Global Capitalism and the Proletariat in the 21st century

[Extracts from a paper presented by Arindam Sen at a workshop of organised sector worker activists in Patna on 11.12.2003.]

“Know the enemy and know yourself, and you can fight a hundred battles with no danger of defeat” — Sun Wu Tzu

A PRODUCT, leader, and still an organic part of imperialism, US empire is becoming a reckless, ruthless, domineering force standing above it. While inter-imperialist collusion remains the principal aspect, conflicts grow sharper and strong centrifugal tendencies emerge, giving us, the world proletariat, a favourable terrain to fight our class war in the 21st century.

Proletariat in the 21st Century

We all know what enormous changes the last quarter of the last century has witnessed. But through all the changes in form, composition and modus operandi, capital remains essentially the same, and so does labour; or to be more correct, in both cases the essence evolves and develops through successive changes in form and structure.

Who is a Proletarian?

Now what is the essential attribute of the Marxian category of “proletariat”? Poverty? Large-scale factory production? These attributes definitely went into the concept as predominant contemporary features, but in the rigorous scientific framework of Marxian political economy the defining factor was commodification of labour power, sale of labour power. The Communist Manifesto defines “the proletariat, the modern working class” as “a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.”1

Now friends, I believe some of you present here work as clerks, computer operators, junior officers, etc., in banks and offices. Don’t you think you have to sell yourselves piecemeal in a highly competitive market? I think the so-called white-collar workers who live by selling their mainly intellectual labour power (I say mainly because they also have to wear themselves out physically through long hours of strenuous labour) broadly belong to the same class as those who sell their mainly manual (mainly because they also have to use their brains) labour power. Not to be included here, of course, are higher executives who earn enough to become capitalists and whose incomes usually include large dividends from shares and interests from other investments.

When we count all ordinary sellers of labour power in factories, offices as well as transportation and related activities -- including the growing millions employed in the informal sectors (e.g., bidi and garment workers including those who work in their homes, constructions workers labouring under petty-contractors and so on) -- and especially when we consider the expanding army of rural proletarians, the working class definitely is not a shrinking social group, as is sometimes alleged. We often hear that unionised workers are no longer poor and therefore no longer revolutionary. But the concept of poverty, like that of well-being, is always relative. Relative to the enormously inflated earnings and assets of the capitalist class, i.e., in terms of relative poverty and the rich-poor hiatus, workers’ conditions have consistently worsened in most cases throughout the history of capitalism. What is more important is that the Marxian category of proletariat is based not on absolute lack of property, but on non-possession of means of production, which prevents a member of this class from earning a living as a petty- bourgeois. Also there is nothing new in the fact that certain sections of manual and mental workers lead comparatively much better lives than others. Engels even talked of “a bourgeois proletariat beside the bourgeoisie”, and Marx shared this view. Lenin introduced the concept of “workers’ aristocracy” -- an entire, albeit small, stratum bribed by the imperialist bourgeoisie in the western countries out of monopoly super profit extracted from colonial/semi- colonial countries -- as the social base of revisionism. At the same time he showed that in Russia the highest-paid metal workers played the most advanced role in the revolution. In our country too we have seen many instances, in yesteryears as well as in the recent past, of organised and better-paid workers in ports and docks, the rail, coal and power sectors, banks, postal and other public services, etc. playing the most consistent vanguard role as a bloc, as a class (i.e., comparative to other social groups or class forces) in the otherwise rather sporadic people’s resistance to the LPG (liberalisation-privatisation-globalisation) offensive. This, of course, is not to deny the ongoing grip of economism and narrow trade unionism over our organized workers. The crux of the matter is that the actual role and level of consciousness of the working class -- of its different sections or strata -- depend on the given politico-economic situation and many other factors, including the political leanings of the unions and the parties which lead them. It is not on this variable subjective role of the proletariat, but on its objective position in the capitalist organisation of production and distribution, in the class hierarchy of the capitalist system, that Marxists base their identification of the proletariat as the class which will lead the transition to class-less society: “If Socialist writers attribute this world-historic role to the proletariat, this is not at all because they regard the proletarians as gods. … It is not a matter of knowing what this or that proletarian or even the proletariat as a whole conceives as its aims at any particular moment. It is a question of knowing what the proletariat is and what it must historically accomplish in accordance with its nature”. (Marx in The Holy Family)

