The following essay was transcribed from MIM Theory #10 [full PDF link]. In it, the author makes interesting points regarding the extraction and distribution of surplus value as it relates to national oppression inside the US.
[MC12 “The White Working Class: Gross Parasitism.” MIM Theory #10, 1996.]
Marxist economics explained the secret of capitalist exploitation by showing that workers were paid not for the value of all that they produced (labor), but instead the cost of reproducing themselves (labor power). In Marx’s analysis, the cost of reproducing the working class, or labor power, was less than the value of what the working class produced, and so the difference was exploitation, resulting in a profit for the capitalists and the extra capital needed to invest and grow the capitalists’ companies.
Defining the value of labor power is difficult. It has to be at least a subsistence wage in order to reproduce the working class so that the capitalists have more workers. But in the era of imperialism, things have changed. On the one hand, in many oppressed nations we find that the proletariat is paid less than the value of their labor power, measured as a bare subsistence. That is, in many countries the wages paid to workers are not enough to sustain them physically, so that they rely on other means of subsistence, such as family farming or other informal economic systems – and they die or are sick more. For that reason, imperialist multinational corporations never employ all the potential workers in a poor country. Those who are not employed by the imperialists need to work to supplement that wages of the paid workers. This is the system of superexploitation, and it generates superprofits, as Lenin described in Imperialism, the Highest Stage of Capitalism.
On the other hand, in the imperialist nations we can clearly see that the working class is paid much more than they need to eke out their survival as a class. This is apparent from looking out most windows within U.S. borders. But it is often contested by supporters of the white working class. How? They cling to an idea from Marx, that the value of labor power is based on subsistence but that it also reflects historical and cultural factors. Apologists for the gross decadence of the labor aristocracy in the imperialist countries extend this principle so that any ridiculous luxury the working classes can afford becomes a necessity by definition. This is tautological, not scientific. A careful reading of Marx reveals the abuse of his idea by the perpetrators of this defense of parasitism. Here we will quote the relevant passage from chapter 6 of Capital at some length, and then offer our comment:
“Labour-power exists only as a capacity of the living individual. Its production consequently presupposes his existence. Given the existence of the individual, the production of labour-power consists in his reproduction of himself or his maintenance. For his maintenance he requires a certain quantity of the means of subsistence…. in other words, the value of labour-power is the value of the means of subsistence necessary for the maintenance of its owner. … His natural needs, such as food, clothing, fuel and housing vary according to the climatic and other physical peculiarities of his country. On the other hand, the number and extent of his so-called necessary requirements, as also the manner in which they are satisfied, are themselves products of history, and depend therefore on the level of civilization attained by a country; in particular they depend on the conditions in which, and consequently on the habits and expectations with which, the class of free worker has been formed. In contrast, therefore, with the case of other commodities, the determination of the value of labour-power contains a historical and moral element. Nevertheless, in a given country at a given period, the average amount of the means of subsistence necessary for the workers is a known datum.”(l)
Some people would take this passage to mean that having a color TV in every room, several cars, vacations, a good pension plan, and ultimately stock. options are all “necessary” as determined by this “level of civilization,” an,d these “habits and expectations.” But Marx is here comparing industrializing Europe and North America with the colonies of his day, and his examples (“food, clothing, fuel and housing”) would vary such that some countries had wooden huts and some had brick buildings, some people burned wood and some people coal, and so on. There is nothing to make us think he is talking about an infinite expansion upward and away from bare subsistence. In fact, a little bit later he goes on to say that:
“The ultimate or minimum limit of the value of labour- power is formed by the value of the commodities which have to be supplied every day to the bearer of the labour- power, the man, so that he can renew his life-process. That is to say, the limit is formed by the value of the physically indispensable means of subsistence.”(2)
Here the reference is “physically indispensable,” which itself does vary according to climate and other conditions, but cannot be construed to include multiple VCRs. Earlier in his career, in the Grundisse, Marx spoke of labor power in terms of what is needed “to keep alive as a worker,” and “his immediate requirements for keeping himself alive,” and even, “mere subsistence.” (3)
This bare-subsistence sense of the value of labor power is more consistent with one of Marx’s cardinal principles for the existence of labor power as a commodity: that the workers have nothing but labor power to sell. If the historical definition of “subsistence” rises continuously upward, at what point do the workers have the choice to start selling their stuff to get out of working? If they have that choice, they are no longer selling labor power, says Marx. Even owning a home, which 68.2% of white households did in l990 (compared to 43.4% of Black households and 42.4% of “Hispanic” households), pushes the boundaries of this definition, in our opinion.( 4)
Marx tells us we should be able to measure the value of labor power, but in practice it is extremely difficult if not impossible in the era of imperialism, for several reasons. “Value” must ultimately reflect labor, but usually the only way we can be sure it is in terms of its price, the paycheck. That works according to the law of value as an average, except that when products and labor are exchanged across arbitrary country borders, with arbitrary exchange rates, and often exchanged within one multinational company which manipulates the prices it charges itself to get the best tax deals, the relationship of value to price is completely muddled. Of particular concern with regard to the labor aristocracy is the movement of dead labor, embodied labor within products, across these borders. That means that oil or diamonds or electronic components produced under a system of superexploitation are shipped across borders to be worked on by much richer workers, they are carrying with them a tremendous amount of labor that has not been paid for. But since no one accounts for it we can’t measure it directly. We argue that this labor turns into so much superprofits ,when the goods are finally sold that there is enough money for the capitalists to turn a profit and pay the labor aristocracy more than the value of their labor in order to buy their allegiance. But we can tell when people are earning much more than bare subsistence.
