But if a surplus labouring population is a necessary product of
accumulation or of the development of wealth on a capitalist basis,
this surplus-population becomes, conversely, the lever of capitalistic
accumulation, nay, a condition of existence of the capitalist mode of
production. It forms a disposable industrial reserve army, that
belongs to capital quite as absolutely as if the latter had bred it at
its own cost.
--Karl Marx, Capital, vol. 1
These are difficult times for workers. In the wealthy countries of capitalism's center, labor is struggling to maintain existing wages and benefits against a combined assault by corporations and governments, while conditions of workers in the periphery are even more difficult. The widespread acceptance and adoption of capital's agenda--"free trade," "free markets," greater "flexibility" regarding labor, and reduced social welfare assistance--has led to one group of real winners. Transnational corporations (and their owners and top managers) now have more freedom to produce where labor and other costs are cheap, have their patents protected, and move capital in and out of countries at will. Many workers, unfortunately, are finding that their situation has become more tenuous.
Many changes in the U.S. economy--including those leading to increased pressure on labor--can be traced to the period of the late 1970s and early 1980s (see "The New Face of Capitalism: Slow Growth, Excess Capital, and a Mountain of Debt," April 2002 Monthly Review). These changes embody capital's response to the stagnation that developed in the economies of the center following a period of rapid growth after the Second World War. In the absence of new technologies or other stimuli able to invigorate the economy, capital had an urgent need to find new ways to squeeze out more profits. The current U.S.-led drive to tear down international barriers to capital--commonly referred to as "globalization"--is nothing more than the aggressive search for new profitable investment opportunities abroad. The numerous limitations to foreign investment in the periphery provided one of the reasons for capital's global offensive. A significant number of countries in the periphery, freed from colonialism after the Second World War (such as India), had created barriers and restrictions on foreign capital as part of their effort to develop independently.
Capital's push to enhance the profitability of investments in the countries of the center has resulted in decreased job security and social benefits. While we will focus below on the United States, the situation in Europe is similar. For example, the trend toward privatization and the calculated policy to lessen union strength have beaten down the once powerful British labor movement. And in Germany, corporations and government--attempting to increase capital's profitability--are changing the privileged position that labor has held since the Second World War. Chancellor Gerhard Schroeder boasted that "we have restructured the labor market to enhance its flexibility ... With our radical reforms of the country's social security systems, most notably health care, we have paved the way for the reduction of nonwage labor costs" (Wall Street Journal, December 30, 2003). In other words, German capital is weakening labor rights, making it easier to discharge workers, and at the same time reducing social benefits.
Government policies in the periphery, combined with the investment drive of international capital, have created very difficult conditions for labor in those countries. In China, laborers from the interior live in inadequate and overcrowded dormitories, work long hours for little pay, have no real unions, and have few, if any, rights. Workers trying to organize unions in Latin America are in constant danger (for example, organizers of workers at Coca-Cola bottling plants have been killed). In South Africa, the embrace of neoliberalism by the African National Congressled government has left one of its partners and original backers, the trade union movement, demoralized. …