“The proletariat, the lowest stratum of our present society, cannot stir, cannot rise itself up, without the whole superincumbent strata of official society being sprung into the air.” (Marx and Engels, The Communist Manifesto) Marxism is nothing if not the revolutionary class ideology of the proletariat, and it is important to reiterate that (a) the composition of working class (the relative numerical strength of “blue-collar” and “white-collar” workers, or formal and informal sector workers, for example) has been, and will be, changing inevitably with the changing structures of capitalist production and distribution (b) such changes, as well as those in working and living conditions, do help or render more difficult the process of movement and organization (c) despite the changes, being the class with no stake in the preservation of private property in the means of production, the proletariat remains objectively committed to the historical mission of abolition of that private property, i.e., of leading capitalism’s transformation (necessitated by the maturing of its inherent contradictions) into socialism and (d) however, subjectively the working class needs to be trained and organized for this historic mission by its revolutionary party, the communist party, in which this objective destiny attains self-conscious and concentrated expression.

Essentially, this is the whole concept of proletariat, proletarian revolution, proletarian party; it is not rendered invalid by the otherwise significant changes that have taken place, and are taking place, among the working class. But the essence appears in different forms in different periods. So from the basics let us move over to certain current features.

Some Recent Trends

Without trying to be exhaustive, let us take note of some of the emerging features or shifts in conditions of work and terms of employment.
Intensified exploitation and new onslaughts
As a neo-liberal offensive of monopoly capital emanating from the global North, globalisation has as its prime target the working class – both at home and in far-off lands. We often discuss the imperialist expropriation of the third world, but no less important are the higher rates of surplus value extraction in the imperialist countries themselves. And as in other areas, here too the USA leads the rest, as evident from the following table:

Presenting the table, JB Foster observes in his recent article Monopoly Capital at the Turn of the Millennium: “Unit labour costs are a more comprehensive indicator of international competitiveness than labour productivity growth rates, which they partly reflect. Hence, it is the relatively slow growth of unit labour costs in the United States, Bureau of Labour Statistics analysts tell us, that point to the decisive advantage gained by the United States in overall competitive position over its major competitors in the period after 1985. There can be little doubt about where the ultimate source of this advantage lies: in the effectiveness of the class struggle against labour in the United States. In this battle to lower the floor, U.S. capital has played the leading role and its major competitors are increasingly moving in the same direction.”

The USA also leads the way in matters of anti-labour legislation. In the public sector, approximately 40% of all workers are still denied basic collective bargaining rights. Over two million employees of the federal government fall under the 1978 Federal Labour Relations Act, which outlaws strikes, proscribes collective bargaining over hours, wages and economic benefits and imposes extensive management rights further limiting the scope of collective bargaining. At the state level, while the situation varies from one state to the next, in general public sector workers are prohibited from taking strike action. Thirteen states only allow collective bargaining for certain public employees and 14 states do not allow it at all. In the private sector, the law requires proof of majority status in order to establish a trade union. This is usually obtained through an election in which more than 50% of workers in any bargaining unit must vote in favour of forming a union in order for it to be recognised for the purposes of collective bargaining. Legislative restrictions on trade union rights exclude 32 million workers from collective bargaining while private companies continue to harass trade unionists and discourage all attempts to unionise.

Black laws, as we know, are a universal corollary of globalisation, and so are privatisation, downsizing, casualisation, wage freezes and sundry other attacks. An adequate treatment of all this will require a full-length paper; suffice it to say here that our own experience in India pales before what our brothers and sisters are made to suffer in many other countries.

Multiple changes in composition

Here we should take note of at least three developments. First, the growing importance of the service sectors relative to the basic productive sectors. In the US for example, between 1899 and 1949, the number of non-production workers increased at more than twice the rate of that of production workers. From 1949 to 1994, the growth of production workers was stagnant (falling at the end of the period), while the average annual growth rate for non-production workers was around 2 percent. The same trend is visible in our country too, if to a lesser extent, and in others. Bourgeois economists project this as a symptom of progress. Looking deeper, we find here another sign of the decay of capitalism in its monopoly, i.e., imperialist stage.

With intensified exploitation, i.e., generation of more and more surplus value at the level of production, the accumulation of funds in the coffers of big business grows too big. If these are reinvested in expansion of production capacity, it would not be possible to sell the increased output, because purchasing power of the masses remains suppressed. Nor is any epoch-making breakthrough comparable to the spinning Jenny, the steam engine, the railways, the automobiles etc. coming up (after the electronics revolution) to provide brand new investment outlets. The monopoly concerns therefore use much of these excess funds on huge sales promotion activities and advertisement campaigns, so that they can mark their products much, much above the prime production cost. A large number of non-production workers have to be employed for this purpose, both by the manufacturers themselves and by the sales promotion agencies working for the latter. For a very good illustration of this trend, look at Microsoft. In 1997, the giant expended 1.1 billion dollars on labour and materials, nearly double the amount (1.9 billion dollars) on R & D and almost thrice the amount (2.9 billion dollars) on sales and marketing.

