February 19, 2017

The Era Within Which American Legacy Rises By Antonio Moore

The Era Within Which American Legacy Rises

We stand here on the verge of a shift in the American paradigm of spending credit to secure capital regardless of social status, a way of life that was born out of thirty years of fast money and easy credit lines. This moment comes at a time during which there are challenges to some of the core American fairness laws that led to some semblance of equal opportunity, one of which Affirmative Action may take a major blow by the Supreme Court in the coming weeks. In the last thirty years while the rich got richer, all of it was masked by access to credit that made the wealth gap appear to be closing in our daily lives. Access to predatory home loans, for-profit student loans and high interest credit cards served as the proverbial closet for America’s historical skeletons. That closet is now full, and showing signs of bursting at the seams, exposing a truth of an America that has not been built purely on a culture of free enterprise and capitalism as so often presented, but also stands upon legally fortified legacy.

From the Roaring ‘20s to the Depressing ‘30s and back again, America has dealt with cycles of economic growth. But no growth pattern has presented such a possibility of devastating the culture of U.S. capitalism as that which we are on the verge of today. Over the last thirty years people with limited means acquired debt that would take more than a life time to pay off. A thirty-year mortgage at $3,000-$5,000 a month for a family making less than $70,000 annually, is the equivalent to being trapped by your home (particularly if it’s underwater). The question begs how will the economic winds take back the keys to life which consumer credit has afforded an entire generation. It will be done quickly and without regard for feelings, or consideration for struggle.

The keys that were given by credit markets allowed a generation to dream that hope had actually led to progress, but these keys were in fact doorways to a kingdom of debt and misguided views of self worth.

The very condition of a class-based system requires have-nots to remain as such. The trick is to make them accept their status not with the wave of a gun, but rather the movement of a pen. The class based structure in the U.S. that seeped into a more simple line of poor or rich, was supported by a race based substructure of black and white. Yet, in between the delusional opportunities to forward spend on a Visa card given by Chase or Capital One, a reality was lost over this period of what defines a class structure. Here in America unlike many other countries, the poor shopped with the rich at the local mall, they looked at the lives of the rich on entertainment blogs and they watched wealth-based reality shows until the meld of the reality on TV blurred the very line of what actually was the reality in their own home.
Americans overexposed to the chance of change, became underexposed to the cost that believing in chance without giving it the true context of history can bring. A middle class that needed heavy doses of reality instead got sugar in the form of low APRs and plastic cards. I believe as the credit surge halts, and the MasterCards and house keys are taken back, what will be left is a nation in a trance of flat screens, smart phones and designer clothes. The new era that has arrived brings us back to a time where what you will become is based not on how much Chase will loan you without collateral, but rather what your grandfather left for you so many years ago. This reality makes our personal family history more important than ever. Over the last thirty years Americans of all walks forgot (or never learned) this country’s true history, and the class/racial structure that defined it some 300+ years prior, starting well before the country’s official Declaration of Independence. We were made to believe that the rich got positioned so purely as a result of effort & genius, as though America did not recently abolish the legal institution of Jim Crow, and as though Slavery’s illegality became enforceable criminally well before the actual date of 1942 when President Roosevelt signed Circular No. 3591 legislation.

Legacy’s power in the U.S. is interesting in that it is remembered for when it carries the gifts of wealth & security, but much more often it bears the unforgiving pain of poverty. It becomes hyper-exaggerated in both directions when laws and policy are designed to expand the gaps between the two groups. I believe that when laws that favor groups create unequal opportunity, it becomes a direct clog in the engine of Capitalism. Free enterprise cannot be free when it is burdened with the weight of a yesteryear, which created mass inequity, so directly by law. Slavery and Jim Crow as legal institutions have legacies that not only clogged American Capitalism from being a truly fair opportunity for all, it has burdened Black America particularly with heavy social cost and chained them as a mass group to lives of struggle. As stated by an opinion article in the Grio “Reagan revisionism can’t whitewash his history with blacks,” this became exaggerated in an era during which Ronald Reagan and his policies from Trickle Down to the Crack laws turned up that impact exponentially by changing the black families trajectory for the worse. People revise America’s history to recreate figures into heroes, repainting their actions with each brush stroke of slanted memory.

I will state undoubtedly many more Americans are affected than just blacks by poverty, but because of the history of this nation and its unwillingness to confront that history, poverty has laid ravage to Black America at a wholly different rate than any other subgroup. Black America today in mass is impoverished, over 10 million of the 40 million self identified African Americans live below the poverty line making less than $11,000 a year, and another large mass of African Americans are classified as “near poor” by new census calculations. A group that played a major role in building the wealthiest country the world has known as free labor, kneels at this country’s back porch in poverty. To give a more specific example of context to the statement of what Black America has lost out on with their unpaid labor investment in the U.S., in chapter 2 of his Best Selling book Outliers, Malcolm Gladwell listed the 75 wealthiest people in global economic history. An astounding 45 were American born, an additional 4 men on the list while not born in America made their wealth here. A country that is a mere 237 years old, created 65% of the wealthiest men the world has known. 14 of the group were all born in a single nine-year span, all preceding the industrial revolution. Focusing in specifically on the top of the list, as an example Andrew Carnegie became the second wealthiest man in the history of the world by investing in the steel business ending up as the head of U.S. Steel. Carnegie made his fortune in the steel industry, controlling the most extensive integrated iron and steel operations ever owned by an individual in the United States. According to Forbes he amassed a wealth holding equivalent to nearly 300 billion dollars, adjusting for inflation.

