What makes imperialism a ‘colossus with feet of clay’

The material below is part of a longer document on "Reviving Marx & Lenin" written by Fred Goldstein of the Workers World Party Secretariat in preparation for the May 13-14 Party conference. This section deals with the effects of the high-tech revolution on the working class.

The bosses embraced the high-tech revolution for its own sake, apart from the military application, because the capitalist economy and their profits were stagnating. The German and Japanese imperialists were getting back onto their feet and cutting deeply into the world market share of the U.S. corporations.

The late Sam Marcy, chairperson and founder of Workers World Party, in a very important book entitled “High Tech, Low Pay: A Marxist Analysis of the Changing Character of the Working Class,” published back in 1986, analyzed this earlier stage of the high-tech revolution and its effect on the working class in the United States.

In a section devoted to its effect on the unions, he traced the phases of the devel op ment of the productive forces under capit a lism from the manufacturing phase of simple cooperation to the industrial revolution and large-scale machinery, to mass production, what is known as “Fordism” or assembly line production, in the early 20th century. He then described the high-tech phase:

“This [mass production] stage has now given way to another phase of technological development. The mass production period, which began with Ford and continued for a period of time after the Second World War, was characterized by expansion. But the current stage, the scientific-technological stage, while continuing some of the earlier tendencies of development, contracts the work force.

“Like all previous stages of capitalist development, the current phase is based on the utilization of workers as labor power. But its whole tendency is to diminish the labor force while attempting to increase production. The technological revolution is therefore a quantum jump which requires revolutionary strategy to overcome.”

Marx’s studies had showed that the advance of capitalist technology subor di nat ed the workers more and more to the machine, made work more and more mono tonous, increased the division of labor and reduced the skills of the workers. The final result was to lower the wages of more and more workers by setting them in competition with one another, all to increase the profits of capital. The high-tech revolution, Marcy showed, has accorded completely with Marx’s analysis.

Marcy noted the decline of manufacturing jobs and the growth of service jobs. But he did not simply talk about them as a bourgeois category. The main aspect of the shift from manufacturing to service was, for the vast majority of workers forced into this change, a shift from high-wage jobs to low-wage jobs.

Changed character of the working class

Marcy promoted various tactics and strategies for the struggle against the anti-labor assault, many of which are completely applicable today. But also important were the sociological observations he made and the political conclusions he drew. “It is this highly significant shift from the higher paid to the lower paid which is dramatically changing the social composition of the working class, greatly increasing the importance of the so-called ethnic composition of the working class, that is, the number of Black, Latin, Asian, women and other oppressed groups, particularly the millions of undocumented workers...”

The changed social composition of the working class—both from the point of view of the growing numerical significance of the oppressed and the increasing preponderance of low-wage workers over the higher-paid, more privileged workers—matters “a great deal,” wrote Marcy, “because in terms of political struggle, the objective basis is laid for political leadership to be assumed by the more numerous segment of the class. ...”

“While it continues to ravage the living standards of the workers, at the same time it lays the objective basis for the politicization of the workers, for moving in a more leftward direction and for organization on a broad scale.”

The tendency of imperialism to build up the privileged layers of the working class at home, which Lenin had observed, was already in the 1980s beginning to be counteracted by the application of automation, robotization and new industrial pro cesses, mini-mills, etc., as the higher-paid workers in heavy industry—steel, auto, rubber, electric, the bastions of the AFL-CIO—were being undermined by capitalist technology and being pushed into the lower-paying service industries or long-term unemployment.

Marcy and other communists were rightfully anticipating that the high-tech assault on the workers would lead to an upsurge of the class struggle. The basis for this prognosis was both subjective and objective. The process of pauperization of the working class would project the more militant sections of the workers forward, while the increase in the productivity of labor would intensify capitalist overproduction and accelerate an economic crisis.

Collapse of USSR & extension of high-tech revolution

However, the collapse of the USSR and Eastern Europe and the opening up of China to capitalist investment served as powerful counterweights to an up surge. From the political point of view, imperialism in general and U.S. imperialism in particular, as the principal adversary of the USSR and socialism, no longer had to contend with a rival social system. The ruling class could drop all pretense of being for the people, of being against racism and oppression, and of allowing labor a “seat at the table.” The demise of the USSR, in addition to demoralizing militants in the labor movement and the movement in general, removed all inhibitions of the capitalist establishment and strengthened the right-wing assault.

President Clinton teamed up with the Republicans to swell the capitalist treasury by destroying the welfare system, which had originated in the New Deal, and plunged millions into deeper poverty—mostly women and their children. Clinton and Newt Gingrich teamed up again in a crucial bloc to pass NAFTA (which was first proposed by Reagan), deepening the attack on the workers in the U.S. and Canada and on the workers and peasants of Mexico.

Global runaway shops: off-shoring & outsourcing revolution

The growing division of labor in the production process allowed its segmentation on a world basis. Commodities—everything from Boeing 737s to amusement park equipment to Barbie dolls—were now being produced in what the bourgeoisie calls “global production networks” and “global value chains.” Labor power was drawn into the process of expanded capitalist exploitation and super-exploitation from around the globe and distributed in such a way as to squeeze the most surplus value out of a growing low-wage global workforce.

