The Exploitative Alliance: How Corporate Strategies and Union Investments Undermine Worker Security

[ILLUSTRATION BY ALEX NABAUM]

By Peter S. Baron

A major obstacle to the collective well-being of workers is how corporate employers connect retirement funds to the stock market. This linking means that workers bear the brunt, as publicly traded companies aim to maximize profitability through cost-cutting measures that negatively impact their wages, job security, and working conditions. Similarly, labor unions like the United Auto Workers (UAW) channel membership dues into investment funds that often hold stocks in the very companies they may confront or negotiate with.

Recent history has witnessed a significant transformation in the structure of labor's retirement portfolios; they are now primarily sustained by individual contributions, with companies only occasionally offering modest matching contributions. Individuals now shoulder the entire risk, while corporations benefit from reduced financial liabilities and greater predictability in managing retirement expenses. Insidiously, as corporations have shifted financial risk onto individuals, they have also directed these investments toward financial management behemoths. These entities hold control over each individual investor’s voting rights, effectively seizing the collective power of working-class retirement funds. This power is then leveraged to amplify the relentless profit-driven mechanisms at the core of capitalism. Running parallel, organized labor’s advocacy power has been undermined by union bureaucrats who have chosen to tether the union's financial health to the success of the same corporate giants it should be challenging, effectively making the union a complacent, and likely complicit, partner in the very corporate strategies that exploit its members. 

These financial realities, carefully engineered by corporations and meekly accepted by labor, are riddled with contradictions that reveal the blatant exploitation at the core of the elite’s oppression of workers. They serve as stark reminders that security and well-being, let alone collective liberation, won't come from corporate investment schemes or the leadership of corporate bureaucratic puppets, but only from the solidarity and unified strength of the workforce. The power to dismantle this exploitation lies in workers rejecting the illusion of corporate benevolence and instead building unwavering unity to reclaim their future through collective action.

Background

Traditionally, workers' retirement funds were managed through Defined Benefit (DB) plans, which ensured a stable pension for retirees and placed the investment risk on employers, who shouldered the costs of employees' retirement benefits. Though these DB plans were similarly invested in the stock market, the companies themselves were responsible for ensuring that the retirement fund has enough resources to meet those guaranteed payouts, meaning the employer must cover any shortfall if investment returns do not meet expectations. These plans became seen as economically burdensome by corporate executives who aimed to maintain steadily growing profits in an era marked by rapid market shifts and increasing global competition (https://livewell.com/finance/why-have-employers-moved-from-defined-benefit-to-defined-contribution-plans/).

The transition to 401(k) and other Defined Contribution (DC) plans offloaded these risks onto employees, fundamentally transforming the nature of retirement savings. Defined Contribution plans prioritize contributions over guaranteed payouts, requiring employers and workers to allocate set amounts into individual retirement accounts. With the employer no longer liable to provide a guaranteed income, workers must now shoulder the burden of their own retirement funding, gambling their hard-earned savings in the unpredictable stock market. Though favorable returns can occur, sustained gains are elusive due to regular market crashes that occur every six years on average. This means that when the market plummets, it's the employees who bear the brunt, not the employers, exposing workers' financial security to the whims of an unstable market while leaving them vulnerable to navigating a system designed to shift the risks and costs of retirement away from corporations.

The neoliberal ideological shift that encouraged employers to search for cost-cutting measures also aligned with broader economic changes, including a shift from manufacturing to service and IT sectors, where new companies were more likely to adopt DC plans. Furthermore, legislation like the Pension Protection Act of 2006 facilitated this transition by imposing stricter funding requirements on DB plans and enhancing the attractiveness of DC plans through various incentives (https://www.ssa.gov/policy/docs/ssb/v69n3/v69n3p1.html).

Running parallel, the recent trend of labor unions—such as the massive United Auto Workers (UAW)—investing membership dues in the stock market, including in companies they might challenge or negotiate with, starkly illustrates how union bureaucracies are increasingly co-opted by the very corporate forces they are supposed to oppose. From the 1980s onward, the government-corporate alliance has evolved into a toxic web of aggressive market liberalization and ruthless deregulation. The calculated removal of oversight was a brazen move that handed corporations unchecked power while shredding public accountability. Worker protections were gutted, and investment returns soared on the backs of labor exploitation, as corporate greed flourished at the expense of those who toil.

The UAW, like many other unions, seized on the opportunity to increase their cash reserves and began channeling part of their dues and pension funds into the stock market. Superficially, this was a move to diversify and increase the assets available to serve and protect members. However, it effectively entangled the unions' financial interests with those of the very corporations they were meant to be monitoring and moderating, at the very least.

This alignment with corporate performance underscores a deeper ideological shift within the union bureaucracy, from champions of workers' rights to managers of complex financial portfolios. This shift has distanced the union's leadership from the everyday realities and immediate needs of their rank-and-file members, leading to decisions that favor long-term financial stability over aggressive advocacy for better wages, benefits, or working conditions.

In both scenarios, workers face a ridiculous contradiction: pursuing their true interest in collective emancipation from the exploitative capitalist class risks undermining their wages, benefits, and retirement savings.

The Paradox of Worker Investment in Corporate Profits

The transition from traditional pension plans to 401(k) plans encapsulates a critical transformation in the relationship between labor and capital, deeply embedded with ideological and material implications.

By investing their retirement savings in the stock market, workers are compelled to support, and indeed root for, the success of the very entities that exploit their labor. The corporate profits that boost their retirement funds are sourced directly from corporate strategies such as suppressing wages, reducing workforce sizes, and demanding increased productivity. This is effectively a transfer of wealth from workers to the rulers, who assume the title of “shareholders” and “executives.” Yet, this extraction of wealth is cleverly disguised as a harmless, or more often, benign, retirement savings scheme, misleading workers into passively acquiescing to their own exploitation.

Under the oppressive gears of capitalism, driven by the relentless hunger for perpetual growth, these savings plans don't just subtly coerce workers into endorsing their own exploitation—they force them to champion an ever-escalating cycle of exploitation. This vicious spiral is demanded by a system addicted to ceaseless profit increases year after year, chaining workers to a fate where they root for deeper cuts into their own flesh. Essentially, through these defined contribution plans, workers unwittingly empower their rulers to repeatedly enact the very cost-cutting measures that threaten their jobs, deny them raises, and increase their workload and hours.

Relinquishing Control

A troubling feature of 401(k) plans is the significant loss of control they impose on workers, who must hand over their financial decision-making to corporate giants like Vanguard, Blackrock, or State Street. Workers are compelled to hand over their retirement funds to corporations like Vanguard, Blackrock, or State Street because these financial goliaths contract with employers to manage 401(k) plans, effectively controlling the investment options and strategies available to employees. These management companies administer 401(k) plans, offering workers only a limited selection of investment options that are chosen to serve corporate goals rather than the financial needs or preferences of the employees themselves. This limited selection gives the appearance of choice, but in reality, it substantially diminishes workers' autonomy over their own retirement funds.

In other words, these managers make critical investment decisions without direct input from the workers, decisions that shape the potential growth and security of the workers' retirement savings. Consequently, workers are left on the sidelines, passive observers of their own financial destinies, reliant on the strategies and ethical considerations of entities that prioritize corporate profitability over individual security.

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Despite the fact that, collectively, the controlling stake in almost all publicly traded companies is technically "owned" by a broad base of worker-investors, the reality is starkly different. By channeling investments through entities like Vanguard, workers are stripped of any direct influence over corporate actions. When workers entrust their savings to financial behemoths like Vanguard, they effectively hand over their shareholder "voting rights," surrendering any semblance of control over the corporations their collective labor has built.

This arrangement starkly illustrates how capitalist structures co-opt workers’ assets for corporate gain, rendering them powerless in decisions that affect their own economic futures. Intermediaries like Vanguard wield our collective power to relentlessly pursue corporate profit growth, endorsing actions that ruthlessly undermine our interests as workers. They push for job cuts, relentless lobbying against fair wage laws, and environmental shortcuts—all leveraging our collective votes to bolster shareholder value at the expense of the very workforce that enables it.

The systemic channeling of worker investments into entities like Vanguard, Blackrock, and State Street is not merely a feature of modern financial management; it is a cornerstone of capitalist power dynamics. This process ensures that the vast pool of capital derived from workers' savings is used not to empower those workers as shareholders, but rather to fortify the very structures that oppress them. With our collective investments holding controlling stakes in nearly all publicly traded companies, the corporate elite deliberately divert this immense power into their own hands to maintain dominance. They design this system to crush any potential worker resistance, ensuring their agendas remain unchallenged while deepening economic disparities that empower the elite at the expense of the working majority.

Blindness to Class Antagonisms

The financialization of workers' savings essentially turns their labor into a commodity. By reducing their economic agency to numbers in an investment portfolio, workers are disconnected from the real outcomes of their own economic contributions. As their hard-earned money is invested in large capitalist enterprises, it's managed under the guise of seeking growth and security. However, this management actually reinforces the power structures that limit workers' autonomy and freedom.

Investment funds serve as tools that embed workers deeper within the capitalist system, presenting their subordinate position as a necessary efficiency rather than exploitation. This makes the process seem like prudent financial management, but it's really about maintaining the status quo. This creates a cognitive and practical dissonance, where the worker’s financial planning for the future is tied up with strategies that undermine their present livelihood and working conditions.

As workers see their retirement savings—invested in volatile stock markets—potentially jeopardized by decisive labor actions, there arises a rational general reluctance to engage in or support extensive strikes or vigorous protests. This caution stems from the fear that disrupting the market, even temporarily, could diminish their financial security, despite the potential long-term benefits such actions could have on improving working conditions.

Without the backing of unorganized laborers whose retirement funds are entrenched in the stock market, organized labor faces a much tougher challenge in gaining public support for substantial changes that would shift power from the elite to the people. This dynamic introduces a significant delay in the class struggle, reducing the momentum for radical change. Thus, the capitalist class gains a buffer period to adjust and refine oppressive strategies, reinforcing the status quo and perpetuating the cycle of worker exploitation, all while maintaining a facade of empowering workers through financial participation.

The capitalist class exploits this lag, not only through overt repression but also through more subtle forms of coercion. By shaping norms and expectations—such as the prioritization of market stability over the improvement of labor conditions—they manipulate workers into accepting, and even defending, a system that fundamentally works against their interests. This ideological control helps sustain the status quo, continually diverting attention from the systemic exploitation that underpins the capitalist system and muffling the calls for transformative change that might otherwise resonate through the working class. This clever manipulation of worker priorities ensures that any potential disruptions to capitalist accumulation are blunted, securing ongoing dominance by the ruling elites.

The UAW’s Investment Strategy and Worker Conflict

Even within organized labor contexts such as unions, bureaucratic structures often paralyze workers into a passive acceptance of a system that purports to aid their financial well-being while subtly undermining their real interests, just as unorganized laborers, with their retirement funds tied to the stock market, passively support the corporate entities they should be challenging. In unions, this dynamic is replicated through bureaucratic controls that bind workers to the same detrimental financial entanglements, ensuring that even within organized frameworks, the mechanisms ostensibly designed to empower workers instead reinforce their submission to a system that undermines their genuine interests.

For example, the UAW bureaucratic apparatus derives a substantial portion of its revenue from indirect auto company subsidies and Wall Street investments. These funds have been used not just for operational costs but to swell the ranks of its high-paid staff and finance extravagant leadership conferences, from which the ordinary union member is conspicuously absent.

Dues from UAW members are funneled into various mutual funds and stocks globally, including stakes in companies whose workers are represented by the union. In essence, the auto workers' union is investing in the very companies they are negotiating with for better wages and conditions! Notably, the UAW also has investments in notorious hedge funds like Bardin Hill Investment Partners and Kohlberg Investors IX, firms infamous for harsh worker cuts, operating out of places like the Cayman Islands. Thus, the UAW is investing in both the employers that exploit their own members and in corporate entities that extract wealth from workers generally.

As a result, net spending for the UAW, excluding strike payouts, escalated dramatically from $258 million in 2022 to $318.4 million in 2023, with compensation for headquarters staff rising from $52.57 million to nearly $59 million. This investment strategy has undeniably benefitted from the stock market's recent boom, driven largely by Wall Street's aggressive undermining of the working class's social standing, particularly through widespread layoffs, wage suppression, and the denial or reduction of benefits.

