All You Need to Know about Liberalism: Capitalism and the State (Part II)

(See Part I here. While closely related, Part II is readable as a stand alone piece.)

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Economics. We know the economy mostly through the dollars we keep (or lack) in our pockets and the jobs we work (or suffer through) during a major portion of our waking lives. Outside of these more tangible ways we experience the economy, talk of the stocks, bonds, and securities, the federal reserve, supply-demand curves, etc… mostly seems arcane and safely ignored. And yet upon reflection, it’s difficult to escape the conclusion that this topic doesn’t deeply determine our lives and social relationships.

How can we imagine a better world and then make one if we refuse to look economics in the eye? Avoiding the principles of economics shackles us to our more immediate impressions of the world and fogs our capacity for critically relating to ourselves and society as a whole. Economics isn’t just for bootlicking academics and the self-aggrandizing rich; it’s also for restless workers and the scheming masses. It may be an abyss, but it’s one that with a little encouragement and self-assurance we can get to the bottom of and weaponize in service of our own ideas of liberation.

This piece is Part II of a series on liberalism. As a refresher, liberalism as a political philosophy does not refer to the first part of the liberal/conservative dichotomy in US politics but is the more encompassing mainstream worldview “that holds that free market capitalism and limited representative government are the best way to organize society, protect human rights, and promote the freedom of people to choose how to live.” Part I focuses more abstractly on defining liberalism and showing how it ignores inequalities of power which then corrupt everything liberalism claims to stand for. Part II is a look at how this plays out more concretely through capitalism.

In preview, the function of liberalism is to justify and facilitate capitalism. Capitalism is the heart and soul of liberalism. While liberalism contains a good many things besides just capitalism, all the other things are accessories to capitalism (e.g., the police), are in perpetual conflict with capitalism (e.g., government regulation, like the minimum wage and environmental laws), or are always being warped to accommodate capitalism (e.g., human rights).

By itself, anti-capitalism is a vague and purely oppositional term, but the critique of capitalism is important on its own and opens up space for other ways of thinking. Like nearly all critiques of capitalism, the one below is loosely Marxian*. Alongside critiques I make brief incursions into other forms of economic thinking, how things like labor, capital, and organizational structure might take on different forms in non-capitalist economics. The last section is about the dynamics of class struggle, as anti-capitalism is not so tasty without a little action to spice it up. Most of all, I aim to present the fundamentals of anti-capitalist class analysis so that they can be understood as all fundamentals should be, as simple and powerful.

(* I should say that Marx’s critique of capitalism goes much deeper into some of these topics, and I think is very worthwhile if you like long theoretical books. The analysis below does use some terminology different than Marx but not because I disagree with his terms. I think a major problem of introductory and brief overviews of Marx’s thought is using the same terms as Marx without the accompanying 1,000 pages that fully explain them. Thus, many leftists get lost in the jargon jungle when instead they could choose any number of more relatable terms that more succinctly capture the central thrust of anti-capitalist, Marxist thought.)

 

Section I: Capitalism

Hating Capitalism vs. Understanding Capitalism

There are many reasons to dislike capitalism. I agree with those who see capitalism as a primary (though not necessarily exclusive) root cause of most of society’s ills, including poverty and hunger, the military-industrial-complex and war, lack of access to good healthcare and education, the heating and polluting of the planet, white supremacy and patriarchy, and so on. These are the negative things that we feel on a daily basis because of capitalism. It is healthy to dislike something because it harms you and others.

Many mistakenly believe that since they see capitalism do bad things and they dislike those bad things, they then understand how capitalism works. But bad things are just the effects of capitalism and by themselves tell us almost nothing about how capitalism itself causes those things. In order to take action against a problem, we need to not merely hate the problem but also understand the problem by learning how and why it comes about. To grasp the overall picture, we need to start at the bottom and work our way up.

 

Economic Value

Value in the economic sense is something made or done by a person–a good or service–that meets a human need or want. Not everything that constitutes value can be reasonably integrated into the formal economy. For example, being kind to your friends and family will certainly meet some of their needs and wants, but they’re not gonna pay you for it. What counts as worthy of inclusion in the formal economy is politically contested; for example, child-rearing is very intensive, time-consuming, and valuable to society but is almost never economically rewarded. When something meets a need or want and starts to be exchanged for money then it becomes part of the formal economy.

Value needs two things to be created: human input (labor) and some broadly defined set of tools (capital). If either of these are missing, economic value can not be produced. The difference between different kinds of economics–capitalist, socialist, etc…–is how labor and capital are organized in relation to each other and to the people that make up society.

 

Capital vs Property

For our purposes, capital is the non-labor inputs needed to produce a good or service and is a universal ingredient of production. There are many kinds of capital. Capital in the old-school sense includes the machinery, the factory building, the vehicles needed to transport goods, and a loan from the bank or money from investors to get the process rolling. Other kinds of capital include software, contracts, and patents. In more abstract form, capital can be company stock or a government bond. Capital is not specific to capitalist economics, as some kind of capital–from hunting spears and fruit baskets to oil tankers and skyscrapers–is needed for production in any economy.

Crucially, capital is different from property. Property is a particular relationship between people and capital that is realized in a particular way in capitalist society. Property is an ownership relation between individuals, capital, and the state.  Ownership is granted by the state and gives the individual owner the authority to use their property however they see fit, which usually entails maximizing profits from it. Private Property = Capital + Ownership. (I use the terms “owners” and “capitalists” interchangeably). If someone tries to do anything with your property that you do not consent to, then you can make claims to state authorities to have that person stopped and punished.

