By Eric Forman
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At the dawn of industrial capitalism, the protagonists of the workers’ movement saw in the ineluctable conflict between labor and capital a contradiction that would burst the integuments of class society asunder. Communism would enter the historical stage through the breach.
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Instead, a “negative dialectic” emerged, in which the contradictions of capitalism are sublimated and deferred into political mediation at the workplace and at the societal level through the institutions of trade unions and political parties, or submerged in bloody repression.
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Fascism, social democracy, state socialism, and corporate liberalism were political responses to the economic contradictions inherent in the capitalist mode of production in the first half of the twentieth century. They were granted political currency by the credible threat of communist revolution. All of these systems were ultimately unable to resolve the contradictions of capitalism and instead displaced them into repression and inter-imperialist war.
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The victory of the Allied powers in World War II was the victory of corporate liberalism and social democracy in the advanced capitalist core, and the victory of state socialism in large swaths of the periphery.
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In the period following World War II in the advanced capitalist core, labor unions developed into a pillar of a “social compromise” that granted “middle class” prosperity to a large proportion of the working class, and stability to the organizational form of the labor union assured by the capitalist state.
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The terms of the social compromise vary by country, but the contours of the agreement are always the same: labor peace and continued production in return for loyalty to the dictatorship of the bourgeoisie at the level of production in the form of acknowledgement of “management prerogative” in the production process, and acquiescence to the foreign policy dictates of transnational capital.
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This system was extended to the former Axis powers and areas occupied by the United States in the wake of World War II, encompassing the entire non-socialist world.
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Within the socialist world, class struggle continued in state-owned enterprises, albeit against state bureaucrats instead of capitalist bosses, and amidst decommodification of much of the lifeworld.
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Capital endorsed the social compromise primarily out of a need to compete for the loyalties of the working class with the socialist movement, including its state socialist exponents, and to realize surplus value by creating consumer demand for commodities by linking wage increases to increases in productivity. This was called “Keynesianism.” The social compromise had the effect of stabilizing capitalism in the core countries, freezing class antagonisms in place.
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The labor unions developed into bureaucratic institutions staffed by a class of professional bureaucrats, seeking to mediate class conflict through legalistic means, reinforced occasionally by a strike. The professionalization and bureaucratization of class antagonism resulted in the disarming and disorientation of the unionized proletariat, which no longer had to fight its own battles.
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Wisconsin rises up against ‘Right to Work’, by Light Brigading, via Flickr.
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The social compromise was predicated on multiple divisions within the working class, between (male) waged and (female) non-waged labor, between the high-wage zones of the core and low-wage zones of the periphery, between the unionized industrial sector and largely non-union service sector staffed by young workers and women, between racialized workers and white workers, and between immigrant and native-born.
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By the late 1960s, those excluded from the social compromise launched repeated challenges to the system, contributing to its signal crisis. Riots in American metropoles, wildcat strikes, women’s entry into the workforce and demand for wages, and postcolonial demands for higher prices for raw materials amplified pressures on the US-centered world system.
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In the mid-1970s, increased competition from the rebuilt industrial centers of Europe and Japan, rising energy costs, and continued restiveness amongst the US working class exhausted the viability of the post-war American system.
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To restore profitability, capital inverted the Keynesian model of development. While in the immediate post-war era, capital sought to compete for the loyalties of the global working class through a regime of unionized, high-wage industrial employment, it now sought to touch off competition between peripheral states for capitalist investment. Where capital had once competed for workers by offering a high price for labor, now states would compete for capital by cheapening the price of labor. The race to the bottom had begun.
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In the advanced capitalist core, capital sought to reduce costs through outsourcing of production to the periphery, commodification of social goods (privatization), and concessionary bargaining or wholesale destruction of unions. Credit filled the role once played by high wages in the first world, allowing for the realization of surplus value through debt-financed consumption.
