Sunday, May 22, 2016

Imperialism In the Twenty-First Century – The Globalization of Production, Super Exploitation, and the Crisis of Capitalism

By John Smith
Monthly Review Press

A review

Anyone who works for a living has asked themselves a few basic questions.  Why are wages so low and profits so high?  Why is there so much new construction, while thousands of homes are being foreclosed on?  Why does the stock market usually appear to be going up, while our living standards stagnate or even deteriorate? 

In John Smith’s new book on imperialism, he uncovers a considerable amount of information that gives us the means to begin to answer these questions.  In order to understand this analysis, we need to step back from our jobs and even this country.  We need to take a hard look at what is happening in the world.

Smith begins his book by looking at the garment workers in Bangladesh and electronics workers in China.

Garment workers in Bangladesh

In Bangladesh, as in countries throughout the world, there has been a huge influx of women into the workforce.  As in the United States the wages of women are about 73% of the wages of men.  However, in Bangladesh only about 33.9% of working age women have jobs. 

The average age of women textile workers in Bangladesh is 16.6 years.  This means that about half of those workers are under that age.  They work about ten to twelve hours per day for one dollar.  That is not one dollar per hour, but one dollar per day.  The wages of Bangladesh garment workers are among the lowest in the world.

In the year 2013 these young workers from Bangladesh generated $809.5 million in customs duties to the United States government.  This amount of money was greater than the sum of all salaries of all garment workers in Bangladesh.  Yet, the U.S. only imports about 22% of all garments manufactured in that country.

John Smith began his book by looking at the collapse of the Rana Plaza in Bangladesh.  1,133 garment workers died and 2,500 were wounded as a result of this collapse, which was one of the worst workplace disasters in history.

The day before this collapse, building inspectors recommended that the Rana Plaza remain closed.  However, the garment workers were ordered back to work, or face termination.  When the illegally installed generators started on the top floor, the building collapsed.

I used to work in a factory where a building was condemned.  No one worked in that building after this ruling.  Clearly, corporations throughout the world prioritize profits over safety.  This example illustrates just one difference between how work is organized in this country and Bangladesh.

We might also think about the fact that everyone in this country knows of the terrorist attack on the World Trade Center that took the lives of about 3,000 people.  Few people know of the Rana Plaza disaster.  One reason is that the garments produced by workers in Bangladesh are on the shelves of department stores throughout this country.
Chinese workers, Foxconn – Hon Hai, & Apple

A while ago I visited an Apple store to ask a question about the immensely complicated device I had purchased.  In the course of my discussion with someone who appeared to be a manager, I asked the question: Do you know the name of the company that manufactures Apple products?  The store employee didn’t know the answer to the question, and I proceeded to give him a bit of information he might not have wanted to know.

The answer to my question is the Taiwan based corporation Foxconn.  The Chinese name for the company is Hon Hai.  Hon Hai also manufactures computers for Dell, a corporation that competes with Apple.  The following information shows how the relationship between Hon Hai and Apple is mutually indispensable. 

Workers who have jobs with Hon Hai do all the work necessary to produce Apple products like the iPhone.  In 2013 Hon Hai had sales of $132.1 billion and profits of $10.7 billion.  Hon Hai had a workforce at that time of 1,232,000 employees.  Employees for the Apple Corporation do none of the work in the manufacturing of it’s products.  Yet, in the year 2013 Apple had $41.7 billion in profits on $164.7 billion in sales with a workforce of 72,800 employees.

This relationship made Apple the most profitable corporation in the world. (Today Google holds that dubious distinction.)  In fact, these enormous profits of Apple cancelled out a decline in profits from all other companies in 2013.

Why is Apple so profitable?  John Smith reported on a fact that the media in this country rarely mentions.  What are the production costs of commodities?  Smith reported that as of 2009 the production cost of the iPhone was $178.96 and this same iPhone sold for $500 yielding a 64 percent profit.

The Chinese workers who do all the work required to manufacture the iPhone receive only $6.50 per phone.  This is 3.6 percent of the final selling price.  These workers have a salary of $30 per week and might work 11 to 16 hour shifts.

