Imperialism, the global labor market and the revolutionary perspective

Following are excerpts from Part 2 of the document “Capitalism in Crisis” by Fred Goldstein, written for discussion at the Workers World Party National Conference taking place on Nov. 13-14 in New York. Goldstein is also author of the book “Low-Wage Capitalism.”

When Lenin wrote his book [“Imperialism: the Highest Stage of Capitalism”], the ruling classes were using a small portion of their super-profits stolen from the colonies to bribe the labor leadership at home and create a broad, privileged upper layer of the working class.

Now, however, with global wage competition under the regime of modern-day imperialism, the capitalist class has orchestrated a “race to the bottom” among the different sections of the global working class. Setting worker against worker and putting workers in the imperialist countries in competition with low-wage workers around the world on a job-for-job basis is destroying the privileges of sectors of the working class, mainly white males, who dominated the labor movement.

The wholesale destruction of privilege is a new aspect of imperialism in the era of the scientific-technological revolution and the post-Soviet period, and must be understood as a new development since Lenin wrote his brilliant analysis. His work still stands as the foundation for understanding imperialism as the rule of monopoly finance capital. But the development of the productive forces and advances in capitalist globalization have transformed the class structure of the world working class and leveled it downwards. This will ultimately strengthen the revolutionary perspective.

Laws of Marxism are still valid

The way to understand the underlying cause of the present crisis is to understand the role of the development of technology under capitalism and its effect on the working class.

The late Sam Marcy, chairperson and founder of Workers World Party, in a very important book entitled “High Tech, Low Pay: A Marxist Analysis of the Changing Character of the Working Class,” published in 1986, analyzed the early stages of the high-tech revolution and its effect on the working class in the United States.

In a section devoted to its impact on the unions, he traced the phases of development of the productive forces under capitalism from the manufacturing phase of simple cooperation to the industrial revolution and large-scale machinery to mass production — primarily assembly line production — in the early 20th century. He then described the high-tech phase:

“This [mass production] stage has now given way to another phase of technological development. The mass production period which began with Ford and continued for a period of time after the Second World War was characterized by expansion. But the current stage, the scientific-technological stage, while continuing some of the earlier tendencies of development, contracts the workforce.

“Like all previous stages of capitalist development, the current phase is based on the utilization of workers as labor power. But its whole tendency is to diminish the labor force while attempting to increase production. The technological revolution is therefore a quantum jump whose devastating effects require a revolutionary strategy to overcome.”

There are two irresistible and contradictory tendencies rooted in the capitalist profit system that exist side by side and derive from the same source: the thirst for surplus value, for profit. One is the tendency of capital to expand production to the absolute limit of capacity, given the available technology, in order to maximize market share and profits. The other is the urge of capital to shed labor and reduce wages, also in order to maximize profits. These two tendencies, which are built into the system, must inevitably end up in a crisis of overproduction — a crisis in which the ever-increasing volume of commodities produced by the workers cannot be purchased by them at a price that will yield a profit for the capitalist.

Declining rate of profit

As technology gets more and more expensive, it tends to bring the rate of profit of the capitalists down. The bosses spend larger and larger sums of money to use more efficient machines and equipment and more raw materials to get more and more production out of fewer workers. Thus they use less labor power relative to the instruments of production. The rate of profit is calculated on the amount of surplus value extracted from the workers relative to the total capitalist investment in means of production and raw materials (constant capital) plus wages (variable capital).

When the rate of profit drops, each capitalist tries to introduce new technology to get an advantage over their rivals. The first to introduce the new technology get an advantage over their rivals who are still using the older, less productive technology. But soon, the new technology spreads. The original advantage of the first capitalist grouping is lost. The new, higher level of productivity becomes the norm. The entire industry or group of industries affected by the new technology is now more productive, churning out more and more commodities with fewer and fewer workers. Thus the cycle in the race for new technology begins over again.

When workers produce more commodities in a given time due to new technology or just plain speed-up, they spend less time on each commodity, or on each operation that goes into creating a commodity. The labor time of the workers is spread out over more and more commodities. The total labor time remains the same but there is less labor time embodied in each particular commodity. Since there is less labor time incorporated in each individual commodity produced using the new, more expensive technology, there is less surplus value in each, as surplus value comes only from human labor.

So the capitalist has to sell more commodities in order to reap the same surplus value and make a profit. It gets harder and harder for the bosses to get their money back to cover the cost of the equipment and maintain a hefty profit from the unpaid labor of the workers. The capitalists must therefore constantly expand sales to get an increased mass of profit to compensate for the decline in the rate of profit. This is the only way to sustain their profitability and to survive the war-to-the-death capitalist competition.

This drives the capitalist class inevitably to create conditions leading to overproduction and crisis.

Read the full text at workersworld.net.