Ostensibly, these vast reserves bolster the UAW's strike fund, yet strikes are rarely called and are often restricted in scope. Last year's "stand up strike" saw most auto workers continue to labor, while the employers’ revenues actually increased. The strike fund, rather than serving as a militant tool against corporate power, increasingly appears as a financial cushion for the union bureaucratic elite, not the workers it claims to represent.

This arrangement embodies a conflict: while the union fights for better wages and conditions, its financial health and the ability of its strike fund to grow are largely dependent on the prosperity of the same corporate entities they may be contesting. This interdependence complicates the union’s role and its strategies in advocating for workers' rights.

Conflict Between Worker Advocacy and Financial Interests

The financial maneuvers of the UAW, particularly its investments in the very companies its members labor under, reveal a stark betrayal orchestrated by union elites. These leaders—career unionists who have risen through the ranks—are entrenched in safeguarding their own positions, power, and privileges at the expense of the rank-and-file workers they claim to represent. These bureaucratic elites have distanced themselves from the daily struggles of the workforce, becoming gatekeepers who often suppress radical initiatives that could genuinely empower workers.

This leadership stratum, with its grip firmly on the union’s strategic levers, has consistently shunned aggressive labor actions that might jeopardize their investment portfolios and their cozy relationships with corporate powerhouses, or possibly even invite state backlash. Their risk-averse, conservative tactics dilute the potential for revolutionary changes, favoring instead incrementalistic policies that do little more than maintain the status quo. In negotiations, these leaders are quick to prioritize job security over substantial wage increases or essential adaptations to industry evolution, such as retraining for emerging technologies. This strategy goes beyond mere conservatism; it is actively complicit. It represents a deliberate choice by a self-interested bureaucratic elite to align with corporations and a co-opted state, entities that actively resist transformative changes.

Reflection

The seismic shift from defined benefit (DB) plans to defined contribution (DC) plans marks a significant transformation in the landscape of worker retirement security. This transition encapsulates a broader trend in the neoliberal economic agenda, prioritizing market solutions and individual responsibility over collective welfare and guaranteed benefits. By shifting the burden of retirement savings to individuals, workers find themselves compelled to invest in and support the very corporate systems that may undermine their job security and wage growth. The involvement of financial giants like Vanguard in managing these investments exemplifies a deep entrenchment of capitalist interests in workers' lives. These firms, by controlling vast pools of retirement funds, not only influence corporate governance but also align workers' financial futures with the health of the stock market and corporate profitability, effectively muting potential collective dissent against exploitative practices.

In parallel, the role of unions like the UAW in this financialized landscape reveals a troubling convergence of interests between union leadership and corporate power. As unions invest in the stock market, including in companies they negotiate with, there arises a conflict between advocating for robust labor rights and maintaining the financial performance of their investments. This duality suggests a corrosion of union solidarity, driven by a bureaucratic elite more attuned to the fluctuations of the market than to the struggles of the rank-and-file members. Such dynamics underscore a broader erosion of labor power, where the traditional role of unions as bulwarks against corporate excess is compromised, making them less a force for challenging the status quo and more a part of the financial systems they should be critiquing.

It's time to disengage from these capitalist structures that exploit us and instead cultivate solidarity rooted in class consciousness. Only by recognizing our collective power and prioritizing mutual welfare can we dismantle the financial machinery that subjugates workers and reclaim our future.

Peter S. Baron is the author of “If Only We Knew: How Ignorance Creates and Amplifies the Greatest Risks Facing Society” (https://www.ifonlyweknewbook.com) and is currently pursuing a J.D. and M.A. in Philosophy at Georgetown University.

What Every Child Should Know About Marx's Theory of Value

By Michael A. Lebowitz

Republished from Monthly Review.

Every child knows that any nation that stopped working, not for a year, but let us say, just for a few weeks, would perish. And every child knows, too, that the amounts of products corresponding to the differing amounts of needs demand differing and quantitatively determined amounts of society’s aggregate labour. —Karl Marx [1] [2]

Every child in Marx’s day might have heard about Robinson Crusoe. That child might have heard that on his island Robinson had to work if he was not to perish, that he had “needs to satisfy.” To this end, Robinson had to “perform useful labours of various kinds”: he made means of production (tools), and he hunted and fished for immediate consumption. These were diverse functions, but all were “only different modes of human labour,” his labor. From experience, he developed Robinson’s Rule: “Necessity itself compels him to divide his time with precision between his different functions.” Thus, he learned that the amount of time spent on each activity depended upon its difficulty—that is, how much labor was necessary to achieve the desired effect. Given his needs, he learned how to allocate his labor in order to survive. [3]

As it was for Crusoe, so it is for society. Every society must allocate its aggregate labor in such a way as to obtain the amounts of products corresponding to the differing amounts of its needs. As Marx commented, “In so far as society wants to satisfy its needs, and have an article produced for this purpose, it has to pay for it.… It buys them with a certain quantity of the labour-time that it has at its disposal.” [4] It must allocate “differing and quantitatively determined” amounts of labor to the production of goods and services for direct consumption (Department II) and a similarly determined quantity of labor for the production and reproduction of means of production (Department I).

To ensure the reproduction of a particular society, there must be enough labor available for the reproduction of the producers—both directly and indirectly (for example, in Departments II and I, respectively)—based upon their existing level of needs and the productivity of labor. This includes not only labor in organized workplaces, which produce particular material products and services, but also necessary labor allocated to the home and community and to sites where the education and health of workers are maintained. Every society, too, must allocate labor to what we may call Department III, a sector that produces means of regulation, and may contain institutions such as the police, the legal authority, the ideological and cultural apparatus, and so on.

In addition to the labor required to maintain the producers, in every class society a quantity of society’s labor is necessary if those who rule are to be reproduced. Thus, the process of reproduction requires the allocation of labor not only to the production of articles of consumption, means of production, and the particular means of regulation, but, ultimately, to the production and reproduction of the relations of production themselves.

Reproduction of a Socialist Society

Consider a socialist society—“an association of free [individuals], working with the means of production held in common, and expending their many different forms of labour-power in full self-awareness as one single social labour force.” [5] Having identified the differing amounts of needs it wishes to satisfy, this society of associated producers allocates its differing and quantitatively determined labor through a conscious process of planning. In this respect, it follows Robinson’s Rule: it apportions its aggregate labor “in accordance with a definite social plan [that] maintains the correct proportion between the different functions of labour and the various needs of the associations.” [6]

The premise of this process of planning is a particular set of relations in which the associated producers recognize their interdependence and engage in productive activity upon this basis. “A communal production, communality, is presupposed as the basis of production.” Transparency and solidarity among the producers, in short, underlie the “organization of labour” in the socialist society with the result that productive activity is consciously “determined by communal needs and communal purposes.” [7] The reproduction of society here “becomes production by freely associated [producers] and stands under their conscious and planned control.” [8]

To identify their needs and their capacity to satisfy those needs, the producers begin with institutions closest to them—in communal councils, which identify changes in the expressed needs of individuals and communities, and in workers’ councils, where workers explore the potential for satisfying local needs themselves. Those needs and capacities are transmitted upward to larger bodies and ultimately consolidated at the level of society as a whole, where society-wide choices need to be made. On the basis of these decisions (which are discussed by the associated producers at all levels of society), the socialist society directly allocates its labor in accordance with its needs both for immediate and future satisfaction.

Driving this process is “the worker’s own need for development,” “the absolute working-out of his creative potentialities,” “the all-around development of the individual”—the development of what Marx called “rich” human beings. [9] This goal is understood as indivisible: it is not consistent with significant disparities among members of society. In the words of the Communist Manifesto, “the free development of each is the condition for the free development of all.” [10] Accordingly, given the premise of communality and solidarity, this socialist society allocates its labor to remove deficits inherited from previous social formations. The socialist society, in short, is “based on the universal development of individuals and on the subordination of their communal, social productivity as their social wealth.” [11]

Conscious planning—a visible hand, a communal hand—is the condition for building a socialist society. This process does more, however, than produce the so-called correct plan. Importantly, it also produces and reproduces the producers themselves and the relations among them. What Marx called “revolutionary practice” (“the simultaneous changing of circumstances and human activity or self-change”) is central. Every human activity produces two products: the change in circumstances and the change in the actors themselves. In the particular case of socialist institutions, the labor-time spent in meetings to develop collective decisions not only produces solutions that draw upon the knowledge of all those affected, but it is also an investment that develops the capacities of all those making those decisions. It builds solidarity locally, nationally, and internationally. Those institutions and practices, in short, are at the core of the regulation of the producers themselves (Department III activity). They are essential for the reproduction of socialist society. [12]

Reproduction of a Society Characterized by Commodity Production

But what about a society that is not characterized by communality, a society marked instead by separate, autonomous actors? Such a society’s essential premise is the separation of independent producers. [13] Rather than a community of producers, there is a collection of autonomous property owners who depend for satisfaction of their needs upon the productive activity of other owners. “All-around dependence of the producers upon one another” exists, but theirs is a “connection of mutually indifferent persons.” Indeed, “their mutual interconnection—here appears as something alien to them, autonomous, as a thing.” Yet, if these “individuals who are indifferent to one another” do not understand their connection, how does this society go about allocating its “differing and quantitatively determined amounts of society’s aggregate labour” to satisfy its “differing amounts of needs”? [14]

Obviously, such a society does not utilize Robinson’s Rule: it cannot directly allocate its aggregate labor in accordance with the distribution of its needs. “Only when production is subjected to the genuine, prior control of society,” Marx pointed out, “will society establish the connection between the amount of social labor-time applied to the production of particular articles, and the scale of the social need to be satisfied by these.” [15] Although the application of Robinson’s Rule is not possible, its function remains. As Marx commented, those simple and transparent relations set out for Robinson Crusoe “contain all the essential determinants of value.” [16] In particular, the “necessity of the distribution of social labour in specific proportions” remains.

The necessary law of the proportionate allocation of aggregate labor, Marx insisted, “is certainly not abolished by the specific form of social production.” Only the form of that law changes. As Marx wrote to Ludwig Kugelmann, “the only thing that can change, under historically differing conditions, is the form in which those laws assert themselves.” In the commodity-producing society, the form taken by this necessary law is the law of value. “The form in which this proportional distribution of labour asserts itself in a state of society in which the interconnection of social labour expresses itself as the private exchange of the individual products of labour, is precisely the exchange value of these products.” [17]

Since the allocation of society’s labor embedded in commodities is “mediated through the purchase and sale of the products of different branches of industry” (rather than through “genuine, prior control” by society), however, the immediate effect of the market is a “motley pattern of distribution of the producers and their means of production.” [18] Yet, this apparent chaos sets in motion a process by which the necessary allocation of labor will tend to emerge. In simple commodity production, some producers will receive revenue well above the cost of production; others will receive revenue well below it. Assuming it is possible, producers will shift their activity—that is, they will show a tendency for entry and exit. An equilibrium, accordingly, would tend to emerge in which there is no longer a reason for individual commodity producers to move. Through such movements, the various kinds of labor “are continually being reduced to the quantitative proportions in which society requires them.”

In short, although “the play of caprice and chance” means that the allocation of labor does not correspond immediately to the distribution of needs as expressed in commodity purchases, “the different spheres of production constantly tend towards equilibrium.” [19] Through the law of value, labor is allocated in the necessary proportions in the commodity-producing society. In the same way as “the law of gravity asserts itself,” we see that “in the midst of the accidental and ever-fluctuating exchange relations between the products, the labour-time socially necessary to produce them asserts itself as a regulative law of nature.” [20] There is a “constant tendency on the part of the various spheres of production towards equilibrium” precisely because “the law of the value of commodities ultimately determines how much of its disposable labour-time society can expend on each kind of commodity.” [21]

Can that equilibrium, in which labor is allocated to satisfy the needs of society, be reached in reality? If we think of a society characterized by simple commodity production, equilibrium occurs when all commodity producers receive the equivalent of the labor contained in their commodities. In fact, however, there are significant barriers to exit and entry: the particular skills and capabilities that individual producers possess will not be easily shifted to the production of differing commodities. Indeed, this process might take a generation to occur, in which case producers in some spheres will appear privileged for extended periods.