Excerpt from Outlier’s List of 75 Richest People in Global Economic History (Below are the individuals that made their wealth in the U.S., and the approximate value of their fortune):

01. John D. Rockefeller 318.3 billion (Standard Oil)
02. Andrew Carnegie 298.3 billion (U.S. Steel)
04. William Henry Vanderbilt 231.6 billion (Chicago Burlington and Quincy Railroad)
06. Andrew Mellon 188.8 billion (Gulf Oil)
07. Henry Ford 188.1 billion (Ford Motor Company)
10. Cornelius Vanderbilt 167.4 billion (New York and Harlem Railroad)
16. John D. Rockefeller Jr. 141.4 billion (Standard Oil)
17. Sam Walton 128 billion (Wal-mart)
18. John Jacob Astor 115 billion (American Fur Comany)
20. Stephen Girard 99.5 billion (First Bank of the United States)
22. Stephen Van Rensselaer III 88.8 billion (Rensselaerswcy Estate)
23. Richard B. Mellon 86.3 billion (Gulf Oil)
24. Alexander Turney Stewart 84.7 billion (Long Island Railroad)
25. William Backhouse Astor Jr. 84.7 billion (Inheritance)
29. Moses Taylor 79.3 billion (Citibank)
30. Vincent Astor 73.9 billion (Inheritance)
33. Jay Gould 67.1 billion (Union Pacific)
34. Marshall Field 66.3 billion (Marshall Field and Company)
35. George F. Baker 63.6 billion (Central Railroad of New Jersey)
36. Hetty Green 58.8 billion (Seaboard National Bank)
37. Bill Gates 58 billion (Microsoft)
38. Lawrence Joseph Ellison 58 billion (Oracle Corporation)
41. Warren Buffett 52.4 billion (Berkshire Hathaway)
43. J. Paul Getty 50.1 billion (Getty Oil Company)
44. James G. Flair 47.2 billion (Consolidated Virginia Mining Company)
45. William Weightman 46.1 billion (Merck & Company)
46. Russell Sage 45.1 billion (Western Union)
47. John Blair 45.1 billion (Union Pacific)
49. Leland Stanford 44.9 billion (Central Pacific Railroad)
50. Howard Hughes Jr. 43.4 billion (Hughes Tool Company, Hughes Aircraft et al)
51. Cyrus Curtis 43.2 billion (Curtis Publishing Company)
52. John Insley Blair 42.4 billion (Delaware, Lackawanna and Western Railroad)
53. Edward Henry Harriman 40.9 billion (Union Pacific Railroad)
54. Henry H Rogers 40.9 billion (Standard Oil Company)
55. Paul Allen 40 billion (Microsoft, Vulcan Inc.)
57. J.P. Morgan 39.8 billion (General Electric, U.S. Steel)
58. Oliver H. Payne 38.8 billion (Standard Oil Company)
60. Henry Clay Frick 37.7 billion (Carnegie Steel Company)
61. John Jacob Astor IV 37 billion (Inheritance)
62. George Pullman 35.6 billion (Pullman Company)
63. Collis Potter Huntington 34.6 billion (Central Pacific Railroad)
64. Peter Arrell Brown Widener 33.4 billion (American Tobacco Company)
65. Philip Danforth Armour 33.4 billion (Armour Refidgerator Line)
66. William S. O’brien 33.3 billion (Consolidated Virginia Mining Company)
69. James C. Flood 32.5 billion (Consolidated Virginia Mining Company)
71. Anthony Brady 31.7 billion (Brooklyn Rapid Transit)
72. Elias Hasket Derby 31.4 billion (Shipping)
73. Mark Hopkins 30.9 billion (Central Pacfic Railroad)
74. Edward Clark 30.2 billion (Singer Sewing Machine)
Note: Only Andrew Carnegie, John Jacob Astor, Stephen Girard and Alexander Turney Stewart were not born in the United States.
Outliers: The Story of Success, Pg 56-61

Many Americans will say we all were cut out of this wealth, but not as many can say that wealth was built by your own family’s free labor investment. This exclusion shut them out of the middle class wealth creation in a rising America, prohibiting them from changing their labor into compounding investment their grandchildren could share for future opportunity. Slavery created a group that was left out of capitalism as a profit participant, but left in as a risk bearer (risking the greatest asset any man had, their own lives doing dangerous work). They did not sit on the sidelines in the marketplace, their labor was allowed to be in play to create other men’s familial wealth that remains in the economy today. Looking more specifically at people on the list like Carnegie, who owned U.S. Steel, one of the major advantages was the ability to at times do highly labor intensive and dangerous work of steel production (mining the coal a key ingredient in steel production), with little or no labor cost. Steel production before mechanization was dangerous, and labor was key in production.

Only men of remarkable strength and endurance could stand up to the heat for hours, turn and stir the thick porridge of liquescent metal, and draw off the blobs of pasty wrought iron... Few of them lived past forty. Numerous efforts were made to mechanize the puddling furnace — in vain. Machines could be made to stir the bath, but only the human eye and touch could separate out the solidifying decarburized metal. Anselm.edu

As covered by the Wall Street Journal in the piece “From Alabama’s Past, Capitalism Teamed With Racism to Create Cruel Partnership”, through Vagrancy laws U.S. Steel (the largest Company in the U.S. at the time; the first corporation in the world with a market capitalization over $1 billion), and others built cities like Alabama on the free labor of African American men that died mining coal for their steel production, under what Douglas Blackmon, author of the prior mentioned piece in the Wall Street Journal, called “Slavery by Another Name.”

Under laws enacted specifically to intimidate blacks... Government officials leased falsely imprisoned blacks to small-town entrepreneurs, provincial farmers, and dozens of corporations — including U.S. Steel Corp. — looking for cheap and abundant labor. Armies of “free” black men labored without compensation, were repeatedly bought and sold, and were forced through beatings and physical torture to do the bidding of white masters for decades after the official abolition of American slavery. 