Hon Hai has a complex of fourteen factories in Shenzhen, China.  At it’s peak this complex employed 430,000 workers.  Most of these workers are migrants from the countryside who aren’t allowed to bring their families.  Workers need to pass through a series of security checkpoints in order to live and work in Shenzhen.  According to one study, these workers felt that the “entry access system made them feel as if working at Foxconn is to totally lose one’s freedom.”  In the peak production season workers might toil 180 hours overtime per month without a day off.

These conditions prompted fourteen workers to commit suicide at the Hon Hai complex in Shenzhen.  Hon Hai ordered workers to erect nets that would catch workers if they jumped out of dormitory windows.

Chinese workers protested against these kinds of conditions with about 2,700 strikes in the year 2015.  In January alone of this year there were 500 strikes.  This state of affairs might make Chinese workers the most militant in the world.

This same state of affairs explains why Apple and many other corporations are not directly invested in corporations that produce commodities in nations where wages are extremely low.  John Smith calls this relationship, “arm’s-length outsourcing.”  Corporations like Hon Hai rely on funding from sources that include the stock market and the Chinese government.

Why do corporations like Apple and Wal-Mart rely for their very survival on workers who have such abysmally low wages?  We can begin to answer this question with Karl Marx’s argument that in the capitalist system the percentage of profits on investment has a tendency to go down.  In order to begin to understand what this means, we need to look at a bit of history.

Marx and Lenin

Karl Marx lived during the 19th century.  At that time he observed that textile workers in British factories were more productive than Indian workers who worked in their homes and villages.  So, while the Indian worker had a lower salary, capitalists found that investing in British factories was more profitable.  However, Marx also saw how Britain gained immense wealth because of their dominance of India and China. 

Vladimir Illyich Lenin lived at a later time in Czarist Russia and wrote about how things had changed.  By that time French corporations had made huge investments in large factories in Russia.  Clearly, the reason for these investments were because Russian workers had lower wages than French workers.  These French investors also felt confident that the Czarist regime would viciously suppress any worker discontent.  Those investors didn’t count on the fact that there would be a Russian Revolution that would confiscate all the factories they invested in.

Under these conditions Lenin wrote his pamphlet, Imperialism the Highest Stage of Capitalism.  Here Lenin argued that capitalism had evolved to the point where monopolies and or cartels dominated the world.  Gone were the days when small companies competed against one another.  In Lenin’s day these monopolies competed for domination of markets throughout the world.  This is the essence of what the two world wars were about.  These wars didn’t happen because of good or bad decisions, but reflected the inescapable outcomes of the capitalist system.

This pamphlet by Lenin argued against a common misconception that exists in the capitalist world.  The media as well as the educational system argues that there are “developing nations” in the world.  Along these lines they argue that investment companies, like the World Bank, are about making life better for those who live in poverty in these so-called developing countries.

Lenin exposed the facts that make this argument nonsensical.  He showed how the domination of less developed nations is not a mistake or an accident.  It happens because this is the ultimate goal of capitalist economies.  As we have seen in Bangladesh and China, throwing workers into poverty is a central feature of capitalism.

The election for President

When we look at the facts presented in John Smith’s book on imperialism, we can see clearly that none of the democratic or republican candidates running for President have any realistic answers.  They all advance the myth that workers in this country have different interests from workers around the world.

Hillary Clinton’s arguments would fundamentally continue the policies of President Barrack Obama.  Her unspoken message is that a Clinton Presidency wouldn’t be quite as horrendous as a Donald Trump Presidency.  The popularity of Donald Trump and Bernie Sanders can in part be explained as a rejection of politics as usual by growing numbers of workers and students.

Donald Trump has made international trade a major issue in his campaign.  He argues that even stiffer trade barriers would protect the jobs in this country.  However, Trump is a capitalist who profits off of the drive to maximize the exploitation of workers throughout the world. 

Increased tariffs would increase prices and drive employers to demand more concessions from the billions of workers who receive two dollars per day or less in wages.  What his proposals would not do is to force corporations to increase their investments in production.  After all these investors are interested in profits, not the interests of workers.

Bernie Sanders claims that he wants to redistribute the wealth in this country.  However, he also supports the basic idea of “America First” that places the interests of workers in this country above the interests of workers in other countries.  This strategy clearly will not redistribute the wealth to the least affluent people in the world.  It would promote trade wars that would result in shooting wars as we saw in World Wars I and II.

