What capitalism does to workers when it thinks it can get away with it

It is perhaps one of the defining myths of our civilization that capitalism creates a high standard of living for workers and capitalists alike.  Indeed to question this sacrosanct myth is generally considered about as polite as relieving oneself on the eldest child of whomever you are speaking to.

In reality though, not only is it rather easy to illustrate that it is not true that capitalism in and of itself creates high standards of living, but, paradoxically, it is also a relatively simple task to illustrate that most people with a sufficient grasp of history perhaps don’t even genuinely believe in the myth itself.  People already have all the facts to refute this myth existing latently within themselves, but are never given the opportunity to connect the dots and formally recognize what they already know.

Consider that most people are well aware that capitalism came into existence in the late 18th Century and closely coincided with the industrial revolution and the creation of the first modern powerful unitary (rather than feudal) state in England.

Consider that most Canadians are well aware of the Winnipeg General Strike which occurred in 1919 and that most Americans are well aware of the various courageous workers’ activities in the late nineteenth century in the United States (and particularly in Massachusetts).  Moreover, most people are aware that the reasons for these actions were not young rabble rousing youngsters seeking a lark but rather were a result of the brutal existence under unfettered capitalism which had existed for nearly 150 years with little increase in the standard of living for most.  For example, the average wage in Winnipeg in 1919 was roughly on par with the average wages we see in Africa to this day (with today, approximately 40% living on less than $2 per day purchasing power parity)

Consider that most people therefore should be aware (and would be intimately aware in a free society) that the high standard of living we in the West enjoy today is an extremely new phenomenon that did not begin to accrue until we saw the development of class consciousness, unions, activism against capitalism and capitalists, the threat of revolution and the beginnings of demands for the democratization of the workplace.

In short, pure capitalism exploited workers untrammelled by pesky legislation and workers’ demands for nearly 150 years.  Then, precisely at the historical moment when workers began to earn victories by moving away from capitalism, we began to see the increasing standard of living which today, according to popular shibboleth, is now attributed perversely to capitalism itself instead of the activism and agitation of workers seeking to move away from capitalism.

The reason this is significant, the reason why I bring this history up now, is that every once in a while we get a glimpse of this old-guard manner of capitalism lurking beneath the modern putatively tame breed of capitalism which we think of in the friendly, fuzzy terms outlined in the popular myth view.  Earlier this month, we got just such an example of what capitalism attempts to do to workers when it believes it can get away with it.

Of course, since we do not live in a free society, this news item was not reported by the press.  However, the University of Pittsburgh’s legal research publication The Jurist had a fantastic piece on what seemingly friendly Wal-Mart attempted to do to its workers in Mexico when it thought it could get away with it.

When you strip away the hard-won victories of workers in the 20th Century as is the case in many quasi-industrial nations like Mexico, we can see very clearly what kind of world the capitalists would like to return to.

From The Jurist:

The Mexican Supreme Court of Justice [official website] on Thursday ruled [press release, in Spanish] that Wal-Mart de Mexico [corporate website; JURIST news archive] may not pay employees in part with vouchers redeemable only at its stores. The court nullified the employment contract of a worker who challenged the voucher payments, finding that they violated Article 123 of the Mexican Constitution [PDF text], which guarantees the right to “dignified and socially useful work.” The court likened the arrangement, which Wal-Mart called the Plan of Social Welfare, to a practice that prevailed during the dictatorship of Porfirio Diaz [profile], who ruled Mexico [JURIST news archive] in the late 19th and early 20th centuries.

If one wanted, one could easily find numerous historic examples of capitalists seeking a regression back to the days before workers rights and the hard-won victories which enable even the modicum of wealth we enjoy in the West today.  However, given that the press will remain the dutiful servant of capitalism, it is important to highlight ongoing abuses and that we never loose sight of the fact that even the various historical examples of capitalists seeking to claw back to a purer form of capitalism have not ended.  Rather, we are faced with these attempts — obscured and out of mind though they may be — and live with them daily.  It’s just that the popular myth makes it impolite to bring these matters up in ‘polite’ conversation.

17 Responses to “What capitalism does to workers when it thinks it can get away with it”


  1. 1 Scott 15 September, 2008 at 10:55 pm

    “Consider that most people therefore should be aware (and would be intimately aware in a free society) that the high standard of living we in the West enjoy today is an extremely new phenomenon that did not beging to accrue until we saw the development of class consciousness, unions, activism against capitalism and capitalists, the threat of revolution and the beginnings of demands for the democratization of the workplace.”

    Very true. However — and this is not to disrespect at all the struggles in rich countries that forced these concessions on capital and that are currently trying to defend them — it is also important that we never forget that “the high standard of living we in the West enjoy today” would also not be possible without historical and ongoing predation on people outside of Europe and outside (sometimes outside within) the settler states it spawned. The elasticity in the system that allows for trouble in “core” countries to be avoided by buying off significant portions of the (white-dominated) working class through high wages over a period of generations in part comes through the ongoing flow of resources from global South to global North, or (to put it differently) from the Third and Fourth Worlds to the First World.

    Any analysis of capital’s eternal search for ways to claw back past concessions, as it has been doing for the last few decades with neoliberalism, has to talk about the fact that as things currently stand, our (relative) prosperity depends on somebody else’s poverty.

  2. 2 Kim Feraday 15 September, 2008 at 11:26 pm

    I would dispute that the problem is capitalism. Rather it is capatalism in its corporatise form that is the problem.

  3. 3 Shawn 16 September, 2008 at 3:59 am

    Kim: What is “capitalism in its corporatized form” and isn’t the corporation relatively new? Isn’t the problem that capitalists attempt to maximize profit and without laws to regulate this maximization, you get things like child labor?

  4. 4 paulitics 16 September, 2008 at 6:06 am

    Scott, point well taken. I agree fully.

  5. 5 blanks57 16 September, 2008 at 9:27 am

    Capitalism in Canada and in the United States is just as bad, is supported by the welfare state now.
    Government corporate welfare funding has taken over from capitalism and in Ontario the Unions are as bad as the capitalist. “Labour advances” have cost Ontario more jobs than the “bad- economy”.
    The CAW union has a corner on the automotive labour market and is just as bad as the corporaton.They don’t know when to stop and the so-called “advances” are only encouraging the capitalists to move to less regulated parts of the world.
    Bad Labour is just as bad as the capitalist and capitalism.

  6. 6 Nick J Boragina 16 September, 2008 at 5:54 pm

    Part of the problem today is with unions. The only people unionized today are those in the “middle class” who are making quite a bit of money working in easy jobs. Meanwhile, those who need unions like Wal-Mart “associates” and so-called McWorkers, get nothing.

  7. 7 MGB 17 September, 2008 at 5:59 pm

    Unions aren’t the problem. Your control is the problem. How can you ever tell another man that he does not have the power to unite, in a common cause, with his brother?

  8. 8 Ryan 21 August, 2009 at 6:43 pm

    It was neither capitalism nor the workers movement that increased technology and the standard of living. It was both combined.

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