At present, the working-class in the United States produces more value in less time than ever before. Though manufacturing has waned, and the service economy reigns dominant today, the fact remains that the working-class produces more profit for the owning-class than ever before. Despite this, the United States has very low profitability amongst its internal economic sector. Instead of reaping profit directly from the American worker, the bourgeoisie turn instead to the profitable countries of capitalist periphery. The reason for this projection onto the periphery is that capitalism in itself is an unsustainable system. The U.S. has benefitted from its capitalist mode of production for centuries, yet with this comes the declining rate of profit and the accumulation of capital.
Though the ‘declining rate of profit’ and ‘accumulation of capital’ are often used without explanation by Marxists, I feel it necessary to explain the two concepts so that clarity might be added here. The two are connected, so I will explain them as such. The declining rate of profit refers to the declining rate at which profit is able to be expropriated from the worker to the capitalist in an economy. Productivity eventually reaches a rate at which it gives diminishing returns, thus reducing the rate of annual profitability and its increases from year to year. That said, as profitability decreases, total profit increases. In a similar manner, as profitability decreases, smaller businesses struggle to survive the capitalist landscape, thus the economy transitions towards monopolies as we see today in Amazon, Walmart, Apple, and Microsoft. While the economy shifts towards monopoly, capitalism shifts larger amounts of money into concentrated spheres of monopoly; in shorter form, capital accumulates in the pockets of a smaller and smaller groups of capitalists.
The declining rate of profit & accumulation of capital are the means of capital’s monopoly as well as the means with which capital digs its own grave. When the rate of profit is in decline and eventually bottoms out, we refer to these stages as crises. These crises happen every seven or so years as short waves of expansion and contraction, but also every half century or so as long waves of larger trends of expansion and contraction. These crises take the form of economic crashes like the Great Depression, the ’08 Financial Crisis, or the Covid-19 recession. This instability is at the very core of the capitalist system.
So capitalism is unsustainable, so what? The consequences of this unsustainability are clearly that every seven or so years the economy crashes and the working class suffers, but there are consequences that extend past these temporary recessions, depressions, or busts. The initial consequences of capitalism’s unsustainability are first the mass waves of unemployment that occur when recession hits. The economy crashes, then the workers are laid off, then left struggling to find new jobs. Because there is then a surplus of workers and a shortage of jobs, the bosses are able to hire workers at lower and lower wages because of the mass numbers of potential employees. This is the mechanism by which crises enrich the capitalist class while the working class suffers generational losses in wealth. Capitalists profit from economic recessions through artificially decreasing wages over the whole period of the crisis, thus restoring their ‘profitability’ and the rate of profit. This restoration is only temporary however, and with each cycle it becomes even more finite. The national capitalist class then has to resort to extracting profit from other means than solely the labor of its national economy.
So - What happens then when the ‘bottoming out’ of the economy ‘bottoms out’ itself? Or, what happens when cycles of recession hit critical mass where they can no longer restore the rate of profit as the neoliberal economists suggest? These instances of bottoming-out of the bottom are the culmination of long waves of capitalist contraction. The conclusion of these long waves takes the form of mass financial crisis that is restored through massive international wars, sweeping social-democratic reforms, or the development of authoritarian command economies as in the fascist regimes of the early 20th century. The two most notable crises of such are first the Great Depression, and then the less known Oil Crises of the 60s-70s. The Great Depression’s crisis restored itself through the New Deal programme and mass investment in the working-class and poor of the U.S. These restorations lasted nearly half a century in what can only be referred to as a long wave of capitalist growth. However, the oil crises have continued their misery on the working-class through the neoliberal doctrine that proceeded from it. Put shortly, the neoliberal program of restoration is the antithesis to the New Deal. Where the New Deal provided jobs, programs, and a healthy welfare state to American labor, the neoliberal doctrine cut costs in any and all sectors by any means necessary. In place of a social democratic welfare state, neoliberalism decided that the only cure to the instability of capitalist crises was to stabilize the cycles of crises themselves through a return to near laissez-faire capitalism. Of course, the consequences of this change have been tremendous and for over fifty years now the doctrine has continued to cripple the popular classes of the U.S.
Neoliberalism is not without its own artificial restorations of the rate of profit. Where the social democratic programs of the 20th century restored profitability through investment in the working-class, the neoliberal program restores its rate of profit through the manufacture of forever wars and endless imperialist campaigns into the capitalist periphery, i.e., the Middle East, East Asia, and the countless CIA-backed military coups in Latin America.