In the case of capitalist commodity production—the subject of Capital—the individual capitalist “obeys the immanent law, and hence the moral imperative, of capital to produce as much surplus-value as possible.” [22] Accordingly, there is a “continuously changing proportionate distribution of the total social capital between the various spheres of production…continuous immigration and emigration of capitals.” [23] Equilibrium here occurs when all producers obtain an equal rate of profit on their advanced capital for means of production and labor power. This tendency “has the effect of distributing the total mass of social labour time among the various spheres of production according to the social need.” [24] However, here again there is an obstacle to the realization of equilibrium—the existence of fixed capital embedded in particular spheres does not permit easy exit and entry.

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Nevertheless, for Marx, the law of value (the process by which labor is allocated in the necessary proportions in capitalism) operates more smoothly as capitalism develops. Capital’s “free movement between these various spheres of production as so many available fields of investment” has as its condition the development of the credit and banking system. Only as money-capital does capital really “possess the form in which it is distributed as a common element among these various spheres, among the capitalist class, quite irrespective of its particular application, according to the production requirements of each particular sphere.” [25] In its money-form, capital is abstracted from particular employments. Only in money-capital, in the money-market, do all distinctions as to the quality of capital disappear: “All particular forms of capital, arising from its investment in particular spheres of production or circulation, are obliterated here. It exists here in the undifferentiated, self-identical form of independent value, of money.” [26]

Equalization of profit rates “presupposes the development of the credit system, which concentrates together the inorganic mass of available social capital vis-á-vis the individual capitalist.” [27] That is, it presupposes the domination of finance capital: bankers “become the general managers of money capital,” which now appears as “a concentrated and organized mass, placed under the control of the bankers as representatives of the social capital in a quite different manner to real production.” [28]

Marx’s Auto-Critique

There is no better way to understand Marx’s theory of value than to see how he responded to critics of Capital. With respect to a particular review, Marx commented to Kugelmann in July 1868 that the need to prove the law of value reveals “complete ignorance both of the subject under discussion and of the method of science.” Every child, Marx here continued, knows that “the amounts of products corresponding to the differing amounts of needs demand differing and quantitatively determined amounts of society’s aggregate labour.” How could the critic not see that “It is SELF-EVIDENT that this necessity of the distribution of social labour in specific proportions is certainly not abolished by the specific form of social production!” [29] Similarly, answering Eugen Dühring’s objection to his discussion of value, Marx wrote to Frederick Engels in January 1868 that “actually, no form of society can prevent the labour time at the disposal of society from regulating production in ONE WAY OR ANOTHER.” [30] That was the point: in a commodity-producing society, how else could labor be allocated—except by the market!

Although Marx was clearer in these letters on this point than in Capital, he was transparent there in his critique of classical political economy on value and money. In contrast to vulgar economists who did not go beneath the surface, the classical economists (to their credit) had attempted “to grasp the inner connection in contrast to the multiplicity of outward forms.” But they took those inner forms “as given premises” and were “not interested in elaborating how those various forms come into being.” [31] The classical economists began by explaining relative value by the quantity of labor-time, but they “never once asked the question why this content has assumed that particular form, that is to say, why labour is expressed in value, and why the measurement of labour by its duration is expressed in the value of the product.” [32] Their analysis, in short, started in the middle.

This classical approach characterized Marx’s own early thought. It is important to recognize that Marx’s critique was an auto-critique, a critique of views he himself had earlier accepted. In 1847, Marx declared that “[David] Ricardo’s theory of values is the scientific interpretation of actual economic life.” [33] In The Principles of Political Economy, Ricardo had argued that “the value of a commodity…depends on the relative quantity of labour which is necessary for its production.” By this, he meant “not only the labour applied immediately to commodities,” but also the labor “bestowed on the implements, tools, and buildings, with which such labour is assisted.” Accordingly, relative values of differing commodities were determined by “the total quantity of labour necessary to manufacture them and bring them to market.” This was “the rule which determines the respective quantities of goods which shall be given in exchange for each other.” [34]

Marx followed Ricardo in his early work. “The fluctuations of supply and demand,” Marx wrote in Wage Labour and Capital, “continually bring the price of a commodity back to the cost of production” (that is to say, to its “natural price”). This was Ricardo’s theory of value: the “determination of price by the cost of production is equivalent to the determination of price by the labour time necessary for the manufacture of a commodity.” Further, this rule applied to the determination of wages as well, which were “determined by the cost of production, by the labour time necessary to produce this commodity—labour.” [35] The same point was made in the Communist Manifesto in 1848: “the price of a commodity, and therefore also of labour, is equal to its cost of production.” [36]

In the 1850s, however, Marx began to develop a new understanding. In the notebooks written in 1857–58, which constitute the Grundrisse, he began his critique of classical political economy. Marx concluded the Grundrisse by announcing that the starting point for analysis had to be not value (as Ricardo began), but the commodity, which “appears as unity of two aspects”—use value and exchange value. [37] The commodity and, in particular, its two-sidedness is the starting point for his critique and how he begins both his Contribution to the Critique of Political Economy (1859) and Capital. [38]

The Best Points in Capital

The law of value as a “regulative law of nature” was not one of the best points in Capital, nor one of the “fundamentally new elements in the book.” After all, if the law of value is the tendency of market prices to approach an equilibrium in the same way as “the law of gravity asserts itself,” then this “regulative law of nature” was already present in Ricardo.

Rather, what Marx argued in Capital is that classical political economy did not understand value. “As regards value in general, classical political economy in fact nowhere distinguishes explicitly and with a clear awareness between labour as it appears in the value of a product, and the same labour as it appears in the product’s use value.” [39] But that distinction, Marx declared to Engels in August 1867, is “fundamental to all understanding of the FACTS”! That “two-fold character of labour,” he indicated, is one of the “best points in my book” (and indeed, the best point in the first volume of Capital). [40]

Marx made the same point in the first edition of the first volume of Capital about the two-fold character of labor in commodities: “this aspect, which I am first to have developed in a critical way, is the starting point upon which comprehension of political economy depends.” [41] Writing again to Engels in January 1868, Marx described his analysis of the double character of the labor represented in commodities as one of the “three fundamentally new elements of the book.” All previous economists having missed this, they were “bound to come up against the inexplicable everywhere. This is, in fact, the whole secret of the critical conception.” [42]

The secret of the critical conception, the starting point for comprehension of political economy, the basis for all understanding of the facts—what made the revelation of the two-fold character of labor in commodities so important? Very simply, it is the recognition that actual, specific, concrete labor, all those hours of real labor that have gone into producing a particular commodity, in themselves have nothing to do with its value. You cannot add the hours of the carpenter’s labor to the labor contained in consumed means of production and come up with the value of the carpenter’s commodity. That specific labor, rather, has gone into the production of a thing for use, also known as a use value. Further, you cannot explain relative values by counting the quantity of specific labor contained in separate use values. If you do not distinguish clearly between the two-fold aspects of labor in the commodity, you have not understood Marx’s critique of classical political economy.

Marx’s Labor Theory of Money

“We have to perform a task,” Marx announced, “never even attempted by bourgeois economics.” [43] That task was to develop his theory of money—in particular, to reveal that money is the social representative of the aggregate labor in commodities. For this, Marx demonstrated that (1) the concept of money is latent in the concept of the commodity and (2) that money represents the abstract labor in a commodity and that the manifestation of the latter, its only manifestation, is the price of the commodity.

If adding up the hours of concrete labor to produce a commodity does not reveal its value, what does? Nothing, if we are considering a single commodity. “We may twist and turn a single commodity as we wish; it remains impossible to grasp as a thing possessing value.” [44] We can approach grasping the value of a commodity only by considering it in a relation. The simplest (but undeveloped) form of this relation is as an exchange value—the value of commodity A is equal to x units of commodity B, where B is a use value. We always knew A as a use value but now we know the value of A from its equivalent in B. (If we reverse this, we would say the value of B is equal to 1/x units of A, and here A is the equivalent.) The second commodity, the equivalent, is a mirror for the value in the first commodity. It is through this social relation that we may grasp the commodity as something possessing value.

Having established that the value of a commodity is revealed through its equivalent, Marx logically proceeds step-by-step to establish the existence of a commodity that serves as the equivalent for all commodities—that is, is the general form of value. It is a mini-step from there to reveal the monetary form of value: money as the universal equivalent, money as the representative of value. [45] In short, once we begin to analyze a commodity-exchanging society, we are led to the concept of money. This is what Marx identifies as his task: “We have to show the origin of this money form, we have to trace the development of this expression of value relation of commodities from the simplest, almost imperceptible outline to the dazzling money form. When this has been done, the mystery of money will immediately disappear.” [46] But this was a closed book to the classical economists; “Ricardo,” Marx commented years later, “in fact only concerned himself with labour as a measure of value-magnitude and therefore found no connection between his value-theory and the essence of money.” [47]

But what is money? To understand money, we need to return to the two-fold character of labor in commodities, that point upon which comprehension of political economy depends. We know that concrete, specific labor produces specific use values. Insofar as labor is concrete, we cannot compare commodities containing different qualities of labor. But we can compare them if we abstract from their specificities—that is, consider them as containing labor in general, abstract labor, “equal human labour, the expenditure of identical human labour power.” [48] The aggregate labor of society is a composite of many “different modes of human labour”: “the completed or total form of appearance of human labour is constituted by the totality of its particular forms of appearance.” [49] That “one homogeneous mass of human labour power,” that universal, uniform, abstract, social labor in general, “human labour pure and simple,” enters into each commodity. [50]

Think about the aggregate labor in commodities as so-called jelly labor, as made up of a number of identical, homogeneous units. A certain amount of this jelly labor goes into each commodity. The value of a commodity is determined by how much of this jelly labor—how much homogeneous, universal, abstract labor, that common “social substance”—it contains. Obviously, we cannot add up jelly labor simply, as we might attempt for concrete labor. How, then, can we see the value of a commodity? We have answered that already. The value of a commodity (that is, the homogeneous, general, abstract labor in the commodity) is represented by the quantity of money, which is its equivalent. Indeed, the only form in which the value of commodities can manifest itself is the money-form.

Every society obtains the amounts of products corresponding to the differing amounts of its needs by devoting a portion of the available labor time to its production. As noted above, “in so far as society wants to satisfy its needs, and have an article produced for this purpose, it has to pay for it…[and] it buys them with a certain quantity of the labour-time that it has at its disposal.” [51] How do we satisfy our needs within capitalism? We buy them with the representative of the total social labor in commodities—money.

Ignorance both of the Subject under Discussion and of the Method of Science

As Michael Heinrich writes, “many Marxists have difficulties understanding Marx’s analysis.” Like bourgeois economists, “they attempt to develop a theory of value without reference to money.” [52] It is a bit difficult to understand why, however, given Marx’s criticisms of classical political economy about this very point. Ricardo, Marx commented, had not understood “or even raised as a problem” the “connection between value, its immanent measure—i.e., labour-time—and the necessity for an external measure of the values of commodities.” Ricardo did not examine abstract labor, the labor that “manifests itself in exchange values—the nature of this labour. Hence he does not grasp the connection of this labour with money or that it must assume the form of money.” [53]

That is why Marx undertook his task “to show the origin of this money form” and to solve “the mystery of money,” a task “never even attempted by bourgeois economics.” We need to understand the nature of money, and how we move from value directly to money. As he explained in chapter 10 of the third volume of Capital:

in dealing with money we assumed that commodities are sold at their values; there was no reason at all to consider prices that diverged from values, as we were concerned simply with the changes of form which commodities undergo when they are turned into money and then transformed back from money into commodities again. As soon as a commodity is in any way sold, and a new commodity bought with the proceeds, we have the entire metamorphosis before us, and it is completely immaterial here whether the commodity’s price is above or below its value. The commodity’s value remains important as the basis, since any rational understanding of money has to start from this foundation, and price, in its general concept, is simply value in the money form. [54]

To understand why Marx felt it was essential to solve the mystery of money, it helps to understand his method of dialectical derivation. Like G. W. F. Hegel, upon examining particular concepts, he found that they contained a second term implicitly within them; he proceeded then to consider the unity of the two concepts, thereby transcending the one-sidedness of each and moving forward to richer concepts. In this way, Marx analyzed the commodity and found that it contained latent within it the concept of money, the independent form of value—and that the commodity differentiated into commodities and money. Further, considering that relation of commodities and money from all sides, Marx uncovered the concept of capital. [55]

The concept of capital, in short, does not drop from the sky. It is marked by the preceding categories. Since money is the representative of abstract labor, of the homogeneous aggregate labor of society, capital must be understood as an accumulation of homogeneous, abstract labor. By understanding money as latent in commodities, we reject the picture of money juxtaposed externally to commodities as in classical political economy and therefore recognize that abstract labor is always present in the concept of capital.

