Charlie Post. The Labor Aristocracy Myth
Alexander Gachikus


The review
Charlie Post. The Labor Aristocracy Myth. September 2006
(This review is the fragment of the article “On the united front”)

The author is the teacher in sociology in New York City, is active in the faculty union at the City University of New York, and is a member of Solidarity, calls himself “Marxist”. Apparently, he is “chair socialist” (i.e. “socialist” of university chair), like our compatriot Bugera.
The author writes in the introduction:

“…The broadest outlines of Marxist theory tell us that capitalism creates it own “gravediggers” - a class of collective producers with no interest in the maintenance of private ownership of the means of production. The capitalist system’s drive to maximize profits should force workers to struggle against their employers, progressively broaden their struggle and eventually overthrow the system and replace it with their democratic self-rule.
The reality of the last century seems to challenge these basic Marxist ideas. Despite occasional mass militancy and even proto-revolutionary struggles, the majority of the working class in the developed capitalist countries have remained tied to reformist politics - a politics premised on the possibility of improving the condition of workers without the overthrow of capitalism.
While living and working conditions for workers in the “global North” have deteriorated sharply since the late 1960s, the result has not been, for the most part, the growth of revolutionary consciousness. Instead we have seen reactionary ideas - racism, sexism, homophobia, nativism, militarism - strengthened in a significant sector of workers in the advanced capitalist countries. Since the late 1970s, nearly one-third of U.S. voters in union households have voted for right-wing Republicans.
This paradox poses a crucial challenge for revolutionary Marxists. However, we need to avoid “mythological” explanations, imagined explanations for real phenomena, whether to interpret natural events or to explain the nature of society. Unfortunately, one of the most influential explanations within the left for working class reformism and conservatism - the theory of the “labor aristocracy” - is such a myth…”

The author resorts to tricks from the outset. He jumps from one topic to another. At first paragraph, where he states Marxist predictions briefly, he says nothing about what countries, developed or not developed, are meant. But at second paragraph Charlie Post speaks only about developed countries. And “the reality of the last century seems” to him “to challenge these basic Marxist ideas”, because the author is merely unaware of 20th century’s revolutions. This is the sign of great-power ignorance: American and European “Marxists” speak only about pre-Leninist Marxism, just as Russian “communists” don’t know the examples of proletarian dictatorship with the exception the Commune of Paris and October revolution.
So, the theory of the labor aristocracy is supposedly “a myth”.
But how the author proved that?
At first Charlie Post writes that “Frederick Engels first introduced the notion of the “labor aristocracy”” and states briefly Engels’ view on that matter by the example of England, but Post doesn’t say what Marx wrote about that, also he doesn’t say, whether he agree with Engels or not. Then the author states briefly Lenin’s position and admits that “while the mainstream Communist Parties generally distanced themselves from the notion of the labor aristocracy as they moved toward reformist politics in the late 1930s, certain left-wing opponents of the Communist Parties continue to defend the theory”. Then the author gives the examples of Leninist groups in USA and Australia, which admit the theory of the labor aristocracy and which have emerged since 1970, when “living and working conditions for workers in the “global North” have deteriorated sharply”, according to Post himself. Moreover, he recognize that “important groups of activists, in particular those working with low-wage workers, are also drawn to the theory of the labor aristocracy”. Isn’t it the evidence of the fact that the reality of the last 30-40 years seems not to “challenge”, but to prove to be true these “basic Marxist ideas”? Incidentally, it is necessary to point out that Post oversimplifies Lenin’s position when he retells it. He writes:

“Lenin located the economic foundation of the labor aristocracy in the “super-profits” generated through imperialist investment in what we would today call the “third world” or “global South”…”

