Millions, if not billions of words have been written about the current economic crisis, especially its financial component, triggered by the collapse of the US sub-prime mortgage market, yet few if any can match the insightfulness and clarity found in Low-Wage Capitalism, a recent book by American Marxist political-economist Fred Goldstein.
Most bourgeois commentators restrict their analyses to the financial crisis, completely ignoring the more fundamental capitalist crisis of overproduction. Indeed, many are blissfully unaware of it.
Goldstein’s analysis rests on three fundamental processes which have accelerated in the last three decades.
Firstly, the world’s workforce available to exploitation by transnational capitalist corporations has doubled in the wake of the collapse of the USSR and Eastern Europe as socialist economies.
Secondly, the technological revolutions of the digital age, in both production and communications, have allowed transnational corporations to destroy high-wage jobs and simultaneously expand the global workforce to generate worldwide wage competition.
Finally, the decline in the economic conditions of the workers and the oppressed, driven by the laws of capitalism and the capitalist class, is inevitably leading to the end of class compromise and retreat, and to a profound revival of the struggle against capital.
Between 1985 and 2000 the world working class newly available for exploitation by transnational corporations increased by 1.47 billion. An International Labour Organsation study shows they came mainly from India, the former Soviet Union and Eastern Europe, as well as China, Indonesia, Brazil, Bangladesh and Mexico. Vietnam, the Philippines and Turkey also contributed to this process.
In this era of rapid globalisation the effect of this is global, not just national. This process fundamentally underpins today’s capitalist crisis of overproduction, especially since the expansion has occurred in low-wage regions of the globe — regions that have been colonised or dominated by colonialism and imperialism at some point in history and are still living at various stages of underdevelopment as a result.
The global expansion of production has been made possible by the scientific-technological revolution, enabling giant corporations with global reach and huge reserves of capital to restructure production and services, to “fragment them”, drawing surplus workers in underdeveloped regions into the most advanced manufacturing and service processes in direct competition with workers in the imperialist countries. This is a competition which was impossible under the old division of labour and the previous technological level.
The wage level of the working class in the imperialist countries, under pressure of the global competition set up by the giant monopolies, is being increasingly determined internationally and under the downward pressure of the wage level in the lowwage countries.
As Marx so tellingly observed in the Communist Manifesto, capital can only exist with wage labour, which in turn rests exclusively on competition between labourers. It is under these conditions which maximum profits are generated.
In this era of globalisation of production, workers are compelled to embrace international solidarity, for their own survival.
The best way to reduce low-wage competition from workers abroad is to help those workers organise to improve their wages and conditions, to assist the workers in other countries to raise themselves up. This is beginning to happen, but there is much more to be done.
The injunction of Marx and Engels, “workers of the world unite”, has profound and wide-ranging meaning, but in today’s world it has also gained a new urgency.