Political managers struggling to keep apace with capitalism

Trevor A. Campbell, Contributor

At the end of the article, 'Don't cry over spilt beer: Red Stripe and the cold, hard facts of capitalism' (Sunday Gleaner, October 23), I promised that I would next discuss the central challenge that the political managers and their technical advisers face. This involves trying to figure out how to organise the physical, technical and social infrastructures - within the political space over which they have jurisdiction - in a fashion that will attract the globally oriented accumulators of capital.

The goal: to provide the possibility of employment for that group in capitalist society (the working class) who cannot survive if they are unable to sell the only commodity of any real significance that they own (that is, their mental or physical energies) to the social class (the capitalists) that owns the tools (the means of production) which are used to produce and distribute the necessities of life!

A unity of opposites

In the piece on Red Stripe, I highlighted that the main objective of the managers of the private corporations is to increase the wealth of their owners/investors/shareholders. The only reliable basis on which to evaluate, objectively, the performance of a corporate management team is how much and at what speed they are able to expand the money, in the form of profits, that has been entrusted to them by the investors/shareholders within the various enterprises.

The late and much-celebrated capitalist economist, Milton Friedman - recipient of the Nobel Prize in Economics - really got annoyed when folks attempted to impute a broader social mission to the existence of the business corporation. Here was his response to what he deemed muddle-headed thinking:

"When I hear businessmen speak eloquently about the 'social responsibilities of business in a free-enterprise system', I am reminded of the wonderful line about the Frenchman who discovered, at the age of 70, that he had been speaking prose all his life. The businessmen believe that they are defending free enterprise when they declaim that business is not concerned 'merely' with profit but also with promoting desirable 'social' ends; that business has a 'social conscience' and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers.

"In fact, they are - or would be if they or anyone else took them seriously - preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades." ('The Social Responsibility of Business is to Increase its Profits', The New York Times Magazine, September 13, 1970).

In other words, what Uncle Milton is saying here is that do-good philanthropy can only come about after the capitalists have accumulated enormous wealth (the surplus labour of the working class).

Contrary to what some people might assume, Karl Marx and Friedrich Engels would more or less agree with Friedman in his assessment of what the corporation is organised to accomplish. Marx and Engels were not trying to change the basic economic laws (which is not possible!) that regulate the social motion of the capitalist society. Their objective was to use the scientific method of investigation to reveal these laws so that the working class and their leadership would have a better understanding of the nature of the society in which they live, what they needed to do in order to survive, and what type of organisational structures they would have to develop, at any particular historical moment, to sustain the struggle for political reforms that would put them in a better position to challenge, and, ultimately, abolish the system. In other words, you can't change something that you don't scientifically understand.

The activities of the political managers include managing the conflicting economic, political and social interests between and among the opposing social classes in capitalist society. Of course, just as how the corporate managers, and the corporations they manage, compete fiercely among themselves for larger and larger shares of various markets, the political managers compete with each other, with equal ferocity, to design and control the political and social institutions that are required to set in motion and sustain the accumulation of capital.

In a capitalist democracy, they appeal to the corporate community for funds in order to vie for the votes of the working class. This is the nature of politics in capitalist society. No amount of appeal to 'all-class unity' can abolish - however deeply yearned for - the struggle between and among social classes in a society where the means of production are privately owned.

Competition among political managers to attract capital

A central requirement for attracting capital that is linked to modern industry, in this era of capitalist globalisation, is to have available a sizeable reserve army of highly skilled workers. In light of this globalised competition, the national or the local state is compelled to make major investments in the training of a labour force that far exceeds what capital will employ at any given time.

The function of the reserve army of skilled labour is to keep down the price of this commodity. No corporation is going to come into an area where the supply of the labour they need is in short supply. In other words, they need to be in a position where they can pick, choose and refuse from among a large pool of workers. The late Steve Jobs - in expressing his disappointment with the Obama administration - made this point crystal clear in a conversation with his biographer, Walter Isaacson. According to Isaacson: "Jobs stressed the need for more trained engineers, and suggested that any foreign student who earned an engineering degree in the US, should be given a visa to stay in the country. The president, reportedly, replied that this would have to await broader immigration reform, which he said he was unable to accomplish."

And, further: "Jobs told Mr Obama that Apple employs 700,000 factory workers in China because it can't find the 30,000 engineers in the US that it needs on site at its plants. 'If you could educate these engineers,' he said at the dinner, 'we could move more manufacturing jobs here.'" ('Steve Jobs' Advice for Obama', Wall Street Journal, October 31)

The political managers have to find ways to sustain this surplus labour force through social services, which also include the building of prisons. This is one way in which the debt burden of the state increases.

Competition intensifies

However, here is a development which most, if not all, of the political managers of the capitalist state clearly did not anticipate: the emergence of tools that are not only energy-saving but also labour-replacing, as the competition between the corporations intensifies. A new book, Race against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity and Irreversibly Transforming Employment and the Economy, published recently by two MIT-based researchers, Erik Brynjolfsson and Andrew P. McAfee, has as its central thesis the following:

"Faster, cheaper computers and increasingly clever software are giving machines capabilities that were once thought to be distinctively human, like understanding speech, translating from one language to another and recognising patterns. So automation is rapidly moving beyond factories to jobs in call centres, marketing and sales parts of the services sector, which provides most jobs in the economy."

And, as Steve Lohr further reveals in his review of this book: "During the last recession, the authors write, one in 12 people in sales lost their jobs, for example. And the downturn prompted many businesses to look harder at substituting technology for people, if possible. Since the end of the recession in June 2009, they note, corporate spending on equipment and software has increased by 26 per cent, while payrolls have been flat ... ." ('More Jobs Predicted for Machines, Not People', New York Times, October 23).

In short: all bets are off as far as the received wisdom is concerned regarding the relationship between capital accumulation (the political managers and the technocrats prefer to use the more neutral term, economic growth!) and job creation. How long can capital accumulation continue if the mass of the population cannot sell their labour-power that would provide them with the wages with which to purchase the commodities that are being produced by the robots? That, folks, is the billion-dollar question!

I have pointed out in past articles that the documents coming out of organisations such as the Planning Institute of Jamaica have very little connection to the actual process that is unfolding within the globalised capitalist economy and what that process implies for the social classes on the ground. These documents serve no other purpose than to foster the illusion that the technocrats are engaged in the some type of serious thinking that would justify their positions.

Meanwhile, the social-science departments at the universities, where many of the political managers are trained, continue to peddle the old, tired dogmas regarding economic growth and national economic development.

The way forward

What is desperately needed at this moment is the development of a popular education campaign at the grass-roots level about the nature of contemporary capitalism. This would include systematic and concrete studies of how modern industries are organised and then linking this to discussions of what the working class in Jamaica and the Caribbean, as a whole, can do to prevent being completely marginalised by the ongoing scientific and technological revolution.

It is only on this basis that the masses of the population can participate in figuring out what are some of the realistic options available at this moment in history.

Trevor A. Campbell is a political economist. Email feedback to columns@gleanerjm.com and tcampbell@eee.org.