However, all accumulations of abstract labor are not capital. For them to correspond to the concept of capital, they must be driven by the impetus to grow and must have self-expanding value (i.e., M-C-M´). How is that possible, however, on the assumption of exchange of equivalents? Where does the additional value, the surplus value, come from? The two questions express the same thing: in one case, in the form of objectified labour; in the other, in the form of living, fluid labor. [56]

The answer to both is that, with the availability of labor power as a commodity, capital can now secure additional (abstract) labor. This is not because of some occult quality of labor power, but, because by purchasing labor power, capital now is in a relation of “supremacy and subordination” with respect to workers, a relation that brings with it the “compulsion to perform surplus labour.” [57] That compulsion, inherent in capitalist relations of production, is the source of capital’s growth.

Let us consider absolute surplus value by focusing upon “living, fluid labor.” The value of labor power, or necessary labor, at any given point represents the share of aggregate social labor that goes to workers. The remaining social labor share is captured by capitalists. When capital uses its power to increase the length or intensity of the workday, total social labor rises; assuming necessary labor remains constant, capital is the sole beneficiary. The ratio of surplus labor to necessary labor—the rate of exploitation—rises.

Alternatively, let the productivity of labor be increased. To produce the same quantity of use values, less total labor is required. Accordingly, increased productivity brings with it the possibility of a reduced workday (a possibility not realized in capitalism). If, conversely, aggregate social labor remains constant, who would be the beneficiary of such an increase in productivity? Assuming the working class is atomized and capital is able to divide workers sufficiently, capital obtains relative surplus value because necessary labor falls. Alternatively, to the extent that workers are sufficiently organized as a class, they will benefit from productivity gains with rising real wages as commodity values fall. In Capital, this second option is essentially precluded because, following the classical economists, Marx assumed that the standard of necessity is given and fixed. [58]

In short, we need to understand money if we are to understand capital, and for that we need to grasp the two-fold character of labor that goes into a commodity. Unfortunately, many Marxists fail to grasp the distinction “between labour as it appears in the value of a product, and the same labor as it appears in the product’s use value”—the distinction Marx considered “fundamental to all understanding of the FACTS.” As a result, they offer a “theory of value without reference to money,” what Heinrich calls “pre-monetary theories of value,” which I consider to be pre-Marxian theories of value or Ricardian theories of value. [59]

Ricardian Marxists do not grasp Marx’s logic, or how Marx logically moves from the abstract to the concrete. The problem is particularly apparent when it comes to the so-called transformation problem. What those who attempt to calculate the transformation from values to prices of production fail to understand is that, rather than transforming actually existing values, prices of production are simply a further logical development of value. [60] The real movement is from market prices to equilibrium prices, that is, prices of production. As we have seen, this is how the law of value allocates aggregate labor in commodities, similar to a law of gravity. The failure of these Marxists to distinguish between the logical and the real demonstrates their “complete ignorance both of the subject under discussion and of the method of science.”

Notes

1. In his fine introduction and interpretation of Capital, Michael Heinrich criticizes traditional and worldview Marxism in An Introduction to the Three Volumes of Karl Marx’s Capital (New York: Monthly Review Press, 2012). Heinrich further expounds the early sections of the first volume of Capital intensely in Michael Heinrich, How to Read Marx’s Capital (New York: Monthly Review Press, 2021).

2. Karl Marx and Frederick Engels, Collected Works (New York: International Publishers, 1975), vol. 43, 68.

3. Karl Marx, Capital, vol. 1 (London: Penguin, 1977), 169–70.

4. Karl Marx, Capital, vol. 3 (London: Penguin, 1981), 288.

5. Marx, Capital, vol. 1, 171.

6. Marx, Capital, vol. 1, 172.

7. Karl Marx, Grundrisse (London: Penguin, 1973), 171–72.

8. Marx, Capital, vol. 1, 173.

9. Marx, Capital, vol. 1, 772; Marx, Grundrisse, 488, 541, 708; Karl Marx, Critique of the Gotha Programme in Marx and Engels, Selected Works, vol. 2 (Moscow: Foreign Languages Press, 1962), 24.

10. Marx and Engels, Collected Works, vol. 6, 506.

11. Marx, Grundrisse, 158–59.

12. On this view of socialist society, see Michael A. Lebowitz, The Socialist Alternative: Real Human Development (New York: Monthly Review Press, 2010) and Michael A. Lebowitz, Between Capitalism and Community (New York: Monthly Review Press, 2020).

13. Discussion of the individual commodity producer applies as well to collective or group commodity producers (as in the case of cooperatives).

14. Marx, Grundrisse, 156–58.

15. Marx, Capital, vol. 3, 288–89.

16. Marx, Capital, vol. 1, 170.

17. Marx and Engels, Collected Works, vol. 43, 68.

18. Marx, Capital, vol. 1, 476. It is important to keep in mind the distinction between the aggregate labor in commodities and the aggregate labor in society as a whole.

19. Marx, Capital, vol. 1, 476.

20. Marx, Capital, vol. 1, 168.

21. Marx, Capital, vol. 1, 476.

22. Marx, Capital, vol. 1, 1051.

23. Marx, Capital, vol. 3, 895.

24. Karl Marx, Theories of Surplus Value, Part II (Moscow: Progress Publishers, 1968), 209.

25. Marx, Capital, vol. 3, 491.

26. Marx, Capital, vol. 3, 490. We are describing here so-called jelly capital.

27. Marx, Capital, vol. 3, 298.

28. Marx, Capital, vol. 3, 528, 491.

29. Marx and Engels, Collected Works, vol. 43, 68.

30. Marx and Engels, Collected Works, vol. 42, 515.

31. Karl Marx, Theories of Surplus Value, Part III (Moscow: Progress Publishers, 1971), 500.

32. Marx, Capital, vol. 1, 173–74.

33. Marx and Engels, Collected Works, vol. 6, 121, 123–24.

34. David Ricardo, The Principles of Political Economy and Taxation (Homewood: Richard D. Irwin, Inc., 1963), 5–6, 12–13, 42.

35. Karl Marx, Wage Labour and Capital in Marx and Engels, Collected Works, vol. 9, 208–9.

36. Marx and Engels, Collected Works, vol. 6, 491. Here, Marx accepted Ricardo’s symmetry in the production of hats and men, and he continued to hold that position in Capital. For a criticism, see Lebowitz, “The Burden of Classical Political Economy” in Lebowitz, Between Capitalism and Community, chapter 6.

37. Marx, Grundrisse, 881.

38. By the time of the writing of Capital, however, Marx had moved to identify that two-fold nature of the commodity as use value and value and explained that exchange value is merely the necessary form that value takes.

39. Marx, Capital, vol. 1, 173n.

40. Marx and Engels, Collected Works, vol. 42, 407.

41. Albert Dragstedt, Value: Studies by Karl Marx (London: New Park Publications, 1976), 11.

42. Marx and Engels, Collected Works, vol. 42, 514.

43. Marx, Capital, vol. 1, 139.

44. Marx, Capital, vol. 1, 138.

45. In classical political economy and in Marx’s time, gold was the money-commodity; however, Marx’s theory of money only requires social acceptance as the universal equivalent.

46. Marx, Capital, vol. 1, 139.

47. Karl Marx, “Marginal Notes on Adolph Wagner’s Lehrbuch der Politschen Oekonomie” in Dragstedt, Value, 204.

48. Marx, Capital, vol. 1, 129.

49. Marx, Capital, vol. 1, 157.

50. Marx, Capital, vol. 1, 129.

51. Marx, Capital, vol. 1, 288.

52. Heinrich, An Introduction to the Three Volumes of Karl Marx’s Capital, 57, 63–64.

53. Marx, Theories of Surplus Value, Part II, 164, 202.

54. Marx, Capital, vol. 3, 294–95.

55. See the discussion of the derivation of capital in Michael A. Lebowitz, Beyond Capital: Marx’s Political Economy of the Working Class (New York: Palgrave Macmillan, 2003), 55–60.

56. “The rate of surplus-value is therefore an exact expression for the degree of exploitation of labour power by capital, or of the worker by the capitalist.” Marx, Capital, vol. 1, 326.

57. Marx, Capital, vol. 1, 1026–27.

58. See Lebowitz, Between Capitalism and Community, chapter 7.

59. Heinrich, An Introduction to the Three Volumes of Karl Marx’s Capital, 57, 63–64.

60. As Heinrich indicates, the transformation of values “represents a conceptual advancement of the form-determination of the commodity.” Heinrich, An Introduction to the Three Volumes of Karl Marx’s Capital, 148–49.

Ethical Consumption in the Socialist Imaginary

By Juan Gonzalez Valdivieso

Since its advent in the 1990s, globalization has transformed the world. One of its many notable effects was the further siloing of consumers from the labor that produced their goods and services. Increasingly complex global supply chains alongside deceptive advertising make it nearly impossible to uncover every step in a product’s production and distribution. Of course, strategic clarification of these processes would come to represent its own form of advertising, as the professed “social and environmental values of consumer products” became reliable selling points in and of themselves. This was mainly due to an increase in consumer consciousness — spurred by globalization’s poster child, the internet — that begged for opportunities to consume “ethically.”

Though such “ethical consumption” marked an improvement over previous consumptive practices, a socialist lens reveals its limitations. As socialists understand, capitalist production relies on the exploitation of workers by capital owners, meaning that no level of consciousness or self-awareness on the part of traditional companies can shed their fundamentally unethical character. Even in instances where a worker’s experience with their employer is satisfactory — as can happen when receiving a high salary or wage, robust benefits, or other perks — the company’s simultaneous profiteering is more than just a harmless manifestation of mutual benefit. The very act of turning a profit beyond that which would sufficiently refinance operating costs is one of theft, particularly of the value that the worker has produced via their labor. This surplus value is not returned to the worker nor does it serve operational ends. It instead comprises the millionaire salaries of executives and further grows the capital to which the company can now claim legal rights. In other words, as socialists often argue, there is no ethical consumption under capitalism. However, when considering the ethics of capitalist consumption, the analysis cannot stop there.

It is not so much ethical consumption but rather ethical purity which is impossible under capitalism. Moreover, beneath such a threshold of ethical purity, there lie two spectra upon which one’s capitalist consumption can and should still be measured: that of ethics and, more importantly, that of the consumer. 

The spectrum of ethics — henceforth referred to as the ethical spectrum — is that which the deliberately advertised “social and environmental values of consumer products” implies. In other words, a hierarchy of ethics in consumption does exist just shy of ethical purity. And, most pressingly, that hierarchy is primarily highlighted by the aspects of a good or service’s production and distribution that can be observed, analyzed, and understood. Of course, such aspects are most often only made publicly available for observation, analysis, and understanding at the behest of their corporate manufacturers but they are empirical points of ethical reference nonetheless. Take the purchase of a shirt, for example. When a consumer purchases a shirt, the ethical spectrum offers a host of consumptive options based on the available social and environmental factors at hand, ones which, for the sake of argument, will be boiled down here into three outstanding choices.

The first choice, which will be the optimal form of ethical consumption in this scenario, is one in which it is known to the consumer that the shirt is both the product of union labor and produced in an environmentally conscious way, be that through the use of reusable materials, renewable energy, waste minimization, etc. The second choice, which will be the middle-of-the-road, intermediate form of ethical consumption in this scenario, is one in which the shirt is still the product of union labor but environmental considerations are not present, meaning labor exploitation is minimized through the presence of unionized production but the sustainable nature of the product is lacking. The third and final choice, which will be the worst and least preferable form of ethical consumption in this scenario, is one in which the production of the shirt lacks both union labor and environmental considerations, making it an ethically lackluster product regarding its accommodations for both labor exploitation and sustainability. It is in determining which of the three choices one should pursue, if any at all, that the second spectrum — that of the consumer — becomes relevant.