The Green Party candidate for President is Jill Stein.  She also wants to redistribute the wealth and says that she will cut the defense budget by half.  Again, change never, ever has come about solely because of elections.  Mass movements of labor, civil rights, and against wars have been the root causes of progressive change in this country.

When Verizon workers and Chinese workers go on strike, they demonstrate how capitalists will not have any revenue without the labor of working people.  This is how wealth is redistributed, not by electing pro-capitalist candidates. 

As the labor organizer Lucy Parsons once said: “Never be deceived that the rich will allow you to vote away their wealth.”

Allyson Kennedy and Osborne Hart of the Socialist Workers Party understand this basic argument.  They are running for President and Vice-President to win support for the Verizon strike as well as workers strikes all over the world.  Ultimately they favor the formation of a worker’s party aimed at taking control of the economy.    

Another vision

Today capitalism throughout the world is in a state of crisis.  Investors throughout the world have dealt with their falling rate of profit by investing in nations where wages are a small fraction of what they are in nations like the United States.  Had capitalists not made these investments and moved production overseas, an all-out depression would have erupted many years ago.  The near collapse of the world economy in 2008 signaled the fact that the forces working to create a new depression have not been stopped, but only postponed.

The one problem with John Smith’s book is that there isn’t a lot of information about the history of worker militancy around the world.  Certainly this was not what his book centered on.  However, Smith argues that if humanity will have any future at all, we must put in place socialist governments that make human needs and not profits the central priority.

When we look at the immense wealth created by workers who toil under horrendous conditions, we can imagine a completely different future world.  Instead of using the wealth workers create for the profit of a tiny minority, that same wealth could be used to eliminate poverty. 

The wealth of the world could be used to make work significantly easier and more rewarding.  Instead of increasing the hours people need to work, a rational government might significantly decrease those hours without any decrease in pay.  After all, a rational use of automation would decrease the hours necessary to produce commodities.

Instead of using wealth to enrich the affluent, that wealth can be used to provide top quality food, clothing, places to live, health care, education, transportation, and communications.  Think about how the arts might flourish if everyone had the absolute right to have the time and resources to pursue the arts.

All of this is only possible when and if working people throw off the ruling powers who dominate the world today.  Those workers on strike against the Verizon Corporation and in China give us a glimpse of the kinds of struggles needed to transform the world.

A walk through a shopping mall

After writing the rough draft of this review, I happened to visit the shopping mall in King of Prussia, Pennsylvania.  This is one of the largest shopping malls in the country.  However, those who control investment capital believe that the mall isn’t big enough.  A new addition to the mall is set to open this year in August.

Walking through the mall I thought of all the commodities that are for sale.  I thought about how the clothes, cell phones, computers, and even the coffee are produced by workers from all over the world toiling under horrendous conditions.

I also thought about the two factories I worked in for twenty-one years that produced parts for automobiles.  I thought about the horrendous conditions in those factories.  I also thought about the fact that both those factories closed and eliminated thousands of jobs.  As we can see from this paper, the reason for closing these factories was to find workers who would toil under even worse conditions.

So, when I walked through the shopping mall, I thought of how literally every penny invested in that mall was about the capitalist drive to maximize profits.  Working people will find much more constructive ways to utilize the wealth produced in the world.   

Monday, May 2, 2016

Our standard of living continues to decline in spite of President Obama’s words

There is a photo of President Barrack Obama on the front page of the May 1, 20016 issue of the New York Times Magazine.  The following article about Obama’s economic policies contained this quotation from the President: “Anybody who says we are not absolutely better off today than we were just seven years ago, they’re not leveling with you.  They’re not telling the truth.”  Normally I don’t like what government officials have to say.  However, this statement was so dishonest that it made me angry.

The author of this article, Andrew Ross Sorkin made the following statement that begins to question what Obama is saying.  "A large swath of the nation has dropped out of the labor force completely, and the reality for the average American family is that its household income is $4,000 less than it was when Bill Clinton left office."     

The Department of Agriculture gives the figures on how one out of every six people in this country doesn’t have enough food to eat.  Obama's answer to this problem was to cut the Food Stamps program $8.7 billion.  President Obama might ask one of the millions of working people who don’t have enough food, how they are doing better now?  President Obama might ask the Verizon workers who are on strike, how they are doing better now?

