Published: September 2014
Author & Intro by: Pat Byrne
When The Socialist Network was founded two years ago it set itself the key task of producing a new Socialist Manifesto for discussion in the international labour movement. Since then we have produced drafts of some of the ideas that will undoubtedly form the backbone of the Manifesto. The following article is a further contribution to the discussion on the Manifesto.
The socialist movement’s historical critique of capitalism is undoubtedly a powerful one. But I would suggest that in some important regards it has tended to be too narrow and thus much less effective that it could have been. This narrowness has also reduced the credibility of our alternative to capitalism, as well as the breadth of the movement that we need to build in order to achieve it. In this, the first of a series of articles, I will start by explaining what I mean by looking at the concept of Exploitation.
In its general political context the term “exploitation” is generally applied by the public to the destructive or unfair use of resources, human or natural. Thus we often hear expressions such as “migrant workers are easily exploited”, “men exploit women”, “big companies exploit their advantages over their smaller competitors” and so on.
Exploitation is a powerful concept that expresses the feelings of ordinary people when they feel they are being ripped off, abused, cheated and swindled out of something. Feelings that have driven people into rising up against their rulers and overthrowing them.
However, in the socialist movement, especially for those following in the Marxist tradition, “exploitation” is used in a much more specific way to refer to the process in which capitalists exploit the labour of their workers to produce surplus value and profit. This exploitation of labour lies at the very core of the capitalist system and has been the main source of its ability to expand. This is certainly true and the role that exploitation plays in production must remain central to our overall conception of how the capitalist system works.
But I would argue that in addition to exploiting the workers, capitalism clearly exploits the world in so many other ways. That there are many other aspects of capitalist exploitation which we need to identify and include in the overall concept of ‘exploitation’, and in doing so we can not only produce a much more powerful critique of capitalism, but also create a much bigger movement for its replacement with a democratic socialist alternative.
Let me give some examples of what I mean.
If we start at the beginning of the chain of production, individual capitalists obviously exploit the resources of nature, whether they be physical resources such as minerals and energy, or biological resources such as animals and plants. And because it is in the inherent nature of capitalism to prioritise profit over all other considerations, and to only look to the immediate future rather than the long-term, we see how destructively these natural resources are being exploited by capitalist companies today. Whether it is the tearing down of the world’s forests by the logging companies; the hollowing out of its minerals and the sucking dry of its oil and gas by the multinational mining and exploration corporations; the over-fishing of its oceans by the trawler fleets; the callous treatment of its livestock by the agribusinesses; the pollution of its climate by the energy producers; and all the other manifestations of this system’s ruinous exploitation of the world. Capitalism is dragging the planet and all of us on it down the road to hell.
Given this obvious fact, which is reinforced by people’s own practical experience and in news broadcasts week in and week out, the idea that there can be an environmental movement that is not inseparably integrated into the struggle to replace capitalism, speaks volumes about the failure of the socialist movement to effectively extend the concept of exploitation from capitalism to nature itself.
Exploiting the Suppliers
Moving up the production chain we come to the suppliers. The inexorable growth of massive multinational manufacturers and retailers has put them in an increasingly dominant position in relation to the hundreds of millions of individual or small producers who supply them with their raw materials.
Nowhere is this more obvious than in the food sector. Giant supermarket chains and food corporations increasingly dominate much of the global food industry. With over $250 billion in sales per year, American supermarket Walmart is now the largest company in the world, and together with its competitors in the US like Kroger, Costco and Safeway, Metro in Germany, Tesco in Britain, Royal Ahold in Holland, Ito-Yokado in Japan and so on, these food giants have a strangehold over farmers in both the advanced and developing countries alike.
A similar story is rapidly developing in food consumption with the fast food restaurant chains penetrating national markets an ever faster pace. Even more concentrated is the meat, fruit and grain processing sectors which are now dominated by a handful of international companies. Servicing these huge conglomerates are hundreds of millions of farmers and small companies around the world who are having to supply their food and services at a fraction of the price that is charged for the finished product when it arrives on the supermarket shelf or the restaurant table.
