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Understanding capital to confront challenges ahead

2020-06-02 | Foundations

While in Spain the uproar over the closure of Nissan factories is still going on, in France Macron is meeting with the employers association and trade unions to "offer" a "new social contract" based on the rapid and massive precarization of the labor power. The alternative he proposes is "wages or work". The media are promoting the logic of capital as if it were unappealable: "without profits there are no wages". They extend the idea that more plant closures will come and that we will be unable to cope with them except by lowering our income even more and accepting worse working conditions throughout the entire productive system. But is it true? Is there really no choice? Is there no point in fighting? To know what works and what doesn't, we need to understand some things about what capital is and how it works today.

What the capital was

Manchester in the first half of the 19th century.

Back in the 19th century most capitalists were individuals who invested capital of their personal or family property in a factory or workshop. They were owners and patrons. When they faced a strike they knew that the longer it lasted the more the company would be devalued, which was their estate. At first a strike was reduced for them to a calculation of revenues: it was a question of comparing how much their future profits would be reduced by improving working conditions and increasing wages, compared to how much they would lose through the effect of the stoppage in production. If the strike lasted long enough and showed strength, the "rational" thing from the point of view of capital was to concede.

The Great London Summer Workers' Strike of 1889


class struggle

The difference between some struggles and others did not express two "levels of consciousness", the "syndicalist" which the workers could supposedly reach on their own, as opposed to the "political" or "socialist", for which they needed a party to organize large mobilizations on a national scale. It expressed the levels and forms in which capital was organized against which it had to impose the logic of human needs. On one level they were confronted with individual capitals, on another with the state apparatus that regulated the general conditions of their exploitation.

British Rail in India.

rate of profit|unitary profit would be reduced

rising capitalism

What capital really is today

Finance capital

The then President of the Government, Mariano Rajoy, greets the President of Banco Santander, Emilio Botín, during the family photo shoot with the top Spanish executives who make up the Business Council for Competitiveness (CEC) in Moncloa in 2014. They are all managers, none of them is a significant owner of the companies they represent.

Companies and factories are no longer run by their legal owners, but by managers who manage the interests of capital in that particular application. These managers form a specific layer: the corporate big bourgeoisie. It would be impossible for them to know all the legal owners of the capital they manage. How many times a day do Volkswagen or Santander shares change hands? How many thousands of rentiers lie beneath each fund? This new form of the bourgeoisie, heir to the old ruling classes, is related to others like them who in turn manage macro-funds and banks, "strategic" shareholders who hope to last longer in the shareholding and who therefore seek to obtain "synergies", that is, benefits beyond the dividend, for all the capital they manage. And all of them are intimately related to the state through the high bureaucracy and the political leaders. Because "business", when capital moves so fast and following expectations that vary with each news item, depends directly on the general conditions of exploitation.

Struggles and class struggle

To demand "workload" from capital is to accept that our welfare depends on it and that fighting is meaningless because there are no interests of workers other than those of capital.

If capitalism has reorganized itself in this way, it is above all as a way of protecting itself against the permanent tendency towards crisis, but it has also changed its capacity to respond to strikes and workers' struggles. And both things come together in every single battle. If, in a company, the workers' demands force a change in conditions by threatening to reduce profits below the regional or sectorial average, the managers know that capital will leave immediately and that this will possibly make lower the chances of recovering or gaining new profitability by capitalization. On the other hand, global demand is in chronic difficulty. "Catching up" by buying new technology that can produce more with the same amount of work is not enough because... there may be no one to sell the extra production obtained.

What do trade unions do? First, they accept the logic of the managers - they are still managers themselves - and tell us that "without profitability there is no employment". And with profitability of capital as their banner, they make their own the managers' claims against the state, that is, they ask for "special treatment" for the capital invested in the company: either by asking the state to sell the factory's products, as in Navantia or special privileges regarding the cost of raw materials, as in Alcoa. The workers thus become a mere tool for the managers to pressure the state in order to survive in the competition to attract capital.

They are right when they say that without profitability, capital takes seconds - sometimes less - to move to another, more productive application. But it is not true that the consequence of this should be to accept the subordination of the workers to the profit and success of the managers. In fact, since the beginning of the 20th century, when capital began to take more and more the form we know today, a new form of struggle began to emerge in which the demand for enterprise was no longer distinguished from the struggle to transform the general conditions of exploitation. A new form of struggle that responded to a situation - ours - in which with an increasingly "liquid" capital, the working conditions of each group of workers depended more and more on the conditions in all.

Nantes during the 1968 mass strike that was extended throughout France

mass strike

Delegates from the delegates committee (soviet) in Shush, Iran, addressing the assembly on the street in November 2018.

Let us look at where we are now: the workers of every company are faced with global capital that is not bound by what happens in a single company and that demands certain conditions of profitability in order to maintain jobs. Profitability is the game played by the trade unions, workplace-by-workplace, so that we can support the particular interests of the capital managers in this or that company.

Let us look at where the extension of the strike over the territory leads: capital has nowhere to go within it, it fears that the example will expand by leaping over borders; the general conditions of exploitation are now its problem and that of the state. The strike puts capital as a whole where it once put the individual capitalist.

trade union

The importance of understanding what capital is today

class struggle