Capitalism at an impasse
The era of jobless recovery & crisis of the profit system
Published May 1, 2011 9:35 PM
The capitalist system in the U.S. and worldwide is deeply mired in a new phase:
the era of the jobless recovery and long-term mass unemployment. This phase is
the inevitable result of the profit system.
The capitalists are recovering from the crisis of 2007-2009, but the working
class is not. Mass unemployment remains high, despite the increase in profits
for the bosses and the growth of capitalist production and services.
Right now in the U.S. more than 17 percent of the workforce, or 24.5 million
workers, are officially unemployed or underemployed — that is, they
either have no jobs or are forced to work part time when they need full-time
jobs. The real number is probably closer to 30 million because of the
undercount of those who have dropped out of the workforce altogether.
The $10 trillion in government bailouts to the banks and auto companies plus
the stimulus package kept the system from total collapse. But the recovery of
economic growth is going at a snail’s pace, and millions of unemployed
have little hope of being rehired. Every week hundreds of thousands of workers
file new claims for unemployment.
Furthermore, while the few new jobs created are mostly in the lowest-paying
service industries, the bosses are also hiring workers on a temporary basis.
Workers are becoming “disposable” under a new system of
The era of the jobless recovery began in 1991. Workers continued to be laid off
for almost two years after the capitalist economy recovered. In the next
jobless recovery of 2001-2004, it took four years for unemployment to come down
to pre-recession levels. During the recent crisis 8.5 million workers lost
their jobs in less than two years. The so-called recovery has been touted for
two years now, but it has not made a dent in mass unemployment.
What is behind this growing crisis for the workers and the system?
Marx on technology & unemployment
In the struggle to maximize profits, the capitalist class has relied on new
technology that drives workers to produce more and more in less and less time
at lower and lower wages. Every capitalist is compelled to use this technology
as a matter of survival. It is a law of capitalism. This creates a huge
contradiction which gets worse and worse as capital grows.
In the book “Low-Wage Capitalism” published in 2008, this author
“Under the capitalist system, no matter how wide the scope of its
operation, production is driven forward by leaps and bounds under the impact of
competition for profits. The bosses look for new, more productive technology
and economies of scale to cut their labor costs, and this leads to
ever-expanding production, which outpaces the slow development of the consumer
power of society.”
This trend leads to fewer and larger monopolies bringing in more and more
technology. This in turn leads to growing mass unemployment or, as Karl Marx
put it, an inevitably increasing “reserve army of the unemployed.”
Explaining this process in Vol. I of “Capital,” Marx called it
“the law of capitalist accumulation.” He showed how the capitalists
used unemployment to depress wages. He also showed how technology destroys
skilled, high-paying jobs and creates more and more low-skilled, low-paying
This law makes it harder and harder for capitalism to grow at a rate fast
enough to keep mass unemployment from steadily rising.
But Marx also showed that this law would lead to a rebellion against and
organization and resistance to exploitation. The working class will eventually
be the “grave diggers of capitalism.”
The U.S. is surely a long way from revolution at the present moment. But there
is a new current of resistance bubbling beneath the surface. Thousands of
workers and students seized the state Capitol in Wisconsin and held it for two
weeks, seeking to block a union-busting law directed against public
Union solidarity is getting stronger. Labor-student-community unity is growing.
The new current of activism and resistance is pushing back against ruling-class
reaction. These two trends are on a collision course. These are the ingredients
for a rise in and a widening of the class struggle against capitalism.
Goldstein is author of the book “Low-Wage Capitalism: A Marxist
Analysis of Globalization and Its Effects on the U.S. Working Class.” He
has also written numerous articles and spoken on the present economic crisis.
For further information visit www.lowwagecapitalism.com.
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