By John Smith
Monthly Review Press
Monthly Review Press
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.
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.