The 2014 attached article from The Militant newspaper by Brian Williams exposes the myth that unemployment has gone down while Obama has been President.  It starts by looking at the percentage of people who are employed.  There are millions of unemployed workers the government doesn’t feel are unemployed because they ran out of unemployment benefits.  The percentage of employed workers decreased after the 2007-2008 stock market crash.  That percentage has remained constant since then.  Real unemployment has not gone down in the past eight years.

Currently I’m reading John Smith’s book Imperialism in the Twenty-First Century.  Smith reported on the growing inequality in the United States.  He argued that: “In 1948 the bottom 90 percent of employees earned 75 percent of payroll compensation.  By 2010 this had declined to 54 percent.”  When we exclude the highest paid one percent of the population, the bottom 90 percent of the population earned a mere 28 percent of the income of this country.  This trend has continued with Obama.

Smith also quoted an official from Goldman Sachs who argued: “Several factors have contributed to the rise in profit margins.  The most important is a decline in labor’s share of national income.”    

Are we better off now?  We also need to consider all the wars President Obama has presided over.  We need to ask the thousands from all over the world who lost family members because of these wars if they are better off now?   When considering all these facts, I believe the answer to that question is a clear and unequivocal, No!!!          

Sunday, April 24, 2016

C. L. R. James – Every Cook Can Govern

A study of Democracy in Ancient Greece – Its Meaning for Today

A review

Back in the 1970’s I had the opportunity of listening to C. L. R. James speak on three different occasions.  These events were held at the Militant Labor Forum sponsored by the Socialist Workers Party in Brooklyn, New York.  From what I recall, James impressed me as few other speakers I’ve heard in my lifetime. 

Brooklyn, if taken by itself, is one of the largest cities in the United States.  A large part of the Black population of this borough was born or has family from the Caribbean or Africa.  On the occasions when I listened to C. L. R. James speak, there was a large turnout of people who viewed him as an outstanding leader from the Caribbean.

James was born in Trinidad.  He worked for a time as a sports reporter for the Manchester Guardian in Britain.  He supported the idea of Marxist politics.  For a time, he gravitated to the Socialist Workers Party and met with Leon Trotsky in Mexico.
His book The Black Jacobins is a classic historical work.  The so-called history we learn in high school is a glorification of the history of the United States and Europe.  In The Black Jacobins, James explained how a revolution of slaves in Haiti defeated the British, Spanish, and French armed forces.  This book was one of the first that prompted my lifelong curiosity of history.

James’ article, Every Cook Can Govern is available on the internet in the Marxist Internet Archive.  While the article was written in 1956, it could have been written yesterday.  The article shows, from a historical point of view, what a democracy looks like.  The politicians who support the current political system in the United States argue that we have a democracy.  This argument falls apart when we look at the reality that existed in the city-state of Athens around 400 BC.

The pros and cons of Athenian democracy

Before I write about the benefits of Athenian democracy, I will mention its shortcomings that led in part to its demise.  The ancient city-state of Athens was a slave society.  There were also many people who lived in Athens who were not born there and did not have citizenship rights.  Women were also excluded from government.  During the period when Athens had a “democracy” the population was about 400,000, but no more than 43,000 were citizens.

In my readings of slavery, I’ve found that technological innovation was very difficult where slavery was the law.  In order for technology to advance there must be a climate where inventors are encouraged to create.  There must also be workers who have an incentive to transform inventions into useful commodities.

In slave societies, slaves have little interest in scientific innovation.  Slave owners have little or no interest in educating slaves.  The primary goal of the slave isn’t to develop new technologies, but to become free.  However, history has all kinds of exceptions and the facts are that the ancient city-state of Athens made some of the most important advances in human history.

Athens was also an imperial power that went to war to dominate the people of other nations.  There is no question that on occasions the Athenians were brutally repressive against the people they conquered.  Because Athens was not capable of sustaining itself, dominating other nations was the only way for their world to advance.  Because of the advances in technology, today the people of the world have the potential to advance together.  This means that under a truly democratic political system workers and farmers would be able to live in harmony. 

