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In the era of globalization:
Has the class struggle been "offshored"?

November 30, 2007 | Page 5

IN A "globalized" world of "offshoring" and international production, isn't the very idea of class struggle outmoded? ADAM TURL explains why, on the contrary, class and class struggle remain central in the U.S. today.

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IT'S AN indisputable fact that important changes have taken place in the structure of the global economy and of the American working class. But the real meaning of these changes is often twisted.

Big business in the U.S. has expanded its empire in other countries. Foreign direct investment from the U.S. increased several times over in the past three decades. In 1982, according to United Nations Conference on Trade and Development, there were 37,000 transnational corporations. By 2005, there were 77,000.

Because of new investment and international outsourcing, especially in manufacturing--also known as "offshoring"--a larger share of international production is now located outside the industrialized nations of North America, Europe and Japan. Products manufactured in the "global South" for export to the "global North" have doubled since the early 1990s.

This has had an effect on manufacturing jobs once located in advanced countries. One study estimated that 406,000 U.S. jobs were offshored in 2004 alone. Nearly 40 percent of these jobs came from union workplaces--meaning organized labor, which represents less than 10 percent of private-sector workers, has suffered a disproportionate share of the losses.

What else to read

Adam Turl makes a more detailed analysis of the changing U.S. working class in "Is the U.S. becoming post-industrial?" published in the International Socialist Review.

The first book to analyze the tendencies in capitalism that would produce globalization was Karl Marx and Frederick Engels' The Communist Manifesto--still, 160 years after it was written, the best introduction to the ideas of the Marxist tradition. A new edition of the Manifesto, edited by Phil Gasper, provides full annotation, clear historical references and explanation, additional related text and a full glossary.

Sharon Smith's Subterranean Fire: A History of Working-Class Radicalism in the United States takes up many of the questions about the U.S. working class and the character of its struggles. For a concise introduction to the Marxist understanding of class struggle and what drives it, see The Meaning Of Marxism by Paul D'Amato.

For more on recent developments in the U.S. labor movement and the potential for future struggles, see U.S. Labor in Trouble and Transition by Kim Moody.


Overall, the U.S. manufacturing sector has shed millions of jobs; it now accounts for just over 10 percent of the U.S. workforce. Offshoring isn't the only factor--another is rising productivity in the U.S. economy--but it is certainly one of the more important ones.

Employers know how seriously workers take the threat of offshoring. There are stories of companies lining up trucks filled with empty crates marked "Mexico" during contract negotiations. According to one study, the threat to move production overseas doubles a company's chances of defeating union drives.

On the other hand, when free trade agreements come up for consideration in Congress, the extent of the globalization of production is downplayed--and the mythological benefits of international trade, which never materialize, are hyped.

In both cases, however, the globalization of work is presented as an unstoppable force. According to the "common sense"--typically accepted not only by defenders of the free market, but by the labor movement and the left--class struggle may have been possible in the past, but not in today's "post-industrial" economy, where "digitized" capital gushes around the world at the push of a button.

But the "common sense" doesn't stand up to examination.

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ALL OF the changes in the structure of the world economy and the working class are better understood as a continuation of the "normal" workings of capitalism and the class struggle.

Geographic shifts in industry were present from the first days of capitalism, when, for example, "trade wars" moved textile production back and forth from northern to southern Europe.

International competition is woven into the system's fabric, as Karl Marx and Frederick Engels pointed out in the Communist Manifesto:

The bourgeoisie has, through its exploitation of the world market, given a cosmopolitan character to production and consumption in every country...All old-established industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life-and-death question for all civilized nations.

Likewise, capitalism has always depended to some extent on an international division of labor. Thus, raw materials from--and slave labor in--the "New World" provided much of the "startup capital" for England's late 18th century Industrial Revolution. This is what, in part, drove colonization and imperialism.

Until the late 20th century, however, with few exceptions, industry itself remained concentrated in the advanced economies. That began to change when the post-Second World War economic boom came to an end in the 1970s. Confronted with declining profits, corporations sought to incorporate more low-wage labor from the global South into manufacturing.

The legacy of imperialism had created, in the words of one academic study, a "practically inexhaustible reservoir of disposable labor in the developing countries." As early as 1975, there were already dozens of "free enterprise zones" in less advanced countries.

Economic "reforms" required by the International Monetary Fund (IMF) and the consequences of free trade agreements drove millions of peasants from their land in these countries, creating an even larger potential workforce concentrated in urban slums.

This process is similar to the "land enclosures" described by Marx in Capital--laws adopted in Europe during the early development of capitalism, which drove peasants from the land and created the initial urban working class.

Capitalism was unable to employ all the new workers it created by this means. Many who left ancestral homes looking for work were made illegal--much like undocumented immigrants today. As Marx wrote: "[L]egislation treated them as 'voluntary' criminals, and assumed that it depended on their own good will to go on working under the old conditions that no longer existed."