It is very simplistic interpretation. Super-profit economically arises from the large scale of capital, from its monopolistic character; it is the addition to profit which caused by concentration of capital, by the scale of capital. And the early stages of that theory are present in “Capital”, i.e. not only Engels wrote about the theory of super-profits and the theory of labor aristocracy which connected with the former. Marx wrote that the benefit from the concentration of capital becomes apparent, if nothing else, from the fact, that in large building one can gather workers which would work in small buildings, because building expenses, repair expenses etc. per worker for large building is less than for small one. Super-profit is obtained from ruining of petty bourgeoisie, from the exploitation of the “own” proletariat, from the part of the profit of petty bourgeoisie by means of monopolistic prices. Competitive struggle for super-profits between monopolist groups, imperialist nations give rise to the division of the world into the spheres of influence. Colonial oppression, occupation of other countries gives super-profits, because it excludes competitors, moreover, colonial oppression gives super-profits not only in the case of the “Third world”, but in all cases, in the cases of all countries. To say that “the “super-profits” generated through imperialist investment in what we would today call the “third world” or “global South”” means to vulgarize the matter. Under free competition investment abroad gives the profit on a level of the average profit rate. The point is that super-profit is provided by colonial oppression. But Post oversimplifies Leninism to the level of Kautskyism.
Post also oversimplifies Leninism when he writes that competitive struggle takes place only in the sector of small, “periphery” firms. But as Lenin argued, between monopolistic groups there is competition too, and it resulted in world wars. Post oversimplifies Leninism to the level of Kautskyism again.
Then Post argues that investments of “North” into “South” amount only to 1.25% of the total amount of investments. But he takes no account that investment in the “own” sphere of influence brings much more profit than investment in the competitor’s sphere of influence. On the other hand, Post takes no account the investment in arms race, in waging wars, although it provides the control over the spheres of influence, therefore, provides super-profits. Also he takes no account the policy of monopolistic prices (buying of raw materials by “North” from “South” at low prices and selling of finished products by “North” to “South” at overprices), which provides that sizeable share of surplus value becomes a part of profit of “North” corporations.

“It is not surprising that the global South accounts for only 20% of global manufacturing output, mostly in labor-intensive industries such as clothing, shoes, auto parts and simple electronics”

This argument is naïve. As we see, Post’s logic is such: is it possible to derive much benefit from “South”, if it produces only 20% of global manufacturing output? But the part of profits of “South” transfers to the profit of monopolistic corporations of “North” as the addition to profit which caused by concentration of capital. National-liberation revolution at “South”, which is going on last century, suggests that the old relations of production already not correspond to new productive forces, that national bourgeoisie (in alliance with proletariat) already stronger economically than colonial authorities, but not yet “constitute” (saying by Marx’ words) itself as a power politically (just as Marx and Engels wrote about pre-revolutionary France of 18th century). In other words, the share of “South” in world profits already not corresponds to its increased economical strength. Just the colonial oppression from the side of “North” prevent “South” from getting the share in profits which corresponds to its economical potential.
To say “is it possible to derive much benefit from “South”, if it produces only 20% of global manufacturing output” is the same as to say “is it possible to derive much benefit from proletarian, if he earns only 4.000 rubles a month” [cost of living in Russia in 2007, which corresponded nearly to 800 USD by purchasing-power parity – A. G.].
At the other extreme are Maoists, which drivel that “South” have the labor productivity not less than “North’s” one, but the wealth of North is resulted from benefitting profits from South too. Maoists pass over in silence that super-profits are not fall from the sky, but have material base; that just economic superiority of “North” over “South” enables receiving super-profits as the addition to profit which caused by the scale of capital.

“In Capital, Volume III, Marx recognized that foreign investment was one of a number of “countervailing” tendencies to the decline of the rate of profit. Put simply, the export of capital from the global North to the global South, especially when invested in production processes that are more labor intensive than those found in the advanced capitalist countries, tends to raise the mass and rate of profit in the North. There is indeed some evidence that foreign profits - from investments in both the global North and global South - constitute an important counter tendency to declining profits in the United States.
Profits earned abroad by U.S. companies as a percentage of total U.S. profits (Table I and Graph I) have risen fairly steadily since 1948, rising from a low of 5.19% in 1950 to a high of 30.56% in 2000. The proportion of U.S. profits earned abroad jumped sharply after the onset of the long-wave of stagnation in 1966, jumping from 6.43% in 1966 to 18.36% in 1986… Higher profits result in more investment across the board in the industrialized countries”