Off-shoring (moving to or setting up in low-wage countries industries that had pre viously paid high or even moderate wages in the imperialist countries) and outsourcing (contracting out what were or would have been high-wage jobs to contractors in low-wage countries) is gathering momentum in the board rooms of corporations.

This is what the labor movement used to call “runaway shops,” that fled to either break up or prevent unionization. For example, the unionized textile and shoe industries in New England fled to non-union, low-wage states in the South. But with the opportunity for even lower wages, these capitalists, based on the high-tech revolution, have now fled abroad to Asia, the Caribbean, Central America and elsewhere to escape from even the low wages of the southern United States.

The early phase of off-shoring and outsourcing based upon the new technology was aimed principally at manufacturing. But while the war against manufacturing continues, the outsourcing and off-shoring of digitalization and communications technology is rapidly spreading to the service industry. Call centers and computer programming are the most widely known examples of this process.

But now, in addition, research and devel opment, engineering, much so-called “back office” work in industrial companies, the insurance, financial and other services are all eligible. Everything from reading x-rays to dental laboratory work, i.e., virtually every type of job that can be shipped out or digitalized and that does not require person-to-person contact, is either already being outsourced or its outsourcing is being contemplated. By one estimate, somewhere in the vicinity of 14 million service jobs in the U.S. are eligible for being moved overseas.

This has been accompanied by a revolution in communications—satellites, cell phones and fiber optics; in transportation—giant freighters powered by powerful gas turbine engines, jumbo cargo jets, automated ports and containerization; and sophisticated servers and databases. The export of capital that Lenin observed as being so prominent a feature of imperialism has taken giant leaps forward as a result of these new expanded opportunities for exploitation and super-profits. Each monopolist grouping must pursue this course in the struggle for profit, lest it be overtaken and destroyed by its rivals.

Right-wing turn in the capitalist state part of anti-labor offensive

This development was completely integrated with and strengthened by an historic right-wing reorientation of the capitalist state, beginning at the end of the Carter administration and taking on a full head of steam under Reagan. The bosses went sharply and ruthlessly from a policy of class compromise, forced upon them during the upsurge of the thirties and continued after the war, to an aggressive policy of rolling back all social and economic gains of the workers.

President Jimmy Carter began the right-wing turn with major cuts in welfare, a military build-up, and his infamous statement that “Life is unfair,” referring to the denial of federal funds to poor women for abortions. The new regime was dramatized by the planned ambush to break up the air traffic controllers’ union, PATCO. The PATCO attack, which was carried out by Reagan, had been planned under Carter. Reagan cut social services by $750 billion, cut taxes for the rich by an equal amount, and began a $2 trillion military buildup, the so-called “full court press” against the USSR. He also inaugurated the policy of neoliberalism abroad, while in fact carrying out the same neoliberal austerity programs and removal of obstacles to capital at home.

The anti-labor offensive has been carried out by Republican and Democratic administrations for almost three decades now. It is still going strong. Witness the latest assault on the UAW and the airlines unions. And it has been greatly strengthened by the global reorganization of capitalism under the impact of the scientific-technological revolution.

The export of capital, high tech, and the working class today

This new stage of high-tech reorganization is profoundly significant for the class struggle in the U.S. and other imperialist countries, along the very lines that Marcy indicated in his book “High Tech, Low Pay.” The new reorganization of capitalist manufacturing and services on a global basis has allowed imperialism access to a vast reservoir of labor in India, China, the ASEAN countries, Latin America, the Carib bean, parts of Africa, Central and Eastern Europe, and even low-wage parts of Western Europe.

The initial effect of this development upon the proletariat of the U.S., Europe and Japan, is to set them in direct competition, job for job, with workers being super-exploited on a neocolonial level. In the past era of imperialism, when colonial and neocolonial labor was largely restricted to mining, plantations and transport—that is, to supplying raw materials and agricultural products to the imperialist centers for manufacturing, processing and distribution—it was impossible for the monopolies to set up direct competition in manufacturing, let alone services, between the workers in “their own countries,” as Lenin put it, and their colonial wage slaves. The productive process had to reach the level of development at which, for example, low- wage workers in Brazil could be employed to assemble a dashboard, which could then be shipped to Detroit to be placed in a “kit” of sub-assemblies containing most or all the parts of the car, and then ship ped to China for final assembly and sale.

This is what the high-tech revolution has wrought. It has changed everything for the workers of the world. The bosses, once having seen the profit possibilities inherent in their technology, have plunged ahead at breakneck speed to develop and spread it to every facility and process in every crevice of the globe possible. It has detonated a new wave of intense competition among the giant monopolies for profit advantage, in which the further intensification of the exploitation of the working class everywhere is the goal.

The inevitable effect of this process is to further lower wages in the U.S. and the imperialist countries in general. Wages for most workers in the U.S. have been either stagnant or declining relative to inflation for almost three decades now. With each new recession it is harder and harder for the high-tech, off-shoring, outsourcing capitalist economy to absorb labor power and create jobs. And each boom ends up with greater economic inequality.

