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.