We as a country have started to allow our politicians to create a new view of the history of America. One in which America has been fair and free from its start, as Senator Marco Rubio so naively stated in his response to President Barack Obama’s State of the Union.
“But we Americans have always known better. From our earliest days, we embraced economic liberty instead. And because we did, America remains one of the few places on earth where dreams like these even have a chance.” Marco Rubio’s State of the Union Reply.
Economic Liberty defined
: Economic freedom or economic liberty denotes the ability of members of a society to undertake economic actions free from restriction.
What is left out of this revisionist history presented by Rubio is Slavery, and the era that followed as described above. What is left out is how the value of old U.S. money compounds, and how betting old compounding investment dollars taxed at 15% on the richest country in the world has created a wealth gap few want to acknowledge no wage earnings today taxed at 40% can correct.
America, the land of the free and the home of the brave, has always been a story staunchly planted in legacy. From the old money Vanderbilts, to the new politic Kennedys, it is a story of immigrants planting themselves and creating power bases for familial success. The top of the U.S. mountain of wealth is a place of limited access, and limited space, during economic downturns that space shrinks. Over the last 30 years the wealth mountain of opportunity did not become less steep (it actually became exponentially more), instead what I believe occurred is a false mirror of credit allowed people to peek at the top and believe they were there next to the privileged. Home loans gave families with little money keys to mansions; the government gave poor kids student loans and credit cards; in the end a credit based system gave us all too much access to touch, but not own everything. As the delusional pillars of consumer credit that helped an over-crowded middle class crumble upon themselves, what will be left is a stark reality that America is not the land of opportunity that it has been portrayed as through modern media. Rather America is in fact something far different behind that veil. It is a land where the sensational story of one ball-dribbling Lebron is repeated by the media so often, it forms a shadow over the failures of all the other Lebrons that live real working class lives, all the while they look for a place to actually be able to work. America is a place where there will not even be one line for all at theme parks, even your position there will be based on class. According to a NY Times article, “At Theme Parks, a VIP Ticket to Ride” will grant you the ability to skip in front of the have-nots to the proverbial front of fun. This country has become a place a place where the slight of hand creates believers in presentation based purely on the idea that the presentation is the full story. The era that allowed for expectations to be built on credit is on its way out, and it will again be replaced with the true power of legacy in its full form.

We of the sinking middle class may sink without further struggles into the working class where we belong, and probably when we get there it will not be so dreadful as we feared, for, after all, we have nothing to lose.” George Orwell

Follow Antonio Moore on Twitter: www.twitter.com/tonetalks

February 18, 2017

Marx on Immigration Workers, Wages, and Legal Status by David L. Wilson in Monthly Review

Marx on Immigration
Workers, Wages, and Legal Status

Photo credit: Values & Capitalism.
David L. Wilson is coauthor, with Jane Guskin, of The Politics of Immigration: Questions and Answers, to be reissued in a new edition by Monthly Review Press later this year.

On April 9, 1870, Karl Marx wrote a long letter to Sigfrid Meyer and August Vogt, two of his collaborators in the United States.1 In it Marx touched on a number of subjects, but his main focus was the “Irish question,” including the effects of Irish immigration in England. This discussion seems to have been Marx’s most extensive treatment of immigration, and while it hardly represents a comprehensive analysis, it remains interesting as a sample of Marx’s thinking on the subject—at least on one day in 1870.
Given the intense and often bitter debates over immigration now taking place in the United States and Europe, the letter to Meyer and Vogt has received surprisingly little attention from the modern left. Immigrant rights advocates in particular have ignored Marx’s thoughts on the issue, especially his remark—which reflects his assessment of how the capitalist system operates—that the influx of low-paid Irish immigrants to England forced wages down for native-born English workers. In fact, many present-day supporters of immigrants’ rights have taken the side of liberal economists who insist that immigration actually boosts wages for native-born workers.2
Marx on Irish Immigration
In his 1870 letter, Marx charged that English policy toward Ireland was based chiefly on the economic interests of England’s industrial capitalists and landed aristocracy. The English aristocracy and the bourgeoisie, he wrote, had “a common interest…in turning Ireland into mere pasture land which provides the English market with meat and wool at the cheapest possible prices.” For the capitalists there was also an interest
in reducing the Irish population by eviction and forcible emigration, to such a small number that English capital (capital invested in land leased for farming) can function there with “security.” It has the same interest in clearing the estates of Ireland as it had in the clearing of the agricultural districts of England and Scotland. The £6,000-10,000 absentee-landlord and other Irish revenues which at present flow annually to London have also to be taken into account.
But, Marx went on, the English bourgeoisie also had “much more important interests in the present economy of Ireland”—the forced immigration of Irish workers into England:

Owing to the constantly increasing concentration of leaseholds, Ireland constantly sends her own surplus to the English labor market, and thus forces down wages and lowers the material and moral position of the English working class.3
And most important of all! Every industrial and commercial centre in England now possesses a working class divided into two hostile camps, English proletarians and Irish proletarians. The ordinary English worker hates the Irish worker as a competitor who lowers his standard of life. In relation to the Irish worker he regards himself as a member of the ruling nation and consequently he becomes a tool of the English aristocrats and capitalists against Ireland, thus strengthening their domination over himself. He cherishes religious, social, and national prejudices against the Irish worker. His attitude towards him is much the same as that of the “poor whites” to the Negroes in the former slave states of the U.S.A. The Irishman pays him back with interest in his own money. He sees in the English worker both the accomplice and the stupid tool of the English rulers in Ireland.
This antagonism is artificially kept alive and intensified by the press, the pulpit, the comic papers, in short, by all the means at the disposal of the ruling classes. This antagonism is the secret of the impotence of the English working class, despite its organization. It is the secret by which the capitalist class maintains its power. And the latter is quite aware of this.