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The spectrum of the consumer — henceforth referred to as the consumer spectrum — is one which makes an even deeper distinction between consumptive practices than that of the ethical spectrum, as it precedes the question of ethics with the question of ability. To consider consumption under capitalism as an exercise of solely ethical dimensions is to neglect the vital reality underlying such a society: inequality is rampant, poverty is ever-worsening, and the material conditions of the masses only become more dire by the day. As such, it is often the case that for many consumers, ethical considerations are an aspect of capitalist consumption in which they simply do not have the socioeconomic capacity to engage. After all, who is to blame a working-class family for neglecting the exploitative or unsustainable aspects of a good or service they’ve consumed when their socioeconomic conditions may not even allow them to ensure their most basic needs?

The consumer spectrum acknowledges this disparity and ensures that the degree of ethical consideration a consumer engages in is proportional to their socioeconomic standing, one best represented by the consumer’s income. However, conditions beyond those of financial earnings can determine whether disposable income in particular will fluctuate over time, a trend that would then require the consumer’s ethical considerations to similarly shift. These outstanding conditions can take on many forms, incorporating factors such as working conditions — a greater likelihood of on-the-job injuries could decrease disposable income prospects due to evermore frequent medical bills — immigration status — undocumented workers have less access to social safety nets and unemployment benefits than their documented counterparts — and living conditions — crumbling infrastructure could gradually increase the financial burden of maintenance faced by tenants, decreasing their disposable income over time. As such, the consumer spectrum adjusts the ethical considerations incumbent upon a consumer based both on their income and on the potential for their disposable income to fluctuate. In turn, the consumer spectrum ensures two important outcomes.

On the one hand, it makes sure that socioeconomically disadvantaged individuals are not burdened with the task of considering ethics when making consumptive decisions to survive. On the other, it holds socioeconomically advantaged individuals to a higher standard of ethical consumption, one in which they would be remiss to not undergo the kind of ethical considerations previously outlined in the shirt exercise. Admittedly, the former assurance has become more widely accepted in discourse regarding working-class consumption. The latter, on the other hand, risks not achieving the same, as the maxim that there is no ethical consumption under capitalism can serve as low-hanging fruit for socioeconomically advantaged individuals to conveniently justify knowingly unethical consumption. The consumer spectrum seeks to account for such co-optation and counter it head-on.

This layout of consumptive spectra can be useful on the individual level of consumption. For those with the appropriate socioeconomic bandwidth, it offers bountiful considerations that can inform the consumption of a given good or service. However, the utility of the model is perhaps best understood on the macro level. Beyond the pressure that socialists must continue to exert on the existing system — uprooting the power of capital owners and corporations in the process — these spectra provide greater nuance to the socialist perspective on individual accountability and action. Through the ethics and consumer spectra, we can better envision the untapped potential of individualized proactivity in creating a less exploitative and more sustainable society, while also accommodating the diversity of lived experiences and forms of exploitation endured under the current economic system.

Thus, the notion of ethical consumption under capitalism should not simply culminate in an indisputable law of impossibility. Rather, it should be understood as a range of activity that can be engaged in — just shy of ethical purity — based on the ethical considerations at hand and, more pressingly, those which directly pertain to the socioeconomic capacities of the consumer. Only in considering this reality can we better understand the role of individual consumption in the broader socialist project of radical change and revolutionary transformation.

Juan Gonzalez Valdivieso is a Colombian Marxist. In his writing, he seeks to interrogate the nuances of socialist thought and praxis.

The Appalling Reality Of Child Labor

By Josh Crowell

Republished from Socialist Alternative.

Child labor has been on the rise since at least 2018. The recent New York Times article ignited a firestorm that has led the Biden administration to create a task force within the Department of Labor as an attempt to deal with this crisis. However, the reasons these children are being exploited is due to a lack of government oversight to begin with. The Department of Health and Human Services has failed to keep proper records of unaccompanied minors as they are placed with sponsors quickly to try to get them out of shelters. Only a third of these minors have any follow-up after placement with a sponsor, and even that limited support ends after a few months.

Hyper-exploitation Of Child Immigrant Labor

This is a crisis of poverty and immigration. Families and unaccompanied minors are fleeing desperate situations in Latin America to find only different conditions of desperation in the States. All families in the US right now are experiencing the pressures of our current economic crisis, from high inflation and the cost-of-living crisis, to the ending of the child tax credit and the rollback of the COVID social safety net leaving many without access to food stamps and Medicaid benefits. While many minors who haven’t migrated are being put in situations where they have to work, many more immigrant minors, with or without their family, are forced to take up work once they arrive in the States, sending money back to their families in their home country or just to afford to survive in America. US immigration policy – under Trump and continued under Biden – criminalizes border crossings. The threat of deportation still hangs over the heads of immigrants and their families. With this stress, many unaccompanied minors also have debts accrued from their border crossing due to fees owed to those who helped them cross the border and additional money owed to their sponsors once they have been relocated out of the government’s custody. 

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This has led many children to take up jobs in very dangerous industries like meat processing plants, commercial bakeries, and construction. These children – some as young as 13 – work upwards of 14-hour shifts doing jobs that are classified as too dangerous for anyone under 18. While these jobs are difficult for any worker, these children must balance their school course load and full-time employment with the additional stresses of worrying about their families back in Latin America and knowing they are already burdened with debts they must pay. Some of these children are forced to drop out of school, many of which drop out unnoticed due to the lack of HHS oversight into their care once placed with a sponsor, if their sponsor enrolled to begin with.

As inflation continues to rise, especially with increases in rents, children and their families are forced to find ways to make ends meet, regardless of whether these survival methods skirt that law. While it is illegal for children to be working in these jobs, the bosses use these desperate circumstances to exploit these minors who are just trying to survive. With the Great Resignation, many sections of the working class no longer accept poverty wages which leads companies to look for workers who will accept these conditions as a way to continue to keep wages low and produce higher profits. Many immigrant children fit this role perfectly due to their need to assist their families back home and pay down their debts to sponsors here in the States. 

This Is A Fight For The Labor Movement

While this crisis is one of true desperation by these children and their families, it highlights the overall weakening of the US and Latin American labor movements. Almost a century ago, child workers and their families fought for an end to child labor and guaranteed education for all minors. This fight was won through mass action, with child workers and their families going on strike and protesting the intense conditions they were being forced to labor under. The bosses are not interested in enforcing labor law, especially when it comes to the hyper-exploitation that comes with migrant labor. The US labor movement must organize to protect all workers and that means fighting back against these trends of increasing child labor. If an injury to one is an injury to all then workers must stand up for these children and demand that they have adequate resources, safe sponsorships, and the ability to go to school and learn, not work as if they were an adult. 

While it is positive that the government is taking some action due to public scrutiny from the media, it will not solve this crisis. A lack of government oversight and the continuation of brutal immigration policies that set up immigrant workers for hyper-exploitation has led us to this situation. It will take courageous strike action from these child workers and their families, joined by the masses of organized labor, to win back what had been won a century ago. These children’s desperation cannot be used by the bosses to continue to exploit them. Workers should fight for guaranteed education for all minors, resources for unaccompanied immigrant children like food stamps and stipends, and for a process within HHS that actually protects children, not simply pushes them through the system.

Artificial Intelligence and the Class Struggle

By Chris Fry

Republished from Fighting Words.

Since the earliest days of the industrial revolution, workers have fought company owners over their use of automated machinery to step up the pace of exploitation.

“Programmable” looms in textile mills allowed owners to hire children to work 12 to 14 hours a day at half pay.

Famously, workers used to throw their wooden shoes called “sabot” into the machine gears to force them to stop, hence the word “sabotage”.

At the Flint sit down strike in 1936, workers barricaded the doors to prevent General Motors from removing the assembly line machinery and setting it up at another location. This tactic helped the workers win the strike and force union recognition.

Today, the focus of automation has moved from mechanical to digital, particularly with the advent of AI (Artificial Intelligence).  Webster’s dictionary provides two related definitions for AI: “1) a branch of computer science dealing with the simulation of intelligent behavior in computers; and 2) the capability of a machine to imitate intelligent human behavior.”

Current AI applications depend on vast databases of different fields of knowledge (e.g., street maps, pictures, languages, literature, etc.) plus powerful computer hardware and software to interact with those databases to allow applications to simulate human intelligence, speech, behavior, appearance and more.

The incredible pace of AI’s increased use has even alarmed some of its developers, so much so that 1,000 of them wrote an open letter calling for a six month pause for AI’s most powerful technologies, as a May 1 New York Times article reports:

In late March, more than 1,000 technology leaders, researchers and other pundits working in and around artificial intelligence signed an open letter warning that A.I. technologies present “profound risks to society and humanity.”

“Powerful A.I. systems should be developed only once we are confident that their effects will be positive and their risks will be manageable,” the letter said.

“Our ability to understand what could go wrong with very powerful A.I. systems is very weak,” said Yoshua Bengio, a professor and A.I. researcher at the University of Montreal. “So we need to be very careful.”

These systems can generate untruthful, biased and otherwise toxic information. Systems like GPT-4 get facts wrong and make up information, a phenomenon called “hallucination.”

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Automated weapons systems – the Pentagon’s “Terminator” syndrome

The most dangerous application of AI to humanity is its use in modern imperialist warfare. On July 9, PBS held an interview with Paul Scharre, Vice President and Director of Studies at the Center for a New American Security, a war industry “think tank”, who said that the Pentagon is already preparing autonomous weapons in its proxy war in Ukraine:

Well, we’re already seeing drones being used in Ukraine that have all of the components needed to build fully autonomous weapons that can go out over the battlefield, find their own targets, and then all on their own attack those targets without any further human intervention. And that raises very challenging legal, and moral and ethical questions about human control over the use of force of war.

Of course, these “questions” have not stopped the war industry’s head-long rush to implement AI technology. Scharre complained in his interviewer that the Pentagon is moving too slowly:

Well, they’re not keeping up. That’s the short version, they’re woefully behind because the culture is so radically different. And the bottom line is, you can’t buy AI the same way that you might buy an aircraft carrier. The military is moving too slow. It’s mired in cumbersome bureaucracy. And the leadership of the Pentagon has tried to shake things up. They had a major reorganization last year of the people working AI and data and software inside the Defense Department.

But we haven’t seen a lot of changes since then. And so the Pentagon is going to have to find ways to cut through the red tape and move faster if they’re going to stay on top of this very important technology.

In the famous Terminator movies, autonomous robot weapons destroy their own creators before attacking humanity in general. In a recent blog from the British Campaign for Nuclear disarmament, that scenario was described in a U.S. military simulation:

Also in May, the Royal Aeronautical Society hosted the ‘Future Combat Air & Space Capabilities Summit’ conference that brought together over 200 delegates from around the world to discuss the future of military air and space capabilities. A blog reporting on the conference mentioned how AI was a major theme and a presentation from Col Tucker ‘Cinco’ Hamilton, the Chief of AI Test and Operations, USAF, warned against an over reliance on AI systems and noted that they were easy to trick and deceive. They can also create unexpected strategies to achieve their goals, and he noted that in one simulated test an AI-enabled drone was told to identify and destroy ground-based missile sites.

The final firing decision was to be made by a human, but the system had been trained that destruction of the missile site was the top priority. The AI decided therefore that ‘no-go’ decisions from the human were interfering with its higher mission and, in the simulation, it attacked the operator. Hamilton was reported as saying that the human operator would tell it not to kill the threat, “but it got its points by killing that threat. So, what did it do? … It killed the operator because that person was keeping it from accomplishing its objective.” Although the system was trained not to kill the operator, it started destroying the communication tower used to connect with the drone.

The Pentagon excuses itself for developing these dangerous weapons AI applications by saying that the People’s Republic of China is also developing these systems. But it must be pointed out that it is the U.S. fleet that is parading its nuclear-armed warships just off the coast of China in its arrogant and provocative “freedom of navigation” campaign, giving China no warning time to respond to an attack. U.S. Imperialism has no such justification.

AI and the strike by the Writers and Screen Actors Guilds

Artificial Intelligence is a major issue  in the ongoing strike by writers and movie production workers, including actors, and the entertainment industry’s corporate owners, called the Alliance of Motion Pictures and Television Producers (AMPTP). This “alliance” includes such giants as Amazon, Netflix, Paramount, Sony, HBO and The Walt Disney Company, the parent company of ABC News.