The plight of the super-exploited coffee farmers in Africa and Latin America has been widely publicised but even the better off farmers in countries like the UK and the US are being ruthlessly squeezed by the power of the corporate buyers, securing often as little as 2% of the final retail price. As one British farmer explained in his country “There are two hundred thousand farmers, dealing with, basically speaking, three supermarkets, two grain merchants, four fertiliser companies. Not a chance … they’ve got the power…”
Clothing is another sector where the super-exploitation of tens of millions of workers across the planet is widely known. Textile workers employed by sub-contractors in the poorer countries are paid a pittance and many are forced to work incredibly long hours in unsafe and appalling conditions. All to produce the latest lines for the department stores and boutiques of the advanced world. And at a tiny fraction of the end price paid by consumers.
This picture of domination and exploitation of suppliers by massive corporations could be reproduced in one industry after another.
Exploiting Small Businesses
An integral aspect of the capitalist system is its perpetual drive towards centralisation and concentration of production and ownership. In any competitive situation those in the lead quickly strive to exploit the advantages of their larger resources and economies of purchase and production to defeat or swallow up their smaller rivals. The larger the firm the more cheaply it can buy its supplies and power, and transport its products. The larger the firm the more easily and inexpensively it can gain access to credit to allow it to expand in good times and survive in bad. The larger the firm the more specialisation, research and development, marketing, inside information and political influence it can afford with which to get ahead of its competitors. The larger the firm the more dirty tricks it can employ to damage its smaller rivals, stealing their customers, ideas, staff and sources of supply, or embarking on short-term price wars to drive them out of business. The larger the firm the more it can use the complex and expensive system of patents and copyright to register its products and brands, and then use the law to protect them from competition. And the larger the firm the more easily it can avoid paying tax through the employment of taxation experts and the use of tax havens.
In this way, we see the emergence of a few ever larger companies in each national sector. With the same process taking place on an international scale. Thus massive multinational companies now increasingly dominate the world’s economy – the revenues of the top 500 companies now equal one third of the GDP of the planet and less than 150 companies account for 40 percent of the global economy.
Of course, in the process of production these huge companies can’t perform every task for themselves and an army of tens of millions of small businesses and self-employed professionals arise to supply them with specialised or small-scale materials, products and services. However, the big companies mercilessly exploit these small businesses and individual professionals by paying them the lowest price they can while demanding the highest quality.
The defenders of capitalism continually trumpet that it is a system of “open and free competition”. They supposedly uphold the importance of the small company and the professional. But the reality is that the system doesn’t give a damn about small business. Instead it exclusively serves the interests of the big corporations which dominate the economy and the super-rich elite that owns and controls them.
Exploiting the Consumers
In yet another myth, capitalism publically proclaims that ‘the customer is king’, ‘the customer is always right’ and so on. Yet the truth is that in capitalism profit is king and the customer just another means to that end. Thus capitalist companies exploit the consumer just as much as they do all the other actors in the production process.
Take prices as an example. The price that the consumer pays for the products they buy is not at all related to the real costs of production. In a capitalist market the price charged for something is not what it is worth but whatever the seller can get away with charging for it. All other things being equal, the seller’s interest is to try to sell for as high a price as possible, for the smallest quantity and at the lowest quality. In this way the capitalist can maximise his or her profits.
In theory, competition from other sellers acts as a pressure to reduce prices or improve quality, and certainly this is a major influence in the market. But there are many other pressures that distort the market and lead to the end users being cheated and exploited time after time. The most obvious example of this is in the case of a shortage of a product – the seller can jack up the price and their profits even though the product costs exactly the same to produce. Often this shortage may be the result of practical limitations on the ability of customers to reach or even find alternative products or services, situations which a capitalist is happy to take advantage of in order to maintain over-inflated prices and rip off the customer.
Indeed, far from capitalists being committed to the “free market” as they so often profess, every capitalist’s dream is to end up being the only company in the market so that they charge very high prices and secure sky-high profits. To this end they seek to take steps to damage their competitors and drive them out of the market whenever they can.