Marx wrote these passages nearly 150 years ago, and he was certainly not infallible: in the same letter he suggested optimistically that independence for Ireland might hasten “the social revolution in England.” But a great deal of his analysis sounds remarkably contemporary.
The parallels become obvious if we substitute the Caribbean Basin countries for Ireland and the United States for England. Just as English policy devastated small-scale agriculture in Ireland, U.S.-promoted neoliberal programs like the North American Free Trade Agreement (NAFTA) have uprooted small producers in Mexico, Central America, and the Caribbean islands, and this in turn has driven millions of the displaced to seek work in the United States. Once here, present-day immigrants are forced, like their Irish predecessors in England, into low-paying jobs and substandard living conditions, only to face hostility from native-born workers who view them as competitors. Antagonisms over this competition are further fueled by racial and ethnic prejudices, “artificially kept alive and intensified by the press.”
But Marx also claimed that Irish immigration drove down wages for English workers. Anti-immigrant forces in the United States make similar claims today. Does that put Marx on the side of people like Donald Trump and former Arizona sheriff Joe Arpaio?
The Economists’ Findings on Wages
The effect of immigration on wages is in fact a key point of contention in the current debate over immigrants to the United States, with nativists routinely charging that immigration reduces pay for U.S.-born workers, and immigrant rights activists countering that immigration has only a small negative influence on wages for the native-born, or even a positive effect.
Both sides cite the work of academic economists. The nativists quote George Borjas, a conservative Cuban American professor at Harvard’s Kennedy School of Government. In 2013, Borjas wrote that from 1990 to 2010 immigration probably “reduced the average annual earnings of American workers by $1,396 in the short run…. [T]he impact varies across skill groups, with high school dropouts being the most negatively affected group.”4 Immigrant rights activists prefer to cite Giovanni Peri, a University of California, Davis professor who argued in 2010 that the total immigration to the United States from 1990 to 2007 would be expected to bring about “an increase of about $5,100 in the yearly income of the average U.S. worker in constant 2005 dollars.”5
Activists on the issue are naturally quick to cite the academic studies that support their own position.6 They are less eager to look under the hood and analyze how scholars arrived at these numbers. Calculating the effect of immigration on wages is a complicated undertaking. There are a variety of possible empirical approaches. One method tries to correlate wages with levels of immigration over a given period. For example, many assume that the stagnation in real wages since the 1970s is connected to the increase in immigration during that period. However, there are many other possible causes—the weakening of the labor movement, job losses due to automation and offshoring, and so on—and these are difficult to quantify. Short of discovering an alternative universe, there’s simply no secure way to model what wages would have been in the absence of immigration.
Another empirical approach is to compare wage trends in different parts of the country. For example, if wages rise in one city as immigration increases there, while at the same time wages fall in another city experiencing an immigration decline, then increased immigration may be a factor pushing wages up.
This second approach is the one that both Borjas and Peri favor, using sophisticated statistical methods to control for other factors, such as the tendency of immigrants to settle in places with higher wages, or of U.S.-born workers to move away from areas where they face competition from immigrants. But the two economists come up with opposing results, and in either case, they can only demonstrate a correlation, not a cause.7 Ultimately, data alone will never provide us with an indisputable conclusion.
The Economists’ Theoretical Models
To deal with this problem, Borjas and Peri supplement their empirical studies with models based on economic theory, principally in terms of supply and demand. When immigrants enter the work force, they increase the supply of labor without immediately increasing the demand; the short-term result is a tendency for wages to fall. Over time, wage rates should stabilize, since the new immigrants also increase the demand for goods and services, and therefore for labor, but these effects vary across different sectors of the workforce. Much of the immigration to the United States from 1970 to 2008 involved workers with little education and limited English proficiency, who sought manual jobs at a time when demand for such work was shrinking. The result was an oversupply of manual laborers, which would then be expected to push wages down for native workers in the same job categories. This is the basis for Borjas’s argument that immigration reduces wages.
Peri and his collaborators refine this basic model of supply and demand using a principle they call “complementarity.” In their view, low-wage immigrants do not simply substitute for native-born workers: given their lower English proficiency, the immigrants take jobs that require minimal communication skills, encouraging native-born workers to use their greater communication skills to move into higher-level jobs. For example, as Peri wrote in 2010,
[a]s young immigrants with low schooling levels take manually intensive construction jobs, the construction companies that employ them have opportunities to expand. This increases the demand for construction supervisors, coordinators, designers, and so on. Those are occupations with greater communication intensity and are typically staffed by U.S.-born workers who have moved away from manual construction jobs. This complementary task specialization typically pushes U.S.-born workers toward better-paying jobs, enhances the efficiency of production, and creates jobs.8
For Peri and his collaborators, this factor more than compensates for the effects of simple supply and demand. According to their models, an influx of low-wage immigrants will bring down wages slightly for less educated native-born workers, and will depress wages significantly for other immigrant workers already in the country. However, Peri writes, the benefits to better-educated U.S.-born workers outweigh the losses for the less educated; according to Peri’s calculations, over the long run, the average worker’s income goes up by 0.6-0.9 percent for each one percent increase in the immigrant population.9
What the Economists Miss
Though they reach opposite conclusions, the analyses of both Borjas and Peri share a major defect: their assumption that the only factors determining wage levels are labor supply and demand and immigrant workers’ education and skill levels. In the real world, of course, there are many other forces at work. Women and African Americans are paid less than white men, but this is not due to an excess supply of women and African Americans. Likewise, it is not because unionized workers are better educated that they earn more than their non-union counterparts.
Most immigrant workers are people of color, and it is hard to imagine that racial discrimination does not affect how much they are paid. One way social scientists try to approach these questions is with the Oaxaca-Blinder decomposition technique, a statistical method that analyzes the wage gap between different groups by identifying known factors that impact wage levels, such as education and skill levels, and teasing out the unknown factors that may be attributed to discrimination. Using a Oaxaca-Blinder decomposition, a 2016 study found that even for third-generation Mexican Americans, only 58.3 percent of a worker’s wage level is explained by known factors such as education and work experience. Discrimination remains still worse for people of African ancestry; for these workers, known factors only account for 48.3 percent of the difference in wages.10