Capitalism would approximate socialism in some ways if the distribution of ownership under capitalism was egalitarian because then everyone would have a stake and say in the economy, but instead the top 1% of the US households own more capital than the bottom 95%. Even more stark is that globally the richest 61 people have more wealth than the bottom 3,700,000,000 people. So a very small class of owners have control over the vast majority of the economy’s capital. What this looks like in practice is investors unilaterally decide where to put their capital, hire company executives to decide how to use that capital, and workers have to find a spot for themselves within an economy in which they had no part in designing. These mechanisms are the opposite of democratic and are usually done in the service of profits over other human concerns. It’s somewhat common for investors to discipline or fire their chosen executives when they deviate from their given mission of maximizing profits.

But not all things we own are capital. The state treats our relations to possessions and capital roughly the same under the banner legal concept of “ownership”, but possessions and capital are very different things. Capital is what is used as a non-labor input in production (e.g., factories, loans, machinery), while possessions are things we have access to and/or control over that are valuable to us in ways not directly relating to producing other goods and services (e.g., house furniture, clothes, food, yachts, sports cars).

Communists or anti-capitalists of whatever stripe are not coming to steal your toothbrush but do have some interest in whoever owns the toothbrush factory. Toothbrushes are possessions; toothbrush factories and toothbrush-making machinery are capital. Anti-capitalists don’t give a hoot about your toothbrush, or your favorite book, or your stamp collection so long as it isn’t inordinately expensive and somehow wrongly acquired (like through money taken from workers via capitalism). We should all have access and control over those things we need in our daily lives.

Anti-capitalists have a primary interest in the ownership of capital because of its central role in the economic system and its reproduction of inequality, whereas anti-capitalists only have a secondary interest in the ownership of possessions insofar as it can become extremely unequal due to the relations arising from the ownership of capital in the first place. Inequality of capital ownership is mostly the cause of society’s economic inequality writ large, and the inequality of possessions is just one effect.

Often, ownership in the capitalist sense is assumed to be natural, and surely people have for all time had access to and control over things that they did stuff with, but what is called “ownership” is a specific way of structuring access and control over our material surroundings. Individualized ownership both of capital and possessions is essential to creating and maintaining economic inequality. The “individual” aspect of ownership is what makes it so destructive to economic equality, as one individual in a company can legally own the entire company and decide on their own entirely how to run the company without taking into consideration the interests or ideas of everyone else in the company. Other ways of structuring human relations to capital and possessions are entirely possible and lead to very different modes of producing and living.

As a briefly sketched alternative to individual ownership, imagine if society made decisions about capital allocation democratically. As with any societal decision that deeply affects everyone, giving everyone input and a stake in that decision is common sense if you think people are deserving of self-determination. Like any instance of democratic decision-making, people who are affected by a decision need to have the relevant information that frames the issue, need to hear proposals about solutions, need to debate with each other the merits of different proposals, and then have some kind of vote. Just as it’s natural for organizations of any kind to have different scales of decision-making (local, regional, national) to deal with different scales of policy, the same could just as easily be used for capital decisions whereby national, city, and workplaces each had some say over the capital in their jurisdiction. These kind of organizational structures are not arcane or complicated and are actually rather common in all democratic organizations of many different kinds. There’s no grand or essential mystery about how to make the economy democratic. It’s just that because so few people have ever participated in democratic economic forms it feels unfamiliar, and because economic democracy is not very profitable for owners, the idea doesn’t get much attention in the media or other public sources of information that owners have influence over.

Ultimately, I’m less concerned with the final capital allocation scheme that might be reached because I’m more concerned with how capital allocation is decided, which determines who benefits from the economy and who doesn’t. I think people make good decisions about their lives and communities when they have the democratic power to do so. The same reasons we don’t like monarchy (unilateral rule of one) in politics should be the same reasons we don’t like monarchy in the economy: the philosopher king is nice in theory, but it fails to live up to its promise of being in the best interests of everyone.

Economic systems in which decisions made about capital are democratic are called socialist. Many governments and political parties have tried to call themselves “socialist” without actually being so, but the original and core meaning of socialism remains unchanged. In the traditional parlance, socialism is “workers’ control of the means of production“.

Capitalism is sometimes defined with an emphasis on the elements of free markets and voluntary exchange. This is misleading, as many non-capitalist economic theories and realities also make use of markets and voluntary exchange. Most essentially, capitalism is an economic system based on private property, which carves society up into a class of owners who structure the economy and reap its benefits and a class of workers who produce the benefits but have little formal influence on the economy.

 

Labor vs. Wage Labor

Labor is the physical and mental effort exerted in the production of goods and services. Labor, when combined with capital, produces economic value. Just like capital, labor is organized in particular ways in particular economic systems.

Wage labor is the dominant way that labor is organized under capitalism and is the relationship where a worker sells their labor power to an employer. Because of private property, only a small group of owners has control over the capital in the economy. Because workers don’t have much of their own capital with which to efficiently and efficiently produce goods and services themselves, they need to rely on owners and thus need to sell their labor.

When a capitalist buys labor from a worker, the capitalist takes the value created by that worker and gives some to the worker and keeps some to themselves. Wage labor includes those who are salaried too and anyone who is paid for labor done in a workplace that uses some other owner’s capital.

The labor contract is written by the employer and covers most things pertaining to the job, including the tasks, conditions, wages, hours, benefits, and so on. Because the owner owns capital and can do whatever they like with it, including writing labor contracts in whatever way they see fit, workers are left to either take the job or not, and rarely have much influence over the details of the contracts being offered. While workers have a range of companies and jobs to choose from given their marketable skill set, the power imbalance between workers and owners in society permits workers only a peculiar kind of freedom. In this scenario, the owner is the bricklayer and the worker is the brick, and it is not of much consolation that the brick may chose its bricklayer.

