Changes in capitalism: implications for the working class

A range of theoretical positions, broadly defined as sceptical, transformational and hyper- globalist have been addressed in relation to changes that have taken place in capitalism. These have been considered against the proposition that capitalism has entered a qualitative new stage in its development. The issue of the nation-state and its relationship to a changed capitalism has also been discussed. The contending schools of thought all recognise that inequality and social disharmony are growing. There is a generally held consensus that things are changing. What is frequently overlooked, however, is the connectedness between

capitalism’s qualitative shift and the dramatic rise in inequality, and of the inevitable social discontent that accompanies inequality. Those most affected, the working class, remain powerless in their quest for emancipation. They remain caught in entanglements of nationalist rhetoric and a retreat into national responses to global crises.

Inequality and discontent are connected, and their growth has been linked to the rapidity of capitalist globalisation. The steady rise in inequality can be observed in individual countries and globally. The rise in social discontent has been manifested in both anti-globalisation movements and more recently, in developed economies, in both left and right-leaning

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the working class as unemployment remains high, industrial and manufacturing production continues to flow from the industrialised states, and welfare state structures have been eroded. Ultimately, this crisis is a consequence of capitalist globalisation, which, in turn, is a by-product of the qualitative changes that are apparent in world capitalism. The ramifications are obvious.

Dallmayr (2002:144) cites the UN Human Development Report (1999) to show that just three of the wealthiest families in the world enjoy an income equivalent to the poorest 600 million. Pieterse (2002:1025) uses these same figures to indicate that there has been a steady and significant growth in inequality since the Industrial Revolution from a situation in 1820 which saw a gap between the richest fifth of the world’s population and the poorest fifth steadily grow from a ratio of 3:1 to 74:1 in 1997. This trajectory has been steadily

accelerating as the concentration of wealth into fewer hands has continued and especially since the 1970s and the qualitative changes in capitalism that have been indicated. Oxfam figures show that the world’s richest 62 individuals control the same wealth as the poorest 3.5 billion people (Oxfam 2016). Credit Suisse (2015) research reveals that nearly three quarters of the world’s population have a per-capita wealth of less than $10,000. Conversely the richest eight per cent of the population own 84.6 per cent of global wealth. Pieterse asks, “what kind of world economy grows and yet sees poverty and global inequality rising steeply?” (2002:1036). The answer to his question is not simply capitalism, but a qualitatively changed capitalism that exists in conditions of irresolvable crisis.

International institutions, analysts and activists acknowledge that a fundamentally new stage of crisis has emerged. A report issued by the IMF (2015) states that:

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Widening income inequality is the defining challenge of our time. In advanced economies, the gap between the rich and poor is at its highest level in decades. Inequality trends have been more mixed in emerging markets and developing countries (EMDCs), with some countries experiencing declining inequality, but pervasive inequities in access to education, health care, and finance remain (Dabla et al 2015: 4).

The OECD (2015) has similarly reported that inequality in OECD countries is at its highest since records began. The same report indicates that the rise in inequality has been reflected in a growth of part-time and casualised labour. Joint ILO/OECD (2015) research has shown that for decades, labour’s share of income has lost ground to capital. OECD (Cingano 2014) reports are also clear that inequality is growing steadily with wealth differentials between rich and poor at their highest in more than thirty years.

Additional ILO (2015) statistics show that in 2015 as many as 75 per cent of all workers across the globe fell into the informal category – either as temporary or short term employees. The growth of capitalist globalisation is mirrored in the growth of the global working class. Dobbs et al (2012) estimate that the global workforce will have reached 3.5 billion by 2030. One factor that the working class in the OECD world and in the developing world have in common is a growing sense of insecurity.

This sense of insecurity is exemplified in the relationship between capital and labour. In responding to the tendency that exists for a fall in the rate of profits, capital has sought, as it always has, to maximise the levels of surplus value at its disposal. What appear to be

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have developed. Traditional labour/capital relationships have been altered. There has been a dramatic rise in the casualisation of labour, ‘flexible’ working arrangements have been introduced, and workers are increasingly regarded as ‘sub-contractors’. Despite these ‘changes’, the reality of that essentially exploitative relationship between capital and labour remains unchanged.

