Chronic Unemployment is Endemic to Capitalism

August 3, 2017

According to the National Bureau of Economic Research, the U.S. has been in the boom phase of the boom and bust economic cycle since June, 2009. And indeed, the rich have been getting richer. But for the working people this “recovery” has been one in which the corporate restructuring and mass layoffs have been continuing.

One sharp indication of the true conditions of the working people is the fact that throughout these eight years of “economic boom,” the official unemployment rate has never dropped below 4.3%. In other words, according to the standards of the capitalist class and its political adjuncts, the masterpiece levels that American capitalism – this “best system in the world” – can reach are those in which millions of workers are condemned to complete unemployment.

In fact, when we reckon a low estimate of 1.5-2 million “discouraged workers” (unemployed workers that the government stopped counting) we find that a minimum of some 8-9 million workers suffered from complete unemployment in the last month. And today, in addition to millions of unemployed workers, there are tens of millions only able to find part-time and temporary jobs, while the entire working class faces growing impoverishment and perpetual economic insecurity as the threat and reality of part-time work and recurring periods of unemployment hang over their heads.

The incurable and ever-growing disease of unemployment starkly reveals just how poorly capitalism succeeds at providing for the well-being of the working people. After years of toiling and sweating for the capitalists, older workers are thrown out of their jobs just as easily as and just as thoughtlessly as a capitalist throws out a used rag. Often the older workers are turned into the street just before becoming eligible for pensions; they are left with no income and almost no job prospects. The younger generations of workers cannot find any way into the workforce and face a life of enforced idleness and poverty, a life without any future. Homes are lost, families suffer without money for health care, spouses and children are forced into minimum wage jobs in order to keep food on the table. Millions of laid-off workers end up accepting new jobs at drastically reduced wages in order to avert total privation.

The “argument” of the capitalists in defense of their system is the claim that unemployment is a matter of “individual responsibility” and that if everyone had more “initiative” no one would ever go without basic necessities and the standard of living of the working class as a whole would not keep declining. At best this is magical thinking. And in fact, behind the naked logic of this social darwinist “law of the jungle” is the declaration that the social environment into which we are all born has no role to play in guarantying the conditions necessary for an individual to live and develop. Indeed, the disintegration, the social breakdown which we see all around us has its roots in the anarchy which is inherent in the capitalist mode of production. Capitalist ideologues boast that theirs is a “dog-eat-dog” system; a system in which competing capitalists madly grab for wealth and power independent of the social consequences of their actions. They boast that, after the so-called death of communism, there must now also be an end to all social responsibility and collective rights. Both the Democratic Party and the Republican Party strive to enshrine and make sacred the anarchy of the capitalist mode of production. So too, their political platforms serve to push society backwards to a period of primitive capital accumulation in which monopolists more and more rely on the state to plunder our country of its public assets through privatization schemes which turn public monies, infrastructure and land over to the private sector.

In the first place, this claim that unemployment is a matter of “individual responsibility” ignores the facts about the economic base upon which such concentration and centralization of wealth rests. It ignores the socialized character of the modern means of production. Modern civilization is characterized by a vast division of labor which forms the base of our economy. Today, less than five hundred corporations account for more than 2/3rds of the country’s gross domestic product. It is the working class which has created and which, everyday, sets in motion the whole, vast modern economic base of our country. The vast dimensions and tremendous productivity of this economic base arise from the concentration and centralization of production into huge economic units and this vast, highly organized economic machine in turn arises precisely from the socialized character of the working class.

In today’s world, the individual cannot secure her/his livelihood by hunting or gathering for herself or himself. From the time of birth, the working class – the vast majority of the population – is disenfranchised – denied the means to guarantee their livelihood. The capitalists in turn exploit the labor-power of the workers, returning in wages only a small fraction of the new values created by the workers. Just as the means which we all need to transform nature and secure a livelihood are already monopolized by a handful of capitalist owners, the working class is separated from the implements of labor and the workers have no way to secure a livelihood except by selling their labor-power, day in and day out, to the capitalist owners. Under capitalism, the living human labor of the workers is looked upon solely as a means for enriching the capitalist owners. Thousands of hands work as one within a single factory while in the economy as a whole a social division of labor amongst 120 million workers supplies the capitalist owners with commodities to sell, and our country with everything from computers, to x-ray machines to food.

Capitalist private ownership of the means of production rivets the workers to the capitalist as firmly as the slave was riveted to the master. Capitalism recognizes the worker only as a seller of labor-power, only as a beast to be exploited. Under capitalism, all the human rights of the worker are denied. He/she lives or dies according to the capitalist system – that is according to the needs of capital.