While all of this talk of workers may seem to exclude those who can’t work for various reasons, the anti-capitalist tradition is clear in its commitment to meeting their needs as well. People who are not owners but also not workers include children, the elderly, the sick, people with certain kinds of disabilities, the chronically under-employed, and so on. While in one sense these people are not workers, as non-owners they are often workers at some point in their lives and thus are part of the working class more broadly. Some people will never work but society still has an obligation to meet their needs, and it’s not difficult to see that an economy that apportions resources democratically would better serve them than one where the rich have financial incentives to defund social services in order to lower their own taxes. As the communist motto goes, “from each according to their ability, to each according to their needs.”

 

Wage Labor vs. Surplus Value

The surplus value of economic production is the money made by a company beyond what is needed to keep production running.

There’s only a limited amount of money that a company makes and gets to divide among its expenses. Raw materials, loan payments, rent payments, replacing old machinery, these are all fixed costs of production meaning that a company doesn’t have the ability to adjust these costs. Labor is a more flexible cost, as owners can decide how much they want to pay workers for their labor.

What’s left over (the surplus value) after all of the expense obligations are paid owners can decide to reinvest in the company and make it bigger, thus making the owners richer, or they can give the money directly to themselves in the form of profits, making the owners richer also.

The easiest and most direct way for owners to increase their surplus value (and thus their wealth) is to push down wages. The easiest and most direct way for workers to increase their pay and standard of living is to increase their wages. Workers and owners have interests that are in opposition to each other. This is an inherent conflict that can’t be circumvented as long as society is divided between those who work and those who own. When wages are set at a workplace, it isn’t a resolution of the fundamental conflict into a fair price but merely an indication of the balance of power between workers and owners at the workplace and in society as a whole.

 

Earning from Working vs. Earning from Owning

Under capitalism, workers are paid wages because owners pay them to create something valuable. Also under capitalism, owners make money from the stuff they own, not the work they do. Owners sometimes work, but they are then paid for that portion because of their work, while the portion of their income from owning accrues merely because they own. In the economics literature, this is called “passive income” because capitalist economics gives them money for owning stuff disconnected from any value they themselves actually contribute through effort.

Passive income from capital ownership takes a variety of forms, including interest on loans that a finance capitalist owns; or rent from buildings or other capital that a real estate capitalist owns; or dividend payments on company stock that an industry capitalist owns; or the increase in asset value of a company or building or commodity that an investment capitalist owns. In all of these cases, owners have the legal right to make money passively and without the logical justification that they actually do anything. Workers do the work associated with these enterprises labor, while a significant portion of the economic value created through economic institutions is given to capitalists free from the burden of effort or need.

The facts are instructive. For example, in 2014, the bottom half of the population owned an average of $326 in capital each, while the top 1% owned an average of $16,000,000 in capital each. The returns on capital for the top 1% averaged over $750,000 in that year. Among the top 0.01%, they earned an average of $21,000,000 each in 2014 from their ownership of capital, which constituted more than 75% of their income.

Capitalism is the ideology that justifies giving money to rich people because they are rich (they own capital), and taking money away from workers because they are not rich (do not own capital). It’s ironic that criticisms of socialism often center on people becoming lazy if not coerced into working via labor markets, but it’s actually owners under capitalism who are getting paid for not being productive. If our economy were structured such that there were real mechanisms for democracy in deciding how to use capital, it’s difficult to imagine that people would democratically decide to give a large share of the income to people merely because they own things and not because they do work or have particular needs.

Most of the money that owners make from property is then re-invested back into property, such that the rich are constantly getting richer and at a fast pace. Workers are stuck in the same relation of needing to sell their labor to cover their expenses. This dynamic, played out through many channels, directly and indirectly, is responsible for stagnant wages for workers and skyrocketing wealth for owners in recent decades.

As IWW organizer Big Bill Haywood said, “If one man has a dollar he didn’t work for, some other man worked for a dollar he didn’t get.

 

Section II: The State

The State as a Means of Reforming Capitalism

Many see the state as a way to reign in the abuses of capitalism and retain capitalism’s useful elements. State-enforced policies on the minimum wage, workplace health and safety protections, and progressive taxes are certainly positive elements that make life better for workers.

But the idea that there are good elements of capitalism that we need to preserve is a sleight of hand. Preserving capitalism in any form means that we preserve the idea that some people make money off of other people’s work. There’s a lot of myths around how capitalism benefits society (it makes people work hard, it produces overall increases in the standard of living, it stimulates technological innovation), but closer inspection (to be covered in a later Part of this series) reveals that none of these pass muster. That which is supposedly good about capitalism is good because workers create value, and that which is bad is owners taking money from the economy without reasonable justification. The distinguishing feature of capitalism is that it gives owners control over the economy via the institution of private property, and to argue that this feature is somehow responsible for the value that workers create requires some vigorous hand-waving.

While pressuring the state to pass pro-worker policies might be strategic from time to time, the idea of the state as champion of the good parts of capitalism and guardian against the bad parts misunderstands the relationship between owners, workers, and the state.

 

Exploitation

In the previous installment of this series, I defined domination as when one person or group can use their power to get what they want at the expense of another group getting what they want because the former has more power than the latter. Say, the bully on the playground pushes you off the swing to take it for himself. That is domination. Exploitation is a specific kind of domination where the person with more power extracts value from the work or resources of the person with less power, usually on a consistent basis. Exploitation is when the bully steals your lunch money every day and says he’s gonna beat you up if you tell on him or don’t have the money every day. For those who don’t believe that extreme economic inequality is inherently self-justifying and natural, persistent inequality is only possible when there’s exploitation to feed it.