The same applies to marketing, with the big companies using their financial muscle to ensure that the consumers only hears about and thinks of their products and their brands. The same is true in ‘the shopping experience’. When customers walk into supermarkets, department stores and shopping malls they think that they are being offered a wide choice of products, whereas they are only able to see the products from those companies which are wealthy enough to pay the high charges levied on them by the retail outlets and shopping centres. Smaller companies who may have better products and cheaper prices are being increasingly shut out in favour of the big brands.
Where it is not possible to exclude competitors from the market and a handful of players dominate a particular sector, the companies are usually happy to enter into secret arrangements with the other producers so that they can fix prices at artificially high levels at the customers’ expense. In one industry after another across the world such price-fixing cartels have been exposed.
The capitalists claim that the “free market” delivers the lowest prices. But the reality of modern capitalist markets tells a totally different story. When a customer goes into a store they simply have no idea of the level of exploitation they are being subjected to behind the scenes. The price that they pay for something is usually many factors over its real price of production and distribution. If a customer pays a euro or a dollar for something, it probably only cost 10% of that price or less to actually make and deliver it. The 90% difference between its real cost and the end price charged to the consumer is mainly to:
a) provide the profits of the manufacturers, distributors, wholesalers and retailers
b) cover the costs of its fancy packaging and the retailers stiff charges for displaying it in particular spots
c) pay for the hugely expensive marketing and advertising budget used for its promotion, along with the sales teams which have negotiated its presence in the store and distribution chain, all of which only exist to persuade you to buy one company’s product over another
Along the way, there is usually a very substantial mark up for the ‘brand’ name which is supposed to give a guarantee of quality, but is often not much different from the other cheaper alternatives.
Then there are all the patents and copyright regulations that ensure a long-term monopoly and through that much higher prices. This is supposed to protect innovation and the creative effort, but all too often it is a commercial excuse for carving out the competition. And once again it is mainly the big companies that can afford to take advantage of these regulations and thus secure a monopoly for their products.
The pharmaceutical companies are a classic example of the exploitation of consumers that patents deliver, enabling the drug companies in the enforced absence of alternatives to charge ridiculously high prices for their medicines. Patents are also doing great damage to innovation with most of their research effort being put into creating ‘me too’ drugs rather than new remedies for the world’s diseases. Even when they have worthwhile drugs, whenever possible they refuse to sell them at a reasonable price to the poorer countries and instead prefer to see tens of millions die from preventable illnesses.
Customers are also sold short on quality, service and compatibility. More and more the big companies are consciously producing products with flimsy components that they know will break down or wear out after the guarantee finishes and the customer is therefore forced to buy yet another replacement. Where repairs are practicable, the spare parts required are deliberately made to be incompatible with those of similar products so that they can overcharge for them, as any motor mechanic can confirm. Symptomatic of the corporate approach, customer after-care service is the last priority for most companies, with their human and financial resources being overwhelmingly geared towards sales, marketing and accounting staff.
Customer safety is another area in which the consumer is heavily exploited. In the food sector already mentioned, the big companies have no regard for the health of the people who buy their products. If their over-sweet, over-salty, over-fat products cause tens of millions to suffer crippling conditions such as diabetes, heart disease and cancer it is no matter – as long as the profits keep rolling in. These companies have done everything possible to hide the health risks, avoiding labeling their products, hindering healthy food legislation and even lying about what is in their products.
Exploiting the Community
Capitalist companies are not concerned about passing on the negative consequences of their production to the local, national and international communities where they are located. It’s what is politely called in economic circles as “shifting the burden of externalities” or in ordinary people’s language as dumping the negative effects of production on someone else. A typical example of this would be a company polluting their local environment and the local community having to clear up the mess. Or a company’s products damaging the health of its consumers such as with the tobacco producers, car manufacturers and so on – not only do their customers suffer but the health and other services of a country have to try to remedy the effects and pay the cost of doing so.
In this way, capitalism exploits the whole of human society within which it operates.