Academic economists also tend to ignore the role that legal status can play in determining wage levels, even though one-third of the country’s immigrant workers—some 8.1 million as of 2012—are undocumented, according to the Pew Research Center.11 These workers face an additional hurdle: they have been made “illegal,” and as a result live under constant threat of persecution and deportation.
Under U.S. law, undocumented workers enjoy most of the same rights as other workers, yet they do not have the right to be here: at any moment, an unauthorized immigrant can be detained, imprisoned, and slated for deportation. Fear hangs over every aspect of these workers’ employment and of their lives in general. The threat of deportation is a weapon always available to employers when unauthorized workers try to assert their rights—to ask for higher wages, report workplace violations, demand compensation for injuries on the job, and form a union. And by law these workers have no access to unemployment insurance or any other part of the frayed social safety net, so they face significant hardship if they lose their current jobs. Going on strike is risky for most workers; for the undocumented it requires a special level of courage.
Is it possible, then, to quantify the “wage penalty” that the lack of legal status imposes on undocumented workers? Several studies have dealt with this question, mostly using the Oaxaca-Blinder decomposition. Given the sheer number of variables, these studies have produced widely divergent estimates of the wage disparity, ranging from 6 percent to more than 20 percent.12 But all agree that lack of legal status has a definite negative impact on immigrants’ pay. And this effect operates without reference to supply and demand—or Peri’s “complementarity.” Even if there is no oversupply of low-wage workers, undocumented immigrants will still be paid appreciably less than their U.S.-born coworkers, and less than immigrant workers with legal status.
This inevitably produces a substantial downward pressure on wages for U.S.-born workers in job categories with high rates of participation by the undocumented. For example, a survey in 2005 found that unauthorized workers accounted for 36 percent of all insulation workers and 29 percent of all roofers and drywall installers.13 Even if the wage penalty for these workers is on the low side—at 6.5 percent, say—it undoubtedly depresses wages for other workers in these construction jobs.
“A Working Class Divided”
Another factor the economists ignore is precisely the one Marx considered “most important of all”: the way immigration can be used to create “a working class divided into two hostile camps.” Marx may have exaggerated when he called antagonism between English and Irish workers “the secret of the impotence of the English working class,” and in the United States today, anti-immigrant prejudice is only one of the forces preventing the majority of the population from asserting their own strength. Racism against African Americans—along with sexism, homophobia, and many other prejudices—continues to play its historic role in keeping workers from uniting and organizing. But xenophobia is also a major factor, especially in periods when immigration rates are high.
There may be no easy way to quantify the effect on wages, but we can find at least one striking example of how effective anti-immigrant sentiment can be in turning the labor movement against the interests of its members. The Immigration Reform and Control Act of 1986 (IRCA) for the first time instituted fines for employers caught hiring unauthorized workers. According to the law’s supporters, these “employer sanctions” would reduce unauthorized immigration by cutting off immigrants’ access to U.S. jobs. In reality, the sanctions have simply provided another tool for the super-exploitation of undocumented workers. IRCA’s documentation requirements provide a pretext for workplace raids, and push many undocumented workers into the underground economy, where they face still more challenges in defending their labor rights. Even legitimate employers may reduce payment to workers who are immigrants—and therefore possibly undocumented—to compensate for the risk of being fined, while other employers now routinely use subcontractors who assume that risk themselves and pay the workers even less.14 Responding to anti-immigrant feeling in its member unions, the AFL-CIO supported this anti-labor measure in the run-up to the IRCA. It was not until 2000 that the labor federation finally renounced employer sanctions and came out in support of legalization for unauthorized workers.15
Fighting Exploitation, Not Immigration
Marx did not elaborate on his reasons for writing that Irish immigration reduced English workers’ wages. He implied that the cause was an oversupply of manual laborers, but his other statements indicate that he considered English xenophobia and the resulting antagonism among workers an even greater problem. The important point, however, is that he was not blaming lower wages on the immigrants themselves; for him the culprits were the colonial system that drove Irish workers to England, and the exploitation of these workers once they arrived.
The same considerations apply in the United States today. The main difference is the addition of legal status as a factor in setting wage levels—the laws that now make work “illegal” for millions of immigrant workers. Immigrant rights advocates may feel it is expedient to cite academic economists like Peri who downplay or deny the downward pressure exerted on wages by the exploitation of undocumented workers. It is not. As Columbia University economist Moshe Adler has noted, this approach does nothing to convince the many U.S. citizens who work in occupations with large numbers of undocumented immigrants and therefore “know firsthand that [exploitation of immigrant workers] puts direct downward pressure on their own wages.”16 Far from helping the movement, citing Peri only adds to these workers’ distrust and resentment toward middle-class immigrant rights advocates.17 More importantly, this approach distracts attention from efforts to address the real issues: the root causes of immigration in U.S. foreign policy, the super-exploitation of immigrant workers, and the common interests of immigrant and native-born workers.
In 2010, the Dignity Campaign, a loose coalition of some forty labor and immigrant rights organizations, proposed a comprehensive approach emphasizing these issues. More recently, Senator Bernie Sanders’s 2016 presidential campaign platform took some steps in the same direction, while the Movement for Black Lives platform made important recommendations in August 2016 for fighting injustice and systemic racism in the immigration laws.18 The political climate has become especially favorable for organizing along these lines since the financial collapse of 2008. Paradoxically, even Trump’s 2016 presidential campaign may have helped: it has emboldened the nativist right, but it has also made a broad sector of the population more aware of the racism underlying anti-immigrant xenophobia.
In his 1870 letter, Marx described what he then considered the overriding priority for labor organizing in England: “to make the English workers realize that for them the national emancipation of Ireland is not a question of abstract justice or humanitarian sentiment but the first condition of their own social emancipation.” His closing words of advice to Meyer and Vogt were similar: “You have wide field in America for work along the same lines. A coalition of the German workers with the Irish workers (and of course also with the English and American workers who are prepared to accede to it) is the greatest achievement you could bring about now.” This internationalist and class-based perspective has lost none of its good sense in the century and a half since it was written.