The massive shift from blue-collar to white-collar employees is thus rooted in the process of extracting monopoly super profits in a world economy that is stagnating at the level of production. Similarly, another important change in the composition of the working class – the growing shift from permanent to temporary/part-time/flextime employment – is to a great extent associated with a changeover from the old Fordist model of mass production to lean production or just-in-time (JIT) production. The latter means producing – and supplying to the market – the exact quantity, quality, and specification of products or services demanded within a very narrow time-frame. It utilises high-speed transport and communications and computerised accounting to establish instantaneous reciprocity between demand and supply, thereby reducing costs of keeping big inventories and stocks of finished products. Such a system can operate only on the basis of unrestricted hiring and firing of workers or a high degree of casualisation. Thanks to improved networking, in many cases it is possible to get the job done by workers at home. Apart from JIT, non-standard employment is resorted to for other purposes like reducing the wage bill and avoiding the hassles of dealing with a unionised workforce. It takes different forms and is popularly known in America as “Brazilisation”, i.e., the extension of labour practices initiated in Brazil. We can gauge how rapidly such practices are spreading in the advanced industrialised countries from the fact that in the European Union the percentage of employees with a temporary contract increased by about fifty percent between 1985 and 1998: from 8.4% to 12.8%. In 1996, no less than 49% of European employees with a length of service of less than one year were working on a temporary contract.

Another important development in the composition of the working class is feminisation: the transfer of mostly low-skill jobs to a workforce that is expected to be more pliant and less costly. The process has been going on for a long time in industry, agriculture, mining and service sectors, and more or less in all countries. In the European Union, for example, 20 million out of 29 million new workers joining the labour force between 1960 and 1990 were women. However, the very prominent rise seems to have reached a plateau in many areas since 1997.

Relocation of production and BPO

An old trend, internationalisation of production has attained new heights in the last few decades with the ‘death of distance’, thanks to technological advances like use of jet aircrafts in civil aviation since the 1970s, containerisation for multimode transport introduced later, and of course, the recent breakthroughs in information and communication technologies coupled with reduced export-import costs.

As the UNCTAD reported in 1998, the share of production by foreign affiliates of MNCs in world GDP rose from 5 per cent in the 1980s to nearly 7 per cent in 1996-97. By now the proportion has increased further. To take a typical case, Nike subcontracts nearly all of its productions to owners of factories in China, Indonesia and Vietnam. While nearly one lakh workers in these countries produce the swoosh-label products, Nike directly employs less than 10 thousand people throughout the world and they are mostly engaged in management, sales promotion and advertising. In 1997, most of the thirty five thousand workers in Vietnam producing Nikes were women who worked twelve hour days for a labour cost of two dollars per pair of shoes (each of which sold for between forty-five and one hundred dollars in North America). Now to come to business process outsourcing (BPO) – a sequel to production relocation and the latest step in the “rightsizing” exercises that started in the 1980s. Firms in the metropolitan countries separate the core operations from the ‘chore’ activities, specialise on the former in their own workplaces and outsource the latter to upcoming low-cost centres in the developing world. In this way, a vast and growing range of activities relating to banking and finance, insurance, clinical services, all sorts of office work and so on are being outsourced every month. To understand the process, it would be interesting to first look at a couple of Anglo-American perspectives. Writes a British analyst:

“Now the jobs we stole 200 years ago are returning to India. Last week The Guardian revealed that the National Rail Enquiries service is likely to move to Bangalore, in south-west India. Two days later, the HSBC bank announced that it was cutting 4,000 customer service jobs in Britain and shifting them to Asia. BT, British Airways, Lloyds TSB [and many other firms] have already begun to move their call centres to India … There is a profound historical irony here. Indian workers can outcompete British workers today because Britain smashed their ability to compete in the past. Having destroyed India’s own industries, the East India Company and the colonial authorities obliged its people to speak our language, adopt our working practices and surrender their labour to multinational corporations. Workers in call centres in Germany and Holland are less vulnerable than ours, as Germany and Holland were less successful colonists, with the result that fewer people in the poor world now speak their languages. The impact on British workers will be devastating …

There is nothing new about multinational corporations forcing workers in distant parts of the world to undercut each other. What is new is the extent to which the labour forces of the poor nations are also beginning to threaten the security of our middle classes. In August, The Evening Standard came across some leaked consultancy documents suggesting that at least 30,000 executive positions in Britain’s finance and insurance industries are likely to be transferred to India over the next five years. In the same month, the American consultants Forrester Research predicted that the US will lose 3.3 million white-collar jobs between now and 2015. Most of them will go to India.

