Extreme inequality in a failing system

As Marx pointed out, the cost of labour is the cost of its renewal, from day to day and generation to generation. This explains why qualified labour costs more than unqualified labour. Its reproduction takes more time and means. But the cost of labour is also subjected to supply and demand. Highly qualified labour may be rare and demand for it strong enough to push up its price. While the least qualified labour may be plethoric compared to demand and drive prices down. There is also a class structure that reserves the priciest education and employment for its most affluent classes. All this combines to create a spectrum of wages and salaries that goes from one to several hundred. While capital incomes that go mostly to the richest 10% widen the gap even more. At the top of the pyramid, all is done to hinder access from below. At the bottom of the pyramid, a constant flow of immigrants fleeing violence and hunger maintains an overabundance of unqualified labour and keeps down its cost.

Wage inequality is probably unavoidable, as certain skills can only be acquired by long and arduous training, and some also depend on random physical or mental predispositions. If the demand is strong, these skills will go to the highest bidder. But all that supposes that some are doing the hiring and firing while everyone else is depending on their decisions, and that capital and labour are separate and opposed. Labour must provide capital with surplus value, so it is always paid less than the value it produces. If that value is small, so is the pay. If it is large, the pay goes up as do profits. Profit is capital’s essential motivation, and it can be an existential necessity to pay interest on debt and dividends to shareholders. Businesses are profitable if they are able to sell goods or services for more than they cost. Reducing those costs increases profits, or it allows a reduction of the selling price and the chance to gain market shares. The cost of production includes the means of production and labour. The cost of the means of production is fairly constant. Inputs in energy and raw materials can see their prices vary at short notice, up and down, but the cost of tools and buildings is determined at the outset for their duration. The cost of labour can be reduced either by a smaller number of employees being more productive, or by the same number having their wages cut. The same number being more productive increases production with the same labour costs, which makes each unit produced a little cheaper.

Productivity is largely dependent on technology, though the organisation of labour and the just-in-time delivery of inputs have their share. Gains in productivity are determined by the technicality of the time and place. It used to be the monopoly of Europe and North America, and along with colonial plunder it allowed higher profits and wages. Now that Asia has caught up its technological delay, the price competition must fall on wages. Capital has managed to get labour to compete with itself, across borders and around the world. Instead of depreciating wages with cheap immigrant labour, capital has moved production to countries with low labour costs, as well as environmental and tax advantages. An executive of the French car-maker Renault explained that an hour’s labour cost 30 euros in France, 10 in Romania and 5 in Morocco. The two countries his company had moved its production to. No one asked him which of the jobless French and the underpaid Romanian and Moroccan workers would be buying his cars.

Capital has always worked at dividing labour and fuelling antagonisms in its ranks. And capital has now reached the stage where those antagonisms are between national labour forces. This change has two consequences. On the one hand, there is a growing aggressiveness towards foreigners, who are perceived as threatening. On the other, the sense of national unity is revived. This combination is dangerous. The rejection of otherness, the split between “them” and “us” must have an exclusive definition of who are the “us”, of who is legitimate and who is not. Humanity has been to the extremities of that path before, and may hesitate in following it again. Especially the growing numbers of people who are beginning to realise that the real existential menace is climate disruption and species extinction, and that the only chance of survival is coordinated action on a global scale.

Capital is privately owned, and that ownership is so concentrated that a bus-load of proprietors has as much wealth as the poorer half of humanity. It has also been estimated that one per cent of Americans possess over four fifths of US company shares. This concentration of riches is a concentration of power. And, though everyone is subjected to the law, the power of money weighs heavily on legislation. The rich pass laws that bolster their position, while their servants in media and government exert themselves to present those laws as being for the common good. And the continuous battering in print, audio and video has proved quite effective so far. People are convinced that those laws keep them safe, healthy and happy, fed clothed and housed. Though, in fact, most laws are about making a profit and protecting the rich from the poor. However, contrary information and alternative stories are beginning to circulate, forcing people to rethink their beliefs.

The upheavals of the 1960s generated a counterculture. But all it had at its disposal was offset and Roneo printing, live theatre and short-lived attempts at pirate radio and TV. Its effect was marginal compared to the mass coverage of national networks. Today’s ideological battles are fought on the internet, which is a slightly more level playing field. Though one may have zero followers and the other millions, an obscure blogger is as accessible as POTUS just about everywhere on the planet. Ideas can be propagated as never before. This proliferation has brought some confusion. What is and what is not, fake or real, fact or fiction, true or false. But the essential consequence is a growing questioning of the structure’s foundations, with the generous contributions of the Orange Wrecking-ball. The consensual class-driven discourse is no longer unique. Wealth concentration has reached the point of obscenity and technology is pushing the world off a cliff. This has been there for all to see for quite a while, but it was hidden in a fog of propaganda. That mistiness is being dissipated by the hot winds of reality and by growing critical choruses. What is lacking, and this can only evolve through trial and error, is and alternative vision. The goals are simple, a different distribution of wealth and incomes, and a technology serving the people instead of capital’s profits, but the paths that lead there are still unclear. Meanwhile, financial and environmental collapse seems increasingly imminent. And it could be that chaos is the only medium out of which something new can emerge.