In his eulogy at the graveside of Marx, Engels pointed to the two great discoveries of Marx, the discovery of the materialist concept of history and the discovery of surplus value as the source of capitalist profit. Surplus value is the difference between the value created by the worker and the value returned to the worker in the form of wages. Surplus value is therefore the value of the workers labor time that is appropriated by the capitalist. In this manner, Marx disclosed the irreconcilable conflict of interest between capital and labor—the capitalists striving to increase their profits by increasing the ratio of surplus value to wages, while the interest of the worker lies in decreasing that ratio. The struggle of the workers to raise their wages or to resist attempts by the capitalist to lower them is what we refer to as class struggle.
If the conflict between labor and capital is irreconcilable as long the capitalist mode of production exists, how then does the class struggle manifest itself in a socialist-oriented market economy? And how does it differ from class struggle in a capitalist economy?
The key to the answer to these questions lies in the class nature of the state.
In a capitalist economy, the primary social function of the state is to ensure the stability of the prevailing capitalist relations of production, that is, the property relations. The capitalists, as a class, also use their control of the state to further their own interests at the expense of the workers. In the United States, for example, income from taxation of the working population is used to fund imperialist aggression abroad. It is also use to provide profits for various corporations involved in providing social services. Legislation concerning patents is a source for tremendous profits for the pharmaceutical industry. The National Labor Relations Board, originally created to protect workers’ rights, has become a major vehicle for preventing unionization and to a large extent is responsible for the decrease in private-sector labor unions from 35 percent to in the 1950s to 7 percent today. Its members, appointed by the executive branch of the government, consistently side with employers in their disputes with the workers, often delaying elections for union representation by ten years, failing to protect workers from being fired for pro-union activities, etc.
In a socialist-oriented market economy, state power is exercised by representatives of the working class and peasantry, the leading role being guided by a party of the working class. Although representatives of the capitalist sector might participate in some political and economic governmental bodies, and even in the party itself, their role is very limited, being more consultative than decision making.
The goal of the corporate capitalist is not merely profit, or even average profit, but maximum profit. In the capitalist world, the corporate sector uses every possible means, legal and illegal, to maximize their profit: fighting against unionization of the enterprises, cutting wages, health care benefits, hiding their profits from the tax authorities, illegal price fixing, use of undocumented workers so they can undercut the current wage scales and deprive such workers of employer contributions to pensions and other nonwage benefits, exporting operations to lower-wage countries, and so on. In the capitalist countries today, class struggle expresses itself in the continual battle of the workers against these efforts to maximize profits on the backs of the workers and other sectors of the population exploited by monopoly capital.
In the developed capitalist countries, the state consistently aids monopoly capital’s effort to maximize profit. One of the consequences of this in relation to other countries is that investments in less-developed countries, designed as they are to maximize profits, leads to unbalanced development in these countries, such unbalanced development is further exacerbated by foreign policy measures, so-called economic aid, and policies of international monetary organizations that are under the domination of the imperialist countries.
In the socialist-oriented countries, the state pursues policies that maximize balanced economic development of its productive capacity. Even though investment is open to domestic and foreign capital, the state, with its regulatory powers and with the credit system not under the control of the capitalists, is able to guide domestic and foreign investments in directions that are in the interests of the people as a whole
In this situation, despite some similarities, there are fundamental differences in the way class struggle manifests itself in relation to the capitalist sector. The subjective goal of the capitalists—maximum profit—remains the same, but it is a different playing field. The state can require the capitalist corporations to recognize labor unions formed at their enterprises, as China has done, for example, with Wal-Mart, which has history of shutting down its stores rather than recognize a labor union in the United States. The state can set minimum wages and conditions for occupational health and safety, require enterprises to provide coverage for health care, pensions, child care, vacations, unemployment insurance, and other benefits for their workers. In the capitalist countries, state regulatory and legislative bodies also provide protections and social services to the working class, but these are consequences long persevering struggles by the working class only after the ruling capitalists conclude that their rule would be endangered were these concessions not made to the working class. Upon granting these concessions, the capitalists seek every opportunity to weaken or eliminate them. A campaign is being mounted by monopoly capital to reduce the retirement benefits under the federal government social security program. A major strike issue in the United States today is over the attempt by the employers to increase the workers’ share of the cost of health insurance.
