I really like The New Yorker. I’ve been reading it for almost two decades. I like its style, the depth of its reporting, that in a desert of irrational fear-mongering, it is an oasis of well-informed, reasoned discourse. But they don’t quite get capitalism.
Most recently, an article by James Surowiecki demonstrates how this bastion of the liberal intelligentsia doesn’t have the critical perspective we really need to comprehend the present. Surowiecki’s article, “The Jobs Crisis,” (Jan. 3, 2011) discusses two views on the current phenomenon of long-term unemployment. The first view, he says, is that unemployment is cyclical. “At times when everyone is cautious about spending, companies are slow to expand capacity and take on more workers,” he explains. The second view argues that unemployment is structural. “Jobs that existed before the recession are gone for good, and the people who held those jobs don’t have the skills needed to work in other fields,” Surowiecki summarizes. The remainder of the article assesses that at stake in this seemingly “academic” argument is the policy direction of the U.S. government.
All this is correct, but Surowiecki overlooks the real structural reason for unemployment: capitalism itself. To the extent that the point of capitalism is to create surplus value, that is, to create more value from labor power than the value of that labor power, it always seeks to minimize either the value of labor power (that is, the cost of its reproduction), or the amount of labor needed for the production of any given amount of surplus value.
The stagnating standard of living and relative decline in wages since the 1970s signals that capital has pushed as low as possible the cost of the reproduction of labor. At this point, to continue to increase the rate of surplus value, it needs to shed labor. This is possible through increases in productivity. Now, this isn’t to say that the most recent spate of unemployment wasn’t most immediately the result of changes in demand, but to point out that capital doesn’t need labor to reproduce itself. This is all the more evident given that in the past twelve months profits have recovered, productivity has risen, and the job market has not.
Now, defenders of capitalism will say that when jobs are lost in one area because of increased productivity (technology), they are created in new ones. To some extent this may be true. If the widget maker sheds employees because a new thingamachine takes their place, there could now be jobs with the thingamachine maker. This is the assumption behind the structural interpretation presented by Surowiecki. Once people “retool” as thingamachine workers, unemployment will decrease.
There are two problems here. One is quantitative. We cannot assume that the same number of employees that lose jobs as widget makers will regain them as thingamachine makers. And while such numbers may not be significant at the level of an individual firm, capitalism is a social system, and at the socially general level this tendency produces “the industrial reserve army,” one effect of which is to suppress the value of labor power.
The other problem with such a defense is that it assumes that capital will flow to productive industries, that is, to those that create employment. Yet, recent history has shown that capital can readily find reproductive opportunities in realms that do little to create employment. So the problem is indeed structural. Individuals need jobs to reproduce their existence, that is to feed themselves, house themselves, etc. That is, individuals need capitalism, but capitalism does not need them.
By ignoring this deeper structural problem, even well-intended assessments like those provided by Surowiecki focus on only the most immediate level of appearances and thus continue to turn us in the same circle, when really we need to be working to identify the possible route by which to escape.