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On the growing economic crisis, unemployment and Marxist political economy

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Fight Back! interviews Masao Suzuki, professor of economics and a leading member of the Freedom Road Socialist Organization.

Fight Back!: Republican Senator Lindsey Graham once said that extending the extra $600 a week in unemployment insurance would happen “over my dead body.” Why are Republicans so opposed to helping out the millions of workers who lost their jobs during the current crisis?

Masao Suzuki: A common view is that the Republican party leadership is cruel and uncaring – and of course this is true. But underlying this inhumanity is the logic of capitalism, which needs what Marx called a “reserve army of labor” to keep wages down and maintain profits. This reserve army is made up of both the unemployed, and in the United States, immigrants from Mexico, Central America and Asia in particular.

Regular unemployment insurance benefits came out of the massive, communist-led struggles by the working class during the Great Depression of the 1930s. But typically, these benefits only replace a fraction of the workers’ lost wages, and last for a short period of time. While they are able to stave off crippling poverty, there is still a strong economic incentive to take another job, even at lower wages.

The fact of the matter is that lower-paid workers were the hardest hit by the crisis, as millions of jobs in low-wage service industries were lost. Since the extra $600 is across-the-board, many of the lowest paid workers are getting more in benefits than when they were working. So, many capitalists would like to end these benefits to put pressure on workers to return to work, without the businesses spending enough to make the workplaces safe. In addition, we see Republicans also pushing for legal protections for businesses that reopen and allow the virus to sicken their workers.

This attitude is very different than workplaces in China, which has a socialist economic system and was the first country with a large outbreak of the pandemic and to bring it under control. In a recent interview by a U.S. business news outlet, the head of operations for a large Chinese computer company in Wuhan said that his first priority is keeping the virus out of the plant, while production comes second. This is the reason why China has gone from also having all of the world’s infections to catching small outbreaks numbering less than 50 per day. In contrast, here in the United States, where we had months to prepare, we have been number one in infections since the end of March. Day after day we have record numbers of new infections, more than 68,000 at last count.

Fight Back!: We seen a big shift to online commerce and a drop in in-store retail. Doesn’t this help keep people safe from the pandemic?

Suzuki: One of the things that capitalist economic crises do is to speed up economic trends already happening. For example, in the last economic crisis, there was a large increase in the use of part-time, temporary and contract workers, who are paid less, often with no benefits, and whose work hours can rise and fall as the business needs. This was already happening before the 2008 crisis but grew even faster with the crisis.

In the same way, the shift to online retail was already happening before 2020 and the pandemic. This is usually explained as a result of new technology, but in fact distance retail has been going on for over 100 years. The rise of Sears, Roebuck and Company and its mail-order catalog in the 19th century was beginning of distance mass merchandising. The explosion of online sales today is safer for consumers, many of whom do not feel as safe browsing through a retail store even when they are open.

But they do not protect the growing number of warehouse workers, like those working at UPS, who are the backbone of online sales. The growth of online sales is also speeding up another tendency under capitalism, which Marx called the rising organic composition of capital. Marx recognized the tendency for capitalist enterprises to substitute machinery and technology for human labor. From the first large textile factories in England, which threw thousands of independent weavers out of work, to the automated warehouses of today, there has been a constant stream of working people who have lost their livelihood to new technology.

This is also happening today in meatpacking, which has perhaps the most labor-intensive large factories in the United States today. Large meatpacking companies such as Tyson foods are doubling down on their efforts to use more robots in their factories in a way that has already been done in industries such as auto.

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