Once again to understand this process it is necessary to view it in terms of the Long Wave. A feature of the long wave noted by some theorists is that the during the Summer Phase of the cycle, people have become used to greater affluence, and the changes in consumption patterns, are also reflected in changes in psychology, the development of new ideas becomes more entrenched - K-Waves This is consolidated further in the Autumn, or Plateau Phase, or Crisis of the cycle. We can see in this mirrored the idea developed by Marx of the historical or cultural aspect of the value of labour-power, as embodying for any country at any particular stage a given standard seen as necessary for the reproduction of labour-power.
In the period of the last Long Wave Boom from 1949-74, we saw in Britain, for example, a rapid increase in accumulation. The demand for labour-power rose sharply. The initial demand was met partly in the 1950's by the encouragement of women into the labour market, and the introduction of large scale immigration. The Spring Phase of the cycle normally sees demand for labour-power being met out of the RAL, or these other sources, and the introduction of new production techniques that increase productivity can limit the extent to which labour can raise wages. But, as the cycle progresses these avenues dry up, and demand for labour-power pushes wages higher. Where strikes do occur, then, as was the case in the late 50's early 60's, these are often short-lived, sometimes only a matter of hours, in the form of wildcat strikes, as capital is more able, and more willing to make concessions out of rapidly rising profits. In fact, as another example of how marginal trade unions are to this mechanism, these short-lived strikes, at this phase, are in stark contrast to the long drawn out strike action typical of the later period, when far from advancing the workers position, the need is to try to limit its decline. So, the periods of long duration, more bitter industrial action occur in the late 1970's, and early 1980's, when the Long Wave cycle has turned downwards, and when capital accumulation has slowed, or even reversed.
As Trotsky describes these processes,
"But a boom is a boom. It means a growing demand for goods, expanded production, shrinking unemployment, rising prices and the possibility of higher wages. And, in the given historical circumstances, the boom will not dampen but sharpen the revolutionary struggle of the working class. This flows from all of the foregoing. In all capitalist countries the working-class movement after the war reached its peak and then ended, as we have seen, in a more or less pronounced failure and retreat, and in disunity within the working class itself. With such political and psychological premises, a prolonged crisis, although it would doubtless act to heighten the embitterment of the working masses (especially the unemployed and semi-employed), would nevertheless simultaneously tend to weaken their activity because this activity is intimately bound up with the workers’ consciousness of their irreplaceable role in production.
Prolonged unemployment following an epoch of revolutionary political assaults and retreats does not at all work in favour of the Communist Party. On the contrary the longer the crisis lasts the more it threatens to nourish anarchist moods on one wing and reformist moods on the other... In contrast, the industrial revival is bound, first of all, to raise the self-confidence of the working class, undermined by failures and by the disunity in its own ranks; it is bound to fuse the working class together in the factories and plants and heighten the desire for unanimity in militant actions.
We are already observing the beginnings of this process. The working masses feel firmer ground under their feet. They are seeking to fuse their ranks. They keenly sense the split to be an obstacle to action. They are striving not only toward a more unanimous resistance to the offensive of capital resulting from the crisis but also toward preparing a counter-offensive, based on the conditions of industrial revival. The crisis was a period of frustrated hopes and of embitterment, not infrequently impotent embitterment. The boom as it unfolds will provide an outlet in action for these feelings."
Of course, this explanation of the way in which the normal process of capitalist development results in higher real wages, without in any way contradicting the drive of capital to minimise the value of labour-power, in order to maximise profits, or the normal tendency for the organic composition to rise, applies in conditions where capital accumulation is taking place, and in particular under those conditions of rapid accumulation typical of the Long Wave Boom. In a globalised economy, capital accumulation can occur rapidly in one area, consistent with the reverse in other areas. The de-industrialisation of Britain, in the 1980's, at the same time as the industrialisation of Asian economies is a partial example, of that. Of course, even during the Long Wave downturn, there is usually still growth, and capital accumulation, just at a slower pace. The capital accumulation during such a period is intensive and labour-saving, rather than extensive. Hence the patterns of consumption and production formerly established, and the incorporation of these into a new definition of what comprises the necessary labour-time required for the production of labour-power, are not reversed. So the living standards established during the 1950's and 60's, were not turned back to those of the 1930's, during the Long Wave downturn of 1974-99, just as, even in the 1930's, living standards established during the Long Wave boom of 1890 – 1914, were not returned to those of the Great Depression of the 1880's.
There is no theoretical reason why that has to be the case. It is quite possible that a position can be reached where capital accumulation, in Britain, for instance, becomes negative. In other words, there is net negative investment. The reasons that could occur are obvious. High rates of profit in Asia, or developing Africa, could suck in capital, whilst low profitability, in the UK, resulting from relatively high wage rates, deteriorating infrastructure, as a result of public spending cuts (which raises costs for capital due to failing roads, telecoms, broadband, as well as under-educated, unhealthy workers), high interest charges, resulting from the build up of debt, used to keep the economy afloat, during the 1980's and 90's, and so on leads to a drain of capital to more lucrative sites in Asia, Eastern Europe, Africa and Latin America. The consequence of such a process would be a reverse of the mechanism outlined above. Capital contraction would mean a continual excess supply of labour-power, and falling real wages.
As stated in previous posts, unless production is shifted to higher valued output, and the consequent employment of more complex labour, capable of competing in a global market place, occurs, some variation of this process is likely, or at least a much reduced level of capital accumulation with consequent effects on wages. Under those conditions, the extent to which trades unions and “class struggle” can raise workers wages, or even maintain them will become apparent, as is happening in Greece currently.
Back To Part 3
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