This is the first combined strike by these two groups of workers since 1960. The real pay for these workers after inflation has greatly declined in the last decade while the pay for owners and executives has skyrocketed. Along with demanding higher pay, these unions are demanding that AI applications not be used against them to lower their compensation.

AI applications like ChatGPT can “scrape” millions of documents from the internet without the writers’ permission to create new documents, or in this case, new story scripts. The writers call AI “plagiarism machines.”

For the writers, they demand that their writing not be used to “train” AI applications, and they not be tasked to correct AI generated scripts, for which they would receive less pay.

As one striking worker put it:

On Twitter, screenwriter C. Robert Cargill expressed similar concerns, writing, “The immediate fear of AI isn’t that us writers will have our work replaced by artificially generated content. It’s that we will be underpaid to rewrite that trash into something we could have done better from the start. This is what the WGA is opposing, and the studios want.”

The Screen Actors Guild has parallel demands regarding AI as their fellow strikers from the Writers Guild. As ABC News reported on July 19:

In addition to a pay hike, SAG-AFTRA said it proposed a comprehensive set of provisions to grant informed consent and fair compensation when a “digital replica” is made or an actor’s performance is changed using artificial intelligence. The union also said it proposed a comprehensive plan for actors to participate in streaming revenue, claiming the current business model has eroded our residual income for actors.

These AI issues may seem obscure to many members of the working class and oppressed communities. But it is important to remember that artificial intelligence in the hands of the Wall Street billionaires and Pentagon generals will lead to more and more exploitation for our class and increase the chances of a global nuclear catastrophe for our planet.

AI could offer tremendous social benefits, such as medical cures and economic scientific planning, but only if it is controlled by the workers through a socialist system.

What is social class?

By Danica Rachel

Republished from Red Flag.

A recent Essential poll found that 79 percent of Australians believe social classes still exist in Australia. This is unsurprising, given the distribution of wealth. For example, the Australia Institute’s Inequality on Steroids report estimates that the top 10 percent of Australian income earners received 93 percent of the benefits from all economic growth in the decade from 2009 to 2019.

Of Essential poll respondents, 49 percent consider themselves to be middle class, 30 percent self-identify as working class and 4 percent as upper class. This raises a question: what is a social class? 

Definitions typically revolve around income. “Middle class”, we’re often told, means earning something like the median income—about $65,000 a year according to the Australian Bureau of Statistics. There’s no consensus on how much below or above this figure someone can earn while still being in the middle. 

This is a vague way to define class and is ripe for misinterpretations and distortions. An article published in the Australian last year described yearly earnings between $120,000 and $160,000 as “middle income” in an attempt to defend the high-end tax cuts due to be implemented by the federal Labor government next year. 

In reality, according to the most recently available statistics from the Australian Taxation Office, people making this much money are comfortably in the top 15 percent of Australian income earners.

More sophisticated classifications refer to education levels, cultural interests and family occupations as well as income. But again, the outcome is imprecise. Anyone with a university degree becomes middle class, and “working class” often becomes a synonym for “lower class”—that is, anyone economically worse off or with lower formal education levels than those in the “middle”.

 Socialists are more precise. While income can often be an indicator of social class, we define the latter in terms of people’s relationship to society’s economic infrastructure. That gives us three categories: the capitalist class, the working class and the middle classes.

Capitalists are the parasites at the top. They’re the executives, CEOs and board members who own and/or control the big companies, and with them the machinery, farmland, office buildings, media outlets, electricity grids, telecommunications infrastructure, ports and so on. They own the “means of production”, which they put to use with the singular purpose of generating profit.

Workers, on the other hand, don’t own any means of production. They might own personal property such as a car, a phone, maybe a house. But while workers use their personal property to meet their daily needs, capitalists use their private property as capital—a means to generate wealth through exploiting workers. 

A worker might grow some veggies in their garden to cut grocery costs; an agricultural capitalist uses thousands of acres of farmland to turn a profit. A house owned by a worker is just a home, but it becomes capital when owned by a real estate investor, used to generate wealth on the market.

The threat of poverty, homelessness and starvation gives workers no choice but to sell the only thing they can: their capacity to labour. They are deprived of control over much of their daily lives, having little say over the work they do or the workplaces in which they are employed. Even simple dignities like meals and bathroom breaks in many places can be taken only when allowed by the boss. 

The number of people fitting this definition of “working class” is difficult to quantify. Diane Fieldes, writing in the 2005 anthology Class and struggle in Australia, estimated that the working class makes up a substantial majority of the population—more than double the 30 percent figure in the Essential poll. 

“Middle class” also takes on a different meaning in this framework. It describes those who sit between the working class and the class of big capitalists. There are many different categories that fit in here: small business owners, middle managers, union officials, academics and state bureaucrats, to name a few. They can have different and contradictory relationships to the means of production—some are small capitalists, others just bureaucrats. What they generally have in common is that they control their own work or the work of others. They certainly make up a lot less than 49 percent of the population.

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The Marxist definition of class is much more useful than loose definitions based on income or education. 

First, it gives us an understanding of how capitalism works. Workers and bosses don’t exist in isolation; they are intimately connected through exploitation. Capitalists own the means of production, but need workers to operate machines, maintain infrastructure, harvest crops, serve customers and so on. The workers are the ones who produce the goods or services that their bosses sell for profit.

But there’s the rub. For the boss to make a profit, they have to sell the products for more than the costs of production, which crucially includes what they pay their workers. So the workers have created value, but that value has been seized from them by the capitalist, and only a fraction returned as a wage. This isn’t just the case with blue-collar workers, but also applies to workers in retail, hospitality, healthcare, IT, administration and elsewhere. 

Whether a business is successful depends on how much profit it can make, and therefore how much its workers are exploited. Profits are the lifeblood of capitalism—and every cent of them comes from exploited labour. By understanding exploitation, we can understand how 93 percent of wealth went to the top 10 percent last decade.

Second, the Marxist definition shows that classes have counterposed interests. What’s good for capitalists is whatever makes their profits go up. This often means, for instance, paying workers less, cutting costs wherever possible and lowering workplace safety standards. What’s good for workers is the opposite: being paid more and having more rights at work. Thinking of class simply as where someone sits on the spectrum from “low income” to “high income” obscures this tension.

Third, defining classes by their relation to the means of production tells us who has power in society. The capitalists own the most important section of the economy, so they make all major decisions about what society produces and how it will be produced. And because of this control, governments must keep them onside. Otherwise, they might move their investments overseas, threaten the economy, or even outright depose governments.

But profits are generated by workers, which gives them a different kind of power. When a workplace goes on strike, its production stops, and therefore profits cannot be made. The bosses go to great lengths to avoid this happening. They’ll pit workers against each other and spread lies about unions to stop workers organising.

Finally, we can see who is needed to run society—and who runs it day to day. The capitalists portray themselves as the deserving few who are indispensable. But their profits and wealth are the fruits of workers’ labour. Workers, not bosses, construct buildings, run hospitals, and stock shelves. Workers run the world, but under capitalism they are forced to run it for the capitalist class.

Another world is possible, where workers run the world for ourselves, because of the simple fact that the bosses need us, but we don’t need them.

On the Concept of "Time Poverty"

[Photo credit: Marisa9 / iStock / Getty Images Plus]

By Rugveda Sawant

“In capitalist society spare time is acquired for one class by converting the whole life-time of the masses into labour-time.”

-Karl Marx

There is a considerable amount of literature on “time-poverty” concocted by researchers and policy-makers. The term is used to denote lack of time an individual experiences to devote to personal and social activities which ends up negatively impacting their well-being.

Apart from the already established definition of the term, a fresh deconstruction of it may lead one to observe that if poverty is understood as a lack of (financial) resources, time-poverty may be understood as a lack of (financial) resources to purchase time rather than lack of time itself. The worker who does not own any means of production and has nothing but his labour-power to sell in order to sustain himself, must do so by lending it out for a certain duration of time to the capitalist who purchases it in order to extract surplus value. However, it becomes important to note that what is being sold and purchased here is not time, but labour-power. Time is not a commodity- it can be a measure of value but has no value in itself; it cannot be produced or purchased. Defining “time-poverty” as “lack of time” helps mask this simple contradiction; we are stuck with a term that fails to delineate the exact relationship between time and poverty, leading to the proposal of flawed solutions for a legitimate issue.

Even though a more liberal understanding is that people, no matter what their financial status, can experience “time-poverty”, a more sophisticated argument observes that it is an issue more relevant to and persistent amongst the income-poor. [1] To avoid ambiguity, let us replace “poor” with the working class and “rich” with the capitalist class. The working class earns its money through ‘wages’ while the capitalist class earns it through ‘profits’. The following illustration by Engels will help us understand how ‘wages’ and ‘profits’ are earned:

“The capitalist takes the labourer into his workshop or factory, where all the articles required for the work can be found – raw materials, auxiliary materials (coal, dyestuffs, etc.), tools, and machines. Here, the worker begins to work. His daily wages are, as above, 3 shillings, and it makes no difference whether he earns them as day-wages or piece-wages. We again assume that in 12 hours the worker adds by his labour a new value of 6 shillings to the value of the raw materials consumed, which new value the capitalist realizes by the sale of the finished piece of work. Out of this new value, he pays the worker his 3 shillings, and the remaining 3 shillings he keeps for himself. If, now, the labourer creates in 12 hours a value of 6 shillings, in 6 hours he creates a value of 3 shillings. Consequently, after working 6 hours for the capitalist, the labourer has returned to him the equivalent of the 3 shillings received as wages. After 6 hours’ work, both are quits, neither one owing a penny to the other.

“Hold on there!” now cries out the capitalist. “I have hired the labourer for a whole day, for 12 hours. But 6 hours are only half-a-day. So work along lively there until the other 6 hours are at an end – only then will we be even.” And, in fact, the labourer has to submit to the conditions of the contract upon which he entered of “his own free will", and according to which he bound himself to work 12 whole hours for a product of labour which cost only 6 hours’ labour.

Similarly with piece-wages. Let us suppose that in 12 hours our worker makes 12 commodities. Each of these costs a shilling in raw materials and wear-and-tear, and is sold for 2.5 shillings. On our former assumption, the capitalist gives the labourer .25 of a shilling for each piece, which makes a total of 3 shillings for 12 pieces. To earn this, the worker requires 12 hours. The capitalist receives 30 shillings for the 12 pieces; deducting 24 shillings for raw materials and wear-and-tear, there remains 6 shillings, of which he pays 3 shillings in wages and pockets the remaining 3. Just as before! Here, also, the worker labours 6 hours for himself – i.e., to replace his wages (half-an-hour in each of the 12 hours), and 6 hours for the capitalist.” (Frederick Engels, Wage Labour and Capital, 1891)

Profits are earned by appropriating unpaid labour of the working class. Profit constitutes the amount of time that the worker has spent in producing value that does not belong to him. The magnitude of profits can be increased by increasing intensity of labour, productiveness of the labour or by increasing the length of the working day. But no matter how these three variables shift, (relative) wages and profits remain in inverse proportion to each other. [2] Lower the wages, more the profit. More the labour-time that remains unpaid, more the capitalist gains. Once this is clear, one can start to see how “lack of time” that one class of the society faces is a gain for the other. The issue of “lack of time” devoid of class analysis leads to vague rhetorics [3] and empty solutions. All sincere critique must elucidate how the “lack of time” that the “poor” face and which affects their “well-being” is an inevitability under capitalist production. [4]

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It is argued that women are the most “time-poor” since they are ones who usually perform domestic and household work which (widely) remains unrecognized and unpaid. The burden of performing these tasks leaves them with very little time for themselves. Recognition, remuneration and provision of alternative arrangements of such work will lead to diminution of the time deficit that women face. Researchers by employing the methodology of time-use surveys have made proclamations like “rich women work harder than poor men”. [5] Such statements are as contrived as the terms “rich” and “poor” are abstruse. Women unarguably are burdened with domestic and household work, which to a very large extent remains gendered. However the premise that it is “unpaid” is false. Even though this work may not be remunerated directly, it is accounted for in the wages earned by the worker:

“The manufacturer who calculates his cost of production and, in accordance with it, the price of the product, takes into account the wear and tear of the instruments of labour…In the same manner, the cost of production of simple labour-power must include the cost of propagation, by means of which the race of workers is enabled to multiply itself, and to replace worn-out workers with new ones. The wear and tear of the worker, therefore, is calculated in the same manner as the wear and tear of the machine.