If we add the amount of effort and time put into child rearing and homemaking to that of the more formal areas of work, women perform an estimated two-thirds of the world’s labour. Yet according to the latest statistics from the World Bank they own just one per cent of the world’s wealth. Further highlighting this contradiction has been the entry in the last 30 years of half a billion women into the global labour force, most of them at considerably lower wages than their male counterparts. There can be no question that most women in a capitalist world are exploited many times over.
To begin with, wealth provides power to those who have it, even on a small scale. And most women’s lack of wealth is a major reason behind their inferior position in society and unequal treatment in the family. Their lack of ownership and means forces too many women to accept all kinds of exploitation and humiliation. Nowhere is this more obvious than in the world of prostitution which has been appropriately called ‘sexploitation’. With an estimated 14 million officially engaged in the global sex trade, prostitution is a flourishing industry that preys on the economic desperation of young women. Directly linked to this is the rapidly rising international trafficking of women into sex slavery. In this capitalist world every ‘product’ has a price and someone willing to organise its sale.
Capitalism doesn’t care who it exploits. Any small pair of hands will do, especially if they are defenceless and cheap. According to the International Labour Organisation’s most recent report there are 168 million child labourers, half of them carrying out dangerous work and many of them working for extremely long hours. The worst abuses of the Industrial Revolution in the 18th century are being repeated today in too many countries. Many of these child workers are kept onsite in little more than slave-like conditions, and beaten to keep their noses to the grindstone.
The vulnerability of children also extends to sexual exploitation by adults , the extent of which becomes ever more apparent as another survey is conducted or scandal erupts. The sexual molestation of boys by Catholic priests or in children’s homes has been well publicised in recent years, but for girls the problem is even more widespread. UNICEF, the UN’s children’s agency, has recently reported that 120 million young girls have experienced rape or forced sexual acts. Such experiences leave a physical and mental mark on their victims. Some surveys have shown that up to 90% of adult prostitutes were themselves sexually abused as children. But capitalism doesn’t wait. Child prostitution is booming in many countries, providing a very profitable line for those willing to organise and supply it.
Super-Exploitation through Capitalist Globalisation
The last three decades of capitalist globalisation have seen the insistent removal of barriers to the flow of investment and products between the world’s states. As a result a massive transfer of global production has been taking place with up to an estimated 80% of the planet’s output now being produced by billions of workers and poor farmers in what was formerly known as the Third World. Thus, multinational companies based in the metropolitan countries find it extremely profitable to manufacture in or outsource their production to countries where labour is super-cheap and super-exploited. There has even been the revival of slavery with an estimated 30 million now working in bondage. This figure would have to be multiplied if workers forcibly tied to their employers through passports and work permits were to be included.
It seems that everything can now be traded or moved across the borders of almost all countries. Everything that is except the workers themselves – immigration laws in the richer countries bar most workers from the poorer countries from moving there in order to gain a higher standard of living. As a result, the super-exploited workforce of the ‘global south’ which is producing so much of the world’s wealth is trapped in low wage ghettos which have been described as a modern version of South Africa’s old apartheid labour reserves. This capitalist double-standard – the free movement of capital and production (and the wealthy) on the one side, denial of the free international movement of labour on the other – is one more graphic example of the vast exploitation and injustice built into this system.
Of course, this is not to advocate the mass uprooting and migration of workers from one country to another as any solution. Instead, we urgently need to bring an end to this profit-driven ‘race to the bottom’ in living standards and replace it with a global movement for the mandatory raising of earnings throughout the world. By ending cheap labour everywhere only then will we have a truly ‘level playing field’ where production, services and workers are co-operatively located according to their best natural and agreed advantage.
The Potential Political Consequences of Widening the Concept of Exploitation
The massive expansion of the concept of exploitation outlined above, if adopted by the labour and socialist movement, could have profound consequences for our propaganda and for our political action.
Traditionally, we have focused our policies and campaigning on the workers and their trade unions in each separate country. That this should have been at the core of our movement was correct and necessary, reflecting as it does the heart of capitalist exploitation and its relations of production. But we should not have stopped there. In doing so we have effectively ignored or sidelined all those other important sections which are also exploited by the system.
