Why do Social Democrats do what they do?

September 30, 2009

ECONOMIC RECOVERY? FOR WHOM? By Sam Hammond, October 1-15, 2009, issue of People's Voice

(The following article is from the October 1-15, 2009, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St., Unit 502, Hamilton, ON, L8P 2H3.)

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It used to be in earlier society that a cobbler made shoes. After the rise of capitalism with its class exploitation, relations of production and market competition, the manufacture of shoes occupies thousands of people.

This is because capital, in its drive to cheapen production costs and dominate markets, accelerates a division of labour into smaller and smaller units, each with lesser but more specialized skills. In turn, this accelerates the competition of labour, the competition between workers, especially in an environment where there are large pools of surplus labour (the unemployed) banging at the doors of workplaces and offering cheaper rates than those already inside. It is precisely this phenomenon that drives capital to cheapen labour and create unemployment.

Capitalism, as it develops through its stages, seeks to turn everything into a commodity that can be sold in the marketplace. Thus the market economy. In capitalism, labour power is purchased and traded like any other commodity. Thus the "labour market" - the odious expression for that part of our lives we hand over to gain wages to sustain that other part of our lives.

Karl Marx pointed out that a commodity will always find a price above or below its cost of production, creating profit or loss for the capitalist. If labour power is sold above the cost of its production (the rearing and maintenance of children, education, housing, etc.) workers will live and by proportion purchase small pleasures. If the price of labour power falls below the cost of its production, workers starve, and the horrible spectacle of deprivation, famine and disease are the results.

Historically, it was the social and political intervention in this phenomenon by the working class that created the labour movement. Workers banded together to gain economic benefit, developing institutions with social-political and ideological goals. The two dominant and competing ideological strains, developed within and imported from without, have been reformism and revolution. Each at different times and places has been dominant, but both are always present in the class struggle. So there is a choice: which do we need at the present time? More on this later.

The Organization for Economic Co-operation and Development (OECD), originating in 1947 to manage the post-war Marshall Plan and make sure Europe was rebuilt along capitalist lines, was an economic parallel with NATO and an instrument in the competition between the capitalist and socialist bloc countries. The original 20 member states have now expanded to 30 and reach into the southern hemisphere (Australia, New Zealand) and Asia (Turkey). All the member states are committed to the so-called free market economy (don't forget the labour market), the International Monetary Fund and the World Bank.

Ironically, the OECD is a great research source for anyone studying economic trends and development; see our page 7 article on the OECD's Employment Outlook 2009, for example. Even more ironically, like most neo-liberal imperialist think tanks, the OECD extols the market economy while also recently preaching necessary regulation and stimulus injection. It points out the dangers of escalating permanent global unemployment that will inevitably produce social resistance ending in....? They won't say the phrase: revolutionary movements. Reformism doesn't directly challenge capital, so it is only dangerous as a spawning ground for revolutionary thought, a rejection of itself.

Like most imperialist word-speaks, the OECD is desperately seeking signs of recovery. If one automobile is sold or one nickel of profit is turned, this is enough to signal a glorious recovery. At the same time, parallel and concurrent, is the prediction of long term permanent unemployment. For Canada, they predict official jobless rates of 10% or more well into 2010 or even 2011.

So at the same time, we have the phenomena of escalating unemployment (read poverty, smashed families, homelessness, cheap desperate labour and general impoverishment) and recovery (read resumed profit, exploitation, wealthy industrialists and bankers).

Which one is correct? Both are, because capitalism is a class society, and the interests of one class are opposed to the interests of the other. The present crisis is the product of capitalism, and also the propellant towards the next more acute crisis, with an exponential increase in human suffering, war and plunder and destruction of environment. Without intervention, the future will be more of the present.

But if capital is market driven, and the market demands consumers, how can there be a recovery with unemployment and cheap labour shrinking the market, increasing the inability of the masses of people to purchase?

This is the fly in the ointment that makes capitalism a social system that has outlived its historical usefulness. It has reached a stage of imperialism, where stagnation is a permanent phenomenon, and economic stimulation can only be regional and procured by the cheapening of labour, the capturing of resources and markets through war.

Some members of the working class think they can survive and prosper as junior partners, an "aristocracy of labour" amongst their own class, living in a sea of cheaper labour, under-employed or unemployed. This can only be transient and temporary, because their acquiescence only helps escalate the objective nature of capital to impoverish labour in general and drive its commodity price down.

In 1847, Karl Marx wrote in Wage-Labour and Capital about the escalating division of labour and the effect of capitalist market competition: "We have hastily sketched in broad outlines the industrial war of capitalists among themselves. This war has the peculiarity that the battles in it are won less by recruiting than by discharging the army of workers. The generals (the capitalists) vie with one another as to who can discharge the greatest number of industrial soldiers."

Downsizing, technology, speed-up, increasing workload, deteriorating work conditions, increased production and cheaper prices with a smaller work force. Is this not Canadian manufacturing, especially auto?

Both the reformist and revolutionary trends in labour have historically grappled with the competition between workers. That is where the word union labour comes from, as opposed to individual labour. That is where collective bargaining seeks to destroy individual contracts. Reformism can be useful in the short term, but soon finds itself shaped and channelled by the "carrot and stick" tactics of capital into counterposing the interests of "members" to those of the class as a whole.

This is not always done intentionally, indeed it is resisted, but is always a pressure from more powerful capital. To move beyond this danger requires a larger outlook, a higher consciousness that embraces and recruits the entire class towards some kind of social solution. That is revolutionary ideology, an ideology that addresses itself to the problem of eradicating the cause as a propellant towards a solution.

As a class, what do we need to resist and maintain ourselves? Competition or co-operation? Cannibalism, raiding and exclusion, or unity and inclusion" That is the question that begs for a debate. What do you think?

(Contact Sam Hammond at newlabourpress@telus.net.)

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