REALLY REALLY RAKING IT IN
In MIM Theory I, we started off trying to help the labor aristocracy advocates prove that white workers are exploited. If they are exploited, then the capitalists have to, be making a profit from their labor. We found this claim was impossible to sustain. This time we’ll look at the question from the angle of the labor aristocracy to see what benefits they gain from imperialism and national oppression. In this essay we will offer some evidence that the labor aristocracy is paid more than the value of their labor power. That is, we challenge the claim that the high rates of pay in the oppressor nations are the result of the value of labor power rising in line with cultural and historical factors. Even when the level of decadence is obvious, some people keep crying “exploitation!” So we’ll just show that the workers could be paid less and still survive, despite increases in the expected standard of living.
We are talking about a lot of money here. Let’s look at employee compensation in foreign affiliates (enterprises owned or controlled by U.S. parent companies) in the manufacturing industry alone. In 1991, these U.S. parent companies, multinational companies, employed 9,538,000 people in manufacturing within the U.S., paying $411 billion for their total compensation, or $43,091 each. That includes wages and salaries, as well as health insurance, pension plans and so on; and it includes all workers, not just production workers. At their foreign affiliates, they employed 4,270,000 people in 1991, and paid $123 billion for their compensation, or $28,806 each. The difference in the cost of foreign versus domestic employees in manufacturing for these multinationals was thus $14,285 per employee. So, the labor aristocracy got $136.25 billion by virtue of being in the U.S. That means the standard-of-living people have a lot of explaining to do if they are going to say Amerikan workers “need” that much more. Even if you want to argue that the U.S-based employees are doing more “valuable” work: Why would they need more to survive and reproduce themselves? (5)
Let’s look at Mexico, right across the most militarized arbitrary border in the Western hemisphere; all that military in the pockets of the labor aristocracy, courtesy of the capital power needed to keep out Mexican workers because the pay differential across the border is so huge. In 1992, the total compensation of manufacturing production workers in Mexico was 15% of the U.S. level, down from 22% in 1980.(6) Although that is total compensation and not just wages, the ratio is comparable to what we reported for wages in MIM Theory 1: in 1977 Mexican manufacturing production workers got 23.9% of their U.S. counterparts. How much money is this? Let’s assume that the 15% holds for wages as well as for total compensation, and look at wages; we’ll also assume the percentage didn’t change from 1992 to 1993. In 1993 there were 12,143,000 U.S. production workers in manufacturing earning $11.76 per hour on average.(7) The average work week of such a worker was 41.4 hours, and if we assume a 50- week year they earn $24,343. For the 12,143,000 workers, then, that’s $295,597,050,000, or $295.6 billion. If they worked at Mexican worker rates it would be $44.3 billion, or $251 billion less. Big bucks.
The labor aristocracy also gains from getting paid more than oppressed-nation workers within U.S. borders. In the passage above, Marx said there was one value for labor power within each country . from this one area of discrimination alone. Although MIM argues that the Black nation is a separate nation with its own economy, the market that determines the price of commodities available to Blacks and whites is very similar (with Blacks more often being gouged, probably). So certainly whites could live on what Blacks earn, right?