Just over half of these are menial “back office” jobs, such as taking calls and typing up data. The rest belong to managers, accountants, underwriters, computer programmers, IT consultants, biotechnicians, architects, designers and corporate lawyers. For the first time in history, the professional classes of Britain and America find themselves in direct competition with the professional classes of another nation. Over the next few years, we can expect to encounter a lot less enthusiasm for free trade and globalisation in the parties and the newspapers which represent them. Free trade is fine, as long as it affects someone else’s job.” (From The Flight to India by George Monbiot, The Guardian, October 21, 2003) Writing in the same vein, Mike Martin observed in Straight Goods, (Internet edition, New Society Publications, 18 November 2003) :

“Americans have lost nearly three million jobs in George Junior’s first three years … as many as a third of these are … white collar jobs. … Companies like Carrier Air Conditioners and Proctor and Gamble are cutting accountants and engineers and sending their jobs to lower paid counterparts in countries like India, South Africa, China, and the Czech Republic. These highly-paid professionals are being betrayed by the same corporations that used to coddle them. … International Business Machines is not only sending some of its legal and accounting work to the third world, but offers a service to other corporations for what are called back office operations in finance and administration. They handle this contracted out work of other corporations by sub-contracting the work to well-qualified fluently English economists and computer experts in poorer countries at a fraction of the cost.”

While big business is all too happy about this newfound cost-saving device, resistance is mounting from the aggrieved “white-collar” workers.
As for the impact of BPO in countries like India, the number of people who are fortunate or unfortunate enough to find employment in the mushrooming call-centres and the few R & D centres etc. coming up in metropolitan cities is insignificant. The jobs are, barring exceptions, tedious, repetitive, low-paid, high-intensity and extremely exacting. The worst thing is that the current high tide may dry up any moment if popular resistance in countries like the USA succeeds in restricting or halting the process. Moreover, the outsourcers are always on the lookout for even cheaper sources of the “cyberlariat” in other developing countries, and the Chinese with a vastly superior IT-infrastructure are rapidly picking up their English and emerging as the toughest potential competitor.

Globalisation: a Proletarian Response

What are the practical-political implications of the new trends noted above and how do we respond to these? First, with intensified exploitation, objective conditions are maturing for sharpened class struggle. Put so plainly, this may sound like an old Marxist jargon or at best a truism. But listen to what Business Week (BW) wrote just on the eve of the new century: “The biggest fault line … seems to be between Americans who are getting an extra income boost from the stock market or a dot com employer, and everybody else. Indeed, the most striking development in the New Economy for many has been the end of the 40-hour week: Americans now log more hours on the job than workers in any other industrialized nation. But growth in real hourly compensation has dropped … This may explain why 51% of Americans feel cheated by their employer, according to a new study from Opinion Research Corp., International.” (BW, 27 December, 1999) According to the same study, 52 per cent of the population registered sympathy with protestors in Seattle, the magazine reported, and warned that the protests could soon spread from streets to workplaces.

Subsequent years have vindicated this prognosis in no small measure (see Liberation, February 2003, for “Encouraging Signs” in the movement). And to be sure, the struggles are not confined to the USA. We often hear about massive struggles like this year’s nation-wide strikes involving millions in France, Austria and other European countries against the respective governments’ pension and retirement plans; the wildcat strike by postal workers in the UK; the strike by more than 20,000 metalworkers’ in Sao Paulo against the government of Luis Inacio Da Silva, himself an ex-metalworker and leader of historic strikes in 1970s and 1980s; and so on. But we did not get reports of the numerous instances of workers’ resistance to Anglo-American military build-up against Iraq (such as transport of ammunitions and other materials) in Italy, UK and even the USA. Nor are we in the know about the thousands of small or not-so-big struggles, not always successful but rich in diversity of forms and demands, which form a colourful rainbow of movements encompassing all segments of the working people. From grocery workers (e.g., the “rotating strike” in Newfoundland, Canada) and supermarket employees (such as the 10,000 strikers in Saint Louis, USA) to teachers and nurses, from garbage workers and casino workers (as in Las Vegas) to truckers and railroad workers, from janitors and lift-repairers to actors and entertainment workers – you name it, we have it on the list of strikers and demonstrators. And hardly any country is left out. It was on this basis that the massive mobilisation of wage and salary-earners – with or without TU banners – in the anti-globalisation, anti-war demonstrations was made possible.