  1. Karl Marx and Frederick Engels,Collected Works, vol. 43, Letters 1868–70 (London: Lawrence and Wishart, 2010): 471–76. All italics in original.
  2. For example, the pro-immigration American Immigration Council (AIC) wrote in 2012 that “immigration gives a small wage boost to the vast majority of native-born workers.” AIC, “Value Added: Immigrants Create Jobs and Businesses, Boost Wages of Native-Born Workers, Employment and Wages,” January 1, 2012, http://americanimmigrationcouncil.org.
  3. The Germanmoralisch, translated here as “moral,” can refer to morale as well as to morals. Marx seems to use the word in a still broader sense: for example, inCapital, vol. 1, chapter 10, he discusses “the moral bounds of the working-day.” He specifies that these “moral bounds” include “[t]ime for education, for intellectual development, for the fulfilling of social functions and for social intercourse, for the free-play of [a worker’s] bodily and mental activity, even the rest time of Sunday.”
  4. George Borjas, “Immigration and the American Worker,” Center for Immigration Studies, April 2013, http://cis.org. Borjas explains his positions at length inHeaven’s Door: Immigration Policy and the American Economy (Princeton, NJ: Princeton University Press, 1999).
  5. Giovanni Peri, “The Effect of Immigrants on U.S. Employment and Productivity,” Economic Letter, Federal Reserve Bank of San Francisco, August 30, 2010, http://www.frbsf.org. For a fuller discussion of Peri’s methodology, see Giovanni Peri and Chad Sparber, “Task Specialization, Immigration, and Wages,”American Economic Journal: Applied Economics 1, no. 3 (2009): 135–69.
  6. See, for example, Neil Munro, “Report: Immigration boosts economy, widens wealth gaps, analysis finds,” Daily Caller, April 9, 2013, http://dailycaller.com; and Mark Engler, “Labor Day: Immigrants Build the U.S. Economy,”Dissent, September 3, 2010, http://dissentmagazine.org.
  7. For one example of these disputes, see David Frum, “The Great Immigration-Data Debate,”Atlantic, January 19, 2016.
  8. Peri, “The Effect of Immigrants on U.S. Employment and Productivity.”
  9. Ibid.
  10. Pedro P. Orraca-Romano and Erika García Meneses, “Why Are the Wages of the Mexican Immigrants and their Descendants So Low in the United States?Estudios Económicos 31, no. 2 (2016): 305–37, http://estudioseconomicos.colmex.mx.
  11. Jeffrey S. Passel and D’Vera Cohn, “Share of Unauthorized Immigrant Workers in Production, Construction Jobs Falls Since 2007,” Pew Hispanic Center, March 26, 2015, Table 1, http://pewhispanic.org.
  12. Patrick Oakford, Administrative Action on Immigration Reform: The Fiscal Benefits of Temporary Work Permits(Washington, D.C.: Center for American Progress, 2014), 14–17, http://cdn.americanprogress.org; Francisco L. Rivera-Batiz, “Undocumented Workers in the Labor Market: An Analysis of the Earnings of Legal and Illegal Immigrants in the U.S.,”Journal of Population Economics12, no. 1 (1999): 91–116.
  13. Jeffrey S. Passel, “The Size and Characteristics of the Unauthorized Migrant Population in the U.S.: Estimates Based on the March 2005 Current Population Survey,” Pew Hispanic Center, March 7, 2006, http://pewhispanic.org.
  14. Douglas S. Massey and Kerstin Gentsch, “Undocumented Migration to the United States and the Wages of Mexican Immigrants,”International Migration Review48, no. 2 (2014): 482–99.
  15. Teófilo Reyes, “AFL-CIO, in Dramatic Turnaround, Endorses Amnesty for Undocumented Immigrants,”Labor Notes, April 1, 2000; David Bacon, “The AFL-CIO reverses course on immigration,” LaborNet Newsline, October 17, 1999.
  16. Moshe Adler, “The Effect of Immigration on Wages: A Review of the Literature and Some New Data,” Empire State College, May 1, 2008, http://esc.edu; “Pitting Worker Against Worker,” TruthDig, April 30, 2010, http://truthdig.com.
  17. Immigrant rights activists should also note that Peri supports highly exploitative “guest worker” programs, and has even proposed that the federal government auction off work visas to businesses, a practice that “sounds like auctioning slaves,” according toLe Monde diplomatique deputy editor Benoît Bréville. See Giovanni Peri, “The Economic Windfall of Immigration Reform,”Wall Street Journal, February 12, 2013; and Benoît Bréville, “Getting In and Getting On,”Le Monde diplomatique, July 2013.
  18. Dignity Campaign, “The Dignity Campaign Proposal,” http://dignitycampaign.net; “A Fair and Humane Immigration Policy,” http://berniesanders.com; Movement for Black Lives, “End the War on Black People,” http://policy.m4bl.org.

