What I Don't Like About Capitalism Part III

There's no Industrialism without an Ultra-Poor Working Class

April 07, 2019

Societies like ours are built on great wealth disparity. And you need an exploited class for that. In some ways that’s what wealth is. The history of wealth in the western world is inextricably linked to exploitation.
– Dr. Chenjerai Kumanyika, Scene on Radio (Seeing White, Part 8)

This post is part of a series:

If there is only first place and the rich get richer then I believe the only eventual reality for businesses to maintain success on Wall Street and maintain CEO salaries is to drive down the costs as much as possible. First it may start with compromising quality or maximizing efficiency through tooling but after that grape has been squeezed, labor is the next cost center to be optimized. Because of that inevitable incentive, it seems to me that industrialism isn’t possible without an ultra-poor working class.

Take America in the Industrial Revolution, poor farmers and immigrants came to cities to work in factories. Before that America’s wealth was built using slave labor. World War 2 America was coming off of a depression, young men coming back from the war were eager to take jobs. Post-WW2 Japan, a nation driven to the brink of starvation during the war and forced to shutter its war machine, had no shortage of cheap labor to reboot their economy. China (not Capitalist, per se, but very industrial) has a very large pool of ultra-poor working class to feed the industrial machine. India, Indonesia, Taiwan, Bangladesh… I think these strong industrial economies bear similar stories. Germany appears to contradict this theory, but then I remembered they inherited a large poor working class during the collapse of the Soviet Union in 1988.

Contextualizing to the current political landscape, there are new programs in place to boost oil and coal jobs. Supporting out of work communities is important, even if continuing reliance on fossil fuels in 2017 seems a bit backwards. But I would hope that we’re always future looking as the cost of creating renewable energy has dropped dramatically. However, given the administration’s ties to billionaire oil executives who hang out together in a private $200,000/yr Florida Country Club, I’m less optimistic about the intentions behind these policies. Seems like short gain that benefits a small cabal of executives.

The border crisis is confounding to me because it seems conservatives are foot-gunning their own interests. Immigrants historically have been a great source of cheap seasonal labor for businesses. If you’ve ever had your lawn mowed, a house built, food cooked in a restaurant, vegetables picked, you’ve likely profited from this pool of imported labor. Cheaper commodities lower the monthly grocery bill of all Americans. But perhaps xenophobia wins out.

With no immigrants, a cheap labor force is still needed to maintain low manufacturing costs. Conservatives have already begun the work of removing “socialist” safety nets, repealing healthcare, defunding social programs, privatizing and effectually defunding public education, and eliminating minimum wage. While the Koch brothers may frame eroding our institutions as empowering people, I can only see it as creating an even more impoverished working class.

Poverty and incarceration are intertwined as well. Incarcerated poor are converted by the aggressive for-profit prison industry into an even cheaper source of labor. I am all for people getting an earlier start on repaying any debts to society they may have, but I would prefer for it handled by a more just system that provides better support before, during, and after incarceration.

“The poor you will always have with you,” said Jesus in the first century. Maybe he’s right and it may be impossible to solve poverty. There will always be a line. But I believe the promise of the American dream is founded on upwards mobility across tax brackets. We need systems and institutions designed for giving people mobility. But as I mentioned before, the system is designed to preserve the wealth at the top. The benefits are cast upon the most wealthy and the poor are left to fight for scraps. I came across a quote from Dr. King.

“What they truly advocate for is socialism for the rich and capitalism for the poor.” – Dr. Martin Luther King, Jr. “The Three Evils of Society”

Get ’em, Dr. King.

Personally, I believe there are solutions that can benefit both sides. Universal single-payer healthcare for example is a social safety net strategy that both benefits people, increases people’s mobility, increases the efficiency of the labor force, and lowers the cost of labor for business owners. It’s expensive, no doubt, but according to Metcalfe’s law the strength of a network lies in the number of nodes in the network. But as long as Big Pharma (flush with cash from the opioid crisis) funds our politicians, I’m not sure it gets better. You see, the rich protect their wealth at all costs.