8-31-06, 11:20 am
In 1970, at the end of the decade that rightwing Republicans have blamed for all of the country's domestic and international problems, they peaked at 53.6%. Each percentage point is worth about $132 billion, which means that workers and employees have lost the equivalent of $660 billion in wages and salaries in the Bush years, while the administration continues to hail its tax cuts as the foundation for a 'healthy economy.'
Even these statistics seriously understate the decline that most workers have faced. Not only has the GDP percentage of wages and salaries dropped significantly, but the gap among salaried employees particularly has also widened substantially. Private and public employers have used various 'pay for performance' and 'merit pay' devices to increase the salaries of a small section of managerial and professional employees sharply, while eliminating jobs and holding down salaries for the majority. These trends have also been seen significantly among wage workers. At the same time, the top 1% of wage earners, including high-level corporate managers and CEOs, have seen their percentage of income from GDP rise from under 6% in the early 1970s to 11.2% today. (Of course, these 'wage earners' have many other forms of compensation).
Analysts also make the point that wages and salaries have continued to go down during the current period of GDP 'economic growth' and that these developments, coming in the midst of what one writer calls 'the Golden Age of Profits,' might undermine the Republicans in the upcoming congressional elections. However, a Republican spokesman responded to this possibility by saying that the GOP had little to worry about, since most workers would blame the corporate leaders not the Republican Party.
Karl Marx would explain these developments differently. He always saw the essence of the class struggle as centered around the 'wages fund,' the money that capital pays labor to both produce and eventually consume the goods and services that capital owns. Capital always seeks to keep the wages fund at the lowest level possible, reducing real wages in order to fund its investments in new machinery, raw materials, and resorting to cheaper labor abroad.
Although capitalists always seek to expand foreign and domestic markets, the capitalist class is unwilling to provide the working class with the income to purchase the goods and services. This is because as more workers become secure as a class, and the more government revenues are used to provide them with social protections, the more likely they are to think clearly about their relationship to capital and to realize that they can get along without it.
The distinguished British Marxist historian, Eric Hobsbawm, saw the 30 years that followed the end of WW II as a 'Golden Age' of rising living standards in both developed capitalist and socialist countries, along with significant advances in former colonial regions. However, public enterprise, state planning and regulation, not 'free market' capitalism were at the center of this 'Golden Age.' The developed capitalist countries adopted state-sponsored social protections and increased regulation of capital (the U.S. less so than others) to try to control the capitalist marketplace that had produced the Great Depression, fascist dictatorships and their war machine, WW II, and the victorious postwar spread of revolutionary socialism. The socialist countries, starting from a much lower base, and in the case of the Soviet Union and China suffering much greater devastation during the world war, made enormous advances that were greater, I would contend, than the advanced capitalist countries. These countries expressed a commitment to full employment and comprehensive social benefits for the working class as a matter of right, not just a socially-engineered safety net to provide the economic and political stability that would protect both workers living standards and capitalist investments as in as the most advanced capitalist states.
In the former colonial regions, the bitter and destructive cold war conflicts were mitigated to some extent by positive forms of foreign aid for development provided by the Soviet Union and to a much lesser extent the United States, and also by many governments themselves which, whatever their long-term failures, looked to national economic planning and large developmental projects to raise the living standards of the people.
These trends continue to exist today in a socialist country like Cuba, a progressive former colony like South Africa, Latin American governments in Venezuela, Bolivia, to a lesser extent Brazil (and, had there really been a fair election, Mexico). But the leading trend for the last 30 years has been away from 'the Golden Age' of rising living standards to the 'Golden Age of Profits.'
In the U.S., workers are much more 'productive' in capitalist terms than 30 years ago but get a 'smaller piece of the pie' in both good times and bad. This divergence of income and productivity is due to the fact that a much smaller percentage of workers belong to unions, and the unions they do belong to are relatively weaker than before. State regulation of capitalist exploitation of labor (in the U.S. never something to boast about even in the best of times) has also been scaled back to a point where it may in real terms fall to pre-New Deal levels in the near future. And, of course, capital has been engaged in exporting itself at higher and higher levels from the 1970s on, a process most people call outsourcing offshore. Today, there is even talk in the Bush administration of outsourcing IRS tax-return administration. What is happening in the U.S. is also happening throughout the developed capitalist world, as de jure and de facto conservative governments (the latter in the tradition of Britain's Tony Blair and Germany's Gerhard Schroeder) weaken social protections, restrict trade unions, and define their mission as making all the concessions they can to capital in order to supposedly, they claim, sustain workers living standards.
In the former colonial regions and the former socialist countries, the International Monetary Fund (IMF) and World Bank (which in the 1950s and 1960s, in competition with the socialist countries and their aid missions, fostered to a considerable degree infrastructure development and improvements in health care and education in order to create more skilled labor forces, greater internal markets, and prevent further socialist victories), today pursue 'neo-liberal' policies of eliminating all social protections and subsidies for the people and domestic capital as impediments to the 'free flow' of finished goods, raw materials, and labor.
These policies have had disastrous consequences both economically and politically in the former third world (increased impoverishment and social breakdown), the former second world (the Soviet Union and its allies, where the security built up through generations of struggle has been devastated in the past 15 years), as well as in the former first world, where stagnation and decline are as apparent to those willing to look as cell phones and computers.
Karl Marx would see all this as proof of his general theory of the anarchy of capitalist production, and the fetishistic religion of the market, today called globalization, to which untold millions of jobs, pensions, access to health care, education and, in poor countries, basic food supplies and sanitary facilities, are sacrificed the way sacrifices were made at shrines and altars in earlier faith-based belief systems.
But Karl Marx would not be happy. Even though he always understood that the structural crises of capitalism would only produce greater misery and suffering for the overwhelming majority of people, without workers and the socialist movement resisting it at every step, he would never say 'the worse the better,' as anarchists and others did in his lifetime, those who were willing to sacrifice the working class to some future socialist revolution and utopia, the way the capitalists regularly sacrifice workers to abstractions like competition, free trade, and 'the global market.'
Marx would also understand that the working class globally has now experienced 30 years of defeats following 30 years of victories after World War II. He would use the statistics presented above to work for both the revitalization of the labor movement and the building of a mass party of socialism in the US, which would educate working people and fight to empower them (just as he did for the international socialist movement in the last decades of his life). For Marx would understand that the victories won by the working class against fascism and colonialism, as well as the economic and social gains of the 30 years following WWII were directly intertwined with the strength of the movement he first called Communist in 1848. The defeats that the working class movement has suffered, he would understand, have also been related dialectically to the decline of the Communist movement and the elimination of many of the states established on Marxist-Leninist principles, particularly the Soviet Union, from the world scene.
It is our task to revitalize and re-connect the labor and socialist movements, if we are to end the 'Golden Age of Profits,' which has been built globally on the increased rate of exploitation of workers in both the rich and poor countries, and a chronic decline in real wages and living standards that all the Wal-Marts in all the advanced economies of the world that sell consumer goods produced by cheap labor abroad with cheap service labor here cannot continue to conceal.
--Norman Markowitz is a contributing editor of Political Affairs and can be reached at