When the capitalist class denies the human right to food and shelter, or the right to a secure livelihood, it is really saying that the means of subsistence must remain monopolized by the rich and powerful, by the capitalist class, and that the masses of people cannot even lay claim to the elementary conditions necessary for survival.

In the second place, from the very emergence of humankind it has been recognized that society bears definite responsibilities for the social and economic security and well-being of the individuals who make it up.

And from the time of the emergence of the modern working class, history has proved time and again that the political economy of the working class is infinitely superior to that of capitalism. As early as the 19th century, the working people recognized and took action to make the rich pay for the fact that the “blind hand” of the capitalist system meant mass economic insecurity, unemployment, poverty, premature death, etc. At the point of production, workers banded together in unions and fought to lessen the degree of exploitation and raise their standard of wages. Such movements as the struggle for the 8-hour day and trade union rights, the struggles of social security, unemployment compensation, Medicare and Medicaid, for public housing, etc., all made continual inroads against the rights of private property. By asserting their collective rights, by fighting and winning these political struggles, the workers have not only created a floor which helped raise the general price of labor-power, but even more importantly, they have insisted that they are not just beasts of burden to be exploited by the capitalists, but are human beings with inalienable economic and social rights.

So too, as early as the latter half of the 19th century, Karl Marx’s theory of scientific socialism had become the main trend in the working class movement, inspiring the workers to come out as a class-for-themselves under the banner of socialism and communism. An all-sided summation of the experience of socialism – of the unprecedented advances of the 1920s, 30s and 40s, of the crisis and decay which have returned to Russia, Albania and elsewhere with the restoration of capitalism – leads straight to the conclusion that the objective content of this era remains the transition from capitalism to socialism on a world scale. It leads only to the conclusion that the workers can only emancipate themselves by abolishing the capitalist system based on private ownership of the means of production. In countries where the workers succeeded in recognizing the already-existing social character of the productive forces, stripping them of their class character – that is stripping the tiny minority of capitalist owners of the “right” to monopolize the economic lifeline of society and of the “right” to exploit the labor of the workers – they achieved unprecedented economic development and established the standard of rights which, to this day, is the template by which workers everywhere measure how far they have come and how far they have to go. Socialism eliminated the anarchy and crises of capitalism and opened the path for the progress of the countries where it existed. Socialism eliminated the exploitation of the working class and guaranteed workers secure, stable livelihoods with a rising standard of living, guaranteed health care, education, shelter, income security in the event of loss of capacity to work, and other economic rights for all. For example, in socialist Albania, unemployment was unknown and everyone was guaranteed a job. Medical care, retirement benefits, education, child care were rights provided free to all the working people. In socialist Albania, both taxes and inflation were abolished and rents were the lowest in the world (less than 2 days wages per month). 

So too, wherever it was established, socialism enabled the people to create advanced political systems – systems based on the sovereignty of the people and their direct role in governance. Political systems which enable the working people to follow through on their drive to emancipate themselves and humanize the natural and social environment by holding the state accountable to the people themselves.

In short, under a system where sovereignty was vested in the people, there could be no failure to recognize in law and actual practice, that society bears definite responsibilities for the social and economic security and well-being of the individuals who made it up.

Today, when not actively denying the existence of society and preaching that everyone must “fend for himself or herself,” the political spokesmen of the capitalist class put forward many theories in order to deceive the working people about the true cause of unemployment. According to the capitalists, it is foreign imports, or foreign workers or “the high wages and low productivity of American workers,” which are responsible for unemployment. Strange theories, indeed, which ignore the simplest of all facts – that it is the capitalist billionaires who close down factories and lay off workers.

In fact, all the capitalist theories are designed not to explain, much less illuminate solutions to the problem of unemployment, but to help the capitalists increase the exploitation of the workers and in turn produce even greater unemployment. For years, the capitalists have been creating hysteria about foreign imports and “low American productivity,” in order to demand wage cuts and impose savage speed-up onto the working class. The workers were told that this wage-cutting and capitalist “modernization” would save and produce more jobs.

But what has happened? The only thing that has been saved and produced is more capitalist profits while unemployment has soared. In industry after industry, wage cuts and capitalist modernization have allowed the capitalists to get more work out of fewer and fewer workers, thus forcing millions into the unemployment lines. In the auto industry, profits are up, but the workforce has been reduced; in basic steel, profits are also up yet the workforce has been reduced; farm machinery industry profits are up, but the workforce has been reduced; aluminum industry profits are up, but the workforce has been reduced; medical industry profits are up, but the workforce has been reduced, etc., etc.