At the heart of the question of who has control over the value created by human activity is the question of who has control over capital — and why. Every unequal society has had some mechanism for exploitation, and under capitalism that mechanism is the interaction of the owners of private property and the sellers of labor. But because exploitation depends on the domination of people, and because people don’t, writ large, consent to domination, by definition, there must be something holding that mechanism in place against the natural tendency of people to resist domination. The ideology of liberalism defends property at the level of ideas, and the institution of the liberal state defends property at the level of physical violence.

 

The Liberal State as the Enforcer of Property

“It is only under the shelter of the civil magistrate that the owner of valuable property … can sleep a single night in security.” – Adam Smith

“Government is the shadow cast by big business over society.” – John Dewey

We now have a basic picture of the dominant forms that capital, labor, and resource access take on under liberalism: private property, wage labor, and ownership, respectively. The state enforces these relationships with its courts, law enforcement, and prisons. Liberalism tries to present these forms as natural when in fact they are contingent on specific historical processes, none of which are inevitable or unalterable.

A substantive survey of arguments about the legitimacy, or lack thereof, of the state is beyond the scope of this post, but a brief summary will be helpful. According to mainstream liberalism, the purpose of the state is the preservation of human rights (discussed more in-depth in Part I), including things like the right to vote, to safety, to religion. It also includes the right to own property and engage in trade with others.

The anti-capitalist critique of the liberal state agrees with John Locke, the most influential originating philosopher of liberalism, that the central function of the state is to protect people’s right to their property. The only difference is that anti-capitalists see this as a bad thing. In this critical view, the state is a tool of those with power and wealth in society to maintain and expand their power and wealth, and the chief strategy for doing this is the coordination of state violence (police, armed forces, prisons, etc…) to protect private property. All of the state’s other functions either compliment the protection of property (safety of persons and social peace make commerce more profitable, among other things) or are victories won by popular struggle (social safety net, public education, wider access to health care) that are ancillary to the state’s primary purpose. Certainly, the state is a site of struggle between popular forces and elites. But the anti-liberalism, anti-capitalist critique of the state locates its essential function as upholding private property and consequently all of the inequality and exploitation that inescapably follows that.

We can crudely test these hypotheses about the state using history. If the state’s basic function was to protect equality of rights, one would imagine that states emerged with these rights protected from the beginning. However, few (if any) of the more positive social functions of the state (public education, safety net, medical care) were birthed alongside the state but only came into being after social struggles to force the state to provide them. On the other hand, if the state’s primary function were to ensure rich people’s right to their property against those without property, we would expect to see, from the beginning, the violence of the state being used against those who challenge that function. The US state’s use of police and military force to crush popular struggle attests to this, from state violence to seize land from indigenous people, to enforce slavery, to repress labor unions, to restrict the rights of women, and so on down a very long list. The violence used against social movements that directly or indirectly challenges the “sovereignty of property” testifies to the state’s central purpose.

 

History and Function of Police

Just as private property and wage labor are not natural institutions, so the police too did not exactly sprout up out of the ground. The police are a particular way to enforce a certain kind of public order which contrasts sharply with other possible mechanisms and kinds of order. Given the liberal definition of the state as upholder of property, it makes sense that the police are the first responders to any threats that property and owners may face.

Looking back historically, police departments only arose in cities after urban populations swelled, urban factories boomed, and labor conflict between workers and owners became pronounced. In the US, where slavery was also a major economic mode of concentrated labor exploitation, the police, as one would expect, also has its roots in Southern slave patrols. Before the institution of the police arose in the 19th century, institutionalized violence to protect wealth was clearly in existence in the form of constables and county sheriffs and the king’s army and such. Threats to property were not urban mobs of the unemployed locked out by capitalists or militant workers’ organizations, but mostly armies of other countries and the occasional rural peasant rebellion. The persistent threat of mass social unrest against inequality took a new form alongside industrialization and urbanization, and the state rose to meet that threat through the creation of the police. (See these articles for a more in-depth treatment.)

What would an institution for safety and fairness look like in a society in which the economy was organized democratically? The police, in their primary function of defending private property, would cease being relevant to society. Some other social forms for safety and fairness would arise, but they would be so radically different than the police as we know them that they really wouldn’t be police at all. This is what is meant by the term “police abolition” that is getting a lot of attention these days in the left-leaning segments of the anti-police brutality movement and the Movement for Black Lives.

 

Section III: Class Struggle

Workers vs. Capitalists

“But the same people cannot be both rich and poor. This explains why these two classes, the rich and the poor, are regarded as parts of the city in a special sense. Nor is this all. Since one of these classes is generally small, and the other large, they appear to have the status of opposed elements among the parts of the city. This is why the constitutions which are established are based on the predominance of one or other of these elements.”

– Aristotle, 350 BCE, emphasis added.

Class conflict was certainly not invented by Adam Smith or Karl Marx. It’s present in all unequal societies, as Aristotle observed 2300 years ago. It’s just that under capitalism, which started to take shape in the late 1700s, class conflict takes the form of owners vs. workers.

Class struggle is a blunt term that covers all conflict between owners and workers stemming from their different positions in relation to capital. Workers and owners each organize to build their own power and exercise it. Class struggle takes many forms, the most visible of which are things like union campaigns for labor contracts, legislation for higher wages and better working conditions, and worker strikes. Class struggle also includes more mundane things like a boss stealing your tips or a worker deciding to work slower because she knows repetitive bodily movements will re-injure her wrist. Anything where worker interests or capitalist interests are acted upon at the expense of the other is class struggle.

 

Labor’s Weapon

If capitalists have almost all of the money, and thus most of the things money can buy, where do workers get their power from? Because economic value needs both capital and labor to be created, when workers withhold their labor from capital, economic production ceases. When production ceases, capitalists make no money, which can quickly become a catastrophe for them because they still often have to cover expenses like loan payments, the rent on their buildings, property taxes, and the wages they owe managers. If a strike is well-executed, owners can face financial ruin if they don’t make a deal with workers that satisfies them enough for them to return to work.