Our compatriot Marlen Insarov made the same error. As a matter of fact, goods are selling not at their values, but at their market prices, or, if not take into account fluctuations of demand and supply, at their prices of production (that is invested capital + profit which corresponds to the average profit rate). Under the freedom of capital flow (i.e. under the absence of customs duties, colonial oppression and other protective measures) capitals of equal sizes bring equal profit, if other things being equal too; and no matter where the capitals are invested, whether in advanced country or underdeveloped one. The ratio of surplus value to invested capital in underdeveloped countries undoubtedly higher than in advanced countries. But the point is that goods are selling not at their values, but at their prices of production, if not take into account fluctuations of demand and supply. That mistake is similar to Kautsky’s mistake, which was made by him when he translated that place of “Capital” (even Soviet opportunists recognized that mistake in one’s time). Incidentally, there is a discrepancy in Post’s words. Now he recognizes that the profit rate for investments in “South” higher than for investments in “North”. But above he argued that even if the profit rate for investments in “South” higher than for investments in “North” then it is slightly. Above it was advantageous to him because of representing that super-profits from exploitation of “South” are negligible. But why now he recognizes the fact, which he called “even if existing, then unessential”? In order to represent that

“…imperialist investment in the global South benefits all workers in the global North - both highly paid and poorly paid workers. Higher profits and increased investment mean not only more employment and rising wages for “aristocratic” steel, automobile, machine-making, trucking and construction workers, but also for lowly paid clerical, janitorial, garment and food processing workers. As Ernest Mandel put it, “the real ‘labor aristocracy’ is no longer constituted inside the proletariat of an imperialist country but rather by the proletariat of the imperialist countries as a whole.” That “real ‘labor aristocracy’” includes poorly paid immigrant janitors and garment workers, African-American and Latino poultry workers, as well as the multi-racial workforce in auto and trucking…”

So, “imperialist investment in the global South benefits all workers in the global North” – but where does that benefit consist in? Does it consist in the fact that under formation of the price of production the part of surplus value flow to advanced countries, and the profit rate in advanced countries higher than it would be if goods would be selling not at their prices of production, but at their values? But does it influence on real wages? No, because competition constrains capitalists to pay wages to workers on the level of cost of living!
Evidently, Post repeats Kautsky’s mistake. Kautsky recognized that Engels was right concerning English world monopoly and its connection with labor aristocracy. But Kautsky represented that with the fall of English monopoly at the end of XIX century no country has absolute monopoly at world market, and the division of workers into labor aristocracy and proletariat became a thing of the past.
So, Post obscures the division of “North” workers into labor aristocracy and proletariat, as if he calms proletarians down: “You are also benefit from investments to “South”” – calms down those who live in brutal poverty, as American Leninist theorists Elbaum and Seltzer evidence, in poverty which is no less than poverty in which proletarians of “South” live, what even bourgeois official mass media recognized repeatedly. It is disguised preaching of alliance between “North” proletarians with their labor aristocracy and imperialist bourgeoisie: “All of us have joint interest”. Post reminds me one philistine who said to our comrade: “Be glad that bourgeoisie give a job to you”.
So, Post, considering the source of super-profits, “puts the wagon before horse”: he speaks about exploitation of poor “South” by rich “North” first of all, but about large capital which is economical cause of super-profits, about the fact that super-profit is the addition to profit which caused by the scale of capital, about what enable “North” to exploit “South” he speak only in the next chapter. It is dirty trick: to pass over in silence the essence of the matter and return to it when the opponent is already “crushed” and it is necessary to “finish him off”.
Post asserts that at the time of economic boom 1950-60’s corporations made profits above the average, but since 1970’s their profits began to lower and became below the average. What firms have the profit rates above the average in that period, he doesn’t say. Evidently, there were not small firms. Evidently, super-profits of large corporations of the old superpowers were lowered due to rivalry with large corporations of the new superpowers – USSR, Japan, Germany, and since 1980-90’s – also China, then India too. So, what Post says about is the declining tendency of profit rates, which not in the least excludes the dependence of profit rate on the scale of capital. Let’s assume that average profit rate was 20%, where the profit rate of small firms was 15%, and the profit rate of large, monopolistic firms was 25%. Then the average profit rate was lowered to 10%, where the one of small firms – to 5%, of large firms – to 15%. In this and only in this sense “the eternal core” (“monopoly” industries) actually “was beginning to show more and more evidence of peripheral (‘competitive’ industries) behavior”, as Post says – to put it more precisely, the profit rate of modern large corporations becomes the same as the one that small firms had several decades ago. But, we added, nevertheless, the profit rate of large corporations always higher than the one of small firms, if we consider these 2 rates over the same year, whether 1970 or 2000.
As we see, Post “refutes” by fraudulent means the benefits getting from concentration of capital, denies the obvious fact that the concentration of capital, of production results in the increasing of labor productivity, hence - in the increasing of the profit rate. As already Marx proved, an artisan with the simplest instruments of production under the domination of large-scale production usually gains no profit on his smallest capital at all, at best he reproduces the value of the means of production and his labor force, at worst he even doesn’t reproduce his labor force.

