Article from 1919 #3 (mcmxix.org), the journal of the North American affiliates of the ICT.

Politicians continue to put out programs containing provisions for worthwhile reforms while the crisis-stricken capitalist system has already decided that life-saving safety measures to decrease the spread and mortality of covid has continued longer than what is acceptable from the perspective of profit-making. Throughout the major waves of the pandemic, most of the working class continued to work as these safety measures were one-by-one repealed. Instead of increasing the social expenditure for provisions to benefit the working class, the ever-brazen capitalist class, directed by the chamber of commerce, has lifted the moratorium for rents and unemployment insurance due to the slower-than-expected economic recovery. Unions too have continued to play their role of negotiating the sale or labor on behalf of the capitalist class and have mediated the current uptick in working class struggle by enforcing unpopular concessions unto their members. Some of the main demands animating the working-class struggle are ending the tiered wage system, an increase in wages due to rising inflation and decreasing the length of the work week. The tiered wage system was forced onto workers by the unions on behalf of their capitalist, workers have also made demands to increase wages since inflation has decreased their spending power. Workers are also being made to constantly work overtime due to labor shortages. These demands are untenable for unions in crisis-stricken capitalism, they instead have handed down raises that are below the rate of inflation and the ultimatum that workers either work overtime when requested to or they’ll be made to work seven days a week. This was the striking Kelloggs’ workers’ experience in the fall through winter of 2021, but it’s an old story. Unions are an old vehicle of the capitalist state, they’ll continue even in a “diminishing capacity” to get workers into the voting booth. Some politicians haven’t completely lost the plot despite their growing inability to manage the affairs of the populace brought on by decades of declining profit rate, worthwhile reforms are no longer tenable . This is despite the aspirations of these farsighted politicians who see their class conciliatory value, in juxtaposition to those who support more rigid class domination. The former, as reality sets in, comes to realize that reforms must be sweet and cheap, and while highlighting the virtues and strengths of liberalism. This falls into the category of “culture warring.” Detractors towards these assertions use the mammoth military budget of the USA as proof that the right politicians are all that’s needed to usher in worthwhile reforms. However, the military and production of waste material is held differently by the capitalist class: a) it furthers the foreign interest of national capital, b) state production of waste material helps rationalize production, and c) the state creates demand and doesn’t compete against other capitalist formations. This is especially the case in states with a historically strong bourgeoisie like the USA. Workers can’t recoup lost wages, but the capitalist can recoup lost profits, workers have received ever vicious attacks by the capitalist who are dead set on making workers pay for the crisis, wages aren’t increasing with inflation, working hours have increased and President Biden had recently announced his commitment to decrease the states spending deficit by $1 trillion.

Capitalism is a social system of class exploitation and oppression. Reformist politicians will step up to curtail the worker’s struggle against the system. These leaders will camouflage that capitalism is dependent on exploiting labor power and oppressing the working class. Reformist leaders can only address areas of oppression such as national, racial and sexual oppression which aren’t essential for the continuation of capitalism. They can’t address the exploitation and oppression of the working class which the entire capitalist system depends on. This oppression is based on wages, labor and the production of surplus value. These democratic leaders will babble on about fighting for democracy, freedom or human rights, but a condition for the capitalist system is that the working class remains alienated from exercising political power, sooner than later these potential democratic statesmen may let the open class oppression of the capitalist state shine through their high-sounding phraseology about the virtues of democracy. These reforms don’t cost the state anything and relatively speaking the more dominant sections of the capitalist class can put their support behind them. These haute bourgeoisie don’t depend on extracting absolute surplus value and may be less pressed to enforce untenable racialist policies or need to segregate the work force to prevent class activity. For these capitalist s, certain economic demands made by unions negotiating on behalf of the capitalist class can be furnished. They may also be more open to anti racist, sexist, or xenophobic legislation. Some of these capitalists can easily see that outright containment and open oppression cost more than it’s worth. These concessions are revocable and will keep the working class constantly on the back foot fighting for reforms and carrying water for the capitalist system. Instead of struggling on their own terrain which opens the possibility for the working class to develop organizational strength and their class consciousness.

During every election cycle, the capitalist managers of the state will make promises pertaining to healthcare-reforms. The most common promises made are to never reduce the state’s spending on healthcare, or even the implementation of a national healthcare insurance program to benefit primarily uninsured workers. This is because it’s unpopular for the capitalist-class to directly attack public health spending, or to outright oppose the implementation of a national healthcare insurance. It’s important for the maintenance of class peace. The illusion of the possibility for reforms is also great for maintaining the voter base for the many left and progressive parties, this is also the basis of the left wing of capital’s “harm reduction” arguments, which are centered around the belief that capitalism can be managed in the interest of the working class.