Thus, the cost of production of simple labour-power amounts to the cost of the existence and propagation of the worker. The price of this cost of existence and propagation constitutes wages. The wages thus determined are called the minimum of wages. This minimum wage, like the determination of the price of commodities in general by cost of production, does not hold good for the single individual, but only for the race. Individual workers, indeed, millions of workers, do not receive enough to be able to exist and to propagate themselves; but the wages of the whole working class adjust themselves, within the limits of their fluctuations, to this minimum.”  (Karl Marx, Wage Labour and Capital, 1847) 

Therefore, even if household and domestic work was to be paid for separately, it would lead to a relative decrease in wages, not leading to any sort of substantive improvement in the life of the working class. The gendered nature of the oppressive burden of household work can be understood as an effect of the patriarchal system but the cause of it lies in the exploitative nature of class relations under capitalism. The patriarchal system itself, at the outset, is a result of the historical division of labour within a class society. The condition of women being domestic slaves to their husbands will not be made better, in any real sense, by demanding for household work to be remunerated.[6] According to the calculations of the capitalist, it is already recognised and paid for in the wages of the worker. As explained above, the impoverished status of the working class is directly linked to the prosperity of the capitalist. Therefore, any demands for alternative arrangement or socialisation of domestic work that might emancipate women from their current state of slavery and proposals about providing free goods and services via public policy, remain incompatible with and a utopia under the capitalist mode of production.

The burden of “unpaid work” that leads individuals to face a “lack of time” is a legit issue. However, it cannot be understood in isolation from the process of production of which it is a part. Marx writes:

“All the slave’s labour appears as unpaid labour. In wage labour, on the contrary, even surplus-labour, or unpaid labour, appears as paid. There the property-relation conceals the labour of the slave for himself; here the money-relation conceals the unrequited labour of the wage labourer.” (Karl Marx, Vol 1., Capital, 1887)

It is this very phenomenon that can so easily lead one to think of household work (domestic slavery of women) as unpaid while overlooking the exploitative nature of class relations within the capitalist mode of production. The concept of “time-poverty“, which wrongly posits time as a commodity, furthers the concealment of the worker’s unpaid labour. The worker appears to be selling his time and not the value creating source that is his labour-power. It becomes easier then, for the price of this “time” to be detached from and determined independently of the value created by him. Terms like “time-poverty” when undisguised reveal themselves as nothing but plain, old poverty. Averse to the dilution and deviation that this term begets, one must not lose sight of the fact that the fight for personal and leisure time is inextricably tied with the fight for socialism.

Notes

[1] “...time-poverty among the better off accounts for very little of the total, and that genuine time poverty is more than a qualitative loss resulting from individual choices. Rather, most people who are time-poor are also income-poor and suffer from other (often multiple) deprivations.” Ghosh, “Time Poverty and the Poverty of Economics,” 2.

[2] “The share of (profit) increases in the same proportion in which the share of labour (wages) falls, and vice versa. Profit rises in the same degree in which wages fall; it falls in the same degree in which wages rise.” Marx, Wage Labour and Capital, 37.

[3] “Though it is difficult to say how much leisure or free time a person needs, one can say that a person who does not get enough leisure is under time stress.” Hirway, Understanding Poverty, 28.

[4] “Capitalist production, therefore, of itself reproduces the separation between labour-power and the means of labour. It thereby reproduces and perpetuates the condition for exploiting the labourer. It incessantly forces him to sell his labour-power in order to live, and enables the capitalist to purchase labour-power in order that he may enrich himself.” Marx, Vol. 1. Capital, 406.

[5] Ultra-poor women rank at the bottom in terms of burden of total work. They spend 32.74 per cent of their total time (53.42 hours) on work. They are followed by non-poor women (and not by ultra-poor men) who spend 31.66 per cent of their time (53.18 hours) on work. That is, rich women work much harder than ultra-poor men in terms of the time put into work. Hirway, Understanding Poverty, 35. Also quoted by Jayati Ghosh in “Time poverty and the poverty of economics” with an addition that “This partly reflects the lack of paid work for poor men as well as the greater burden of unpaid work borne by women in their own households.”

[6] “Payment for the housewife’s “reproductive labour” in the house, i.e. for domestic slavery, in addition to keeping the working family’s standard of living the same, and consequently the level of the housewife’s freedom on the same level as before, is something that would serve to perpetuate the idea of the housewife as the beast of burden that bears on her back all the social pressure exerted on working-class homes (including psychological and physical abuse). It would keep her away from social life, imprisoned within the four walls of her house, making her numb with chores that mangle her body and dull her mind.” Rey, Is housework an “unpaid” job?

Revisiting Eric Williams' 'Capitalism and Slavery' and Dismantling the Accepted Narratives of History

By John Burns

Republished from Monthly Review.

When British capitalism depended on the West Indies,” Eric Williams wrote in 1938,

they ignored slavery or defended it. When British capitalism found the West Indian monopoly a nuisance, they destroyed West Indian slavery.

Williams had no time for sentimental views on the abolition of slavery. The history he dealt in was more honest, more straightforward, and unafraid to confront the accepted narratives, wherever these might be found.

And confront he did. His 1945 work, Capitalism and Slavery, systematically destroyed the traditional, rose-tinted views of abolition in the UK, replacing the cozy and humanitarian with the cold and pragmatic, substituting empathy and egalitarianism with hard economic necessity. In Williams’s view, the United Kingdom reaped the immense benefits of slavery—for centuries, in fact—and dropped the practice only when it no longer served its lucrative purpose. To look at the facts in any other light is simply a pretense.

There are voices of humanitarianism within Williams’s work. There are voices of empathy, of egalitarianism. There are people whose consciences are clear, who’s hearts are true, people who fought against slavery and the British Empire’s grim association with it. There are all of these things because there were all of these things in real life. These voices existed in Georgian and Victorian Britain, and so they are present in Williams’s writing. It’s just that these voices, these notes of discord, were lost in a far larger choir. Those making all the noise—those who truly influenced governors and policymakers—were motivated by very different factors, such as economics, geopolitics, imperialism, and capitalism.

Williams received his early education in his native Trinidad and Tobago, then still part of the British Empire. As a student, he was awarded a scholarship to Oxford University, where he excelled as a student and refined many of ideas that would characterize his later work. In 1956, Williams formed the People’s National Movement (PNM), becoming the Prime Minister of Trinidad and Tobago that same year, and eventually led the country to independence in 1962. He continued to serve at the helm of the new nation right up until his death in 1981 at age 69, in the nation’s capital, Port of Spain.

His achievements as a freedom-minded politician and global head of state may have overshadowed his earlier work in academia, but these two aspects of his career cannot be separated. His clear-eyed and honest approach to history, and to his own people’s place within that history, shaped the path he would take in the following decades. By deconstructing UK attitudes to the slave trade, and its eventual abolition, Williams laid the foundations for dismantling British imperialism in the Caribbean. His contribution to our historical understanding, and to nationhood for Trinidad and Tobago, are inextricably linked.

Williams’s ideas are not new anymore. Capitalism and Slavery was written largely as a doctoral thesis in 1938, refined and published in 1945, and has been discussed for decades since. But Penguin’s relaunch of the book in 2022 is the first mass-market edition of the work to hit the shelves in the United Kingdom. It has, deservedly, become a bestseller.

But why does this matter now? Because we are still in danger of falling under the sway of accepted truths and fantastical narratives of history. The book is a timely reminder that history is a science that helps us better understand the culture and politics of our own age—it is not sculptor’s clay, ready to be molded into whatever shape or form best suits our own blinkered, and often prejudiced, aesthetic vision. History does not owe us anything. It is not ours to manipulate or distort.

In June 2020, the statue of enslaver Edward Colston was toppled by demonstrators in Bristol—a city that appears again and again in the pages of Capitalism and Slavery, thanks largely to the profits from the trade in sugar and enslaved people that flowed across its docks. This trade was so lucrative that Bristol became the Crown’s “second city” until 1775. It was men like Colston who helped achieve this status—hence the statue.

Colston had been, but his work as a merchant, slave trader, and subsequently, a Member of Parliament is etched into the stone upon which Bristol stands. He was almost three centuries dead by time his bronze likeness was lobbed into the Bristol Channel, and he likely had very little opinion on the matter.

Fortunately for Colston, there were plenty of people in 2020 who did have opinions on the matter. History—their history—they cried, was being erased. The “armies of wokeness” and “politically correct groupthink” were destabilizing the proud heritage of the United Kingdom, they claimed. Sure, Colston traded in slaves, but it was a different time, and Colston was a great man—a true hero of the city and its people—not to mention the criminal damage, public order offenses, or the rights of the sculptor himself.

This is an example of historical distortion and manipulation at work, pursuing ends that are nothing short of racist. History has provided us with a figure—Colston—whose great wealth led to the rise of one of the UK’s most important cities. History has provided us with the facts regarding the sources of that wealth—the slave trade; the theft of dignity from our fellow human beings. History does not provide us a way with which we can separate the two—we cannot have one without confronting the other. Erecting a statue to Colston—celebrating Colston for his efforts and his achievements—means erecting a statue to the slave trade, too.

Nor does history provide us with icons who are beyond reproach. By searching history for unimpeachable icons—symbols of a particular set of values or ethics—we are destined only for failure. If, in response to our disappointment at finding flawed human beings in lieu of the pristine icons we seek, we resort to mythologizing and hagiography, we play a very dangerous game, indeed. In another of the twentieth century’s great social texts, Women, Race and Class, Angela Y. Davis examines the relationship between feminist heroes Elizabeth Cady Stanton, Susan B. Anthony, and the “women first, negroes last” policies of Democratic politician Henry Blackwell.

Blackwell spoke in support of women’s suffrage in the South, asserting that “4,000,000 Southern women will counterbalance 4,000,000 negro men and women”, retaining the “political supremacy of the white race.” Davis writes about the “implicit assent” of Anthony and Stanton to Blackwell’s racist logic as she explores the troubling and complex nature of women’s suffrage during its gestation.

Like Williams and his deconstruction of accepted beliefs regarding abolition, Davis’s analysis of racist attitudes in the women’s suffrage movement leads to an awkward confrontation. Stanton and Anthony made incredible contributions to the rights of women in the United States, and this should never be forgotten—but to turn a blind eye to the gross inequality that formed the backdrop to the movement is to deny this injustice altogether, leaving us with a flawed and incomplete understanding of our own history.

This approach—this honesty, this meticulousness—is found within the pages of Capitalism and Slavery, too. This is not simply an attack on the white establishment of the United Kingdom and their forbears in the heyday of the empire; this is a methodical analysis of the key drivers behind the rise and fall of the British slave trade. Williams’s work is certainly not an attack on abolition—a critical moment in establishing of a better world for all human beings—but neither does it seek to perpetuate false ideas of who and what made the moment of abolition a reality.

Two centuries before the slave trade reached its peak, the very concept of slavery was decried by the uppermost echelons of power in the British Empire. Queen Elizabeth I herself said that enslavement would “call down the vengeance of heaven,” and yet, by the eighteenth century, all sorts of mental gymnastics were deployed to justify the trade. Church leaders, Williams said, proposed that slavery could bring “benighted beings to the chance of salvation,” while conservative thinker Edmund Burke—himself a rigorous supporter of religion’s place in society—expounded on the slaveholder’s right to maintain ownership of “their property”, that is, the human beings they had paid for. It seems ethics and morality are not absolutes, and can be manipulated to support economic prosperity.

When such leaps of logic and desperate justification can support the rise of the slave trade, why should these moral contortions suddenly cease? Why should the voices of humanity win the day, defeating the barbarism of trans-Atlantic slavery and achieving a resounding—if delayed—moral victory? The answer is simple: they didn’t. Williams foreshadows the eventual collapse of the trade by presenting the views of contemporary economists Josiah Tucker and Adam Smith, who declared the trade to be expensive and inefficient. In the end, it would be economics, not ethics, that would defeat the United Kingdom’s plantations and slave ships.