“The notion that the existence of a small number of large firms in an industry limits competition, allowing higher than average profits and wages, is derived from neo-classical (non-Marxian) economics’ vision of “perfect competition.”
For neoclassical economists, perfect competition - which allows instantaneous mobility of capital between branches of production, uniform technology, equal profit rates and wages - exists only when a large number of small firms exist in a market. Any deviation from this is “oligopoly” - a form of “imperfect competition” that creates obstacles to capital mobility, different techniques, and higher than average profits and wages.
The notions of perfect competition and oligopoly/monopoly are both conceptually and empirically flawed. Perfect competition is an ideological construction - an idealization of capitalist competition that makes the existing economic order appear efficient and just”

But the acknowledgment of the fact that “the existence of a small number of large firms in an industry limits competition” doesn’t mean “an idealization of capitalist competition”. Neo-classics which are modern free-traders, opposing any state interference in economy, allege that capitalism may be “free”, and they advocate such “free” capitalism. As distinct from them, Leninists understand that free competition generates monopoly, and if the competition more free then it generates monopoly more rapidly, stronger. Leninists don’t advocate “free” capitalism, they oppose capitalism at all, seeing progressive character of concentration of capital under capitalism (i.e. the replacement of large number of small enterprises by small number of large enterprises) and seeing progressive character of “free” capitalism, under which this concentration grow the most rapidly, in comparison with “bureaucratic” capitalism, under which this concentration grow slowly. Objectively neo-classics turn their eyes towards the past, they see their ideal in the past – in pre-monopolistic capitalism, in the return from monopolistic capitalism to capitalism of small producers, while Leninists see the problem solving in the future, in the transition from imperialism to communism.

“Real capitalist competition - from the birth of capitalism in English agriculture in the 16th century, through the industrial revolution of the 18th and 19th century to the emergence of the transnational corporations in the 20th century - has never corresponded to the dream world of “perfect competition””

Yes, capitalism “has never corresponded to the dream world of “perfect competition””. But until the middle of XIX century the restriction of competition came from feudal power. England in the latter half of XIX century was more or less purged from feudal productive relations, and capitalism there was more or less “free”. However, since the middle of XIX century in England and since the end of XIX century in France, Germany and USA capitalists were turned from organizers of production into unnecessary class, into usurers, and became the same burden for the development of productive forces as feudal lords were earlier. I.e. to “refute” Lenin’s theory that monopoly causes super-profits and labor aristocracy for the reason that “capitalism has never corresponded to the dream world of “perfect competition”” means to lump together feudal protectionism and protectionism on the newest capitalist, imperialist basis. It means to lump together capitalist imperialism with feudal, pre-capitalist imperialism – just as Kautsky drew an analogy between modern imperialism and Roman Empire, concealing that their economic bases were absolutely different, for what Lenin criticized him.
Post cites a certain Botwinick:

“…Because fixed capital generally requires prolonged turnover periods, new techniques will be adopted primarily by those capitals that are in the best position to do so. Thus, although new capitals will enter the industry with ‘state of the art’ equipment and other existing capitals will gradually begin to replenish and expand their productive facilities with the latest techniques, older, less efficient capitals will also tend to live on for many years. This is particularly true within prolonged periods of rapid growth... Rather than creating identical firms, competition therefore creates a continual redifferentiation of the conditions of production”

and concludes:

“Put simply, competition - not its absence - explains the diversity of technical conditions of production and the resulting differentiations of profit and wage rates within and between industries throughout the history of capitalism. The higher wages that workers in unionized capital-intensive industries enjoy are not gained at the expense of lower paid workers, either at home or abroad. Instead, the lower unit costs of these industries make it possible for these capitals to pay higher than average wages. As we have seen over the last thirty years, however, only effective worker organization can secure and defend these higher than average wages”