War restores profitability. It serves like an adrenaline shot into the rotting body of the capitalist corpse. There in the fecund earth capitalism’s corpse lies, where it siphons off the life force of profit from the neoliberal programme of imperialism. Where neoliberalism fails to restore the crises that it manufactures and reaps all reward, it projects these crises onto the capitalist periphery in the form of imperialist campaigns. When I say imperialist campaigns, I am referring to the illegal occupation of nearly the entire Middle East, the bombing campaigns on Korea, the illegal invasion and occupation of Vietnam as a proxy war against the growing international socialist solidarity movements, and the CIA-backed military coups and torture regimes installed by the American government. Despite these atrocities, it is not the American worker, but the capitalist class that exploits them that is responsible.
Though these imperialist campaigns are atrocities, they are not the sole means of exploitation and appropriation of the capitalist peripheries. Since the United States engages in little material commodity production today, or, it is predominantly a service economy, it must extract profit first through stock-market speculation, but also through the manipulation of peripheral economies by way of predatory “investments” that permanently cripple the economy of said economies.
Take the example of Lebanon during the height of the neoliberal era (1990s to present). In Lebanon, the debt to foreign economies has overtaken the total GDP of the country. Put shortly, when external debt to a foreign economy surpasses that of the GDP of a country, the country is then doomed to a perpetual state of exploitation by which the dominant G7 banking economies of the West and Global North reap the profits solely through rent collection of these countries.
You will properly ask – Why would the peripheral countries ever accept these predatory loans? In the case of Lebanon, the country had been completely destroyed during the civil war, which ended only a decade before the height of the neoliberal program. The destruction of this country has in large part been due to the U.S. funding and backing of far-right militias that regularly engaged in Islamophobic fascistic wars against left-wing or left-aligned communities in the country. Additionally, the U.S. occupied and engaged in physical imperialist war in Lebanon during the civil war. The consequences of the civil war are immense, though the important aspect to examine here is the subsequent collapse of the Lebanese economy. In attempt to ‘fix’ the economy, foreign investments were the only option for Lebanese capitalists to develop the rate of profit, thus the process began which concluded in the surpassing the total GDP by external debt. There then is the secondary mechanism of capitalist imperialism.
So what does this have to do with the working-class in the United States? Of course, there are the moral concerns, but as a Marxist the material consequences of such imperialism are especially important to discuss. As discussed above, capitalism can restore its profitability through either investment in the working-class or neoliberal austerity and imperialist invasion. At present, capitalist restoration occurs primarily through the imperialist campaigns of invasion, predatory and crippling debt imposition, and mass exploitation of the disempowered international working-class. This leaves the American worker hung out to dry, with no material support from the government. Neoliberal austerity can only be understood as an international assault on the world working-class by the capitalist class of the dominant first-world economies of the world.
The struggle against capitalism by the working-class in the United States must place anti-imperialism at the forefront. Only through the absolute dissolution of the imperialist war machine can the class interests of the first-world working-class be realized. The task of the first-world proletariat is thus immediately aligned with the third-world anti-imperialist movements that have been so often killed by the imperialist war machine. Anti-imperialism does not mean uncritical support for the authoritarian, autocratic regimes of the world that disguise themselves as socialist. Rather, anti-imperialism is a principled position amongst those in the imperial core against the imperialist campaigns of the hegemonic capitalist countries of the world. Anti-imperialism means ruthless criticism of the capitalist systems that seek to exploit the moneyed and empowered profit of the third-world. So often anti-imperialism devolves into apology and romance of authoritarian regimes around the world; these systems are worthy of criticism, but not of imperialist invasion, aggression, and economic sanctions. The emancipation of the working-class in the United States is ultimately tied to the working-class of the imperial periphery, and it is only through the dissolution of the imperialist war machine that the working-class of the United States can be free from the shackles of capitalism.
Thomas McLamb is a Lebanese-American Marxist writer and historian. His current research interests involve the history of colonial incarceration in Lebanon and Syria. Other research interests involve Marxist perspectives on international capitalism and its consequences, as well as contemporary discourses on Marxism, communism, and anarchism. Thomas is currently completing an M.A. in History at Appalachian State University.
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