By politicians maintaining the illusion that there is a possibility for reforms that are beneficial towards the working class, it greatly helps to prevent workers from becoming disabused towards the capitalist system. This thwarts the development of working-class consciousness and potential for a revolutionary rupture. Workers will instead get involved in organizations such as institutional parties, and unions, etc. that operate on the capitalist class’s terrain. This directs the potential for genuine class activity into avenues that are safe and affirming towards national-capital. The working class, which is practically excluded from exercising political power, is drawn into electoralism. Each party is competing for the power to manage the state, and to ensure capitalist accumulation continues without a hitch. These parties will bid to win the workers’ votes as the working class is numerically the greatest class in capitalist society. Their programs may offer concessions for reforms, but once they win ‘your’ vote, and become ‘your’ representative, the working class’s role in political consultation is immediately relinquished.

Then there’s unions, which were legalized as a part of the New Deal and were integrated into the state as a part of the state’s security apparatus. Workers received unemployment insurance and paltry wage increases in exchange for outlawing strikes, small wage increases were gradually replaced by stagnant wages and decreases while the union bureaucrats could receive fat salaries from collecting dues, along with receiving positions in the state. Even before their integration into the state as a part of a corporatist setup they were never revolutionary organizations. They are permanent mass organizations that have no political commitment for entry; their function in the capitalist system has always been to negotiate the sale of labor-power and as such are dependent on the continual health of the capitalist system. They will never advance the class struggle — instead they’ll keep it off proletarian class terrain. Sections of capital only began to repel unions as the rate of profit began to decline. Workers’ activities in unions are limited to participating in a secret ballot, canvassing for the Democratic Party and paying dues in the spirit of taxation; they may get involved only in deciding who will manage the negotiation for the sale of labor-power.

Due to its essential role in the revival of the capitalist system, [the union] is destined to continue until the end of the economic, social and political hardships of a dying capitalism, and will only be defeated when the assault of the revolutionary proletariat brings down the imperialist state.⁽¹⁾

Onorato Damen

Even unions that call themselves “revolutionary”, “rank and file”, or “grass roots” have the same function in capitalism: negotiating the sale of labor power. Organizations that claim to be part of some kind of union have to resolve the dilemma: either become a mass organization with reformist goals or become a political organization. Syndicalist organizations are yet another reformist vehicle among the left wing of capital. The stated purpose of syndicalist organizations is to group the whole class into one large union at best. They too must bow under the pressure of the same capitalist structural imperatives that control any other union, or face a loss of membership. They also have to adopt a similar bureaucratic structure to maintain their organization; when they have to concede to capital or face the capitalist divesting and shipping away the shop. Despite their entirely correct desire to overcome the divisions of workers into categories created by the capitalist division of labor, this can be done only on a political level with a political organization. Unions by their very nature express those divisions and are linked to its negotiating counterparts, the capitalist.

It is therefore beyond question that even many members of the union, like many of the anarchists and syndicalists, do not want the communist party, because it puts the revolution before reforms.⁽²⁾

Herman Gorter

It’s important to remember why the capitalist-class is comfortable in workers ‘ enfranchisement to begin with. They know that the working class by and large isn’t class conscious outside of revolutionary situations. Most workers believe there’s no way to organize production without waged labor and capital. Workers are aware they can’t sustain their needs without working for a wage in capitalism, but they believe that the capitalist system will provide worthwhile reforms that will improve their living standards. So most of the working class’ potential energy is spent on elections. Recently, during the democratic primaries for the 2020 election Bernie Sanders and his pseudo revolutionary-reformist platform (which had provisions for ‘Medicare-For-All’ and American jobs instead of abolishing the system of wages) had by mid-2019 over a million people volunteering in his campaign; thousands of events were put on by campaign volunteers and his campaign received $46 million in February 2020 alone.⁽³⁾