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The 1980s and 1990s were marked by defensive struggles to retain the guarantees of the post-war social compromise in the workplaces of the capitalist core. However, decades of collaborationist relationships with politicians and bureaucratization left workers unprepared for the open class war they faced. Unable and unwilling to mount a class-wide offensive, the labor movement began a long retreat.
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In the periphery, the race to the bottom took the form of the proliferation of “special economic zones” or “export processing zones,” replacing the developmentalist strategy of import substitution with production for export for first-world consumption. Production in the periphery undercut first-world wages, due in large part to a sort of arbitrage where lopsided exchange rates allowed dollars to buy large quantities of third-world labor with profits reaped from first-world consumption of the products of that labor. This was capital’s “spatial fix” for the crisis of the post-war social compromise.
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US client states have waged a permanent counterinsurgency in the periphery to stifle the emergence of third-world workers’ movements, primarily through targeted assassinations of militant union activists and sponsorship of collaborationist unions. This violence underpins the capitalist world system today.
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The United States sought to drive a wedge in the socialist camp by integration of China into the capitalist world system beginning in the early 1980s through subcontracting of export-oriented production to its special economic zones.
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The collapse of the Soviet Union and capitalist “opening and reform” of China signified the disappearance of any systemic alternative to global capitalism, creating the illusion of the End of History in liberal democracy.
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The absence of a systemic competitor led capital to abandon concerns of political stability and accelerate the inversion of the Keynesian system of high-wage employment and production in the core, and development through import substitution in the periphery. This inversion was represented by the cancellation of the post-war social compromise in wider areas of the core amidst a bonanza of debt-financed consumption, and ballooning export-oriented production in the periphery facilitated by free trade agreements and World Trade Organization policies.
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Capitalist globalization is now leading to the transcendence of the “spatial fix” that began in the 1970s, with the equalization of exploitation in the core and periphery through intensified exploitation of the core working class, and a slow increase in living standards for a segment of the population in areas of the periphery that have successfully retained a portion of the surplus value generated in export-oriented production. The rise of a “middle class” in the periphery aligns with the interests of global capital to develop consumption markets outside the traditional western core. But rather than a universalization of middle-class living standards, capital has only traded the old spatial fix for another one, constructing new core-periphery dichotomies between the monied centers of its global cities and their banlieues, favelas, suburbs, and hinterlands.
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In the core, intensified exploitation has led to a return of conditions resembling the pre-war era, necessitating and enabling the rise of a new movement of the dispossessed. In the periphery, capital can promise increased standards of living, but only at the cost of lifetimes of exploitation in dirty, dangerous, and dull work and destruction of the living environment.
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While the objective conditions for a return of a revolutionary workers movement are now in place, the subjective will, organized into a political force at the level of the workplace and society, has not yet fully crystallized—in the core or periphery.
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Especially since the 2007 financial crisis, a new wave of struggles has escalated across the capitalist core due to increased attacks on what remains of the now-empty promises of the post-war social compromise. However, the decay of the labor movement, transformation of the production system, and petit-bourgeois domination of social movements has largely vitiated the arrival of resistance where it is most powerful—the workplace.
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The arrival of resistance in the workplaces of the capitalist core has been forestalled by a massive mutation in the system of production: the shift from manufacturing to service-sector employment. In 1939, the services-to-manufacturing employment ratio in the United States was 2.1-to-1. By 2015 it was 9.9-to-1. This seismic shift moved the earth beneath labor’s feet. The working class has yet to fully orient itself on this new terrain.
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The progressive shift from manufacturing to services results primarily from dynamics inherent in the capitalist mode of production. Marx’s Grundrisse: “The increase of the productive force of labour and the greatest possible negation of necessary labour is the necessary tendency of capital… The transformation of the means of labour into machinery is the realization of this tendency.” Capitalism tends toward replacing labor with automation, particularly in response to worker struggle. Tronti’s Strategy of Refusal: “[capital] seeks to use the workers’ antagonistic will-to-struggle as a motor of its own development.” The Keynesian development pathway is now an obsolete response to this tendency. In the absence of a successful struggle for wages without work, capital’s long-term response to class struggle is automation or outsourcing of manufacturing and the growth of service-industry employment.
