United States capitalism faces next crisis
By Gus Hall
This article was reprinted from the July 11, 1998 issue of the
People's Weekly World. For subscription information see below. All
rights reserved - may be used with PWW credits.
(Gus Hall is national chair of the Communist Party USA. The following
is the second excerpt of his report to the full national board of the
CPUSA June 27.)
I want to put together the new, mainly economic, mainly negative,
developments and processes I have been talking about over the past
months.
These developments are having a profound impact on the working class
and trade union movements, as well as the overall class struggle.
Megamergers and acquisitions
First, the size, number and extent of the continuing process of
mergers and acquisitions is greatly expanding the power, influence and
domination of the monopolies over every area of economic activity and
life in the United States.
Just this past week the tobacco industry and Microsoft won victories
over attempts to impose some restraints on monopolies, even though in
the case of tobacco it will cost the health and lives of countless
people.
The acquisition of TCI Communications by AT&T signals the rebuilding
of AT&T's worldwide empire. This merger frenzy has led to
conglomerization and globalization - the internationalization of
production.
New structure, new strategies
'Globalization' is a new word that also describes the new form and
content of imperialism. Global corporations have different features
than other monopoly corporations.
Their structures, policies and actions are different. And, the new
global giants have developed new strategies to fit this new structure
and these processes.
One is the strategy of fragmentation by diversifying their production
locations so that the work force is scattered in different plants
owned by the same corporation, producing the same product or products.
Also, multinationals are constantly spinning off subsidiaries to
create the appearance of different ownership to make it difficult to
determine who really owns, controls and runs the corporation.
Then there is the rise of huge financial empires which are mainly the
result of bank deregulation and bank mergers. It is these relatively
new, bigger banks and financial institutions that make mergers and
globalization possible.
And, there is the privatization process whereby various schemes are
used to privatize education, hospitals, schools, prisons, sanitation,
public transportation, postal services, social services, welfare,
social security and more. This is to turn public, socially-owned
institutions over to private, for-profit corporations.
Then, of course, there is the scientific and technological revolution,
perhaps the most dramatic and profound because it is increasingly
replacing human labor with chips and robots.
These processes have increasingly narrowed the already thin line
between finance capital, corporate capital, the monopolies, the
military and the state.
Together, these developments are changing the basic economic structure
of U.S. capitalism and the form and content of U.S. imperialism
Another scheme is the operation of a plant assembly line entirely by
subcontractors so that in an auto assembly plant, for example, one
station making wheels and tires is run by one company; another
station, run by another company, adds suspension.
Then another company adds chassis modules and so on until many major
subcontractors have added their products.
The purpose is to make it easier for all the contractors to keep out
unions and enables the overall plant owner to put pressure on the
subcontractors to keep down wages and costs by threatening to switch
to cheaper subcontractors.
Yet another strategy makes it possible for a U.S. corporation to
subcontract its production to other U.S. companies operating
sweatshops in low-wage countries where workers are paid, for example,
7 cents ($1 a day) to make a shirt sold back in the United States for
$11.99.
Another scheme is subcontracting all production to foreign- owned
sweatshops. For example, Nike sneakers subcontracts all its production
to companies operating in low-wage, non union countries.
Machines replace human labor
The issues of outsourcing and imports are two of the main issues in
the GM strike. The third - new technology - is the most devastating
and crucial issue.
The General Motors strike is an example of the new kind of economic
problems workers face. The new technology keeps replacing workers so
GM keeps laying off workers, while it increases productivity and
profits. This process is new.
It is estimated that the strike is costing GM $75 million dollars a
day in profits. That gives us an idea of what corporate profits are,
year in and year out.
Increasingly, GM sets up production facilities where the wages of
workers are as little as $100 a month in some countries.
Thus, the exploitation of workers by GM is becoming more and more
global.
The 115,000 auto workers who are out of work because of the GM strike
and plant closings are being forced to think what the future will be
like.
In a sense, the GM workers are striking also for future jobs, for
their families and all future workers.
What is to come
An example of what is to come is the fact that right in the middle of
the strike GM signed a contract with China to build a production
facility that can eventually produce up to 100,000 trucks a year.
This will obviously have an impact on truck production in the United
States.
Because of the new technology it is now much easier for corporations
to transfer their production facilities to low wage, non-union areas.
The strike slogan 'GM is leaving America" says it all.'
It is clear that to fight these new conditions the trade unions will
have to come up with new global forms of struggle.
The international labor movements must find some new methods and forms
of struggle. Issuing statements is not enough.
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