Mr. Post has played dirty trick again! At first he imputes Kautskyist nonsense that the monopoly excludes the competition to Lenin (Post does it above too, when he divides firms into “monopolistic” and “competitor”), then he preaches “with scholarly look of expert”: “competition - not its absence - explains the diversity of technical conditions of production and the resulting differentiations of profit and wage rates within and between industries throughout the history of capitalism”. In fact, Lenin criticized Kautsky for his assertions that monopoly can replace competition, and contradictions between monopolistic corporations will become a thing of the past, imperialism will be replaced by “ultra-imperialism”.
Yes, new technologies enable to get increased profit while the rest of bourgeoisie have old technologies. It’s right. But who, what bourgeoisie have the opportunity to renew their own equipment earlier than others, have the opportunity to use the newest technologies, and, thus, have the lowest cost of production? Naturally, big bourgeoisie have. Furthermore, big capital can put the brakes on the development of productive forces in colonies in order to prevent them from getting the necessary material base for national independence.
On the other hand, big monopolistic capital gets a profit bigger than capital of the same size and with the same technical equipment, but not yet constituted its power. The example of that is respectively England and Germany in late XIX century; respectively Russia and China (or India) in early XXI century. The other example is USSR in 1989 too: the old Soviet bourgeoisie, which have political monopoly, was rivaled by competitor which was stronger in economical sense – “democrats” – but in political sense “democrats” not yet constituted their power and, due to the monopoly, the profits of the old Soviet bourgeoisie were bigger than the profits of “democrats”, in spite of technical backwardness of the former. In this case the difference of profit rates are caused just by the monopoly, not competition.
Post says about “the diversity of technical conditions of production and the resulting differentiations of profit and wage rates within and between industries throughout the history of capitalism” (italicized by me – A. G.). By this assertion Post demonstrates the total absence of concrete historical approach in his argumentation. In fact, in the past, in pre-monopolistic period several firms didn’t get steady high profits, profits were fluctuating around average value, in contrast to modern period, when large corporations get steady high profits, and small firms get steady low profits (of course, the fluctuations of profit rates during economical circle take place both at large and small firms, but they occur around significantly different values of profit rates).
Incidentally, Post, who alleges, that the theory of labor aristocracy is “myth”, at the same time acknowledges that

“Nor are the “benefits” of increased profitability and growth due to imperialist investment distributed equally to all portions of the working class. As we will see below, the racial-national and gender structuring of the labor market result in women and workers of color being concentrated in the labor-intensive and low-wage sectors of the economy”

