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Those of us involved with the publication of Facts For Working People blog are constantly reminding ourselves, and our readers, of the economy and how what happens with regard to the economy will have a much wider affect on society as a whole.
June is the tenth anniversary since the end of the Great Recession of 2008-2009, what Marxist economist Michael Roberts refers to as the “Long Depression”. And while it is impossible to predict when any capitalist business cycle ends, it is important to not lose sight of the fact that it always does. I recall a period during the tech boom of the 1990’s when young entrepreneurs and their older peers and some bourgeois economists were drunk with the successes of the market. I recall reading articles in the big business press discussing the possibility with some confidence, that the capitalist business cycle over and was no longer a threat to capital accumulation.
Then we had the tech crash at the beginning of the century that shook them back to reality and the Great Recession of 2008-9 that forced the capitalist state to take socialist measures to save capitalism from itself, dragging it from the edge of the abyss through an injection of public money to the tune of a few trillion dollars and the nationalization of some major industries. They used the term conservatorship’ as a cover for the “N” word.
The present economic situation is beginning to concern the US ruling class, the unelected minority that govern society, as a slowing economy is made all the worse by the Predator in Chief Donald Trump’s trade wars and unpredictability. Capitalism must have a certain stability for capitalists to risk throwing their precious possession in to circulation otherwise they will not invest in production.
Media reports on the economy are beginning to look a little gloomy and especially so with US manufacturing. Manufacturing accounts for about 11% of U.S. gross domestic product, according to the Bureau of Economic Analysis, down from 16% in 1999.
Manufacturing commodities is the lifeblood of the capitalist mode of production as it is through the labor process that profit is generated as the working class as a whole produces more wealth than we receive in wages. This surplus value, a product of unpaid labor time, is the source of profit, but has the negative side in that workers produce more than they can buy back in the form of products. The capitalist overcomes this problem in a number of ways one of them is through credit. Credit allows capitalism to go beyond its limits as moneylenders charge us for money (wealth we have produced) to buy the very products we make. This staves off collapse temporarily until value is destroyed, production cut, workers laid off and the process can begin again.
In 1979 19.4 million US workers were employed in manufacturing according to the Bureau of Labor Statistics. By 1987 this had fallen to 17.6 million as the capitalist offensive picked up steam after Reagan smashed the PATCO strike in 1980 firing 11,000 workers and banning them for life from working in their industry. PATCO and other major strikes, Greyhound twice, Eastern Airlines, Hormel and others were defeated as the failure of the heads or organized labor to lead a fight back gave the bosses the green light for their offensive against organized labor.
“As a share of the overall workforce, manufacturing has been dropping steadily ever since the Korean War ended, as other sectors of the U.S. economy have expanded much faster. From nearly a third (32.1%) of the country’s total employment in 1953, manufacturing has fallen to 8.5% today.”*
When we see the decline in the share of the economy occupied by manufacturing and the declining workforce, this should not be seen as a weakness. It is in fact a strength. What it reflects in the increased productive power of this sector. US Manufacturing produces more products and by that measure more value than it did 30 years ago with fewer workers. This raises the issue of ownership of the productive forces and all other aspects of social production, more accurately, the commanding heights of the economy. Increased productivity could be a wonderful thing if workers benefited from it. But we don’t. We don’t own new technology or any other aspects of production that reduce labor time. which could, if we did own it, increase leisure time. Advances in this are used by those who own the productive forces and that means to increase profits and strengthening the dominance of capital over labor.
The weakness in the global economy, fueled by Trump’s disastrous trade policies and a stronger dollar is placing some serious pressure on US manufacturing.
Trump’s recent announcement of tariffs on Mexico to influence immigration policy, has been opposed by many US industrialists. Trump’s U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. were both “blindsided” by the decision according to sources. This tendency of Trump to say what he wants whenever he wants is not good for business and it is almost impossible not to draw the conclusion that the dominant and most serious sections of the US bourgeois will ensure he doesn’t serve a second term---capitalism cannot afford it. But in this era of volatility I have learned to be cautious.
“There is something fairly serious going on,” said Andrew Hunter, senior economist for London-based Capital Economics. “We’re going to see some kind of slowdown this year.” (Wall Street Journal 6-3-2019)
I am more in agreement with the NAM President Jay Timmons who the WSJ quotes as saying of the Mexico tariffs that it “would have devastating consequences” on manufacturers in America. Trump doesn’t care though. He is running his own business as far as he is concerned and he was never good at that.
I am not an expert on the capitalist economy, but workers are real economists just as a parent who keeps the home and maintains the family is. To maintain the home and family is an economic venture. It is important we look at economics and all aspects of society from the perspective of a wage-worker. Does a decision or position divide or unite workers? Does it strengthen us in our struggle against capital (conscious or not) for a better life. It becomes very obvious for example, when we look at racism or sexism through this lens, that these divide and rule tactics are harmful to all workers and our families. We have to reject the economics of the bourgeois or capitalist class, or 1% if that’s what you would rather call them, and look at the world as we live it.
Despite not being an economist, like most workers I can, if it is presented correctly, and by that I mean in the language of the working class, grasp the general and contradictory processes of the capitalist economy and how those contradictory processes built in to it lead to slump, collapse and catastrophe. One doesn’t have to be a so-called “expert” to understand general processes that are at work in society.
Here is an old statistic that was in Business Week decades ago but I lived through this period and it shows the wondrous advantage of innovation and increased productivity on the one hand and what it means for the worker on the other. I used it in an article some time ago:
The productive power of labor is staggering. Between 1980 and 1992 steel companies reduced the man hours necessary for the production of a ton of steel from 9.2 to 5.
Between 1982 and 1994 manufacturers in the US slashed 4 million jobs still employing roughly the same number of production workers as they did in 1946 but producing approx 5 times as many goods. In roughly the same period corporate profits increased 166%, consumer prices by 75% and executive pay 514%.
These simple statistics show clearly that a two or three day workweek is easily achievable and hunger, poverty, the needs of society can be met with the present productivity of human labor power and modern production. Capitalism has laid the foundation for a future free from want but can no longer advance society. Capitalism was revolutionary in the sense that it socialized production and our task, that cannot be separated from the war against climate change, itself a market driven catastrophe, is to socialize ownership.
What we as workers have to grasp a hold of is that when the slump hits, and I think it likely will be a slump rather than recession, all bets are off. The US ruling class will not be able to bail capitalism easily after the last bailout in 2008. The downturn will have a huge affect on the US election in 2020 and also on labor disputes and labor/management relations. If you are a teacher, a construction workers, a transport operator or in the service sector, the economy will mean major changes for you and we cannot discuss our future without taking the economy in to account.
* Pew Research Center
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