While service jobs are being outsourced in increasing numbers, manufacturing jobs are still being destroyed by high tech. One consequence of the destruction of union manufacturing jobs is the intensification of national oppression. It has been shown that one of the principal means for African-American workers to lift themselves up out of poverty was through semi-skilled industrial jobs. The decline in auto, steel, rubber and other industrial sectors is taking a disproportionately heavy toll on Black workers. The increasing proportion of women in the workforce is a direct result of the lowering of wages for jobs of all sorts. The trend is fed not only by the increased number of jobs open to women as a result of high tech but also because more families need a minimum of two wage earners just to make ends meet. Furthermore, the feminization of the workforce on a worldwide scale is growing as the bosses set up their international production networks, many of which include sweatshops. The struggle for women’s rights and the class struggle are bound to reinforce each other and give a new energy to the global class struggle.

Imperialism without colonies

This new phase of imperialism, however, has another side that is highly significant and overlooked in the West. It pertains to so-called “neoliberalism.”

The development of neocolonialism as a form of imperialism without colonies was made prominent by Kwame Nkrumah, the late president of Ghana, who was overthrown in a military coup in 1966 that many suspected was organized by the CIA. Nkrumah was a radical leader of the anti-colonial movement, an ardent anti-imperialist and an advocate of African unity in the form of Pan Africanism. One of his most renowned works, published in 1965, was entitled “Neocolonialism: the Last Stage of Imperialism.”

In the introduction to his work, which was an important contribution to bringing Lenin’s imperialism up to date, Nkrumah stated:

“The neocolonialism of today represents imperialism in its final and perhaps most dangerous stage. In the past it was possible to convert a country upon which a neocolonial regime had been imposed—Egypt in the 19th century is an example—into a colonial territory. Today this process is no longer feasible. Old-fashioned colonialism is by no means entirely abolished. It still constitutes an African problem, but it is everywhere in retreat. Once a territory has become nominally independent it is no longer possible, as it was in the last century, to reverse the process. Existing colonies may linger on, but no new colonies will be created. In place of colonialism as the main instrument of imperialism we have today neocolonialism.

“The essence of neocolonialism is that the State which is subject to it is, in theory, independent and has all the outward trappings of international sovereignty. In reality its economic system and thus its political policy is directed from the outside.”

This was written in the era of decolonization, when the imperialists were trying to fly under the radar and hold on to influence in the dozens of former colonies that were being formally declared independent and were joining the United Nations. The old colonial powers made a strategic political retreat in the face of the post-war anti-colonial wave. This retreat was hastened by the triumph of the Chinese Revolution; the armed struggles in Korea, Algeria and Cuba, and the nationalist uprisings in Egypt, Iraq and other places. Seen in this light, what is today called neoliberalism is in fact an aggressive form of neocolonialism, in which the underdeveloped countries of the world are forced into becoming platforms for world capitalist production by the monopolies, suppliers of cheap labor and havens for investments by finance capital of all types.

The IMF, the World Bank and the World Trade Organization are the enfor cers of neocolonialism, the battering rams that break down all obstacles to the unobstructed penetration of imperialist capital investment and commerce by forced agreements to surrender their economic sovereignty. Under neocolonialism the dependent regimes become tax collectors for the big banks and yield up the super-profits, of the type that Lenin refer red to when he was describing the export of finance capital during the earlier stage of imperialism and direct colonial rule. Nkrumah’s early description of countries that “have all the trappings of international sovereignty” but are “directed from outside” is as widely applicable now as it was then.

The neoliberal destruction of all barriers to investment and trade is the political-legal foundation for the high-tech reorganization of capitalist production by the transnational corporations and the banks. But while this reorganization of the export of capital has assisted in disorganizing the workers in the imperialist countries, it is destined to have the opposite effect in the underdeveloped, the neocolonial and oppressed countries. Indeed, this new phase of imperialism has another side, to which the progressive and leftwing sectors of the labor movement must pay the closest attention. It helps the proletariat in the low-wage countries to develop numerically and socially, and it helps them become cohesive as a class. It helps those drawn into the workforce to escape unemployment and rural poverty and puts them in a position to organize as workers. The newly developed proletariat is most susceptible to class consciousness and militancy once it gets organized. (The newly proletarianized peasantry was the basis of the Russian Revolution and the vanguard of the Chinese Revolution.)

This capitalist process is bound to improve the workers’ level of organization and their ability to carry on the class struggle. The struggle will enable them to raise their wages and improve their working conditions and become a leading force in the struggle against imperialism. Hun dreds of millions of workers are being drawn into capitalist production and the proletariat is growing numerically on a world scale. This is the inevitable outcome of the expansion of capital and it is an objectively favorable development for the future of the global class struggle and for world socialism.

On the other hand, it will further level the wages of the upper strata of the working class in the imperialist countries, and in the U.S. in particular, where the globalization process of capital investment is pronounced, along with Germany and Japan.

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