Reprinted from Labor's Champion
June, 1988
The workers in every capitalist country are constantly faced with the threat of unemployment. Although the numbers may rise or fall, there are always millions of people without work. Some are able to survive off of minimal benefits or savings, but frequently they are thrown out of their homes and forced to beg in the streets. The U.S. government and capitalist news media brag that the official unemployment rate is down to 5.4%, the lowest in 14 years. But even this figure represents some 6 million people without work and ignores the millions more not counted because they work part time or have given up looking for work and many of the millions on welfare. Taking these factors into account, one study places the jobless rate at 11.1% and the number of unemployed at 12.4 million. The situation in the capitalist countries in Europe is worse, with the official unemployment rate averaging between 8 and 10%. And for the workers in the neo-colonial and dependent countries of Asia, Africa and Latin America, it is frequently between 20 and 50%.
The economists and other apologists for capitalism talk as if unemployment has always existed, in all societies and at all times. But this is not true. Under earlier class societies, ancient slavery and feudalism, there was no unemployment. How could a chattel slave be kept unemployed? It is apparent that the master, having purchased the slave and his labor power for life, would loose production when the slave was idle, unable to reproduce his means of subsistence and a surplus product for his owner. In a like manner, the feudal lord would loose wealth if a portion of his serfs were unemployed for any time. Part of the "freedom" of the wage worker under capitalism is that he is free to sell his labor power to which ever capitalist "master" will hire him. If the worker doesn't find work, the capitalist is not obliged to provide him a portion of the means of subsistence, previously created by the workers, to tide him over until he can get other work. In short, the wage slave is free to starve if he doesn't get work. Unemployment is the specific product of the capitalist system.
The object of capitalist production is the accumulation of wealth in the hands of the capitalist employers. This is referred to as an increase in capital. Said another way, the growth of capital is the expansion of the means of production available for the exploitation of the workers. This is brought about when a part of the profits produced by the workers is added to the original capital for increased production. This is commonly called reinvestment. New factories are built, new machines purchased and more workers are hired. This by itself leads to increased employment.
But along with the increase in active workers there is also the appearance and growth of a pool of unemployed workers. This is because the relative demand for labor-power shrinks as capitalism grows. As capital is amassed, it undergoes a change in its composition - that is, in the way it is divided between machinery and raw materials, on the one hand, and wages on the other. An ever greater share of accumulation goes to machinery and raw materials rather than to the purchase of labor power. This tendency is reinforced as larger capitalists take over smaller ones, leading to an increased centralization of production.
|
Let us take the following example as an illustration of the process. A young capitalist starts up production with $10 million: $5 million in the form of raw materials and machinery and $5 million to purchase labor power - wages. Suppose after a few years of exploitation of the workers he reaps another $2 million in unpaid labor (profits) and adds all of this to his original capital, bringing his total to $12 million. But in this case the increase in total capital did not lead to an increase in the total number of workers he employs, because he invested the entire $2 million to purchase new machinery. Consequently, the relative demand for labor-power fell, since he spends only 41% of his capital on wages as opposed to 50% originally. On the other hand, the demand for labor-power would have fallen even if he only applied half of his profits ($1 million) to accumulation. The fall would simply have been less.
Because of competition, what happens in this individual case sooner or later happens in each branch of industry and the economy as a whole. The relative fall in demand for labor power, of course, is accompanied by the growth in the absolute number of workers from year to year. But this growth overall is matched by a counter movement, the appearance of unemployed workers. Karl Marx describes this process well.
"In all spheres, the increase of the variable part of capital, and therefore of the number of laborers employed by it, is always connected with violent fluctuations and transitory production of surplus-population, whether this takes the more striking form of a repulsion of laborers already employed, [layoffs - Ed.] or the less evident but not less real form of the more difficult absorption of the additional laboring population through the usual channels." (Capital, Vol. I pg. 691.)
He makes the important observation that "The laboring population... produces, along with the accumulation of capital produced by it, the means by which it itself is made relatively superfluous, is turned into a relative surplus-population; and it does this to an always increasing extent. This is a law of population peculiar to the capitalist mode of production." (Capital, Vol. I, pp. 631-632.)
As opposed to the lies of the capitalist economist, the truth is that capitalism by its very nature creates unemployment.
Capitalism not only creates unemployment. It needs unemployment for its survival. The unemployed workers form for the capitalists what Marx called an "industrial reserve army... a mass of human material always ready for exploitation." For capitalist production goes in cycles of average activity, intense activity, crisis and stagnation. During the periods of increased activity, there must be a mass of people available for work. The unemployed thus serve as a reserve for such periods of expanded production. And when this period has passed, and gives way to a crisis, the mass of unemployed workers swells. Today, in the monopoly stage of capitalism, the phases of production have been modified. The general crisis of capitalism has left its mark. The periods of "expansion" and "recovery" are very weak, and as a consequence, the entire industrial reserve army is not absorbed into production at anytime. The industrial reserve army is a chronic mass of unemployed hands that is growing by leaps and bounds.
The unemployed serve another crucial function for the capitalists - to hold down the demands of the workers for increased wages. During periods of increased production, the existence of a mass of unemployed workers available for jobs limits the wage increases the workers can achieve. If pressures for an increase in wages become too great, the capitalists will find some new machinery or technology that will allow them to throw additional workers out into the street. During periods of crisis the unemployed are used as a tool by the capitalists in reducing wages and benefits. Every worker knows that there are many others available to take his or her job. That is why developing the organization and consciousness of all workers, both employed and unemployed, is crucial to their defense at all times. Only a highly conscious and organized movement, which expressly unites the actions of the unemployed alongside the employed, can curb the bosses in the fight over wages and conditions of labor.