February 17, 2017

Japan's Abe’s subservience to Trump stands out: Shii in statement on Japan-US Summit

February 12, 2017

Japanese Communist Party Chair Shii Kazuo has described the Japan-U.S. Summit meeting held on February 10, local time, in the White House as displaying Abe’s “subservience to Trump”.

Shii on February 11 issued the following statement on the first bilateral talks between Japan’s Prime Minister Abe Shinzo and U.S. President Donald Trump:

Abe during his first summit meeting with Trump showed his submissive stance of promising the “Japan-U.S. alliance first” to the Trump administration which calls for “America First”. Abe’s extraordinarily “obsequiousness to Trump” has stood out in every policy issue from security to the economy.

This summit meeting took place amid intense criticism from within the United States and abroad against Trump’s executive order barring people from seven countries. PM Abe, regarding such critical humanitarian issues involving international human rights, kept silent by saying, “I decline to comment about that.” Here again, he showed to the world his position as a “Trump adherent”.

During the summit talks, the two leaders emphasized the strengthening of the Japan-U.S. alliance and agreed that “Japan will assume larger roles and responsibilities in the alliance.” They also reaffirmed, “The United States and Japan will continue to implement and expand defense cooperation as laid out in the 2015 U.S.-Japan Defense Guidelines”. Furthermore, they confirmed to instruct their foreign and defense ministers to hold a 2-plus-2 meeting “to identify ways to further strengthen the U.S.-Japan Alliance”.

The meeting confirmed Abe’s commitment to continue going ahead with military cooperation on a global scale between U.S. troops and Japan’s Self Defense Forces and to further promote his ambition to turn Japan into a “war fighting nation abroad” based on the New Guidelines and the national security legislation (war laws). The Japanese Communist Party severely opposes such a dangerous and aggressive enhancement of the Japan-U.S. military alliance. The JCP will continue making efforts to abolish the unconstitutional security legislation (war laws).

In the meeting, the two leaders affirmed the promotion of the new U.S. base construction in Okinawa’s Nago City as the “only solution” (to the Futenma base relocation). It is totally unacceptable to impose another base burden on Okinawans for the sake of the Japan-U.S. alliance by trampling on local opposition which has repeatedly been expressed in opposition victories in recent elections.

Regarding economic issues, Prime Minister Abe showed his stance of being extremely subservient to President Trump. At the joint press conference, PM Abe said that Japan will be able to “contribute to President Trump’s growth strategy,” adding, “There will be even more new jobs in the United States.” He announced that Japan will fully cooperate with and work for Trump’s policies in regard to the U.S. economy. This is nothing other than what can be characterized as a “fawning diplomacy”.

Under the situation where the Trump-led U.S. government decided on departing from the Trans-Pacific Partnership free-trade framework, the Japanese and U.S. leaders pledged to “explore how best to accomplish” the deepening of their nations’ relations on trade and investment in addition to the start of discussions “between the United States and Japan on a bilateral framework”. Based on Japan’s compromises in the TPP negotiations, Japan will face the risk of being forced to offer more in every field in future trade talks with the U.S. government. The JCP will forcefully oppose such moves.

Furthermore, Abe and Trump agreed to set up an economic dialogue led by Japan’s Deputy Prime Minister Aso Taro and his U.S. counterpart Mike Pence as a new structure for economic cooperation between the two nations. Themes for the dialogue have three main pillars: These will be economic policies; cooperation in infrastructure investments and the field of energy; and rules on trade and investment. It is highly likely that this new framework would lead to U.S. interference in the Japanese government’s economic policies.

The Abe government’s “Japan-U.S. alliance-first” approach to the “America First” Trump administration will face opposition by the general public and eventually reach an impasse. It should drastically change its rigid position which puts absolute priority on its military ties with the U.S.

Only by abrogating the Japan-U.S. Security Treaty, a source of Japan’s continued subordination to the U.S., and concluding a genuine friendship treaty can Japan-U.S. relations in the 21st century enter a new stage based on friendship on equal footing.




The first two decisions by President Trump following his inauguration were to withdraw from the Trans Pacific Partnership (TPP) agreement, and to renegotiate the North American Free Trade Agreement (NAFTA). He campaigned on the mass permanent unemployment, slashed wages and living standards, and de-industrialization that NAFTA caused in the US, blaming the carnage on the Democrats and Bill Clinton who negotiated the deal in 1994.
But Trump’s plans aren’t intended to help workers, to reduce climate change, or to respect the sovereignty and independence of its trading partners, or their economic needs and well-being. A quick look at the Trump Cabinet tells the whole story: this is a government of billionaires intent on running the country like a corporation. They aim to rack up the biggest private profits ever, for themselves and for the US-based transnational corporations they speak for. Their foreign and trade policies fit the same mold.
A January 10th Op-Ed piece in the Globe and Mail by Gordon Ritchie, former ambassador for trade negotiations and deputy chief negotiator of the Canada-US Free Trade Agreement (FTA) warns that there is no level playing field in US-Canada trade negotiations. The US is coming to get the things it couldn’t get in 1994.
Ritchie writes, “If, as president, Mr. Trump is determined to rework NAFTA in favour of the US protectionists, Canada must come to the table with its own serious demands and negotiators tough-minded enough to stand up to the neighbourhood bully. High-minded tinkering will not be enough.”
But NAFTA is, and always has been a bad deal for Canada, and efforts to renegotiate it can’t change that. Standing up to the neighbourhood bully means Canada should pull out of NAFTA now.

