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Prol-position: "Stop looking into the headlights"

posted Oct 16, 2008 1:59 PM by John Clegg   [ updated Oct 15, 2008 7:56 PM ]

Stop looking into the headlights – Some thoughts on the current crisis

from forthcoming prol-position newsletter


The following are rather more preliminary and turmoiled thoughts in
turmoiled times than a collectively debated position...

It's a production affair!


The current financial crisis is rooted in the crisis of social
production: profit squeeze / over-accumulation in the industrialized
regions of the world, workers unrests and increasing desires in the
newly industrialized periphery, major pressure from the roaming rural
proletariat of the South, trying to escape the misery of the soil and
village life.

There might be a crash, but no short-cut!


We have to understand the real limits of capitalist social production
which are hidden behind the current crisis, not only in order to avoid
false short-cuts (demands for regulation of the financial sphere from
the moderate left, un-rooted voluntaristic proclamations or
'direct-action' from the radicals), but also in order to find a
revolutionary answer within the proletariat: not as bank-scratching
paupers who have lost their little savings, but as producers who have
fuelled the frenzy and who are able to produce a different social
community. In the following we will try to lay out some of the material
limitations of the current capitalist cycle. We will mainly refer to the
global automobile industry and we have a reason for doing so: it was and
still is the main industry of this capitalist cycle, the 'American
Century', it is one of the most socialized industries with the longest
production chains within the international division of labor, the most
resource and human labor consuming sector.

Under the surface of over-production and financial bubbles: a way too productive social cooperation!


The industrial crisis has been simmering since the early 1970s, since
then 'de-industrialization' was the word of the day, everyone focused on
rust-belts and increasing unemployment. In fact most industries were not
dismantled but underwent a productivity boost. While it took 20,000
workers to produce 100,000 GM cars in the mid 1970s, today the job is
done by 6,000 workers. The same is true for misnamed 'post-Fordist'
industries, e.g. call centers, where 100 or 200 agents easily displace
1,000 white-collar workers, e.g. in banking or insurances. The
expenditure for capital to surround and suck out the remaining workers
with ever more machinery increases, the real unemployment and
unproductive jobs, too. The enormous increase in productivity meets its
consequence: falling relative income and falling profits in the
production sphere. This emerges as an over-production crisis. The
back-bone of Neo-Keynesianism (give people more money and the economy
will recover) has now been broken twice. Firstly, people had the deficit
spending power, but it didn't help. Secondly, this crisis reveals that
capitalism is not a consumer society: a decreasing share of the social
product is dedicated for private consumption, the increasing share flows
into the extension of the (war/factory) machinery...

Dot.com dead: No new product-cycle in sight!


Despite all the talk about an information society and post-industrial
relations, no social product and mode of production has emerged which
would have replaced industrial products like cars, mobile-phones etc.
The hailed new consumer goods (DVD-Players, mobile phones etc.) need a
tiny fraction of social labor, the Nokia plant in Bochum manufactured
100,000 to 150,000 phones per day and was closed because it was not
productive enough. A micro-wave plant in China supplies half of the
world demand for micro-waves: you cannot build a capitalist cycle on
that! And you cannot build it on IT services. The dot.com crisis was the
final straw, the new sector which was supposed to be the way out of the
automobile crisis and it collapsed within no time! The flight into
finance accelerated.

The crisis won't be exported: China and India have to cope with the increasing unrest of a mobile urban/rural proletariat!


The last WTO talks failed, the global South, namely India and China, did
not want to swallow the over-production of the North, particularly the
agrarian surplus production. This is not due to any kind of
anti-imperialist attitude, but due to the major challenge of global
capitalism: a rapidly growing proletariat in the global rural South.
Most of the rural population in India and China (about 1.7 billion
people) depend on wages and commodities – the ups and downs of markets!
They have left the misery of village's personal hierarchies and
exploitation and find themselves in the social whirl-pool of
proletarianization: increase of insecurity and desire. The states of the
South need a relatively calm hinterland; they are busy copying with the
new urban working class, migrating workers and growing slums. The state
tries to tackle the rural proletariat with migration control and
histories' largest job schemes. The complete opening of the regional
market for the excess production from the North would cause major
disruption in a situation of simmering social turmoil: millions of
semi-proletarianised households (half depending on wage work, half on
agricultural production) would have to compete with industrialized
agriculture and be thrown into the social void.

