In 2019, demand for fixed hours of work per day is almost impossible for most of the working class. This is true due to mainly three causes: labour market distortion, continuous automation of the production process done by the capitalist class and global mobility of capital. Time has changed a lot since the days of Paris Commune or Workers’ Movement in Chicago.
Working class movement by itself took a great role in bringing about this change. But has these changes made working-class irrelevant today? Is it because of this working-class movement is getting sidelined by left-wing identity politics and right-wing ultra-nationalism? Then what is the relevance of the Workers’ Day today? These are the questions that we will deal here today. Our answer will be simple. Working class is still the most important political force but it is still stuck with old priority and hence failing to establish itself. The first duty of the working class is to understand the era we are living in, how its priority has changed from the previous era and what should be the new priority in order to march ahead to the future era.
Characteristics of the Present Era
Capital’s bargaining power has increased considerably over the working class. Let us discuss the causes:
Automation: Capitalist class when tries to raise the scale of production with the same production process they need to hire more workers and hence bargaining capacity of the working class rise which raises wages. To counter this trend capitalist class automates existing technology where more production can be done with the same number of workers. Thus need to hire more workers is reduced. When a new product is introduced new demand for workers is generated. So automation and new product launching are two opposing forces that determine the demand for workers in the labour market. In the mid-19th century, during the initial years of the industrial revolution, all products are new from the capitalist point of view.
Existing industrial base is too small and so room for automation is quite small as well. So the impact of the introduction of new industries dominated the impact of automation. Thus the demand for labour was very high throughout the 19th century. This reached its zenith in times of Henry Ford’s assembly line production process. After the second World War, with rising of communism, the working class of industrialized countries started to increase its bargaining power further since the workers can now make capitalist rulers afraid of communist revolution. Keynesian prescription of government spending and Marxian strategy of state ownership started to increase subsidized employment which reduced unemployment and raised the bargaining power of the working class further. Employment became the main criteria of production for the overall economy while profit was becoming a secondary micro level objective.
Global Mobility of Capital: Since the 1970s after the collapse of Brettonwoods Agreement capital reacted in two ways to counter the enhanced power of the working class. Firstly, it sought to profit from asset trading or finances in the industrialized world especially the largest economy USA. Secondly, while these economies began to specialize in finance, they started exporting the production base to the newly industrializing Third World countries because of cheap labour. Between the end of the Second World War and 1970s, many Third World countries especially China made tremendous progress in modernizing their feudal society by investing heavily in physical capital and human capital. Thus their working class though cheaper than that of industrialized countries gained productivity considerably.
These cheap productive Third World labour became very much competitive in the global economy. Facing competition from Third World labour the Western manufacturing gradually lost global market which weakened the working class of developed economies considerably. Information Technology and digital revolution created new industries but they were also used for automation. The existing industrial base becomes so large in developed economies that room for automation became very large and the introduction of new industries started to take the marginal role. Thus global mobility of capital and automation together destroyed bargaining power of the working class throughout the globe.
Labour Market Distortion: Labour market becomes distorted when there is a lack of mobility of labour due to institutional or geographical or historical factors. Institutional factors include legal barriers, monopolization by labour unions, not allowing labour movement across international borders and everything that allows section of working class to have higher wages than what market allows and hence keeps many people unemployed or work as unorganized workers as the later cannot be hired in organized sector even if are willing to work at lower wage. Many labour laws that came into being between the end of Second World War and 1970s, became tools of labour market distortion by a section of the privileged working class.
This created a big distinction between the organized working class and unorganized working class. Organized labour aristocracy becomes part of the ruling capitalist class. On one hand, the global market is influenced by the global mobility of capital and automation reduced the bargaining power of the working class as a whole. On the other hand, pro labour laws became tools of minority privileged working class to raise wage beyond market helping in further rise of unemployment and unorganized sector and thus further eroding the bargaining power of the working class.
Way to Move Forward
Firstly we need to realize that the material condition is not in favour of the working class in its struggle against capital. The working class has lost its bargaining strength in this new era mainly due to the inequality of wage rate between developed economies and the Third World. It is this global wage inequality that helps capital to increase bargaining power by the ability to move from higher wage country to lower-wage country and forcing down wages by the ability to move between to lower wage countries. So reducing this global wage inequality must be the prior objective of working-class parties. Just old ways of demanding higher wages or benefits or security or fixed hours of work will not give permanent result in this era. Working class parties have to draw down strategy to develop Third World countries faster so that wage gap with developed economies gets reduced. Once this objective is achieved, capital will lose its present bargaining power and it is then that working class can unite globally and its impact will be more than those of 19th centuries or post Second World War.
Labour Aristocracy and Market Forces
Working class parties have to undertake the task of tearing down laws and unions of labour aristocracy that is creating labour market distortion. This will help to establish equality within the working class. It is said charity begins at home. So the working class must start by focusing on equality among workers within a country. This will boost the economic growth of the country as well.
Development to Increase Capitalist-Worker Inequality
It is true that if a working-class party wants to develop a Third World country faster, there is a high chance that economic inequality between workers and capitalists will be raised. This is because payment according to ability has to be made effective to the full extent and since working ability varies a lot, payment to vary as well. The exploitation of economies of scale, rent from innovation, etc. further raises inequality between workers and capitalists. This has to be allowed as a necessary evil.
This is because if we want to impose equality in a society with a low level of technology attainment by preventing development, the material condition of global capital’s bargaining power will continue to exist. This will also perpetuate global inequality between developed economies and the Third World. So a working-class party must go for development of productive forces of Third World first and only after reaching the stage where productive forces are more or less evenly distributed across the globe, the contradiction between capitalists and workers within countries can be addressed. This is because capital will then loss one main weapon, global mobility. It will be left with the weapon of automation only.
Reactionary Tendency among Working Class
Marx once said that the working class that will change the world will have to change itself. Hence a class has to address contradiction inside it before addressing contradiction with another class. Lenin clearly told that in the imperialist age, the working class of developed economies have become labour aristocracy and part of ruling elites. Today this observation holds correct as well. The only difference is that labour aristocracy has grown among sections Third World working class as well. While developed country labour aristocracy moving towards ultra-nationalism and fighting against global mobility of capital, Third World labour aristocracy is preventing the Third World countries to develop.
An important point is both of these labour aristocracies use the classical Marxist theory of exploitation to justify their reactionary claims. Developed country labour aristocracy criticizes capital’s movement towards the Third World as an elite conspiracy against their races and that country’s working class and also criticizes capital’s motive of exploiting cheaper labour of Third World. They fail to understand this is no conspiracy but basic nature of capital and Third World labour are getting better employment opportunities due to this global movement of capital. Third World labour aristocracy criticizing capital’s exploitation upon them but keeping silent watching the same exploitation of unorganized worker class.
The only way forward is to follow the Communist Party of China’s development model. First, hammer down the difference between organized and unorganized workers within a country by allowing more market forces in the labour market. Second, develop the Third World countries fast to narrow the wage gap with developed economies. Only after these two steps, the global working class can act successfully against global capital. We will then move to a future era.
DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy and position of Regional Rapport.