Cash Nexus to Needs Nexus: A Radical Response to Growing Poverty
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By Bruce E. Parry
In an article
on the budget, the Wall Street Journal recently estimated
the following cuts from 1995 in billions:
Housing & Urban
Development 5.5 Health & Human Services 3.4 Education
2.3 Labor 1.6 Foreign Operations 1.5 Transportation 1.1 Energy
& Water 1.5 Interior Dept 0.5 Agriculture & Rural
Developmen t 0.5 Commerce Dept. 0.4 EPA 0.6 NASA 0.5
Given the spread
of both urban and rural poverty, the danger of unemployment,
and the tragic state of the environment and national infrastructures,
there has to be some explanation of why every major political
figure is calling for across-the-board cuts in the federal
budget. How can cutting the budgets of the very areas that
are in crisis solve the problems? The answers to these questions
lie in the economic undergirding of our political system.
The economic changes
taking place today are the result of replacing electrical-mechanical
technology with electronic technology in production. The world
economic order is so now intertwined that products cannot
be made without cooperation among people around the globe,
coordinated and controlled through satellite-based communications
systems above earth with neither country or nationality.
Completion of international
globalization was brought home by the downturn of 1974 and
1975. There were massive layoffs in auto, steel, rubber, glass,
durable goods, textiles and other "smokestack" industries.
Many of the workers never returned to those jobs. That downturn
was the first domestic indicator of the changed world economy.
It was both the harbinger of globalization arrived and the
impetus to electronic retooling.
The demand for
computers and computing ability had been fed by globalization.
Demand for integrated inventory, payroll, financial and accounting
packages and international communications pushed companies
like IBM to the peak of economic power and to the top of the
Fortune 500. Bigger was better. If a mainframe did not suffice,
supercomputers were available. Fast, versatile mini-computers
began to make their mark in smaller organizations.
The first downturn
was from 1979 to 1981 : major industrial companies retooled
their plants with electronics. As a single example, General
Motors closed its Baltimore Assembly plant, sent much of the
workforce off to computer training, and rebuilt the inside
of the plant with robots and electronics. After the renovation,
the plant bore little resemblance to what it had been. Robots
began the process by welding the body pans and frames. The
machines that most closely resembled human workers automatically
sprayed rubberized sealant in the gaps between metal parts
as the cars rolled down the assembly line. The paint shop
was replaced with automation. The workforce of thousands was
reduced overall, by about 500 workers immediately, and by
thousands more in later years.
Hundreds of thousands
of industrial workers were thrown out of work. The work force
in auto and steel has never been the same since. More than
half the workers were gone in each industry. Detroit and Pittsburgh
were symbols of the devastation. Those that continued to work
were in economic combat: wage and benefit concessions, job
reorganization and elimination, and retraining were the norm.
aspect of the electronic revolution was, perhaps, less visible
than the rapid diffusion of personal computers, video and
arcade games, microwaves and hundreds of other consumer items.
Its effect was no less profound.
the Cash Nexus'
In the advanced
capitalist countries today, there are factories, mills, plants,
stores and even farms with virtually no labor. No one is putting
the product together, or drilling, forging, molding, cutting
or bending the parts. What labor there is, is technical: programmers,
maintenance workers, machine overseers; inspectors with the
technical expertise to make adjustments. Robots, computers,
and machines, in the meantime, are performing what is normally
Shops like this
produce electrical switches and cars, but they also reproduce
themselves: there are factories where robots and computers
produce robots and computers. Cybernetics, machines that produce
machines that produce products, is the beginning of the "workerless
society." These plants represent the future; they represent
where production technology is headed. There is no economic
or historical force to stop it.
are profound. When robots create the products, there is no
need for labor or the laborers that provided it. It is here
that the Social Contract breaks down. The Social Contract
is between capital and labor. Capital provides the jobs and
labor provides the work. In return, capital pays wages with
which workers provide for themselves and their families. The
efficacy, fairness and even justness of this system have been
argued for hundreds of years, but the basic Social Contract
worked to the degree that it provided many, if not most, with
the necessities of life.
however, there is no basis for the Social Contract. If workers
are replaced by electronics and therefore not needed in the
work place, there is no basis for paying them wages. With
no wages, there is no way for them to provide for themselves
or their families. As hundreds of thousands are put out of
work, there is added downward pressure on wages for those
who are still employed. Wages fall and even those still employed
are less able to provide. The Social Contract breaks down
because the circulation of money in the Cash Nexus has been
This scenario has
not played out in its pure form. There are more jobs now than
ever. The U.S. labor force is 126 million and growing. Billions
work around the globe. All-robot firms are still rare. There
are programs to help those in need: public assistance, food
stamps, public housing, and even soup lines and shelters.
There are a number
of reasons. First, the process has just begun. Nevertheless,
it has played out sufficiently for homeless people to be on
the streets. Poverty continues to swell. While in rural settings,
the homeless are more hidden, rural poverty still accounts
for nearly half all poverty in the U.S.
Second, the U.S.
is a world industrial power. It has been able to shift much
of the burden overseas. Poverty in the Third World is long
standing and deep. In Mexico, for example, some 60 percent
of the population lives in poverty. About half of that is
in devastating need, unemployed, homeless, malnourished and
Third, a lot of
capital has shifted from manufacturing to sales. This shift
has generated jobs. Manufacturing jobs have always paid well;
sales and service jobs are equated with minimum wage. Thus,
while there are more jobs, wages are lower for those still
employed. This is part of the reason that the number of jobs
of the homeless work; many work multiple jobs. They still
cannot command sufficient resources to put a roof over their
head and food on the table on a regular basis, let alone maintain
their families. Poverty today results from human labor's base
value being practically nothing. The value of labor in any
market tends to hover to the lowest necessary level. In a
competitive market, if workers are willing to work for less,
the capitalist will lower wages to that level, given equal
quality and adjusting for required education and other special
training or skills. In today’s market, the level of
wages is tending to equalize with the wages of robots. Robots,
of course, do not receive any wages.
of human life in modern culture that so often receives comment
is a direct result of its falling monetary value in the market.
Our commercial society values people by what they do, rather
than who they are. Those who are prevented from working are
not valued. Valueless labor also explains the political climate.
Perhaps the most
devastating misbelief in America today is the idea that we
do not live in a class society. Classes are properly defined
in terms of people’s relation to production and distribution,
not their wealth. Those who own businesses constitute the
capitalist class. With stock ownership, pension funds, mutual
funds and the like, identification is complicated, but since
people do own businesses, they constitute an economic class.
The capitalist class is the ruling class.
What does that
mean? Virtually everyone knows how this country is run. Business
runs it. Businesses make donations to the political campaigns
of the candidates they like and those they do not like. The
point is not to support the ones they like, but to make them
beholden to their funders. Ross Perot, both a politician and
the CEO of a major corporation, succinctly summed this up
when he said, "When politicians are trying to get votes,
they play every tune they can get their hands on. CEOs understand
that: O.K, the politicians are going to have to punch us around
a little bit to look like populists. But once they get in
office, we own them because we funded them.
the laws that are passed are often suggested and always influenced
by lobbyists paid for by business. Political Action Committees
(PACs) have merely raised the entire process of electing "public
servants" and passing legislation to the level of commercial
enterprise. It is regularly reported after every election, what
the going price for elective position is, be it a Senate seat,
a state legislative position or a mayoralty. It does not make
any difference that anyone can play; not everyone has the money
to play. Instead of "one person, one vote," the system
has become "one dollar, one vote". More