We might consider that C. L. R. James found no contradiction in writing about the democracy of the Athenian slave world and also writing about the slave revolution in Haiti.  Before democracy, Athens had experienced a number of repressive regimes.  According to Aristotle, the influence of the Greek Hill party was the basis for Athenian democracy.  This Hill party was made up of artisans, small shopkeepers, indigent peasants, miners, as well as the more progressive merchants and manufacturers.     

C. L. R. James gives the following summary of some of the most important Greek scholars:

“Epic poetry – Homer, Dramatic Poetry – Aeschylus, Sophocles, and Euripides, Comedy – Aristophanes, Lyric poetry – Pindar and Sappho, Statesmen – Solon, Themistocles, and Pericles, Sculpture – The Master of Olympia, and Phidias, Oratory – Dernosthenes, History – Thucydides and Herodotus, Philosophy – Socrates, Aristotle, and Plato, Science and mathematics – Pythagoras, and Archimedes, Medicine – Hippocrates.”

All these intellectuals flourished in an atmosphere the Greeks called isonomia.  This word translates to democracy, but for the Greeks this word also meant equality.  This meant that literally all Greek citizens participated in making decisions that affected everyone.  Those who chose not to participate in this process were labeled idiotes.  This is translated to the word idiot. 

Decisions in democratic Athens were made in public assemblies.  These assemblies appointed officials, generals, and decided on the questions of taxation and war.  Every year 6,000 people became the effective government.  They were divided into groups of 500.  These people were citizens who were chosen at random and made all decisions of government that included trials by juries of 500.  Judges were mere secretaries who took notes and followed the orders of the 500 who were charged with making the final decisions.

The consciousness of the Greek citizen in these societies was completely different from what it is today in the United States.  Greek citizens didn’t think of themselves as individuals, but as people who were a part of society as a whole.  This meant that everyone’s rights were respected.  Those who felt they were in any way better than anyone else were ridiculed harshly.

Materialism vs. idealism

The Marxist George Novack also wrote about Athenian democracy in his books Origins of Materialism and Democracy and Revolution.  Novack argued that the two principal schools of philosophy are materialism, vs. idealism.  Materialism argues that all thought comes from the material world.  Idealism argues that the mind operates independently from material reality.  Therefore idealists argue that God exists even though there is no physical evidence of this. 

The debate between idealism and materialism took place in ancient Athens.  Materialists were able to make scientific innovations because of their study of science.  Materialists also studied the events of their times without any preconceived ideas of what should or should not be reported. 

Idealists also made legitimate criticisms of the materialists.  Clearly the Athenians did not have the knowledge we have today which led the materialists to make errors.  However, the Athenian materialists were the ones who first recognized that all matter was made up of tiny particles.  Centuries later Albert Einstein confirmed this theory and labeled these tiny particles atoms.

We should also recognize that the Greeks of this time were deeply religious.  However, the religions of those days attempted to explain the world as it was and not to argue that a supernatural being was responsible for all creation.  The Greeks rotated their religious clerics as they rotated their government officials.  This idea that everyone participated in government and religion led C. L. R. James to title his article, Every Cook Can Govern.

Democracy before the Athenians

In my readings of history I’ve found that many aspects of Athenian democracy were not new.  What was new was the fact that the Greeks of that era made a somewhat thorough written record of their world.  Of the developed societies of their era, the Athenians were ones who best utilized democratic norms.

Throughout most history human beings lived in communal societies.  We know of these societies from the writers who studied tribal people from all over the world.  In these societies decisions were made through discussions and leaders were chosen and removed through these discussions. 

Unlike Greek democracy, we know that women experienced much more equality in these societies.  Lewis Henry Morgan wrote about the real political power women had in his studies of the Iroquois who lived in what is now the state of New York.

The opportunity to establish a true democracy

Looking at history from this perspective we can appreciate George Novack’s statement about the reality of the so-called “democracy” in the United States.  Novack argued:

“A system in which the people do not control the most important decisions and actions of the government, their economy, their welfare or the course of their lives can hardly be considered genuinely democratic.  It can be more precisely defined as a plutocracy dressed in democratic disguise.”  A plutocracy is a government that serves the interests of the affluent.

Looking at history from this perspective, we can see how working people have the potential to transform the nations of the world into a genuine democracy.