Wednesday, 18 December 2013

US Economics and Politics v The UK and EU - Part 10

After the US Civil War, the industrial North was able to treat the agricultural South as its internal colony, in the same way that Britain and other European powers had used their external colonies. Those colonies acted both as providers of cheap foodstuffs and raw materials, and as protected markets for the manufactured goods. As European feudal landlords took possession of these large landed estates, they also provided them with extensive rents, and European money capitalists, often from the same aristocratic families, made huge sums financing the trade. Lenin describes the way Russia, in its process of primary capital accumulation, used Siberia in a similar manner. In the US, the South provided the foodstuffs and materials, and protected market for northern manufactures. Northern carpetbaggers stepped in to buy up southern estates, and the South also provided a steady supply of labour-power “freed” from the land.

In many ways a similar process has occurred over the last 30 years. Looking at the US, it is still a very divided society, and that division is manifest in the current political divide. In Part 8 and 9 I described how, in the US in particular, the response to the Long Wave downturn, as in the UK, was to try to create a low-wage/high debt economy, to focus on the extraction of additional absolute surplus value, had created a situation in which the workforce was divided between a relatively very small number of very highly skilled, highly paid workers, working in a range of very high value production from entertainment through to space technology, and a very much larger number of unskilled and semi-skilled workers, paid very low wages, with very uncertain conditions of employment, and a large section of the workforce that was semi-permanently unemployed.

An indication of the extent to which the wages and conditions of this large section of the workforce has declined during this period can be witnessed by the fact that many workers who previously would have been considered to be in reasonably well-paid jobs, are today reliant on food stamps. Around 40 million US citizens, or about 20% of the population, are in receipt of food stamps. A similar situation exists in the UK, where a similar policy of trying to create a low-wage/high debt economy, under Thatcher and her successors, has created a situation where a large proportion of those in work, can only manage with some form of state aid, be it Housing Benefit, Child Benefit, Tax Credit etc.

This is the consequence of the policy of Thatcher/Reagan in the 1980's of trying to build a low-wage/high debt economy, rather than restructuring the economies towards investment in high value production, in investing resources in modernising the infrastructure, in education and training for the workforce etc. It means that where the surplus value created in that high value, dynamic sector could have been accumulated as the economy entered the new Long Wave Boom, instead it is siphoned off to cover the payments of various welfare benefits as cited above, and without, which the low-paying, inefficient sectors of the economy would not be able to retain the workers they now pay subsistence wages.

Its in this sense that over the last 30 years, in the US in particular, but it applies also in the UK, and also in the EU, a process similar to the use of internal colonies has been repeated. The US is sharply divided between its metropolitan, city areas and its rural, particular southern and mid-western areas. The former are more like western Europe, they are the heartlands of social-democracy, the alliance between big capital and the working class. The latter are more akin in many ways to the parts of the Middle East and North Africa which economically is still virtually living in pre-capitalist conditions. In both cases it leads to the development of ideas, including religious fundamentalism appropriate to those conditions, just as it did in Mediaeval Europe.

On the one hand, we have a US that is by far the most technologically developed economy on the planet, with consequently some of the most intelligent scientists. On the other, we have a society where a large proportion of the population, concentrated in these backward areas, believe unflinchingly in the Bible, believe that Man has only been on the planet for 7,000 years, and walked side by side with dinosaurs!

My neighbour was telling me the other day that she has just been visiting her daughter who now lives in the US. She could not believe how backward these people were she said. Her daughter had told her that people she worked with had absolutely no idea about anything outside their local surroundings. Her daughter had even been asked by a work colleague what Language we spoke in England?

This level of backwardness stemming from the very real material conditions of the population in these areas, is the basis for the development of the individualistic ideas that form the bedrock of Republicanism, and more particularly today of the Tea Party. These conservative, indeed reactionary ideas flow from the desire of an essentially peasant population, and are wholly inimical to the interests of US big industrial capital. Yet, this section of the population is large, and is concentrated in these areas, which are themselves geographically significant. Over the last 15 years, as the global Long Wave Boom has brought a huge increase in global demand for raw materials and foodstuffs, these peasant farmers have also seen a significant increase in their economic well-being, as the price of their commodities has risen substantially. That gives them added political clout.

But, there is also that other section of the population, which resides in the cities, but which has been excluded in large part from the benefits of the boom – the unskilled and semi-skilled workers. Their wages have fallen. 

In Part 11, I will look at how these different groups have acted as an internal colony over the last 30 years.

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