by John Smith
The attack on organised labour and working people in Europe, Japan and the USA, through intensification of labour, wage repression and cuts in social spending, was on its own nothing like enough to allow capitalism to escape from the systemic crisis of the 1970s. The most important contribution to the resumption of capitalist accumulation in its heartlands was the surplus-value extracted from hundreds of millions of workers in the export-oriented industries of the Third World (or Global South) and captured by imperialist transnational corporations (TNCs) and their suppliers as profits and by imperialist states through taxation. Once again, systemic crisis propelled capitalism along an imperialist trajectory.
By exposing workers in imperialist countries to increased competition with workers in low-wage countries, outsourcing, even the threat of it, has proved to be a powerful weapon against organised labour, which could not resist because its leaders failed to heed Marx’s prescient warning: “In order to oppose their workers, the employers either bring in workers from abroad or else transfer manufacture to countries where there is a cheap labour force. Given this state of affairs, if the working class wishes to continue its struggle with some chance of success, the national organisations must become international” (Marx, 1867).
The employers’ offensive in the imperialist countries in the decades before 2007 was most intense in the United States, where the median real wage has barely changed since the late 1970s and where the social safety net has been shredded.(1) Since wage inequality sharply increased during this period, it is evident that broad layers of the US working class have experienced declining wages. In contrast, most workers in most European countries experienced a slow but steady advance in real wages since 1980—including in the UK, despite Thatcher’s onslaught on unions. The major exception is Germany, where, according to the OECD, between the mid-1990s and 2008 real incomes of the poorest 30% of German households declined and those of the next 30% barely moved (Fredrikson, 2012).
The German reunification in 1990, which exposed West German workers to competition from lower-paid workers from East Germany, and the eastern expansion of the European Union, which exposed them to competition with workers across central Europe, ended the era when (more…)