If the going was good, the slave trade would continue, no matter how many horrific acts were perpetrated on the shores of Africa and on the islands of the Caribbean. When the market stopped being profitable—when the fiscal engine driving slavery forwards started to cough and sputter—the trade would cease. The laws of business and enterprise, as cold and inhuman as they are, were far stronger than any moral outrage.

More than eight decades have gone by since Williams completed his doctoral thesis, and it is pleasant to think that we have moved on a great deal since those days. After all, Williams was then a subject of the British Empire. Now, the citizens of Trinidad and Tobago—along with the citizens of other former colonies—are free to determine their own path in the world. In 1965, the United Kingdom passed the Race Relations Act, outlawing discrimination on the “grounds of colour, race, or ethnic or national origins”—a positive step towards a better, more welcoming nation.

But we should not wrap ourselves too tightly in this comfortable blanket of pleasant thought. In 1968, three years after the Race Relations Act was passed, Enoch Powell made his rivers of blood speech in Birmingham. Throughout the 1970s and ’80s, division and discrimination led to violent flashpoints as riots ripped through urban centers. In 1993, the tragic murder of Stephen Lawrence exposed the systematic racism at the core of UK policing. In 2018, the so-called Windrush Scandal, overseen by then-Home Secretary Theresa May, saw immigrant UK citizens stripped of their rights and their dignity. The fight against discrimination and prejudice is far from over, and no amount of historical airbrushing can compensate for this.

This is why Williams’s work is so relevant today: It reminds us to question the comforting and convenient narratives of accepted history. Twisting historical narratives to fit our own agenda—to reflect our own view of what Britain represents—is deceitful at best, and dangerous at worst. A more critical, clear-eyed, analytical approach to the past is necessary if we are to truly understand the challenges of the present.

John Burns is a freelance writer and editor from Nottingham in the United Kingdom, now residing in Yunnan, southwest China.

Sources

• “Collections Online: British Museum,” Collections Online | British Museum. Accessed October 31, 2022.

• Angela Y. Davis, Women, Race & Class (New York: Vintage, 2020).

• Samuel Earle, “‘Rivers of Blood’: The Legacy of a Speech That Divided Britain,” Atlantic, April 20, 2018.

• “Edward Colston Statue: Four Cleared of Criminal Damage,” BBC News, January 5, 2022.

• “Eric Williams,” Encyclopedia Britannica. Accessed October 31, 2022.

• Chris Matthews, “Purge of Edward Colston’s Name in Bristol Continues,” Daily Mail Online, April 27, 2022.

• Matty Edwards, “‘A Monumental Moment in History’: Cable Readers React to the Colston 4 Being Cleared,” Bristol Cable, April 22, 2022.

• “Race Relations Act, 1965.” Legislation.gov.uk. Queen’s Printer of Acts of Parliament. Accessed October 31, 2022.

• Eric Williams, Capitalism and Slavery (London: Penguin Books, 2022).

Elon Musk, Twitter, and the Power of Ownership

[Musk family wealth came from property ownership throughout Africa, including Apartheid South Africa and Zambia, where Errol Musk owned an emerald mine like the one pictured above]

By Carl Beijer

Republished from the author’s blog.

Last month, Elon Musk purchased Twitter and immediately disbanded its entire board of directors. This may have surprised you if you get your ideas about power from the populist right, who have been telling us that “power has passed from individual bourgeois business to a new ruling class” — the so-called “managerial elite.” Evidently, their “cultural power” with its full arsenal of “wokeness” and “cancel culture” couldn’t do a damn thing to save them in the end.

Even their enormous incomes couldn’t help them! These are no blue collar workers; these are multi-millionaires with astronomical salaries. “Heterodox economists” like Lévy and Duménil tell us that capitalism is over and we now live in the age of “managerialism”, in which “the main social split is nowadays between lower and higher wage earners, and increasingly so in conformity with the rise of managers”; but Musk had no problem whatsoever kicking some of the highest paid managers in the world to the curb.

Capitalist discourse loves to dismiss Marxist economics as a kind of obscurantist and contrarian analysis that no sensible person could possibly take seriously, but look at how everyone is talking about Musk right now and it’s obvious that we all know exactly what happened. He won because he took ownership of Twitter. That is what allowed him to crush the assembled power of the professional managerial class — Twitter’s corporate governance structure, the complex of NGO professionals and celebrities and academics who protested his takeover, all of it — on a whim. Taking ownership was his coronation, and the moment it happened everyone knew that his opponents would never prevail.

If you take one lesson from the Musk takeover, it should be this: capitalists can do this whenever they want. And even the highest-level managers and corporate executives know it, which means that they can only either defer to ownership or risk getting fired. This is a point I spelled out a few months ago when former WWE CEO Vince McMahon resigned:

Whether or not he has plans to exercise that power [majority ownership of the the WWE] is beside the point; at any given moment, shareholder Vince can decide to appoint a new board that will re-appoint him as CEO. And the very possibility that he could do this gives him the exact same power over management that shareholders have when Vince pleads that he only fired wrestlers because he’s a publicly traded company.

Private ownership confers a unique form of power unlike anything else in our politics. It matters more than professional titles, than academic degrees, than cultural norms and values, than the power of free speech and public reason. Even the state’s victory against it isn’t assured. And there is no form of power concentrated in fewer hands.

Nor is there any form of power that we meet with less skepticism. If you don’t believe me, just pay attention to how we talk about Musk’s power-play moving forward. You’re going to see a lot of talk about how Musk is a bad apple, one of those dreaded right-wing Silicon Valley billionaires. You’re going to hear about the rising tide of fascism, driven by vague hatreds of egalitarianism and freedom. You’re even going to hear some talk about “corporate” power, as if Twitter’s board would still be in control if it were structured slightly differently. But what you won’t hear is skepticism of the basic legal, political, and economic institution — private property — that actually keeps Musk in control.

Why Is The Global South Still Poor?

By Allen Myers

Republished from Red Flag.

In the years following World War Two, as numerous direct colonies won formal independence, there was a widespread belief, or at least a hope, that political independence would lead fairly rapidly to significant economic progress. No longer under the control of foreign exploiters, the ex-colonies would be free to undergo economic development like that which had occurred in the wealthy capitalist countries. With assistance from benign international institutions and former colonisers who had seen the error of their ways, the “underdeveloped” global south, renamed “developing countries”, would soon “catch up”, and the huge economic differences between countries would be overcome.

As is obvious today, it didn’t happen. In 2015, not quite 1 billion people in twelve “first world” countries had a per capita GDP of US$44,392; 6.2 billion people in 148 “third world” countries had a per capita GDP one-tenth that size. Why, and how?

The “why” is relatively easy, while the “how” requires a bit more detail and analysis. Despite the nonsensical propaganda they produced, European imperialists didn’t colonise Africa, Asia and the Americas out of noble motives. Their motive, pure and simple, was greed. When a combination of their weakening in the world war and the uprisings of colonised peoples forced them to grant political independence, that didn’t make them stop being greedy. It just made them modify their techniques of exploitation.

The underdevelopment of the global south was not some kind of natural misfortune, like a drought or poor soil or geographical isolation. It was something inflicted on the colonies by their Western colonisers—something concisely summarised 50 years ago by the Guyanese Marxist Walter Rodney in the title of his book, How Europe Underdeveloped Africa.

Of course, it was easier for imperialists to plunder the southern countries when they had direct political control over them. They could engage in what amounted to looting and piracy: forced labour or slavery, direct expropriation of land and other wealth, taxes remitted to the imperialist centres, destruction of industries that might compete against imperialist companies.

Forced to give up direct political control, the imperialists nevertheless continued exploiting the former colonies in more subtle ways. Capitalist competition, promoted as a pathway to growth, was in reality a deliberate dead end. The wealth extracted from colonies over decades or centuries had built large, technically advanced businesses in the imperialist centres. Conversely, the exploitation meant that the former colonies lacked the capital that would have been necessary to create industries that could compete with the imperialists.

No problem, declared the ideological servants of imperialism: the former colonies can borrow the capital they need in order to develop; then they can repay the loans from the profits of their new industries. One of several flaws in this argument was that many citizens of former colonies thought it a bit unfair that they should have to borrow money that had been stolen from them, and then pay interest to the thieves.

This is where international bodies such as the World Bank and the International Monetary Fund come in. They pose as independent, well-meaning sources of capital for the “developing” economies. In reality, they are, and have always been, controlled by the governments of the wealthiest imperialist countries. This ensures that loans go only to governments that don’t rock the boat—the boat that is carrying the enormous interest payments that poor countries must make to both bilateral “donors” and to the IMF/WB mafia.

These interest payments are transfers from poor countries to wealthy ones, and are a significant part of what keeps the global south poor. A 2020 study of 63 “impoverished countries” by the Jubilee Debt Campaign, based on IMF and World Bank figures, found that their external debt servicing in 1998 consumed an average 16.6 percent of government revenue. Partial debt relief for some of the most indebted countries reduced that figure to 5.5 percent by 2011, but it then started rising again, reaching 11.1 percent in 2018. The COVID pandemic will have undoubtedly raised it further. The World Bank notes of the pandemic’s impact: “Low- and middle-income countries’ external debt-to-GNI [gross national income] ratio rose to 29 percent in 2020 from 27 percent in 2019, and the debt-to-export ratio increased to 123 percent from 106 percent in 2019”.

These figures stand like an ironic commentary on the idea that “development” loans would make it possible for poor countries to build industries that increased their incomes and repaid the loans. Even if these countries were to do the impossible for a year and devote all of their export revenues—that is, every cent of export sales, not just the profits—they would still not be able to pay off their full foreign debts.

The owners of the imperialist economies of course never intended for their governments to help poor countries create industries that could compete against them; imperialist corporations are not suicidal. So “development” in the poor countries is restricted to fields that continue the transfer of wealth to the rich countries: direct imperialist investment, the profits of which of course go to the investing corporations; and natural resource extraction and industries characterised by low- or at best medium-level technology, which have correspondingly low rates of profit.

Capitalists in the global south are confined to the least productive, and therefore least profitable, fields. As a result, much of the value created in the south is transferred to the imperialist countries in the course of trade: the poor countries import overpriced goods and sell their own products for less than their real value. The amounts of money transferred in this way, called “unequal exchange” by economists, are staggering. 

A recent article in the journal New Political Economy attempts to quantify the sum for the years 1960-2018. The authors write: “Over the whole period, drain from the South totalled $62 trillion (constant 2011 dollars) ... Appropriation through unequal exchange represents up to 7% of Northern GDP and 9% of Southern GDP”. That is not a typo: the global south was deprived of $62 trillion. Such value transfers are the underlying cause of situations such as the current disaster in Sri Lanka.

If imperialist corporations seem to have arranged everything for their own benefit, it must be recognised that they can’t do it all on their own. Even in the time of direct colonies, to maintain control, the colonisers needed collaborators within the colonial population. After political independence, imperialism still required a social layer that would cooperate to keep the system ticking over profitably.

It found the components of that layer among local capitalists, large landowners and would-be capitalists. In some cases, they might have come from among the open collaborators. In others, they came out of the movements for independence, from those leaders whose visions didn’t go beyond a change of personnel at the top.

Because of the huge sums of value appropriated by the global north, the capitalists of the global south generally cannot compete with the major imperialist industries. Aside from situations of natural monopoly (oil, for example), capitalists in the poor countries have to rely on low-profit areas such as manufacturing consumer goods that northern capitalists have abandoned or assembling electronics for high-tech imperialist companies. In these labour-intensive industries, the poverty and low wages of the south allow them to compete, and they are driven to maintain those low wages as a matter of their own survival.

So, while southern capitalists might sometimes feel that they are oppressed by imperialism and, if they have the opportunity, might put some pressure on imperialist corporations for improved terms of their collaboration, they know well that they share class interests with the imperialists and have a common enemy in the working class. If Marx called competing capitalists a “band of warring brothers”, we might call imperialists and southern capitalists a “band of squabbling big brothers, little brothers and occasional distant cousins”.

This is why southern capitalists are never reliable allies of working people and poor farmers in any struggle against imperialism. It is why the possibility of a radical popular movement forming government in a third world country always arouses the threat of imperialist intervention against it, to ensure that the country’s capitalists remain in charge.