World affairs

Labour aristocracy a thing of the past.

Another Labour Day has come and gone, so how are workers faring these days? Not all that well.

Exactly a century ago, Vladimir Lenin, soon to become the Communist ruler of Russia, published a treatise designed to explain why workers in industrialized countries were not attracted to left-wing revolution. In Imperialism, the Highest Stage of Capitalism, Lenin theorized that imperialist countries in the developed world, through exploitation of their colonies by access to cheap raw materials and exports of goods, enabled their capitalist classes to make such “super profits” that they could pay high wages to their own employees at home.

This created, in Marxist terms, a “labour aristocracy” that could count on strong trade unions that protected decent wages, job security, and standard of living. The result, wrote Lenin, was “something like an alliance” between the workers of a given nation and their capitalists.

Lenin’s theory of imperialism argued that the “handful of the richest, privileged nations” had turned into “parasites on the body of the rest of mankind.” Why is this no longer the case? Why have the ruling classes in so-called imperialist countries seemingly abandoned their own working classes in favour of a borderless international economic system? A new book by Richard Baldwin, The Great Convergence: Information Technology and the New Globalization, helps us to understand this process. He notes that between 1820 and 1990, the share of world income going to today’s wealthy nations soared from 20 per cent to almost 70. Since then, however, that share has plummeted. As he explains, this reversal of fortune reflects a new age of globalization that is drastically different from the old.

The “old” globalization, the result of the Industrial Revolution, increased international trade, but goods were produced in the developed home countries and exported. Innovation and production remained local, so well-paid jobs in major industries remained in the rich countries. Hence the “labour aristocracy” of yore, where factory workers could live comfortable “middle class” lives.

Baldwin, a professor of International Economics at the Graduate Institute, Geneva, and president of the Centre for Economic Policy Research (CEPR), in London, asserts that the new globalization is driven by an information technology that has radically reduced the cost of moving ideas across borders. Rapidly falling communication and co-ordination costs have made it far less necessary for all stages in a production process to take place in the same factory or even country.

This has made it practical for multi-national firms to move labour-intensive work to developing nations. These firms also ship their marketing, managerial, and technical knowhow abroad.

It has allowed jobs that were previously sheltered to being sent abroad. He cites obvious examples such as the outsourcing of call centres, data entry and digitization. Now managers, technicians and clerical staff back home, as well as manual workers, are also in danger. The historically uneven economic development between advanced industrial metropoles and peripheral colonies, which allowed for a comfortable life for the working class, no longer exists. Economic globalization has had more and more people join what British sociologist Guy Standing, a professor of Development Studies at the School of Oriental and African Studies, University of London, calls the “precariat.” Published in 2011, his book The Precariat: The New Dangerous Class describes the economic insecurity that has resulted in a precarious way of life for those who have fallen out of the old working class. Sites like Airbnb and Uber result in the decline of hotels and taxis. It means more people losing somewhat steady income in those sectors of the economy, while the Airbnb and Uber entrepreneurs really become part of the precariat, with no security or pensions.

As stable jobs disappear, the uncertainty of work has become normal. Everyone becomes what used to be called a “temp.” Obviously, they have no unions to protect them.

So where is today’s politically correct left, while all this has transpired? Engaged in identity politics, and more worried about pronouns and bathrooms than about lost jobs.

Not only that, they are so worried about nationalism that they support establishment globalists like Emmanuel Macron of France and Angela Merkel of Germany.

The reaction? As advanced economy “losers” are laid off, with little prospects for future well-paid work, they register their alienation and anger via the ballot box, so we see the rise of populist movements across the developed world. Lenin and his Bolsheviks had insisted that, since no ruling class willingly gives up power, there could be no peaceful road to socialism. Will this also prove true regarding a peaceful road to economic nationalism?