The labor strike is the primary weapon used to withhold labor, and has historically been the working class’s primary way to win demands from their employers. The most historic labor struggles have been won or lost on the effectiveness of their strikes.

 

“Managers Are Workers” vs. “Managers Discipline Workers”

While the interests of workers and owners are directly at odds with each other, owners usually never interact with workers and hire other people to do so.

Managers (executives, bosses, etc…) occupy a nether region between owners and workers. On the one hand they don’t own capital and are paid salaries for the labor they perform and are thus similar to workers. On the other hand, managers are employed by owners to directly advance the owners’ interests over and against workers’ interests, and a central part of that is disciplining workers who object to or take action against inadequate wages and poor working conditions. Sometimes disciplining and controlling workers is done bluntly, with write-ups or firings. Sometimes it’s done softly with a smile, with carrots instead of sticks, and with gossip instead of outright threats.

Of course, not all jobs are bogged down with constant conflict or toil, as some people are lucky enough to have jobs that are fun or engaging or where they are largely independent of boss supervision. This doesn’t mean capitalism doesn’t operate in these spaces, just that there’s enough benefits to go around to make these few and lucky people happy enough. However, the fortunate conditions of these workers often exist alongside and depend upon the more harshly exploited labor of other workers elsewhere in the same industry. For example, being a software engineer on cutting edge technology may be a dream job, but the workers who make the electronics that the software runs on do some of the lowest paid and most menial jobs on the planet. Even in jobs thought to be traditionally free from class tension, owners are always looking for ways to be more profitable and lower wages, and jobs like programmers and doctors are increasingly feeling the weight of exploitation. When it comes down to it, whether you’re a professional or a sweatshop worker, if you start to ask for a higher proportion of the overall value you create, you’re in for a ride. In the class struggle, managers side with owners 99% of the time and are the face of class exploitation that workers are most familiar with.

In a socialist economy, sole decision-making power at the level of the company would not lie in the hands of one or a small handful of managers. Instead, everyone would have some kind of vote to determine the organization of production. Certainly, some people could be elected to take on various kinds of specialized tasks, including management-like tasks of coordinating teams, but people with these responsibilities wouldn’t have boss-like authority to unilaterally discipline workers. Many managers do economically and socially useful tasks for companies, it’s just that they do so within an organizational structure that also requires them to discipline workers, which makes them largely adversaries of working class struggle when it bubbles up. If you possess a skill set that contains the more socially beneficial managerial tasks–such as long-term and large-scale planning, people skills, organizational and administrative expertise–these are also useful for grassroots organizing, though using them that way isn’t as financially lucrative.

 

Class Consciousness

Class consciousness is a knowledge of class dynamics and a commitment to engage in class struggle to advance the interests of your class as a whole. The conventional way class consciousness is said to arise is as follows: 1) workers individually feel the negative effects of their poverty, formal powerlessness, and lack of dignity in the workplace, 2) workers talk to each other about their problems and discover that they have shared grievances, 3) workers realize that if they band together, they have the power to fight back against their conditions and demand more, as in the form of higher wages and better conditions, 4) class consciousness becomes revolutionary when workers come to the conclusion that the only way to truly free themselves and humanity as a whole is to destroy capitalism so that people collectively share in the value created by labor and democratically decide how production should be organized. While the process of acquiring class consciousness looks different for each person, I think this general process is one most people go through in some way when being radicalized.

 

The Contradictions and Tensions of Class Society

Contradictions are when two forces oppose each other. In class society, the primary contradiction is between owners and workers. Owners want to maintain the separation of humanity into these classes because it is the basis of their ability to extract surplus value from workers. Liberalism is the ideology that owners use to justify class society. Workers want to abolish this contradiction because it dehumanizes and disempowers them. Socialism is the ideology that workers use to delegitimize class society by arguing that the economy doesn’t have to be structured from the top-down but could be bottom-up.

If the working class and the owning class are two tectonic plates perpetually crashing into each other, class tensions are the friction and earthquakes that ripple out from this fundamental contradiction. Here again, liberalism seeks to either gloss over these tensions, justify them, or redirect the agitated response to these tensions away from capitalism.

A common class tension is elites’ championing of the freedom of the individual and capitalism’s dependence on most people having little freedom in and gaining so little benefit from the part of their lives in which they create social value. Smaller-scale manifestations of class tension are when your boss says they care about you but then cuts your hours or wages, or when a millionaire CEO says they wish they could offer better health care packages to workers but that they can’t afford it, or when a politician says they support workers but oppose a higher minimum wage. Because capitalism pushes and pulls on every bit of society, its tensions are everywhere.

When the contradictions of class society are sharpest, when the tensions are most starkly perceived, deeply felt, and cut through the myths we are told by liberalism, is when the potential for class consciousness and struggle is most fertile. When people hear about the supposed joys of capitalism and feel the pangs of their suffering under capitalism, that is when masses of people can quickly come to ideas about the need for collective action and changing society.

Resolving class contradictions means getting rid of class society, which requires getting rid of the institution of private property that divides people into workers and owners.

 

Contradictions and the Dynamics of Class Struggle

Social forces approach these contradictions in different ways: 1) liberalism tries to rationalize and justify the contradictions, 2) owners pursue their own immediate interests of seeking lower wages and higher profits, 3) workers pursue their own immediate interests of higher wages and better conditions, 4) when owners are threatened by worker power, their longer-term interest dictates that they soften the contradictions through reforms just enough to deflate worker power but maintain profits and control, 5) some workers try to advance their longer-term interest by channeling class consciousness into anti-capitalism and a belief in social transformation of fundamental class relationships and not mere economic reform. Thus, workers and owners have opposing immediate and longer-term interests and liberalism tries to keep everyone happy whilst maintaining the status quo. Let’s look at each of these in more depth.

