The singular contribution that Marxism offers to the theory of the working class movement is the idea of exploitation as well as a way to gauge its intensity. Prior to the pioneering efforts of Marx and Engels, those sympathetic to the miserable conditions of working people brought on by the rise of industrialization pointed to the grinding poverty and short, brutal lives of employees and urged reforms and relief. They failed to locate these conditions in the very logic of capitalism. They failed to find the source of these conditions in the relation between capital and wage-labor.
Marx and Engels brought the concept of exploitation to the fore as both a rich and robust moral concept and as an objective, measurable centerpiece of working class political economy. Exploitation, in its most intuitive and simplified sense, is the appropriation of the product of labor by those not engaged directly in producing those products. Stealing, of course, is a kind of appropriation as well, and a kindred notion to exploitation, but exploitation differs by existing in a socio-economic system that permits and even encourages its practice. A clear and transparent example of exploitation is the extraction of coal from a tract of land. The workers produce the end product, but the owner of the land, by virtue of the institution of private ownership, appropriates that product in its entirety, paying the workers the least amount adequate to coax them to take the risk and supply the effort. In such a pure example, it is apparent that the compensation of the workers is largely independent of their necessity and sole role in creating a useful product. It is equally clear that the owner may very well add no effort to the product’s creation though commanding its disposition – possessing the product – solely by virtue of a contingent social relationship: ownership of land. The amount paid to workers is determined independently of their role in production; the less the owner pays for the production of a given quantity of commodities, the greater the rate of exploitation.
The Mechanism Unveiled
While the complexities of a modern capitalist society tend to obscure the relations of exploitation, a deep capitalist crisis serves to expose these relations. With growth slumping, investment meager, and wages and benefits stagnant, the unquenchable thirst for profits requires an intensification of exploitation to restore the system’s health. If profit is the life blood of the capitalist organism, exploitation is its nutrient. We see the rising rate of exploitation in the current US economy with the dramatic growth of labor productivity. Beginning early in 2009, worker’s output per man hour accelerated dramatically, advancing by 5.1% in the fourth quarter over the previous year. Nearly all of this increase can be attributed to layoffs, resulting in fewer workers producing as much or more than in the prior year. The mass layoffs of the last two years retarded and reversed the declining productivity of 2008 and spurred an explosion of productivity growth in 2009.
The rate of exploitation, as expressed today in productivity growth, serves as the best indicators of the condition of the working class and its prospects. Increasing exploitation reflects capitalist aggression, the failings of the labor movement and the politicians it sponsors, and the unlikelihood that any great effort to improve employment is forthcoming. Political leaders and corporate managers are reluctant to deny the market economy the one lever that has successfully restored profitability and corporate health. A glance at the last recession earlier in the decade reveals the same pattern: economic decline followed by layoffs and a jump in labor productivity, restoring profitability. Commentators then wrote of the “jobless” recovery. Today we are experiencing the same process in a far deeper recession. As long as layoffs remain the mechanism for gains in productivity, profit restoration and corporate recovery, unemployment will remain high. Only a new level of labor militancy and anti-corporate fight back will install a recovery for the people ahead of a recovery for capitalism. The bankruptcy of shoring up capitalism to promote the people’s needs – the ideology of social democracy and labor-management cooperation - has been demonstrated over the last decade.
The Other Side of the Coin
Exploitation is equally intensified by paying less in wages and benefits for the same effort, a process made easier by labor capitulation and the fear of job loss. In late January, Ford announced that it will hire 1,200 union workers, many at “at significantly reduced wages” (The Wall Street Journal, 1-26-10). The 2007 contract with the UAW allows the Big Three domestic automakers “to fill jobs vacated by older workers who leave or retire with new hires earning a little more than $14 an hour, about half what veteran workers are paid. Newer workers also get reduced benefits”. The “second tier” workers will have a 401(k) retirement plan rather than a traditional pension. Bob King, the heir apparent to the UAW Presidency, confirmed that “[t]here will be new people hired at Ford.” Since the 2007 UAW contract gives existing workers priority, the hiring of new, entry-level employees is retarded by desperate workers laid off around the country, but willing to uproot and relocate where jobs are available. Nonetheless, industry experts expect the mass hiring of low wage workers to be a significant factor in employment by 2015.
The same depression of wages and benefits – an increase in exploitation – is ravaging the public sector. The Chicago Transit Authority secured concessions from the unions in 2007, but are back again with even greater demands upon the workers. The CTA threatens to layoff more than 1,000 workers unless deep cuts in wages and benefits are made. A transport workers’ concessionary proposal has been ignored by management. The Chicago Sun-Times (1-29-10) reports that Chicago Federation of Labor President, Dennis Gannon, has urged the transport unions to accept in whole the management proposal to “save 1,100 jobs…” Once again, the long standing philosophy of labor-management cooperation proves ineffective and thwarts the fight back to rally workers and the public to defend living wage jobs.
This failure to marshal a resolute and militant struggle against corporate aggression – a legacy of the destruction of labor’s left in the Cold War – is confirmed by the latest Labor Department figures. In the last twelve months, inflation adjusted wages and benefits in the private sector fell by 1.3%, the worst performance since the government began to record data in 1983. At the same time, US corporations succeeded in reducing 2009 health care cost increases to the second lowest yearly figure in the decade by cutting their contribution or shifting workers to less comprehensive health plans.
Can a capitalist economy recover without forcing the burden of recovery on the backs of working people? At a time when corporate profits are improving and management salaries are exceeding historic levels is it inevitable that workers must endure great sacrifices for the economy to bounce back?
On January 18, 2010, The New York Times reported that the French government – led by the conservative President, Nicolas Sarkozy – demanded that the firm Renault “maintain employment at its French factories.” Meeting with the head of Renault, Carlos Ghost, Sarkozy extracted a commitment that “Renault is a French company, a socially responsible citizen, attached to its industrial and technological roots.” Of course the French car companies do not want to do this; they would prefer to shift production to low-wage countries and layoff French workers. Nor does Sarkozy, an avowed fan of the US neo-liberal, free market model, want to make these demands upon the industry. But all know that any retreat from guaranteed employment will bring French workers into the streets and into occupancy of the factories. They know that the public will rally around the French workers.
Renault, like Peugeot-Citroen, received government bailout money from the French people under the condition that they would maintain employment; “The companies pledged in return to protect French jobs.” The industry minister stressed that “The state will have its say. When a French car is destined to be sold in France, it should be made in France.” This is, of course, in sharp contrast to the US President, allegedly a progressive and friend of labor, whose policies dictated that US auto companies would close plants and layoff workers in exchange for bailout money. The difference, quite clearly, is the militancy and class consciousness of labor. French unions, unlike their US counterparts, have consistently and without relent, refused class collaboration.
Politicians, media pundits, industry experts, and the EU competition commissioner have cast dire predictions that supporting employment, wages, and salaries in France will result in a weak, uncompetitive economy. Ironically, France showed the best economic growth of all EU member states in the fourth quarter of 2009.
We Can Do Better
Weakened by years of close and servile collaboration with management, most US unions and the AFL-CIO hierarchy are in a difficult position. The atrophy of labor militancy has backed leadership into the corner of choosing concessions or job loss. Labor’s political “friends” have betrayed labor’s cause without retribution to the point that they no longer fear labor’s still significant strength. The only way out of this corner is mobilizing the membership, the unemployed, and its many allies in a determined campaign to stand up to the corporate offensive and expose the political charlatans who pose as friends. As always, this begins with bringing people to the streets.