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In broad strokes, the shift from manufacturing to services in the core was a shift from concentration of workers in large workplaces to spatial deconcentration across small, networked production sites, from production to reproduction, hard industries to soft, masculine to feminine, full-time to part-time, high wage to low wage, direct employment to subcontracting and freelancing, stable to precarious, and unionized to non-union employment.
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The progressive decimation of the industrial working class means a “death of the subject” of American corporate liberalism, European social democracy, and the socialism of their opponents. While socialism saw in the industrial workers the agents to capital’s undoing, the Keynesian partisans of the status quo saw in the unionized, high-wage factory worker the missing link in capital’s circuit of valorization. Capital’s transition to service-sector employment has robbed the ideologies of the twentieth century of their protagonist. The prophets have lost their people, confusion and division have set in amongst the ruling classes and their opponents alike.
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The rise of the service industry has led to the rise of a service class in the capitalist core. The industrial working class has been replaced by a post-industrial working class of cashiers, cooks, servers, and clerks at the low end, and teachers, nurses, programmers, and technicians at the high end. The post-industrial proletariat in the capitalist core is now an enormous class in itself; the task of labor today is to catalyze its coming to consciousness as a class for itself.
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Where conflict was once mediated and deferred at the molar level of the social organism by political compromise and collective bargaining, capital has now dissolved all forms of collectivity, invading the molecular level of society through debt, human resources management, social media, and ever-more insidious manipulations of desire
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The development of consciousness and struggle amongst the service class is stymied by the far-flung production sites, high turnover rates, and unchecked power of the bosses characteristic of this sector, rendering it nearly impossible to achieve the increasingly global scale of organization required to inflict substantial economic pain on the multinational corporations that monopolize the service industry.
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Supply chains are vulnerable to workers’ direct action. However, the challenge facing the working class is not only to momentarily shut down the old system, but to take over and build a new one. This requires not only structural power of workers located in the key logistical nodes, but the associational power of the exploited millions across the low-wage service sector, creating new forms of labor and social organization that point beyond the shell of the old.
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Rooted in the basic dynamics of the capitalist mode of production, the shift to services is the tendential direction of capitalist development. This is already clear in the post-industrial core, and will soon manifest in the rapidly industrializing periphery. Thus, a failure to find a development pathway out of capitalism that takes the service class as its point of departure means a true End of History.
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Low wage workers go on strike in Milwaukee, by Light Brigading, via Flickr.
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The post-industrial proletariat has begun to gain consciousness of itself as a class, evidenced by the emergence of struggles in fast food, corporate retail, and other major subsections of the low-wage service industry. Yet most struggles in the capitalist core have been stunted by the remaining organizational forms and modes of activity of the bureaucratic apparatus developed to constrain and direct worker resistance under the post-war social compromise. Struggles outside of this apparatus have been unable to develop a scale capable of confronting capital in its full stature.
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The bureaucratic apparatus in the core consists of the remnants of the class-collaborationist labor bureaucracy, as well as a constellation of NGOs revolving around a set of philanthropic foundations that enacted corporate liberal domestic and foreign policy during the Cold War.
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The bureaucratic apparatus is largely unable and unwilling to grasp the task confronting the working class in either its global or systemic dimension, routing resistance into piecemeal reforms and single-issue campaigns that can easily be coordinated by the professionalized managers of worker struggle, and be assimilated by capital as non-structural reforms that do not threaten its hegemony.
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Generally, struggles managed by the bureaucratic apparatus are successful to the extent that they are limited.
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The piecemeal demands of the bureaucratic apparatus amount to a demand for the return of the post-war social compromise—but social compromise is not on the agenda, and ironically, can only be put back on the agenda by a successful revolutionary struggle that breaks a large section of the world economy away from the capitalist world system, generating pressure on the remaining capitalist states to put political competition for the loyalties of the working class over economic drives for short-term profit.