No low wage paradise left: The crisis won't be re-located anymore!


So far the core plants of the automobile sector have not been re-located
to low-wage countries, mainly due to the major share of fixed capital: a
car plant is heavier than sewing machines or head-sets. If we take a
closer look at those industries which actually are relocated, e.g. the
textile industry and call centers, then we can state there is no low
wage region left to further relocate to in order to solve the profit
squeeze by finding even cheaper workers. The textile industry moved from
Indonesia, to China, to Vietnam, to Bangladesh and fuelled workers'
unrest and pressure on wages from below on the way. The same is true,
though less riotous, for the new generation of call center workers in
the Spanish and English speaking periphery. Wherever new car plants
opened in the periphery, major strikes and demands emerged, e.g. during
the last months in the 'global car' plant of Dacia in Romania or at Ford
in St. Petersburg, Russia. Another problem for the 'globalized' hunt for
cheap wages is the increasing transport costs due to rising oil prices:
the production chains are over-stretched.

Social death of the peasant worker: The migrants won't do the job!


So far one of the main ways to undermine a local working class and to
re-structure industries was to suck in peasant workers into the new
industrial areas. This was true for the beginning of the 'Fordist' era
in the US, for the 're-construction' in Europe after World War II, for
the dictatorships of development of the 1960s to 1980s (from South Korea
to Brazil) to India and China today. The problem is that this
'peasant'-worker is a dying social figure. In China today the second
generation of industrial migrant workers refuses to go back to the
country-side, this is what the Turkish 'guest-worker' did in Germany in
the 1960s and 1970s. Capital has to face migrating proletarians which
already have made their experiences with urban life, with factory or
wage work, with modern forms of class struggle: e.g. migrating women
workers from the Philippines or Bangladesh, who have worked in Dubai,
Liberia and Romania and who have learnt how to fight.

The food riots showed a new subject: not the starving desperate poor, but an urban working class!


So far capitalism has been able to 'starve out' the poor; the main
famines and poverty related massacres took place on the countryside, on
the bloody soil itself. The recent food riots showed that capital and
state have to face a desperate, hungry and angry, but also highly
organized urban proletariat. The food riots in Bangladesh were organized
mainly by female textile workers, in Cameroon by taxi drivers and local
youth. The forms of urban struggles seem to become more similar, be it
in Parisian banlieus or industrial suburbs of Dhaka. The ruling class
will need one, two,... many Katrinas in order to beat the urban poor,
given that even the missiles on Bagdad or Kabul, the CCTV systems in
London or job schemes in Villeurbanne do not seem to be able to sort
things out.

Impasses in the factories in the North: neither low wage temp jobs nor humanized team-work solved the crisis!


Facing this dead-lock situation in the periphery, capital has to try
harder to solve its crisis in the factories and other spheres of
exploitation in the North. In order to do this capital has met a further
situation of impasse concerning the development of a 'post-fordist'
production model, the attacks of the core workers, the employment of
precarious or temp workers, outsourcing to suppliers or sweat-shops.
Following short glimpses on the matter.

Fordism re-loaded: capital was not able to overcome the assembly-line!


There were two specters haunting the shop-floor of factories in the
North during the 1980s: the automated production and the humanization of
work. It became clear quite early on that the new technologies (IT) are
first of all used to speed-up work (particularly in logistics) and to
tighten control, but that the actual physical work remained more or less
untouched. The 'humanization' of work got another turn in the 1990s,
when everyone was talking about Toyotism, job enrichment and team-work.
Since then 'team-work' in most factories is a synonym for
'peer-pressure' and institutionalized group bullying. Actual 'team-work'
turned out to be unproductive once placed under the necessity of
valorization: role model manufacturers like Volvo returned to the
assembly line. There seems to be no way out: value production, abstract
labor, has to be met by a material form of production – factory work
based on a rigid division of labor and connected to the rhythms of
machines. Capital was not able to 'revolutionize' its very own fundament
– the focal point of workers' reformism was crushed.

Expensive attacks on the core workforce: future focal point of popular discontent?