What Trump Wants
            Richie’s Op-ed piece summarizes the key demands that the US is likely to make in NAFTA negotiations. First, to impose restrictions on BC’s softwood lumber exports, which the US has tried to curtail since 1994 with legal challenges under NAFTA’s Chapter 11 (investor state dispute settlement mechanism). Those attempts failed, but finally forced Canada to sign a 10-year agreement restricting its exports. This agreement has now expired. Trump wants to impose these unacceptable conditions on softwood exports into the NAFTA agreement.
It’s clear that softwood lumber is at the top of Trump’s demands to change NAFTA. But why would Canada agree to that? This is a very important resource industry, and jobs for Canadian workers.
Trump also wants to change the investor state dispute settlement (Chapter 11) which is a cornerstone of NAFTA, and a powerful reason to get out now. But he doesn’t want to get rid of ISDS, he wants to strengthen it to benefit US capital, at the expense of Canada and Mexico. If Trump gets his way, all future trade disputes will be resolved in favour of the US, under NAFTA.
Trump is also out to change the agricultural supply management system, which has been vital to protect Canadian agriculture, and to protect the food supply from companies like Monsanto, and from additives like rGBH which is already in the milk supply in the US and Mexico (and would have been allowed here under the terms of the TPP). The US strongly objects to the marketing boards that are also part of the supply management system. Trump wants free access for US producers to Canadian markets, and to restrict exports of Canadian food products, including dairy and pork, to the US market. This includes restrictions on imports of Canadian meat, using country-of-origin rules that are illegal under NAFTA.
Trump wants US and foreign car-makers to move their parts and assembly plants, so that cars sold in the US are all made in the US. Cars and trucks made outside the US, including Canada and Mexico, will face stiff tariffs and border taxes. His threat to slap a 35% border tax on Toyota cars and trucks, unless the company cancelled planned investment in Mexico, is a prime example of “America First”. He wants to add this to the new NAFTA deal, which would cost Canada thousands of direct and indirect jobs in the auto sector, profoundly impacting Canadian workers, manufacturing, and the economy as a whole.
Trump wants more access for mass corporate culture, in the way of US television and movies. State support for Canadian film, television, books, and culture is seen as an unfair trade subsidy that should be eliminated.
He wants to open up access for US healthcare corporations to operate in Canada, in competition with our single-payer Medicare system, and more access for Big Pharma.
Trump wants access to Canadian water, and to commodify the Great Lakes. He wants pipelines to transport Canadian oil, including bitumen, to US refineries in the Gulf. He is about to confirm the Keystone XL pipeline, which millions of Canadians oppose, and which Indigenous peoples have committed to stop. His rhetoric against climate change science will also likely find its way into the new NAFTA.
There is much more that the new US government wants to re-negotiate in NAFTA, including reductions in workers’ rights and in the powers of elected governments at all levels, in favour of the large national and multi-national corporations and supra-national institutions like NAFTA itself, and the Investor State Dispute Settlement sections of NAFTA.
There is nothing in NAFTA of benefit to working people for negotiators to salvage. This rotten deal should be finally buried.

Needed: A New Trade Policy

What working people urgently need is a new trade policy that protects our interests, respects the sovereignty and independence of our trading partners, and works for multi-lateral and mutually beneficial trade, secured in a foreign policy of peace, disarmament and mutual security. This new trade policy should include extending long-term credits to the developing countries.
Canada also needs an industrial strategy that includes a basic steel industry, and builds up value-added manufacturing and secondary industry, to create good jobs, raise living standards, and build the country. This should be done in an environmentally sustainable way, using science and technology to reduce greenhouse gasses and carbon emissions.
It should include a national strategy to build affordable social housing across Canada, and to expand publicly-owned municipal and provincial infrastructure.
It must include improved social programs and public services, expanded to include a national childcare program that is universally accessible, affordable, and public. It should include expansion of Medicare to include vision, dental, long term care, pharmacare, and mental health care; and enforcement of the Canada Health Act. It should include free tuition for post-education and stipends for students in post-secondary institutions.
The real change that working people seek includes expanded labour, civil, democratic and equality rights, and the protection of all citizens and residents from racism, xenophobia, sexism and homophobia.
That’s the Canada working people want. Not capitalist globalization, not NAFTA, and not far-right demagogues and governments like Trump’s.

Trudeau should take note of the outpouring of resistance at the Women’s March. Bowing down to Trump will cost him dearly. Now is the time to stand up for Canada – no weaseling allowed.

February 16, 2017

Palestine Communist Party: 'Unite against all conspiracies for the sake of freedom and independence' ICP, 14 February 2017

PCP: 'Unite against all conspiracies for the sake of freedom and independence'

The Palestine Communist Party (PCP) released a statement on the latest Zionist legislation.
ICP, 14 February 2017
The Palestine Communist Party (PCP) released a statement regarding the recent Zionist legislation to build settlements on Palestinian territory, the PCP pointed out that this was 'the biggest proof of the rejection of the state entity for any political settlement of the Palestinian issue based on the two-state solution'. The statement reminded that the PCP in its last conference had ruled out this solution, based on the new conditions imposed by the occupation. 
PCP pointed out that Israel had a single goal to stall the negotiations in order to gain enough time for the confiscation of Palestinian land and displacement of Palestinians from their homes. In the statement, the Palestinian people were summoned to unite and resist this occupation carried out either by roadblocks scattered across the country or with procedures and laws of racism remaining from this negotiation policy throughout 25 years.
Without 'begging the enemy or the international community, which has never been an ally of the oppressed peoples', the PCP called to end the 'Palestinian vs Palestinian division' and embark on a program which involves 'a phased operation in compliance by all honorable Palestinian forces, without exception'.  The statement warned not to rely on EU relations, NATO or the US administrations whose only goal is to control the wealth and exploit the peoples of the world. 
The statement continued as follows:
'We must bet on the ability of our people that has proven through its long history in the struggle its ability to thwart the Zionists and their allies' schemes.... The cost of resistance and confrontation with the enemy is much less than the cost of surrender and begging the Arab reactionary local allies.'