It is fair to say that the worker’s involvement begins and ends in the ballot box of the democratic system. There’s considerations for rights such as freedom of speech, assembly, and press, etc. There will be no interference by the state if these rights are used for systems-affirming purposes that don’t oppose the capitalist system. Any opposition is immediately brought onto capitalist terrain as reformism, which demands that the capitalist system is improved, not abolished. The class, or more so strata, who make these demands are those who are most involved in the democratic system , namely the so-called middle-class or middle strata, composed mainly of the petite bourgeoisie and sections of the bourgeoisie. Some sections of this strata are those involved in management or academia. They want a better functioning system since they’re becoming discouraged by their lack of upwards mobility. Or some sects of this strata believe that class and structural contradictions can be overcome, and that it’s possible to provide an improved standard of living for the masses in a classed society. They take up the same opportunistic reformist politics which transformed the class character of workers’ organizations in the Second International and the labor movement in the late 19th-early 20th century . In the end, these promises and aspirations made by the capitalist left and other progressive functions of the capitalist class are undermined by the reality of the declining rate of profit, which has pushed capital increasingly onto the offensive against the working class. This is a result of insoluble contradictions in the capitalist system. The continual existence of the social system requires increasing the rate of exploitation of the working class, a class that’s “in civil society but not civil society”.

Capital is dead labor, that, vampire-like, only lives by sucking living labor, and lives the more, the more labor it sucks.⁽⁴⁾

Karl Marx, Capital Volume One, Chapter Ten.

What’s known as neoliberalism is a set of policies that correspond to the conditions brought on by the scarcity of profits in the private sector, as a result of the post-war accumulation cycle coming to an end. Neoliberalism is crisis-stricken capitalism. The state is cutting tax rates and funding for social expenditures that would supplement the poorest section of the working class; while the state increasingly relies more and more heavily on deficit financing to fund its growing expenditures, it’s all done so to redistribute surplus value upwards and bolster anemic profit rates. The crisis of profitability has also caused the state to go against the former sacred calf and abandon the commanding heights of the economy, to restructure investments in favor of leaner, more profitable industries in the metropoles to restructure investments in favor of leaner, more profitable industries in the metropoles as well as taking advantage of cheap proletarian labor in Asia. This increases the rate of absolute surplus-value that’s being extracted and the import of cheaper commodities has been used to offset stagnant wages in the metropoles.

The state won’t drastically increase its already rapidly growing expenditures and reduce the diminishing profits of the capitalist, which can negatively impact the state’s own spending power. States that can do so have been more reliant on deficit spending, or deferred taxation to fund their rapidly growing expenditures. The main impacts of state reliance on deficit spending is that a colossal portion of the state expenditure goes towards debt servicing simultaneously with increased inflation brought on by bringing more and more money into existence without increasing the rate of exploitation. This may all sound counterintuitive when in May 2021, the USA’s defense budget for the fiscal year 2022 increased $10 billion from the previous fiscal year.⁽⁵⁾ The reason for this is out of all of the production for public consumption, the capitalist states prefer arms production since arms are neither means of production or consumption , but rather waste production. Since the beginning of capital’s period of decadence, there’s been a continual growth in the state’s expenditure for state-induced waste production. Their purpose is above all else to rationalize production, utilize a greater proportion of the nation’s capital, and there’s also the need for arms production. Even during times of war when the percentage of unproductive expenditures to productive, profit-producing expenditures is greatly expanded, states have difficulties keeping most of the nation’s capital utilized and keeping the entire working class employed. In the 1970 during the peak of USA’s war in Vietnam the state could keep around 80% of the nation’s capital utilized and officially 6 million remained unemployed. Despite the restructuring of capital, this has remained the case, especially with arms production which, like all other unproductive expenditures, are used to help maintain employment and social stability.⁽⁶⁾ After the 2nd World War the US military budget “became a very crude substitute for public works or social actions and, in itself, made possible government deficits […], thus sustaining the whole economy […]” All states, not just the USA, have economic and political investments in militarism.⁽⁷⁾

Arms production is preferred over the rationalization of production in what was called the commanding heights of the economy because they back up purely economic competition. The state has to carry out imperialist objectives and repress the working class and capitalist who threaten the health of the capitalist system, which requires arms. Imperialist objectives can take on the form of preferred state agreements, diplomatic pacts or even the highest expression of the crisis of decadent capitalism-imperialist wars geared towards destroying rival states as competitors. Neither does arms production compete against private capital formations involved in the production of marketable commodities. The state-induced production of arms doesn’t further diminish the market demand for these commodities. The capitalist-class especially supports arms production as a form of waste production due to that, it’s augmented both when state intervention is increased to maintain the utilization of productive capacities and increase employment levels and when there’s steady capital formations which increases the state’s spending power without drastically decreasing capital accumulation. Under the former conditions there’s the need to forcefully alleviate structural contradictions, through carrying out imperialist objectives, eventually leading to wars of varying intensity and involvement of major imperialist states. Under the latter, the capitalist tend not to fuss over arms expenditures due to their role in maintaining a state’s standing on the international market and its ability to uphold the interest of the national capital. Overall, the state prefers guns, not butter: arms over any other expenditures.