The last decades have seen hundreds of examples of expensive attacks on
the core work-force in the North: Rover in England, VW in Brussels,
several GM plants in the US. In the 'best cases' capital and state had
to pay quite high redundancy payments or social benefits. In 'worse
cases' workers managed to organize a collective response, e.g. the
wildcat strike at GM in Germany 2004 against outsourcing and dismissals.
During the last weeks car makers announced major job cuts or production
stops. With the aggravating crisis, the struggle against closures of
major plants and or other job cuts could become a focal point attracting
everyone who felt fucked over by the current crisis regime. This is much
more likely than an organized unemployed movement or spontaneous looting
of the stock-market. Therefore capital and state will also calculate the
'political price' of a direct attack on the core workers.

Relatively low labor costs compared to costs for capital: Low wages won't help!


If we talk about the major industries, e.g. automobile, chemical,
agro-business etc., we can see that low wages won't be the solution for
capitalist crisis. In a modern car factory only four to five per cent of
the total production costs are spent on wages (including those of the
managers). At GM in Germany a temp worker might only get 6 to 7 Euros
before tax compared to 14 to 17 Euros of a permanent worker.
Mathematically, lower wages would not change the general costs
calculation too much, but in times of crisis every cent counts. Actually
the increasing use of temp and low wage work has hit productivity:
recently Spain got an official warning by the EU that too many temp
contracts would cause a major increase in sick leave and lowering of
work performance. Today most industrial workers are not able to identify
with 'their' company anymore, which for capital is a very high price to
pay.

The crisis won't be out-sourced: Crisis and re-concentration of the supplying industries!


One attempt to lower production and wage costs was by increasing the
out-sourcing of certain departments. In this process some major car part
suppliers grew nearly as big as the actual car manu­facturers, e.g.
Delphi, Bosch, Visteon. Everything seemed to fit the picture: a flexible
production on demand, just-in-time, and a fragmented work-force. During
the last years these myths collapsed: the strike at Fiat Melfi in 2004
finally showed the vulnerability of the supplier-assembly plant link,
for a stable production the suppliers started to manufacture in close
spatial distance, the wages at the suppliers increased, and in 2005 the
crisis of Delphi and Visteon showed the still existing mutual
dependency: GM had to save Delphi, pay its workers' pensions and wages,
Ford had to jump in and pay out its former outsourced daughter Visteon
in order to guarantee production.

In this dead-lock situation credits become crucial: preparing the financial crisis!


Having met these various impasses the industrial capital had to bet on
future profits by increasing the amount of credits. This became obvious
even before the current financial crisis; major industrial companies had
liquidity problems, GM and Ford lost millions with their pension funds
on the stock market, Chrysler's leasing bank was close to bankruptcy.
The run for money started on a global scale. Proletarians did the same,
low wages were compensated with private debts and mortgages – but
compared to the state and to companies their indebtedness remained
marginal (and within the global proletariat the average Indian rural
proletarian household is probably deeper indebted than a US-American
working-class family, relatively to both economic output and income).
Once the financial crisis kicked in, once the 'credits' turned bad it
swung back and aggravated the industrial crisis further: particularly
the BRIC states (Brazil, Russia, India, China), the only states where,
e.g. car production and sales were still increasing, are badly hit by
the crisis. Neo-liberalism is dead, major parts of the left have been
flogging a dead horse. Time for reorientation...

Stop staring into the headlights: more than ever before the global character of this crisis can reveal the global character of the working class today!


Instead of letting ourselves be hypnotized by the debt clock and share
price slumps we should first of all analyze the struggles which relate
to this crisis, e.g. the short wildcat strike of Renault workers against
the announced dismissal of 1,000 work-mates in Sandouville (France) or
of Greek airport workers against a pension scam. We will also have to
review the uprising in Argentina during the last crisis in December
2001: only during the first weeks of financial crash everyone seemed
united, then the middle-classes got appeased and went back to the
election ballots again, the employed workers only went on demos after
the end of their shift and the unemployed movement turned into thugs for
the new government or got occupied with the struggle for survival. The
crisis itself won't unite us, we have to reveal the global character of
social production today: within the chains of migration, the global
experience of industrial work and urban life, the growing desires of the
rural proletariat – which all demonstrates that neither the factory
work-organization nor profit margins or interest rate cuts will be able
to contain our collective productive unrest!