Black full-time year round workers in 1992 earned a median of $21,750 each, compared to $28,678 for the 59,775,000 white workers.(8) The gap is $6,928 per worker. For the 7,623,000 such Black workers, then, the capitalists saved $52,812,144,000, or $52.8 billion, which is 21.2% of the $249.1 billion the capitalists claimed in profits. If they paid these workers the same amount as white workers, their profits would have been that much smaller.
You might say that not all of this pay gap is discrimination on the part of the capitalists. In fact, a lot of this inequality looks like it comes from unequal education and job opportunities in the first place, not on-the-job pay inequality. Maybe Blacks just have the lower-paying jobs, and if there were Black-white equality there would just be more whites in these worse jobs. That is partly true, but it’s misleading. We know from these figures that the white workers could- have “survived” and reproduced themselves on the lower pay of the Black workers. If the white workers had been paid $21,750 each instead of $28,678, then the white workers would have been paid a total of $414.1 billion less. That’s even bigger bucks.
Since the white workers could survive and reproduce themselves as a class with the lower pay that Black workers get, another way to look at that is that this is as $414.1 billion in the pockets of the labor aristocracy, courtesy of the capitalists who want their allegiance, which is more than the capitalists pocketed for themselves!
But if you want to look at it as a source of profits and you aren’t satisfied with calling it all discrimination, we can also break it down by education level. If we look at pay inequality within education level, we can say that even if it’s not direct discrimination, at least we know that two workers with the same education level could be trained to do the same job pretty easily.
OK. The Black-white pay gap between median earnings for full-time year-round workers without high school diplomas was $3,804. So the 1,072,000 Black workers in that category saved the capitalists $4.1 billion. For those with high school diplomas, the gap was $3,999, with 2,913,000 Black workers therefore saving the capitalists $11.6 billion. For those with some college or associates degrees the gap was $4,607 and there were 2,190,000 Black workers, saving $10.1 billion. For people with a college degree or higher, the gap was $7,948 and there were 1,447,000 Black workers, for a capitalist benefit of $11.5 billion. Together these add up to $37.3 billion in savings for Mr. Moneybags. That’s still 15% of all profits in 1992 from this one area of discrimination alone.
Or, look at how much the white workers got over what they could have lived with, by multiplying the number of white workers in each category times the wage gap. The white workers got:
$15.4 billion (4,053,000 workers without high school diplomas * $3,804)
+$82.5 billion (20,640,000 workers with high school diplomas * $3,999)
+$75.1 billion (15,963,000 workers with some college or assoc. degrees * $4,706)
+$151.6 billion (19,072,000 workers with a college degree or higher * $7,948)
$324.6 billion in subsidies for being white, even by this restricted definition, and even limiting the analysis to full-time, year-round employed workers. This is still more than the capitalists kept for themselves. This is not a final measure of the non-exploitation of the white working class. The point of this analysis is to show that the level of subsidy to the white working class is so great, as we can demonstrate so many different ways, that we can move on from the question of whether or not they get more than the value of their labor power to some more difficult questions. For example, we would like to delve more deeply into the Black economic situation and see how many Black workers are not exploited and what the consequences of that are for political consciousness. We would like to calculate reparations, to name another example.
MIM will go on with our work of documenting the gross parasitism of the white working class even as we struggle to figure out these other questions. We just urge the communist- minded people in North America and the rest of the imperialist world to finally, truly, accept the concept of the labor aristocracy and its major implications for revolutionary struggle all over the world today. Only then can the imperialist-country-based parties in the international communist movement truly regain their footing, break with revisionism, and put communist internationalism into practice.
1. Karl Marx, Capital, Volume I, New York: Vintage, 1977.pp. 274-5.
2. ibid. p. 276-7.
3. “The Grundisse,” in Robert Tucker, ed., The Marx-Engels Reader, 2nd edition, NY: W.W.
Norton 1978.p. 249.
4. Statistical Abstract of the United States 1994,p. 735.
5. Figures from Ibid., pp. 560, 563.
6. ibid, p. 872.
7. ibid., p. 424.
8. Figures from Claudette Bennett, The Black Population in the United States: March 1994 and 1993, U.S. Bureau of the Census, Current Population Reports, P20-480, U.S. Government Printing Office, Washington, DC, 1995. Table 28.
This gives medians instead of means, which means that strictly speaking you can’t multiply them to get the total figure. Median is usually used with income data because the mean is pulled upward by miIIionaires, so these calculations probably err on the side of being too low rather than too high.