Today's neoliberal "enclosures" have created--along with other factors, such as China's free-market industrialization--a massive pool of lower-wage labor available on the global market. Corporations both exploit this low-wage labor abroad and immigrant labor at home--and they push down the wages of current workers by threatening to move production or use more immigrant labor.

The IMF estimates that the "globalization of work" has lowered labor's share of national income in all the advanced economies. But this isn't to the benefit of workers in the global South.

The North American Free Trade Agreement (NAFTA), for example, led to a devastating fall in living standards for Mexican workers, and Chinese workers today face an intensity of exploitation that echoes the scenes of England's Industrial Revolution as described by Charles Dickens.

At the same time, however, industrial production has not been moved wholesale from the U.S. to Mexico or China. Parts of the production process have been moved, but there are still 15 million manufacturing workers in the U.S.--and nearly as much foreign direct investment in manufacturing flows into the U.S. from capitalists of other countries as flows out.

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IN THE first half of the 20th century, industrial companies introduced the assembly line, which was designed to break down the manufacturing process into separate and deskilled tasks, in order to squeeze as much as possible out of each working minute.

Until the 1970s, the assembly line process was typically contained in a single factory, located mostly in the advanced economies. Today, though, tasks can be spread around the world. The most labor-intensive are located in countries with lower labor costs--usually in a nearby country, such as Mexico for U.S. businesses. The most capital-intensive tasks often remain anchored in the "home" country.

Capitalism needs cheap labor. But it also needs the highly productive machinery and infrastructure accumulated in the advanced economies.

So, for example, assembling a car is a more capital-intensive process than making parts for those cars. U.S. auto companies tend to locate more parts production in Mexico, and more assembly plants in the U.S.

Between 1987 and 2002, the share of "foreign-sourced inputs" into U.S. manufacturing nearly doubled, from 12.4 to 22.1 percent. This is part of an international trend--according to the IMF, up to half of all imports into advanced economies are used in manufacturing.

This is the point of globalizing work: To internationalize production, while keeping labor divided by national borders in order to push down wages and increase exploitation. While the specifics may be new, the dynamics aren't. As Marx wrote of the divisions between Irish and English workers in Britain:

The ordinary English worker hates the Irish worker as a competitor who lowers his standard of life...The Irishman...sees in the English worker both the accomplice and the stupid tool of the English rule in Ireland. This antagonism is artificially kept alive and all the means at the disposal of the ruling classes. This antagonism is the secret of the impotence of the English working class...It is the secret by which the capitalist class maintains its power.

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THE GLOBALIZATION of production has immediate benefits for capital. But there are limits to the process.

First, and most obviously, many jobs--for example, in heath care, education, transportation and services--are largely immobile and can't be sent abroad.

Furthermore, while capitalism uses national divisions to increase profits today, it sows the seeds of future conflicts by bundling together the grievances and material interests of workers across national lines.

The globalization of work is part of an overall assault on labor that eventually compels workers to fight back, and the logic of those struggles leads to the idea of fighting back together.

Is it a pipedream to imagine workers of different countries challenging the same multinational corporation that exploits them all?

The current experience is of a low level of working-class struggle in most every country. But the high points of the working-class movement historically have always had an international dimension.

Thus, in Marx and Engels' own time, the revolutions of 1848 spread across much of Europe. The Russian Revolution of 1917 inaugurated a wave of revolts and rebellions across Europe--reaching even the U.S., where dockworkers in Seattle went on strike after discovering they were loading guns to be used against Russian workers. In the 1960s and 1970s, the anti-imperialist struggle in Vietnam and other countries found echoes in mass struggles in the U.S. and Europe.

More recently, the immigrant rights protests of 2006 and 2007 were, in many ways, a product of NAFTA, which drove 2 million Mexican peasants from their land in search of work. The mega-marches cast a spotlight on the importance of the labor movement defending workers of all nationalities.

The changes caused by globalization are real, but workers still have a material interest and the social power to fight back.

In some ways, the changes make workers struggle easier. Thus, the rail strike in Germany this November shut down factories in Belgium because of the internationalization of production. In 1996, a strike at one Ohio plant making brake parts for General Motors shut down the company's production in most of North America because of a continent-wide "just-in-time" delivery system.

It isn't automatic, however, that workers will realize and act on their mutual interests across national boundaries. As the Economic Policy Institute's Jeff Faux argued, one of the weaknesses of organized labor has been the "assumption of most trade unionists...that their economic interests are entirely bound up with the success of their nation state in international competition for capital."

The U.S. labor movement's focus on protectionist measures to restrict trade is more and more clearly a dead end. Protectionism cuts off U.S. workers from co-workers abroad--their much-needed allies in struggle. Today, wages and working conditions will increasingly rise or fall together across the world's frontiers.

Karl Marx realized the importance of international solidarity from the earliest days of the working-class movement. It was no mere rhetorical flourish that The Communist Manifesto ends with the words: "Workers of all countries, unite!"

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