Varying groups of unemployed form the reserve army of labor. One consists of those workers who are alternately hired, and laid off, by capitalist industry. Their conditions vary with the cycles of capitalist production, working for longer periods in times of prosperity, often unemployed in times of crisis.
The agricultural population forms a latent (hidden) section of the reserve labor force. As capitalist production takes over agriculture, small farmers and peasants who are displaced by mechanization move to the cities to look for work. In the U.S., besides the small farmers in the Mid West, many of these workers come from the oppressed nations inside and outside the U.S. borders. Peasants from Mexico are the most important example today. Sharecroppers from the Black Belt South in the 1950s and '60s and peasants from Puerto Rico during "operation Bootstrap" were forced off the land and came to the major U.S. industrial cities to find jobs. Similarly today, displaced peasants from other dependent countries, such as the Dominican Republic, Haiti, and the Philippines, migrate first to the main cities in their countries, and than later to the U.S. to look for work. They are generally super-exploited in the lowest paying jobs.
A third category of the reserve army of labor consists of the long-term unemployed who work very irregularly. This group includes a large part of the population on welfare. Many in this group must supplement their benefits by work as household workers, in small stores or other "off-the-books" jobs in which they have no rights and receive the lowest wages. Their welfare benefits thus help the capitalists to super-exploit these workers, since their money wage is much less than the regular worker. And the tax structure puts the main burden of the relief on the backs of the workers and lower strata of the petty bourgeoisie.
The reformers and other apologists for capitalism are putting forward various schemes to allegedly "control" unemployment. One of these is the contention that the development of high-tech industries such as computers will cause unemployment to evaporate. This is a gross lie. The same law, the relative decline in the demand for labor-power, operates with the same force in the so-called high-tech industries as elsewhere. This is proven by the growing unemployment in these industries. So, it is absurd to think that high tech could be a solution in the economy as a whole.
In recent years, there has been a decline in basic industries in the U.S. such as steel and auto. This has been exacerbated by the fact that the monopoly capitalists who control these industries have been exporting capital to the dependent countries, such as South Korea or Mexico, where the workers are more exploited and the cost of labor power less expensive. This has led to large scale lay-offs in these industries within the U.S. Many capitalist politicians, reformists and revisionist scum are calling for the enactment of laws to stop the export of capital and to give workers notice of plant closing. It goes without saying that such a law would be completely useless to end unemployment. Basically these demands confuse the relation between the capitalist economy and the capitalist state. The extraction of the maximum profit is the fundamental economic law of contemporary capitalism. The U.S. capitalists will not only move their operations to places all over the world where they can obtain the maximum profit, but they will do this with the assistance of the U.S. state. No amount of dreaming will change the nature of the state. It cannot oppose its masters - the billionaires. Further, even if such a toy law were passed, it would exist only for ornamentation. It in no way could affect the fundamental economic law that brings about unemployment wherever capitalism resides in the U.S. or abroad.
To end unemployment, capitalism must be destroyed and genuine socialism established. Only through socialist revolution has the working class ever been able to accomplish this task. The Soviet Union, when it was a genuine socialist country under Lenin and Stalin, showed this clearly. In the early 1930s, when all capitalist countries were in the grip of the Great Depression, the Soviet Union eliminated unemployment in the process of building socialist industry and collective agriculture. It could do this because production was carried out, not for maximum profit as in the monopoly capitalist countries, but to meet the growing material and cultural needs of the working people. But since the restoration of capitalism in the USSR after the death of Stalin, we see the return of unemployment there.
Today, the People's Socialist Republic of Albania, is the only genuine socialist country, and therefore the only country in the world without unemployment. After the end of the anti-fascist war in 1949, the Albanian Communist Party organized the people to reconstruct the economy. The rich were expropriated and the major means of production were eventually made the property of the people. New economic enterprises were built and the masses of unemployed were slowly drawn into production, never to be without work again. The growing use of the latest technology hasn't displaced workers but has improved the standard of living. Albania now finds itself in the position of having labor shortages. The Constitution of the country reflects the victory over unemployment. It states:
"..citizens have the right to work, which is guaranteed by the state. Work is a duty and honor for every citizen. Citizens have the right to choose and exercise their profession, in accordance with their capacity and personal inclination, and in accordance with the needs of society." (Article 44, Tirana, 1977.)
We have seen that unemployment is a product of the capitalist system. Therefore, the workers must fight for measures that will lessen the effects of unemployment, and will increase the unity of the employed and unemployed sections of the working class. They must fight against lay-offs and plant closing, as well as against attempts to evict unemployed workers from their homes, or turn off their heat, gas and electricity. But the struggle must not be confined to this. The workers immediate demands must be integrated with a revolutionary struggle. The Marxist-Leninist workers must prepare the entire working class for socialist revolution, the only way to finally eliminate unemployment. The immediate political task for the workers is the conquest of state power and establishing workers democracy - the dictatorship of the working class.
The working class in power would then expropriate the capitalists and organize centralized socialist production to meet its own needs and that of working people world-wide. This would lead to a great expansion of production in all industries. And under socialism, new labor saving technology would not be a threat to the livelihood of the workers. Rather, the advances in automation, computers, robotics, etc. would serve to reduce the hours of labor and raise the standard of living. For it is only under capitalism that new machinery, which increases the productivity of labor, becomes a threat to the workers instead of a benefit to all working people!
Bibliography:
Karl Marx - Capital, Vol. I. Chapter XXV.
Click here to return to the U.S. Index