Saturday, July 03, 2010

How to make an American job

How to Make an American Job Before It's Too Late by Andy Grove, co-founder of Intel:
Long term, we need a job-centric economic theory -- and job-centric political leadership -- to guide our plans and actions. In the meantime, consider some basic thoughts from a onetime factory guy.
(via Yves Smith)

Again, I have to observe that by and large we already know what to do, and we know by direct experience what works. We have to ask: why aren't we doing it? We have to ask why an intelligent, educated man such as Princeton (!) economist Alan S. Blinder would say that, "[N]owadays the number of television sets manufactured in the U.S. is zero. A failure? No, a success." And we have to ask why even a single working-class American would vote for a politician advised by such a man.

The problem is that the social and economic structures of capitalism create a relentless pressure to reduce costs and improve efficiency. Where a "natural" demand exists, this pressure works to lower true costs (the number of hours worked) and improve true efficiency (use-value per hours worked). In the early days of industrial capitalism, the need of the workers for an improved standard of living to improve their productive efficiency and lower the true cost of labor power provided this natural demand; in China today the export market provides this natural demand.

But at some point, we have to create and maintain "artificial" demand: raising the price of labor power above its cost. The New Deal basically created this artificial demand, at least for American labor, supported in no small part by a policy of ruthless economic imperialism abroad. The New Deal proved surprisingly robust for a time, but the relentless pressure of capitalist economics eventually destroyed it, and we face today a crippled manufacturing infrastructure, a powerless working class and massive un- and under-employment. Worse yet, the pressures of capitalism have crippled our primary and secondary political systems, from the legislature to the "free" press, eroding not only our economic but our social and political rights. Our press has become propaganda, our police have become occupying troops, our courts have become advocates for the ruling class.

Sure, we could match China's manufacturing prowess, and we could do it in a generation. All we need — at least under capitalism — is to reduce the cost of our labor power to match China's. Start people working at 16, let them die at 50 or 60. Poverty and degradation are cheap; dignity and quality of life are expensive.

But who would these workers be producing for? Not the ruling class: even today they cannot spend the vast amounts of surplus labor that capitalism has generated, even with the help of what's left of the professional-managerial middle class.

There's simply no way out of our current crisis. There's no one left to exploit. China turned to capitalism, but their only natural market is the decaying corpse of Western industrialism. Once that corpse has been stripped bare, they will be faced with the same problem as the West: All the social and political mechanisms of capitalism work against allowing the working class to exercise demand. We cannot "do capitalism" better: we have to change the fundamental economic, social and political systems of capitalism that exercise relentless pressure to reduce the cost of labor power.

It is in the workers' interest — and their interest only — to raise the price of labor above brute survival. It is in the capitalists' and professional-managerial middle class's interest (at least in the short run, and "in the long run, we're all dead") to push the price of workers' labor to brute survival. We can change the fundamental nature of capitalism only when the workers' interests are paramount and all the rest of society revolves around their interests.

As we have seen in reality, the capitalist ruling class might maneuver, they might make strategic reforms when their very survival is at stake (and only when the most savage repressive measures have decisively failed), but those reforms never persist. They cannot persist.

Our only hope is the dictatorship of the proletariat. Our only alternative is slavery.

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