Similarly, onslaughts like informalisation and de-regularisation of labour and outsourcing have given rise to new initiatives for organising the affected sections. Mike Martin informs us that American white collar professionals never felt the need for organising unions, but attitudes are changing rapidly:

“The American trade union center, the AFL-CIO, report that a record 66,000 new white-collar workers joined unions in 2002, and accounted for almost 30% of the overall rise in AFL-CIO membership. In 2002, their growth outpaced all other occupational groups within the federation.

“In the United States white collar workers, such as nurses, doctors, teachers, engineers, attorneys, musicians, journalists and even forest rangers, now account for 60% of the overall US workforce, according to the Bureau of Labour Statistics. That’s a lot of people to organize, but at least they seem to be making some headway.” (Ibid.)

Thirdly, we should also consider the trend of replacing permanent workers by casual/part-time workers from another angle. By throwing large sections of workers out of the environment of passivity and narrow trade unionism that characterises most of the old established unions, does not the bourgeois offensive open up new vistas for fresh revolutionary organisation-building? Make no mistake: I do not welcome the capitalists’ move; I say this must be resisted as far as possible. But if we fight from a conservative trade unionist framework, we feel helpless whenever we fail to thwart the capitalists’ attacks in particular industries, particular units. For in that micro framework we find nothing more to do when, in a particular factory or industry, we ultimately fail to resist downsizing of the workforce or replacement of our union members by contract labourers. But if we think macro, if we view the whole thing from a broader, i.e., class perspective, we will realise that beyond the scope of conventional trade unionism we have the responsibility of organising the retrenched, the casual, the part-timer, the job-seeker and other sections of the victimised workforce. For this we must formulate new slogans and devise new methods of campaigning, new forms of organisation.

Yes comrades, our Party’s consistent emphasis on work among the informal/unorganised sectors must be grasped in this new context. You can claim to be conscious representatives of the entire class only if you work for a “unified resistance to the ongoing onslaught”.

Fourthly, imperialist globalisation has led to a “new internationalism”, as we have discussed in several issues of Liberation over the last 2-3 years.2 This refers not just to Seattle and what has followed. International solidarity with Iraq under attack acquired a distinct class dimension when in early June this year a conference of the International Liaison Committee of Workers and Peoples (ILC), a Paris-based coalition of trade unionists from more than sixty countries, decided to launch a Campaign for Labour Rights in Iraq, focusing on restoring basic labour rights, particularly the right to have genuinely independent unions and to work under safe conditions. The US Labour Against the War (USLAW), a coalition of labour organizations that opposed the war, presented a report titled “ The Corporate Invasion of Iraq” which detailed the labour, human rights, environmental and political records of eighteen US companies working under contract in Iraq. Gene Bruskin, USLAW’s co-convener, based in Washington, said “US and Iraqi workers now have a direct link because our companies are over there”. US workers are concerned for their own interests as well as for their Iraqi counterparts’, he added: “we have a President talking about a Middle East free-trade zone, and we know from direct experience that means jobs going abroad”. Already new forms of solidarity struggle are coming up at different levels in different places. In France for instance, “strike by delegation” became quite popular in the 1990s. Those able to go on strike (above all people in the public sector) were massively supported by those who were in a weaker position, e.g., employees in the private sector, pensioners, the unemployed, and so on. In Latin America, public sector employees – workers, doctors and medical staff, public school teachers and others -- launched concerted strike struggles in the middle of this year across Ecuador, Bolivia, Peru, Brazil, Argentina and Columbia. Millions were involved, and in many cases the strikes triggered work stoppages in the private sector too, defying mafia and police attacks.

What do we conclude from all this?

Globalisation has immensely accentuated the rich-poor divide between classes and among nations. But it is proving to be a great churner and great leveler for the wage and salary earners. Different segments of them are thrown into a great whirlpool, a giant melting pot so to say, where our PSU employees meet the same fate as jute workers, where the Euro-American workforce face the onslaught of “Brazilisation” and the lower and middle rungs of elitist, isolated computer professionals everywhere rediscover themselves as the “cyberlariat” chained in “keyboard slavery”. In the 21st century, in the era of the world-wide-web, we have to work in this giant cauldron – getting tempered in the heat, exposing the myths and resisting the onslaughts of globalisation, broadening our action programmes to reflect the new conditions and new demands, building bridges of solidarity among varying segments of our class, and above all, never losing the forward-looking, offensive approach even when we have to fight defensive battles. For at the end of the day we have nothing to lose but our chains. We have a world to win – a world freed from empire, imperialism and their running dogs.