An SLP Statement—

Getting Something for Nothing

Getting something for nothing is supposed to be the great anathema of the age. Abhorrence at the very thought of a welfare mom or a jobless dad living off the dole is the great “moral principle” driving the political demolition crew bulldozing the “welfare state.”

Look again. Appearances can be deceiving, but never more deceiving than when our moral vision is refracted through the Scrooge-eyed lenses of capitalism. Remove those lenses for a clear view and what is supposed to be the great anathema of the age can be seen for what it really is: the “moral” foundation of capitalism itself.

Who Does the Work?

Getting something for nothing is what capitalism is all about. That is what capitalists do best. Indeed, that is all they do. Capitalists do not earn, or create, or build anything. They live by profiting from the work done by others. They live off the labor of the working class. The names these two classes bear tell the story. Workers work and capitalists capitalize on the work that workers do. Capitalism exists and can only exist as a system of exploitation. Capitalists are the exploiters and workers are the exploited.

Want proof? Then you shall have it.

‘Riding High’ on Labor’s Back

Turn to Business Week. The issue of October 9, 1995, tells us that “corporate America” is “riding high” on a “productivity bonanza.” Wages are down, profits are up, and American workers are producing more than ever before. Better yet, at least as seen through the refracting lenses worn by Business Week, fewer workers are producing more than more workers used to. Better still, they are doing it in less time and for lower wages.

“It’s a catch phrase for our era, the Age of Productivity,” said an exultant Business Week.

“Today,” it added, in obvious reference to huge capitalist outlays for labor-displacing technology, “Corporate America has embarked on a capital-spending boom.” “Corporate profits as a percentage of national income are far higher than they were in the 1980s.” Which, when we unravel the pretzel of Business Speak, can mean only one thing: Workers’ wages as a percentage of national income are far lower than they were in the 1980s.

Get the picture? If not, Business Week provides one in the form of a chart. The chart is simple. It shows a thick black line that traces “unit labor costs” from 1980 through June 1995. Guess which way the thick black line goes. It drops like a rock by 10 or 11 percentage points to 1983. It hits so hard that, like a rubber ball, it bounces back a few points by 1985 and again in 1990. Then it drops back to zero and below zero. The black line runs off the bottom of the chart and out of sight. To top it off the chart gets a title all its own: “Workers are more efficient.”

Productivity & Unemployment

So, wages are down and profits are up. Why up, why down, and what does it mean? Business Week explained it this way:

“Underlying these gains is a powerful upsurge in productivity. In the 1990s, nonfarm productivity has been rising at a 2.2 percent rate, more than twice the anemic pace of the previous two decades. And in the fifth year of an economic expansion...productivity posted a remarkable 3.5 percent year-over-year gain in the second quarter of 1995.”

Not only that. Business Week provides us with another picture chart so we don’t forget that “layoffs are legion.” Layoffs have run from more than 200,000 to more than 600,000 every year.

Flattened, starched and ironed out, it all comes down to this: The “profit bonanza” comes from the intensified exploitation of labor.

The ‘Good News’

If all of this gives you that sinking feeling, it shouldn’t. According to Business Week, higher profits, increased exploitation (productivity), and falling wages paid to fewer workers add up to “good news.” It said that “the productivity [exploitation] tide will lift all boats.” It said:

“The U.S. economy is more productive and competitive than it has been in three decades. But the good news just won’t wash with a lot of people.

“Little wonder. [Indeed!] Over the past two decades, real wages have been virtually flat, and the productivity-led recovery of the 1990s hasn’t improved the situation.”

If “flat wages” don’t measure up to your idea of “good news,” maybe this will: “Real wages have declined 0.2 percent annually over the past five years.” From flat to down in the flick of an eye!

If it still doesn’t “wash,” try this: “Workers are...bound to do better as fatter paychecks follow higher productivity. Over long periods of time, productivity and wages track each other closely....”

That last statement simply isn’t true. At any rate, it certainly can’t be true for those laid off by legions—200,000 to 600,000 in each of the last five years—whose wages have gone from “flat” to “declining” to nothing. Even if it were true, however, Business Week did not say how long workers whose wages fall somewhere on the scale of flat to declining to nothing must hold their breath under the tsunami. It did not say why capitalists, having just “embarked on a capital-spending boom” to displace labor, increase productivity and lower “unit labor costs” to become more competitive, would or could turn around and undo it all. It had a better argument to float its “good news” boat on. It said it must be so because Karl Marx and Frederick Engels said the opposite, and to prove that they said the opposite, and therefore what cannot be true, Business Week quotes from the Communist Manifesto. Marx and Engels bobbled the ball by saying: “The modern laborer...instead of rising with the progress of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth.”

Marx just didn’t get it, and “just as Marx far underestimated the eventual payoffs from the Industrial Revolution, so, too, are today’s pessimists missing the coming gains from the Information Revolution....”

First Black...

One supposedly Marx-like “pessimist” is Jeremy Rifkin, author of The End of Work. Rifkin may be a pessimist, but he is no Marxist. The two things don’t go together, but sometimes they touch.

A recent sample of Rifkin’s outlook appeared in the Los Angeles Times on October 11, under the title of “What’s a Worker Worth in a Workerless World?”

“In the mid-1950s, automation began taking its toll in the nation’s manufacturing sector,” he wrote. “Hardest hit were unskilled jobs in industries where black workers were concentrated. Between 1953 and 1962, 1.6 million blue-collar jobs were lost in the manufacturing sector. While the unemployment rate for black Americans had never exceeded 8.5 percent between 1947 and 1953 and the white rate of unemployment had never gone beyond 4.6 percent, by 1964, blacks were experiencing an unemployment rate of 12 percent while white unemployment was only 5.9 percent.”

...Now White

Rifkin could have added that capitalist apologists of the period proclaimed that “dislocations” caused by automation were temporary and that more new jobs would be created to replace those that would be lost. That never happened, as today’s horrendous unemployment and poverty rates among millions of workers, black and white, attest.

“Today,” Rifkin continued, “the same technological and economic forces are beginning to affect large numbers of white male workers with potentially ominous consequence for society at large....”

Rifkin added that new jobs “will be far too few to absorb the millions of workers displaced by new technologies....” It need not be that way, Rifkin suggested.

“If, however, the productivity gains of the Information Age are not shared but used primarily to enhance corporate profits, chances are that the growing gap between the haves and have-nots will lead to widespread social disintegration and increased crime and imprisonment on a scale previously unknown in America.”

Marx Was Right

Why on earth does Rifkin think capitalists are installing all this technology if not to “enhance corporate profits”? What does the experience of the 1950s–1960s and the fate of millions of African-American and (we insist) other workers prove? What are the “economic forces” that “are beginning to affect large numbers of white male workers” if not the economic laws that govern capitalist production?

Marx was right about workers sinking below the condition of their own class. Rifkin shows it with his numbers from the 1950s and 1960s. What might eventually prove him wrong and make Business Week happy is if the whole working class were reduced to the same abject level. Then there would be nothing for the worker to sink below.

Capitalism is an immoral system. It condemns millions to lives of poverty and despair just to enhance the worthless lives of a few. It is not the welfare mom or the jobless dad who bleed America. It is the capitalist vampire that is sucking the working class dry.


Socialist Labor Party of America, P.O. Box 218, Mountain View, CA 94042-0218 • •

Return to SLP Statements and Leaflets
Return to SLP's Home Page