So, Post, acknowledging “inequality of distribution of imperialist “benefits” between the portions of the working class”, acknowledges by that the correctness of the theory of labor aristocracy, but he does it apprehensively, unwillingly, when this theory is already “demolished” by him. However hard those gentlemen “scientists” may try to allege that Leninism is “myth”, they are unable to keep evident corroborations of Leninism by the life, by the practice back, and they are compelled to acknowledge these corroborations, but do it with thousand reservations.
As we saw already at introduction, Post denies the connection between labor aristocracy and opportunism. In his opinion, the most striking example, which refutes that connection, is the fact, that Bolsheviks were supported in 1917 just by high-paid workers of large factories, while Mensheviks were supported by low-paid workers of small factories. If for Mr. Post this unsuccessful example is the most striking – I don’t know how to react… Really, was Russia imperialist nation in capitalist sense before 1917? No, Russia just began to show imperialist features (in the sense of capitalist imperialism) at that time. Post adduces a fact that the concentration of workers at large factories in Russia was the greatest in the world, that Putilov’s factory with 40,000 workers was the greatest in the world at the number of workers. But this is just the case, when Russian capital not yet “constitute” itself, when its portion in the world profit sharing not yet corresponded with its economical force, and became to correspond owing to October revolution and later – to the victory in World War II.
Furthermore, is it a truth? Is it a truth that Bolsheviks were supported by high-paid workers of large factories, while Mensheviks were supported by low-paid workers of small factories? Charlie Post cites a certain David Mandel. The citation is evidently unconvincing. It will be possible to name this example “striking”, if Post cites Lenin, for example.
As I remember, Lenin really wrote at one place, that Bolsheviks are supported more by workers of large factories: although they are high-paid, they are more organized. But he wrote this before 1914! In 1918 in the article “Constituent assembly elections…” he already didn’t write about this division, as I remember, he wrote only about the fact, that Bolsheviks were supported by proletariat of metropolises, centers.
As a matter of fact, the split into Bolsheviks and Mensheviks was of world-wide historical importance – it was the split into revolutionary Marxism and opportunism, into proletariat and labor aristocracy. Menshevism, legal Marxism, Bernshteinism with its allegations about the improvement of living standards of workers were connected naturally – in Russia too – with that stratum of workers, which conditions were really improving within the limits of capitalism, but in Russia this stratum was much less than in the West, and it turned out easier to defeat opportunism. Lenin repeatedly wrote about this. He also wrote that Menshevik organization was wealthier than Bolshevik one, and if Bolsheviks have overtaken them at membership fees by 1912, it was made because of great number of workers, each of them gave a little sum, i.e. donation to the newspaper per head in Bolshevik organization was considerably fewer than in Menshevik organization. But Post didn’t consider these facts.
We see the evidence of the theory of labor aristocracy by the example of Tsarist Russia not only in scientific literature, but in realistic fiction too. Take for example Gorky’s short novel “Twenty six and the one”. Of course, I don’t idealize low-paid workers which are shown at that short novel, but bourgeois manners of high-paid workers, their “respectability” (to say more simply, their “elitism”) are demonstrated there very clearly.
Bolshevism is inseparable from Lenin’s theory of labor aristocracy, and to say that Bolsheviks were supported by labor aristocracy as Post does – means to say nonsense, means to cross out the history with one stroke of the pen, in addition citing some “authority”.
So, according to Post, the basis of opportunism is not labor aristocracy. If that is so, then what is the basis of opportunism?

“The objective, structural position of workers under capitalism provides the basis for collective, class radicalism and individualist, sectoralist and reactionary politics.
Bob Brenner and Johanna Brenner point out, “workers are not only collective producers with a common interest in taking collective control over social production. They are also individual sellers of labor power in conflict with each other over jobs, promotions, etc.” As Kim Moody put it, capitalism “pushes together and pulls apart” the working class. As competing sellers of labor power, workers are open to the appeal of politics that pit them against other workers - especially workers in a weaker social position…”

So, according to Post, the cause of opportunism is the fact that workers are dual, they are “not only collective producers with a common interest in taking collective control over social production. They are also individual sellers of labor power in conflict with each other over jobs, promotions, etc.” Incidentally, Russian opportunist (who named himself “Leninist”!) Prigarin similarly see the cause of the presence of 2 currents – communist and social-democratic – in the fact that working class is “dual”. According to Prigarin, on the one hand, working class struggles against capitalism, on the other hand, it struggles for the improvement of its condition within the limits of capitalism.
In fact, Lenin wrote about the dualism of petty bourgeoisie.
It is really so. Of course, proletarians also have petty-bourgeois prejudices – careerism, economism etc. But they have many fewer prejudices than labor aristocracy, and their prejudices are much less stable. Post ignores the fact that among one part of workers the former (“common interest in taking collective control over social production”) prevails, while among other part of workers the latter (the interest of “promotion” etc.) prevails. It is similar to Russian idealist Bugera, who denies that social being determines consciousness, that class consciousness in the modern society is determined by the size of income (understandably, not for certain man, but for millions cases).
But Post “beats” himself. As we see already in the beginning, he acknowledges that Lenin’s theory at the “North” was “cancelled” in 1930’s from above – by opportunistic leaders of Comintern, and began to revive from below, by communists who work with low-paid workers, moreover, it began to revive in 1970’s-1990’s with deepening of the general crisis, with impoverishment of the masses of labor aristocracy (the same can be said also about Russia, such process began here about 20 years later, than at the West, but go more rapidly). And Charlie Post objectively plays the role of imperialists’ servant whose task is to hamper this process of revival.
Really, if the theory of labor aristocracy is a “myth”, why become necessary for Post to refute it 85 years later? The rise of topicality of this theory just at last 30 years, which Post himself acknowledges, already says that it is not “myth”.

September 10, 2007




Copyright © 2007 Alexander Gachikus
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