In socialist-oriented market economies, the state, representing the interests of the working class, can be a powerful negotiating force for the workers in setting the wages and benefits and other conditions of employment. In this way, the locus of class struggle between capital and labor shifts from that between the workers and their employers to between the employers and the state. The state, however, cannot replace, unions. In order to avoid sharp confrontational class relations, the labor unions need to be organized from the bottom up, that is, with the participation of workers at the rank-and-file level in the organizing process and election of their union officers. This is necessary so that the regional labor-union leadership can be adequately informed of the needs and demands of the workers of the enterprise during negotiations of collective-bargaining agreements. In this way the regional labor-union body, with the support of appropriate state bodies, if necessary, can exert direct pressure on the enterprises to reach a reasonable settlement with the enterprise labor-union.
The fact that the socialist-oriented market economies are in countries that are far less developed than the leading capitalist economies obviously limits the demands that the enterprise labor union or the state can make on the capitalist sector. The lower wage scales associated with this difference in levels of economic development make the opportunity for investment attractive to foreign and domestic capital, which in turn, strengthens the bargaining position of the state in its negotiations on behalf of the working class, so that the workers need not rely on strikes to win their demands. The state, however, must take into account, however, the needs of the capitalist sector to maintain a rate of profit comparable to that in the capitalist world market. As the economy develops, the level of worker skill and productivity rises, making it possible for the average wage to rise without adverse effects on competitiveness in the global market, as we already see happening in China and Vietnam. The ability of the state to raise the minimum wage becomes a powerful tool for the working class to ensure a continuing rise in average wage levels as productivity and levels of skill increase in the course of economic development.
As the economy grows, the increased income from the profits of state-owned enterprises in the state sector and from taxes on private sector can be used for the expansion of social services and other benefits to the population as part of the social consumption budget, which not only does not have adverse effects of the competitiveness of the state-owned and privately owned enterprises, but enhances their competitiveness by raising the levels of education, health, and culture of the labor force.
In this way, the basic living standards and conditions of labor of the working class can be established without labor-capital strife on the enterprise level. This condition of economic development can be described as harmonious development.
The capitalists however, remain capitalists, and the temptation to increase profit at the expense of the workers is ever present and can lead to violations of the agreements between the capitalist employers on the one hand and the labor unions and the state on the other. Labor-union vigilance is therefore a necessary component of harmonious development. An effective shop-steward system of shop-floor level representation is the best mechanism for maintaining vigilant enforcement of existing agreements on living and working conditions, and is not in any way contradictory to the concept of harmonious development.
Let us now consider how the international character of class struggle affects the socialist-oriented market economies.
Economic globalization is the result of the objective developments of the forces of production. These developments of the forces of production “include but are not limited to technological progress in transportation and information exchange; computerization of economic data processing; automation and robotization of production; growing numbers entering the work force; and rising levels of education. These factors facilitate the globalization of productive activity. This occurs by reducing obstacles in coordinating goods and services across great geographic and cultural divides” (Erwin Marquit, “What’s Wrong with Globalization,” Political Affairs, September 2006). In this way, globalization leads to internationalization of the labor force on a qualitatively higher level. The campaign to unionize the workers of Wal-Mart in the United States can gain strength if the unions now being formed at Wal Mart stores in China lead to better working and living conditions for the Chinese workers at Wal Mart stores in China. It is important therefore for labor unions in the United States and other developed capitalist countries to develop cooperative relationships with their Chinese labor-union counterparts, a process that is beginning to unfold between U.S. and Chinese labor unions.
Globalization also places obligations on Chinese state-owned and private firms in their operations abroad to engage in labor practices that are models of labor-management relations. This is another reason for international consultation among Chinese labor unions and the labor movement in other countries. The need for international working-class solidarity is as relevant today as it was in 1848 when Marx and Engels called for “proletarians of all countries, unite!”