No, it is not “low productivity” or “foreign competition,” but the capitalist system itself which produces unemployment. Capitalist production is carried out with one and only one goal in mind – maximum profits. The capitalists constantly seek to increase the rate of profit by increasing the productivity of labor, by having fewer workers do more and more work through understaffing and constant pressure to work faster. This process not only superexploits the employed workers but simultaneously produces an ever-growing and permanent army of unemployed. The unemployed workers, in turn, become a convenient lever for the capitalists to force wages down even further, by increasing the competition among workers. With an excess of workers and a scarcity of jobs, the capitalists are able to dictate lower wages.

Karl Marx, the great teacher of the international working class, long ago showed how, under capitalism, the increasing productivity of labor produces a permanent army of unemployed workers as well as an ever-increasing exploitation of the employed workers: “We have seen that the development of the capitalist mode of production and of the productive power of labour. . . enables the capitalist, with the same outlay of variable capital, to set in action more labour by greater exploitation (extensive or intensive) of each individual labourer. . . The production of a relative surplus-population, or the setting free of labourers, goes on therefore yet more rapidly than the technical revolution of the process of production. . . The over-work of the employed part of the working class swells the ranks of the [unemployed], whilst conversely the greater pressure by the latter by its competition exerts on the former, forces these to submit to overwork and to subjugation under the dictates of capital. The condemnation of one part of the working-class to enforced idleness by the over-work of the other part, and the converse, becomes a means of enriching the individual capitalists, and accelerates at the same time the production of the industrial reserve army on a scale corresponding with the advance of social accumulation.”

“. . .within the capitalist system all methods for raising the social productiveness of labour are brought about at the cost of the individual labourer; all means for the development of production transform themselves into means of domination over, and exploitation of, the producers; they mutilate the labourer into a fragment of a man, degrade him to the level of an appendage of a machine, destroy every remnant of charm in his work and turn it into a hated toil; . . .they distort the conditions under which he works, subject him during the labour-process to a despotism the more hateful for its meanness; they transform his life-time into working-time, and drag his wife and child beneath the wheels of the Juggernaut of capital. But all the methods for the production of surplus value are at the same time methods of accumulation; and every extension of accumulation becomes again a means for the development of those methods. It follows therefore that in proportion as capital accumulates, the lot of the labourer, be his payment high or low, must grow worse. The law, finally, that always equilibrates the relative surplus-population, or industrial reserve army, to the extent and energy of accumulation, this law rivets the labourer to capital more firmly than the wedges of Vulcan did Prometheus to the rock. It establishes an accumulation of misery, corresponding with the accumulation of capital. Accumulation of wealth at one pole is therefore at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e. on the side of the class that produces its own product in the form of capital.”

Today, in the course of the strikes against wage cuts and other concessions, in the battles against the neverending tax increases and social service cutbacks, we must keep in mind that the most important and lasting victories lie in the growing organization and independence of our class. While mobilizing and organizing ourselves in opposition to and struggle against the capitalist exploiters, we must also accumulate the forces necessary for the coming socialist revolution. Only through the revolution can we overthrow this relic called capitalism, and instead put the whole productive force of society in the hands of the working class.

The workers will find no relief or way out of permanent crisis of capitalism except through class struggle. The chronic and ever-increasing problems of unemployment, and the ever-increasing speed-up drives and intensifying exploitation of the employed workers which accompany them, demand the unity of the employed and unemployed workers. We must target the government at every level and demand JOBS or INCOME for every worker. The unemployed workers must take an active part in the struggles of the employed workers against speed-up and wage-cutting, just as the employed workers must take up the banner of “Jobs or Income” for all. The entire class must unite in sustained and systematic struggles directed towards forcing the rich to bear the burden of the crisis of their system. The billionaires must be forced to cut into their gigantic profits in order to provide jobs and a higher standard of living for all workers.

Through these and other class struggles we can not only protect our livelihoods and living conditions, but succeed in building our own political party and accumulating forces for the impending social revolution. It is an elementary starting point of the working class that economic life be organized on the basis of firstly guaranteeing the livelihoods of the people. That is, the workers’ answer is that everyone must be guaranteed a job or livelihood at a level commensurate with our country’s high degree of development.

This means that the workers must firstly fight for a fundamental change in the economy. Ultimately the working class must cure the disease of chronic unemployment by taking over the ownership and control of the social means of production and building a genuinely socialist society, in which all the wealth of society is used to improve the economic and cultural life of the people. Then we will be able to guarantee jobs and a constantly increasing standard of living for all the people.