1) If the function of liberalism is to uphold capitalism, we should expect a main feature of liberalism to be upholding the contradictions, which it does through narratives about who deserves money and power and why. This is done in many ways: Liberalism tells us that we have every opportunity as anyone else to make as much money as anyone else (“equality of opportunity”); economic outcomes are the natural outcomes of individuals’ character and worth to society (“individualism, hard work, bootstraps”); when people are poor, they are either lazy, dumb, or unfortunate (not systematically exploited or oppressed); if workers are unhappy, they can leave their job whenever they like or can move up the ranks in their company or industry (“freedom of choice”); rich people and bosses are not only talented but are generous and kind and spend their time trying to improve society (Bill Gates, Warren Buffett); owners and bosses are responsible for the economic privileges that workers enjoy (instead of labor struggle and unions, or the valuable labor workers perform, or the necessity of bosses having to pay more because of job competition). The function of these myths is to uphold the economic order by directing our anger at the victims of capitalism for their supposed inadequacy and by directing our admiration at owners for their supposed accomplishments and magnanimity.

2) The way owners pursue their immediate financial interests is through increasing profits, which can most easily and directly be affected by decreasing wages. Owners have many ways to do this. Most directly, they can just directly decrease the wages they pay their workers. Owners can also fire workers and hire new ones at a lower cost, or divide up the company’s full-time positions with benefits into more part-time positions without benefits, or move factories to areas with lower overall wages and non-unionized workforces, like Latin America, Asia, or the Southern US.

A good share of the entire state legal apparatus exists to facilitate this process. Free trade agreements internationally enable the free flow of capital across national boundaries but increasingly restrict the movement of people, which allows factories to be relocated to poor regions while workers in poor regions can not relocate to regions with economic opportunity and so they become the fodder of low-wage sweatshops. Owners have the legal right to set wages as they see fit. Companies take their profits from workers and use favorable legal frameworks to hide profits in hard-to-reach places while workers are left to carry local and national tax burdens.

3) Workers pursue their immediate interests through seeking higher wages. Done individually, workers ask politely for higher wages or try to find a better job for themselves. A minimum degree of class consciousness is needed to see that wherever you work, if you bargain by yourself against your employer you will be at a disadvantage, while if you band together with other workers you have more power to demand concessions from owners in the form of higher wages and better benefits. Worker power is exercised through collective disruptive action. Labor unions are the primary organizational channel through which to do this.

4) Owner interests are not (usually) pursued so recklessly and bluntly that they aim only for short-term maximum profits and corporate control. Owners know that if they push their interests further than they can sustain given their power, workers can use those heightened contradictions to strike back more effectively. It’s the same reason a soccer team doesn’t just play 11 people at the forward position with no defense or goalie. The overall interests of owners dictate that they consider long-term consequences, and they do this in the form of reforms and concessions, but only when it’s advantageous. This is one of their primary defenses against worker power.

This happened most dramatically during the Great Depression when President Franklin D. Roosevelt “saved capitalism” with the New Deal reforms. For liberals, FDR is among the greatest presidents, but radicals are less rosy about the short- and long-term implications of his rescuing the status quo. After the economy crashed, unemployment and poverty were skyrocketing and while the wealthy were not making as much money as usual, they were retaining much of the massive wealth they acquired in the 1920s while other people went hungry. Class consciousness was super-charged by razor-sharp class contradictions and a period of labor struggle unseen in the US before or since took place. Strikes and other labor actions were spreading like wildfire, with 3 particularly large and violently repressed strikes among automakers in Toledo, truckers in Minneapolis, and longshoremen on the West Coast. FDR had come to power and then made labor unions protected and legal, gave the unemployed jobs through direct jobs programs, and set up many other institutions (public housing, for example) to mitigate capitalism’s most terrible effects. Many capitalists were strongly against FDR’s reforms because of their short-term interests, but overall the elites settled on this compromise to maintain their class position and prevent labor militancy and radicalism from spreading further.

5) What is the workers’ long-term strategy to counter owners’ long-term strategy of giving out crumbs to calm things down when worker agitation gets hot?

When focused merely on immediate needs and survival, getting paid enough for food and rent can satisfy workers just enough that they do their jobs and complain but otherwise move along. The capitalist strategy of giving out crumbs creates a kind of life-long, slow burn of exploitation where immediate destitution and starvation is unlikely for most workers but self-determination, deeper fulfillment, and a standard of living to match their labor output are never attained.

For more substantive change to be possible, we need to motivate people to not be calmed by the crumbs and soothed by the myths of liberalism. We need to look deeper–seeing that crumbs don’t solve the problem but just sugar-coat it–and broader–even when one segment of society gets crumbs many others are left out. Connecting immediate and widespread grievances to deeper problems of capitalism, and formulating a plan to address them by way of a radical, militant, grassroots movement to dismantle private property is the long-term strategy of revolutionary class politics.

 

The Function of Mainstream Labor Unions

Mainstream labor unions have become significant social institutions precisely because most people are workers and under capitalism, workers don’t get the full share of the value they create, and thus there are lots of opportunities for mainstream unions to try to get a little more for workers. It’s impossible to understand class struggle without understanding the role of these unions.

When worker agitation is not channeled into bureaucratic channels and is not given some gains, it can boil over and threaten capitalism. Thus the state (and owners) have a long-term interest in bureaucratic channels to prevent social explosions that threaten private property. Likewise, many workers want to pursue their immediate interests in the safest possible way, by joining together and collectively bargaining with employers. All of the effort of going on strike and resisting corporations and the state can be risky and time consuming, and if workers can just pay someone else to negotiate on their behalf every once in a while, mainstream unions are often the choice of least resistance while still retaining some power. Thus, some workers and owners often have their interests united in the role of mainstream labor unions dampening class conflict and handling things bureaucratically. This is the function mainstream unions play in class society.

