would open the class struggle and push things back in a progressive direction.

If concessions were necessary after the struggle, then the union could make concessions. But no one knows what the outcome of such a struggle would be. It could be that instead of concessions there could be great gains. There is no way to determine this except by fighting back.

To make concessions in advance, without a fight, assures a negative outcome. What is needed is for the rank-and-file to begin to organize from below and to eventually reverse the course of retreat that has been followed for the past three decades.

Labels: capitalist, capitalist crisis, Chrysler, concessions, Ford, GM, jobs bank, low-wage capitalism, non-union, retiree, Toyota, treasury, UAW, unions, wages, White House

Labels: bail out, bush, capitalist crisis, fred goldstein, globalization, low wage capitalism, obama, stimulus program, wall street