Arms production (and all that goes with it) does not appear as ‘end’ goods on the market. Governments either tax or borrow private resources and induce private entrepreneurs to produce armaments. Their production costs and profits, though paid by the government, are paid out of their own contributions to the government by way of taxes or loans-the latter merely implying deferred taxation. Looked at from the point of view of society as a whole, not from that of the individual arms producer, the arms economy removes through its growth an increasing part of ‘end’ goods from the market and thereby diminishes productive (profitable) investments. Instead of the accumulation of capital there is the accumulation of the national debt.⁽⁸⁾

Paul Mattick

The production of waste has its limits, until it impacts the rate of capital formation, which corresponds to the rate of profit. They’re a deduction of the national income; waste production can’t be capitalized or be used to enlarge capital or be consumed. The growth of arms expenditures are at the expense of capital accumulation, also decreasing living standards.

Sections of U.S. politicians who are more open to reforms still consider the policies of the “New Deal” to be the highest triumph of the democratic system’s history. In 1933, the ‘New Deal’ was conditioned by an increase in industrial activity. The state also used inflationary policies to finance the new set of expenditures mainly to finance firms; it was enamored by effective liberal phrases in order to appeal towards the mass of the working class and help reinforce the state. This was necessary at the time due to the opposition of some sections of the capitalist class against the ‘New Deal’, namely; investment bankers. The “forgotten man” turned out to be industrialists who supported the decoupling of commercial and investment banking, agribusiness who wanted higher commodity prices, mining firms, ailing railways firms who had lost a substantial amount of revenue and their capital had massively devalued and alcohol producers who wanted prohibition to end. By 1937, the opposite trend began with a decline in industrial activity; the ‘New Deal’ program which called for increased wages and living standards now turned towards increasing the rate of exploitation, through implementing new technology to increase the rate of relative surplus value and decrease the prevailing wage.

Defeated slogans came to the force again. No longer was a policy of higher wages and shorter hours demanded, but the reduction of prices by way of an increased productivity in other words, more work and less pay to raise profits.⁽⁹⁾

Paul Mattick

The prerequisite for temporarily overcoming the crisis and implementing the post-war social state was American participation in an imperialist war, which devalued capital internationally by a figure of 50%, opening up the longest cyclical boom until 1973.

Capitalist healthcare reforms tend to only amount to cost cutting measures; the ideals of a socialized medicine are in stark contrast to the imperatives of the market, which the capitalist class has no real control over. Even the “socialist” health care systems, both former and current so-called “actually existing socialist states”, only served the needs for capitalist accumulation. It decreased individual firm’s cost of maintaining labor power and limited the disruption to the reproduction of profits caused by illnesses, which is all in all the capitalist class’s main concern when it comes to the health of the working class. There were always practical economic reasons for why welfare reforms were ever implemented in the first place, not to mention their value for class conciliation. The capitalist class tends to avoid direct assaults against the working class when it comes to blocking these reforms, decreasing their coverage or real funding. For example, in the UK, despite some sections of capitalist politicians’ commitments to increase public health spending, public health spending has in reality decreased when inflation is accounted for. Apart from the IMF’s stipulation for a loan to bail out the UK’s public finance, the state had to reduce its spending on healthcare. Over about a fifty year period, the state has reduced the hospital capacity of the NHS by about 50%.⁽¹⁰⁾ The origins of the so-called social state can be traced to 1917 and the revolutionary wave, where the bourgeoisie, under the impetus of workers’ radicalization, changed the juridical ownership of the commanding heights of the national economy and began to implement what would become comprehensive healthcare programs such as the NHS, which has served capital masterfully. It fitted the social democratic voting-machines and the democratic labor movement’s definition of socialism, despite neoliberal restructuring of the national healthcare services in various states. This has been used to deflect the working class’s attention away from forming revolutionary political organizations. Instead workers are persuaded to vote for the right politicians, and only do that. This keeps workers constantly on the back foot and it prevents the working class from developing its organizational strength.

For the USA, which doesn’t have a single national healthcare system, there’s the illusion wielded traditionally by the Democratic Party that a National Health Insurance will be implemented through electing the right politicians. This is great for maintaining a voter base and limiting workers disabuse towards the system. Overall, in any state most sections of politician’s won’t directly attack public health spending; it’s important for the maintenance of class peace. Rather, cuts in public spending for health, education and social insurances are done through stealth and deceit.