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In the periphery, the rise of an immense industrial sector has led to the rise of workers’ movements resembling the insurgencies that once led to class compromise in the capitalist core.
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The ruling class of China and other nations in the periphery have embarked on the politically treacherous but economically viable neo-Keynesian path of harnessing strike waves to boost wages in order to sponsor consumption in a bid to build a consumer center, reliant on a large service sector, that displaces the Western capitalist states as the core of the world system.
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Wildcat strike waves in China and elsewhere in the periphery—though massive—and the class struggles fomented by the remnants of the labor bureaucracy in the capitalist core share a common limitation: foreshortened political horizons, evidenced by purely economistic demands.
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Left electoralism, no matter how red its flag, is unable to transcend the limitations imposed by global capital. Until the working classes are organized as a political force capable of a credible threat of communizing the means of production, attempts to resolve the contradictions of neoliberal capitalism solely through fiscal and monetary policy will be futile. Any engagement with electoral politics must generate structural reforms in the system of production, or it will become the left wing of capital.
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Accepting the leadership of the bureaucratic apparatus is suicidal, insofar as the bureaucratic apparatus accepts the leadership of capital. The working class must rupture with the practices of the class collaborationist bureaucratic apparatus if it is to transcend its role as the object rather than subject of history.
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The present contains a future. The emergent new forms of worker organization must deliberately avoid repeating labor’s mistakes of the twentieth century, or they will bring us only more of the same.
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Where the bureaucratic apparatus professionalized struggle in order to manage workers in the long-term interests of capital, the new forms of worker organization must deprofessionalize and diffuse the skills of organizing throughout the working class. We must reject bureaucratic control in favor of the construction of direct-democratic organs where the exploited manage their own struggles.
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We must reject “management prerogative” over the production process in favor of expansive struggles for workers’ control to produce for the good of the entire planet and all its creatures. Where the social compromise was based on restriction of solidarity to isolated “bargaining units” defined by the walls of a factory or narrower job classification, a revolutionary workers’ movement must generate a class-wide solidarity that overflows the walls of the workplace, uniting producers and consumers as one working class. Our campaigns must go beyond narrow wage demands in favor of the decommodification and socialized distribution of the products of our labor.
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In the place of the imagined community of nationalism and its bedfellows of racism, sexism, homophobia, xenophobia and other forms of oppression, we must construct a real community based on the material interdependence of all life on earth. In the place of capitalist states, administered by technocrats left and right, we must build and confederate assemblies and communes to exercise self-government. But political autonomy is only as meaningful as it is possible to materially survive within it: there is no real autonomy without control of the means of production.
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While a large-scale break with the fixation on recapitulating a Keynesian capitalism in the ascendant peripheral states and declining core states is unlikely in the short term, the decline of US hegemony and recurrent economic crisis has led to the emergence of areas of relative autonomy with greater liberatory potential: worker-run factories in Argentina, experiments in socialist democracy in Venezuela, Zapatista communities in Mexico, and the rebel region of Rojava in northern Syria, for example. While none of these present a clear systemic alternative to the capitalist world system, they may contain the seeds of a decommodified “workers’ economy.”
The construction of the workers’ economy not as an “alternative,” but as hegemonic world system is the only hope for averting the cataclysms of environmental destruction, war, and poverty which loom on the horizon in this period of world-systemic interregnum. We must defend the new world wherever it breaks through, rejecting the foreign policy of global capital in favor of a strategy of solidarity with regions that rupture with the capitalist system.
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Breaking the negative dialectic of capitalist development means breaking humanity’s chains where they are forged: in the jaws of the means of production. Whether based initially in the workplace directly, or on the terrain of the community, developing new forms of worker organization to wage class struggle and construct a global workers’ economy is our most urgent task today.