Consumers & Small Businesses: Tragically, we on the left have allowed the right-wing political parties to pretend to champion the interests of the consumer and small businesspeople. Rarely, if ever, have we joined hands with these sectors and included significant policies in our programmes that would genuinely help them as part of a democratic socialist reshaping of the economy and finance. Policies that could lead to lower prices, safer and longer-lasting products for consumers; cheaper credit, fuel and marketing for small businesses; fairer prices for suppliers; and so on.
Rather we have tended to focus only on the interests of labour and the public sector and in so doing have largely left the field clear for the pro-business parties to claim to be on the side of the individual proprietor and the shopper. But behind their public relations masks, these political imposters have done the opposite, helping to obtain ever-increasing power for the big corporations while presiding over declining prosperity, influence and security for small businesses and consumers. This has been a con-trick of gargantuan proportions and it is a major failure that we have allowed them to get away with it, a failure that has fundamentally reduced the potential support for a radical transformation of society and provided mass support for the enemies of working people. For without the backing of the ‘middle class’ voters, the pro-big business parties would be exposed as the elitist organisations that they are and relegated to the margins of society.
Pressure Groups: Our unnecessarily narrow focus on workers has also led to the emergence of major pressure groups outside the labour movement. Thus we have seen the emergence of massive separate environmental and women’s movements; youth, unemployed and retired groups; and large-scale campaigns on behalf of suppliers like Fair Trade or against cheap labour, slavery and other important single-issue campaigns. These separate campaigns make a significant impact but how much more effective would they be if they also were to unite their voices and resources? But who can bring them together?
The Key Role of the Trade Unions: The various national trade unions form some of the largest and most enduring membership organisations on the planet with 200 million members worldwide. Despite the large numbers of trade unionists their rights, working conditions, living standards and job security are under more and more serious attack from the increasingly powerful employers. In response, the trade unions can’t just put their heads in the sand and hope that their problems will go away. Nor can they just rely on their own industrial strength to fight attacks on their members, attacks that increasingly come from the worldwide effects of economic recession, the outsourcing of production and services to cheaper countries, or from government onslaughts on their jobs and living standards.
The trade union and the wider labour movement must actively join hands with all the other victims of exploitation and fight back together. The unions should consciously see themselves as the future core of a broad movement of resistance. This means that each trade union needs to bring social and political campaigning into the centre of its thinking and activity on a continuous basis, not just as an emergency measure launched to fight against a particular piece of government legislation, or as an add-on that is rolled out at election time in support of one political party or another. The trade unions should actively work with democratic and progressive consumer groups and small business organisations, and where these do not exist they should help create them. They should permanently link up with environmental movements, women’s organisations and the other related pressure groups.
The trade unions in each economic sector should organise conferences and ongoing coordination with that sector’s consumer, supplier and small business organisations, along with its appropriate pressure groups, in order to evaluate the problems of the sector and draw up programmes to solve them. In this way, all the relevant actors can learn from each other and arrive at realistic plans for the democratic ownership and running of their sectors.
Out of all this the workers will be able to call on much wider layers of support when they take industrial action, while the campaigns of the other economic actors can be understood and supported by the workforce. In this way the usual tactics of divide and rule which seek to isolate the workers from other sectors of society can be overcome and the movement of resistance greatly strengthened.
On an international scale, the labour movement could link up with global pressure groups in a world-wide campaign for an end to cheap labour, the oppression of women, child work, slavery and exploitation in all its forms. In opposition to the horrors of capitalist globalisation we must offer a different kind of globalisation, one that brings benefits to the many rather than the few. In this way we can concretely unify all the exploited sections of society in the wider struggle to end the exploitative capitalism system and replace it with a democratic socialist society in which all the contributors of economic life participate fully in the running of it and share equitably in the fruits created by it.
Pat Byrne September 2014
Feedback on this article gratefully received by the author at: email@example.com
Next month I will look at the question of Alienation – how it drastically undermines efficiency in capitalism and how it could be practically overcome in a democratic socialist society.