The possibility for the state to increase expenditures that could be beneficial for the working class is predicated on high profit rates; only then will the state redistribute surplus-value for such provisions. This was the case even when the capitalist system was stricken with the global Covid-19 pandemic, at a time when public healthcare reforms would be the most needed. States are instead terminating unemployment insurance to get workers back to work to pay for the crisis of decadent capitalism. States in the early days of the pandemic that could quickly move towards creating public-private partnerships did so to prevent their internal markets from collapsing. By late February 2020 most states had already seen a 10% decrease in market activity.)11) The state’s role was ramping up production for public consumption (similar to times of war which further negatively impacted accumulation) namely personal protective equipment (PPE), medicine, expanding hospital capacity to counteract decades of decline, as well as a vaccine for Covid-19 using decades of past research. Some states hoarded PPE or the materials needed to manufacture them; this caused a spike in certain commodity prices and bidding wars.⁽¹²⁾ This helps show what measures the state will take when there’s a threat to the system. The interest of the state and capital are intertwined. While on one hand states produce an abundance of vaccines, enough for the whole world, most to lack access to them. This is due to the struggles between states to secure vaccines and other materials to resume economic activity with the least amount of disruption. While the capitalist states “say follow the science”, in their actions they’re defending their national champions’ (pharmaceutical companies) ability to collect rents on vaccines and spread their influence. Another contradiction is the state’s concern for the health of the capitalist system as a whole, as shown in these initiatives along with partial and full lockdowns while promoting spending money at small businesses, or going out to increase economic activity. Currently, Covid-19 safety measures have been rolled back or outright repealed, as some sections of capitalist view them as too great of an interference to profit making. States have also been deregulating labor laws, such as decreasing the age minimums in certain industries to help increase the total amount of surplus-value. Surplus value is going to be distributed upwards to bolster anemic profits–not to be spent on a greater amount of social support for the working class, despite some sections of capital who aspire to alleviate the workers’ conditions. For the capitalist, it’s merely a concern of national cohesion and security in profit-making; for workers, the lack of access to insurance and the state’s decrease in spending on public health means privation. For workers, the consequences of the pandemic are real: due to the conditions of the capitalist system, workers face death and degradation from diseases and ruin from unemployment. Each election cycle, workers are drawn in to simply vote for which capitalist will rule them. Instead, workers must become disabused towards the system and not simply support this or that state measure. This will require a revolutionary organization to relate these conditions to the crisis of decadent capitalism; only such an organization can direct workers’ demands for things such as PPE, better wages, hazard pay, or to close shop and receive unemployment insurance, onto our own class terrain.

Notes:

(1) Onorato Damen and Amadeo Bordiga “On the Union Question”, Bordiga: Beyond the Myth. Prometheus Publications, London, pg. 66. leftcom.org

(2) Herman Gorter “The Communist Political Party”: The Organization of the Proletariat’s Class Struggle. The KAPD, Berlin. marxists.org

(3) Shane Goldmacher: Bernie Sanders Raised $46 Million In February, a Record for 2020. The New York Times. nytimes.com

(4) Karl Marx, Section one: “The Limits Of The Working-Day”, Chapter Ten: “The Working-Day”: Capital Volume One. marxists.org

(5) The Department of Defense: The Department of Defense Releases The President’s Fiscal Year 2022 Defense Budget. defense.gov

(6) Paul Mattick : America’s War in Indochina, Root and Branch, 1971, No. 3, pp. 19 26. marxists.org, America’s War in Indochina by Paul Mattick-Marxists Internet Archive

(7) G. Kolko, Century of War: Politics, Conflicts, and Society Since 1914 (New York: The New Press, 1994), 475.

(8) Paul Mattick, Review Article: Arms and Capital, International Socialism (1st series), No.34, Autumn 1968;marxists.org

(9) Paul Mattick: Roosevelt’s New “New Deal”: Proletarian Outlook, vol. 5, no. 5, pp. 5-10. November 1939. marxists.org

(10) Siva Anandaciva, Leo EwBank, Helen McKenna, James Thompson, Deborah Ward: NHS hospital bed numbers : past, preset, future. Kingsfund.org.uk

(11) Prior to California’s state of emergency, however, the markets had already witnessed a 10% decline in late February. The United States declared a state of emergency on March 13th. Trump, D. J. (2020, March 13). Proclamation on declaring a national emergency concerning the novel Ccoronavirus disease (COVID-19) outbreak. The White House. web.archive.org

(12) Estes, C. (2020, March 28). States are being forced into bidding wars to get medical equipment to combat coronavirus. forbes.com