This strategy puts radical workers and their organizations at odds with workers and organizations who want higher wages but not deeper change. Does this mean we must fight against our fellow workers? No, it means we must organize.

 

Mainstream Unions vs. Radical Unions

The function of radical unions, as used by radical workers, is to fight for short-term victories in a way that advances towards the long-term goal of abolishing private property. The differences in the functions of mainstream and radical unions leads to differences in how these kinds of unions operate and are structured. Knowing the differences is important for orienting ourselves to the kind of labor movement we want to see.

Some mainstream unions have been made more democratic, militant, and radical by their members taking initiative, and these efforts are valuable and should be applauded. Often, however, even more active mainstream unions are still limited by the aspects of mainstream unionism that they retain. To give mainstream unions the benefit of the doubt, in this account I’m assuming they’re actually trying to improve the lives of their members, even though in practice some of these unions are really just parasites who take dues and are rigidly authoritarian or are just as abusive to their own staff organizers as corporations are to their workers. Similarly, not all unions that claim anti-capitalism are active or effective. Below, I draw out the main institutional features of most mainstream unions and radical unions and how they differ.

I. Who Is the Union

In mainstream unions, worker-members are often disconnected from the formal organization of the union. When these workers think of the union, they think of their union steward, union representative, union negotiators and lawyers, and union president. The highest union executives often make six-figure salaries when the majority of the membership is making a small fraction of that. This class of union officials can acquire their own set of interests separate from the workers, such as seeking to maintain their own salaries instead of advancing worker power. This kind of union feels like and in many ways is an outside entity, which some workers enjoy because they don’t have to do union work themselves but some workers resent because it can feel like they’re paying people out of their paychecks and not seeing much in return.

In active radical unions, the membership is the union. Workers do the organizing and the administration of their union, and those who take on a lot of hours of administrative work may be paid but at rates similar to their job wages. Full-time administrative jobs are minimized as much as possible and are rotated on a regular basis so that life-long administrators don’t arise and monopolize the skills and knowledge of the union and don’t acquire a set of interests separate from the membership.

The organizing is also done by workers themselves, which can be more effective than having professional staff organizers because people are a lot more likely to listen to and trust people at work who share the same conditions and who they see everyday than someone from the outside. In these ways, the radical union is never projected onto those who aren’t the workers themselves, and the workers retain the full agency of their efforts. In short, radical unions aim to be as participatory and democratic as possible.

II. What Is the Union

For mainstream unions, the labor contract with the employer is what the union is centered around. Labor contracts are fought for, and after they are won, labor contracts are enforced. The ink on the paper defines the rights of members. The goals of mainstream unions revolve around getting a slightly better contract at each negotiation and having lawyers and arbiters on hand to enforce the contract if the employer violates it.

When grievances arise in the workplace, a mainstream union will file an official grievance through a union representative, the union and employer will try to settle the grievance, and if that’s unsuccessful, the grievance will go to a body of the National Labor Relations Board (NLRB), which is essentially a special court system for labor disputes.

For radical unions, worker power in the form of co-worker relationships, democracy, and direct action is the life of the union. Contracts can be incidental to this type of unionism, sometimes useful and sometimes not. Radical unionism realizes that a paper contract is still just a piece of paper, and that how many rights workers have in the workplace is a function of how much power the workers have.

Worker power is built through getting people involved, sharing skills, and developing leaders. Worker power is exercised through direct action in the form of confronting the boss as a group, slow-downs, publicity campaigns, picket lines, strikes, etc… If workers have power but not a contract, they can force the concessions they need from the employer with action. If workers have no power but do have a labor contract, the employer can violate the contract systematically and with no consequence. First and foremost, radical unions seek workplace power, and whether or not a contract is involved is often a secondary concern.

III. Where Is the Union

In mainstream unions, much of the activity of the union happens behind closed doors, such as in negotiations, in NLRB grievance processes, or union staff meetings. Much of this often happens with virtually no engagement of the union membership itself.

In radical unions, much of the activity is done in the workplace via co-worker discussions and direct actions, or through meetings where each worker has one vote to directly influence union policy and strategy.

IV. Politicians and the Union

Mainstream unions become dependent on political parties to maintain their foothold of mainstream legitimacy and their influence within state bureaucracy. Many things that affect workers and unions are legislated in government, such as minimum wage laws, sick time, if workers of various industries are allowed to strike (many public employees are legally forbidden from striking). Perhaps most of all, positions on the National Labor Relations Board are appointed by politicians, and since fights over union contracts often need to rely on NLRB adjudication and arbitration, having friendly NLRB officials significantly increases your chances of success in that arena. Elected and appointed judges can declare strikes legal or illegal, and elected and appointed government attorneys can aggressively prosecute union or corporate leadership if they so choose.

Because mainstream unions are so dependent on state mechanisms and the politicians that oversee the state, they bend over backwards to please politicians. Mainstream unions spend lots of resources on political campaigns, they have their members door-knock for political campaigns, and they urge their members to vote for union-endorsed politicians.

Radical unions see all of this political maneuvering as mostly a waste. While mainstream unions have plunged untold sums of resources into lobbying and election campaigning, laws around worker rights have generally stalled or declined (e.g., Right to Work laws around the country) and union membership rolls have been dropping off a cliff since the 1980s. Mainstream political parties do a little to please working-class working blocks to win votes, but their campaigns are really funded by the capitalists that hold almost all of society’s wealth, making political parties a dead end for advancing meaningful worker power.