Bieler, Lindberg and Pillay (2008: 11) argue that the most important change that has occurred in the last 15 years has been the weakening of the position of labour in relation to capital. United Nations Development Program figures (2014) show the downward trend in labour’s share of income over the past thirty years. The dilemma that faces the nation-state, as both administrator of capitalism and simultaneously as competitor against other states and against a transnational capital, is clear. The dilemma for the working class within these nation-states is not always so clearly stated.

There is ample evidence to show a dramatic rise in inequality both within nation-states and between states. Capitalism and inequality are inextricably linked. In Marx’s (1986d) assessment inequality is a necessary component of the wages system. It is an argument that goes to the very core of the relationship between capital and labour. Capitalism uses both physical and intellectual labour as a commodity. In even more strident terms Marx declared that “the cry for an equality of wages rests, therefore, upon a mistake, is an insane wish never to be fulfilled … to clamour for equal or even equitable retribution on the basis of the wages system is the same as to clamour for freedom on the basis of the slavery system” (1986d: 208-209 emphasis in the original). Peet (1975: 570) affirms this perspective, arguing that social equality can be achieved only when the sources of inequality are replaced.

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The profound changes in capitalism, and in its quest to maintain profitability, has affected how states operate. This is the case in both developed states and the developing economies. Globalised markets have acted as a motivational force for investors to move capital from the traditionally regulated economic centres to the less regulated (Hay 2007: 281). This initially resulted in accelerated global economic growth but has resulted in increasing instability and insecurity for the working class. What is particularly significant is that the rate of economic growth appears to have stagnated or at least is growing at an unacceptably slow rate (IMF 2016b). While this reflects the underlying problems in capitalism as a crisis-prone system, the fact remains that globalisation was, and is, an attempt to rapidly accelerate economic growth to forestall and circumvent crisis stemming from falling profit rates.

Globalisation has also been accompanied by an unevenness in development. Martins (2011: 12) draws a parallel to the extent that inequality grew with the coming of the industrial revolution. Globalisation has been described in terms of it being the ‘second’ great

transformation within capitalist development as it moves from national to global capitalism and thereby assuming a qualitatively different character (Pieterse 2002: 1024). The first, being the establishment of national capitalist relations. Such a characterisation echoes the past with a growing divide between rich and poor.

Social disharmony and discord is evident, but effective challenges have not materialised. There are a range of reasons why this is so and all remain centred around the key questions that this study raises. The working class remains firmly attached to the physical and

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working class, if it was to gain emancipation from capitalism, must accept its

internationalism (Marx & Engels 1977: 74), the strength of nationalism and nationalist sentiment has remained. Bereciartu argues that “national sentiment in general and nationalism in particular appears to be profoundly rooted in the consciousness of the

European working class … at present nationalism is expanding” (1994: 53). It is a view that not only remains entrenched in the thinking of the working class but in the minds of many whose stated perspective is the struggle against capitalism.

Theorists from the Marxist tradition frequently remain locked into a national response to what is ultimately a global question. Capitalism occupies an international terrain. To wage a primarily localised struggle has serious limitations. Class-based discontent has traditionally been waged through trade union activities which become acutely limited by nationally based responses to global problems. Moody (1997) and Berberoglu (2009) are representative of this nationalist perspective. Yates (2003: 239) goes a step further, arguing that the Canadian Auto Workers Union successfully built an identity around class and radical nationalism. Such a proposition, that ‘identity’ can be developed by a unity of class and nationalism is dubious at best. The issues that occupied European Marxism in the period immediately preceding World War I clearly defined two separate responses. Marxists called for a class-based response but nationalism and an identification with national bourgeoisies remained the dominant

perspective. Working class discontent, in the past decade, has shifted, with less emphasis on overt anti-globalisation, anti-capitalist rhetoric to more pronounced nationalist expressions of dissent. Such responses indicate a serious lack of effective leadership and of the nationalist perspectives that still dominate the thinking of many and which are engendered and promoted by the state.

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There is also a tendency among some activists and scholars to offer radical propositions but to ultimately vacillate. Robinson (2004: 178), after building a theory to ‘explain’ the rise of a transnational ruling class and the end of the nation-state as an organisational unit, concludes his arguments by calling for a broad ‘democratisation’ of global society. Webster, Lambert and Bezuidenhout (2008) suggest that there is a ‘necessity’ to engage in utopian thinking. The central contradictions of capitalism, however, remain.