Radical unions think worker efforts are better used creating their own base of power independent of state bureaucracy. From this independent base of power unions can pressure politicians through direct actions to do the right thing without needing to cozy up to them and hope they favor your preferred policies over the preferred policies of their rich donors.

V. When Does the Union Strike

Disruptive actions like strikes by mainstream unions are only legal, and even more rarely used, in a narrow set of circumstances: only between periods that are covered by contract between workers and employers and not during the period covered by the contract, only after negotiations have failed for agreement on a new contract, only after the executive board has authorized a vote by the membership to go on strike, only after the membership votes to strike, only if the industry is not favored by the government (e.g., air traffic controllers, many public employees are forbidden by state law from striking), only over certain kinds of grievances (like wages and benefits, but often not negative impacts on communities by corporations or certain kinds of working conditions), etc… The process of going from the start of contract negotiations and/or some major collective grievance to a strike can take months or years using this approach. If mainstream unions try to go on strike outside of this very restricted legal process, union leadership is liable for outrageously high fines and even prison.

Unfortunately, because mainstream unions have forsaken direct action at every point leading up to when a strike is necessary, their strikes often don’t go well because the membership (and often the union leadership) has little experience or knowledge about how to take action effectively. Nonetheless, when bureaucratic means fail for mainstream unions, they are pushed into a corner and going on strike is their only chance to win, but they usually don’t.

In contrast, radical labor unions advocate going on strike whenever it’s strategic. 99% of mainstream union contracts with employers have a “no-strike” clause written into them which is responsible for all the technical roadblocks to strikes noted above and also bans basically any worker action that might slow production. In contrast, radical labor unions refuse to ever agree to such a clause because it cuts off workers’ main source of power (withholding of their labor) from the beginning. Surely, strikes shouldn’t be launched willy-nilly, but radical unions retain the ability to use them strategically when the need arises, which is often not on the timeline that bureaucrats set for themselves.

VI. How Many Unions

Mainstream unions build footholds in particular trades, often competing with other mainstream unions for members in the same industry, trade, or workplace. If collecting dues to pay union bureaucrats is a major aim of mainstream unions, the ideals of worker empowerment can become second to infighting between different unions over who can sign up the most dues-paying members.

Mainstream unions mostly organize along the lines of trades or crafts, which is called “trade unionism” or “craft unionism.” In a hospital, for example, the nurses, nursing assistants, technical specialists, janitorial workers, security guards, office workers, and cafeteria workers may each have their own totally separate union. If any one group of these workers have grievances, they can rarely rely on the support of other workers in other job classes in their workplace because they’re all organized into separate organizations. This is one way owners prefer workers to be divided, because each different job class can be played off against the other and it makes it so workers are never able to stand up to owners in unison.

Radical unions try to bring workers all in the same industry into the same union, which is called “industrial unionism.” At a hospital, all the aforementioned workers could be under the same union. Instead of each job class bargaining separately with employers and on different timelines, they could bargain altogether and threaten much larger disruption with a collective strike than they could with a strike of just one job class. If owners try to force concessions on one particular job class, the one big union can frame that as part of an attack on workers in general, and that for workers to be strong, they have to act in solidarity with each other.

Collective action is the most effective weapon of class struggle, and the more people that are in struggle together the more powerful their action can be.

 

Section IV: Conclusion

“It is the impossibility of living by any other means that compels our farm labourers to till the soil, whose fruits they will not eat, and our masons to construct buildings in which they will not live. It is want that drags them to those markets where they await masters, who will do them the kindness of buying them. It is want that compels them to go down on their knees to the rich man in order to get from him permission to enrich him. What effective gain has the suppression of slavery brought him? ‘He is free,’ you say. That is his misfortune. These men, it is said, have no master. They have one, and the most terrible, the most imperious of masters: that is, need. It is this that reduces them to the most cruel dependence.”

-Simon Linguet, 1767.

Private property is the central pillar of capitalism and capitalism is the central pillar of liberalism. The division of those who earn from working and those who earn from owning results in the twisted iteration of human society that we see around us. Owners of our most prominent companies play around on $40 million yachts while many of their workers have two jobs and no benefits and can barely afford expenses.

Tensions like these are the fuel of class struggle, which is always taking on new forms. Contrary to what Marx believed, it appears that capitalist society isn’t inevitably leading to its own demise as the tools used to support capitalism–repression, reforms, mainstream labor unions, etc…–have so far successfully warded off full-scale efforts to give workers real power in society. Rather, the fate of class society lies in our own hands. What can we do with the historical conditions that have been given to us? Radical unions have played central roles in every small and large (if temporary or incomplete) victory against capitalism achieved so far. At their best, radical unions put into motion those dynamics of working class action that strike capitalism at its roots.

While this piece paints a conceptual picture of the fundamentals of capitalism, it is incomplete in many ways. Anti-capitalism will only feel real if connected to concrete and lived experience. Our relationships to our jobs and workplaces are intertwined with capitalism in very complex ways, and there’s much to be gleaned from reflecting on how exactly that manifests in our own lives. Much of what is missing here conceptually (more on the state, race and gender oppression, etc…) I hope to touch on in later entries in this series.

A life of anti-capitalism is not easy or joyless or unrewarding or uncreative or monochromatic. It is a choice, though not one anyone should make all at once. I hope these ideas give you something to chew on. People have been chewing on this, living this, and fighting for better things for a long time. That capitalism still reigns is no mark towards its inevitability, as monarchies and other tyrannies have lasted far longer before being pulled down. It’s our love of fellow workers, and a burning fire of disgust at our circumstances, that inspires us and keeps capitalism always looking over its shoulder, hoping that the revolution never comes.

One thought on “All You Need to Know about Liberalism: Capitalism and the State (Part II)

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