International Committee of the Fourth International
Fourth International Vol. 20 (1994): Capital, Labor and the Nation-State

Capital, Labor and the Nation-State

This speech was the opening address at the Labor at the Crossroads Conference held by the Workers League in Detroit on June 18-19, 1992.

As the title of this conference suggests, we are meeting at a critical point in the history of the American and international working class. All over the world, the working class is confronted with a savage attack on its living standards and social position. The historic advances made earlier in this century, on the basis of revolutionary struggles to which countless millions dedicated their lives, are being lost one after another.

The Soviet Union, the product of the greatest social revolution in world history, has ceased to exist. The great social achievements realized by the Soviet working class, despite the depredations and betrayals of the Stalinists, are being rapidly liquidated. The workers of Russia, the Ukraine, White Russia, Georgia and the other shattered fragments of the ex-USSR are being reduced to a level of poverty that has not been known since the end of World War II.

In the third world, the conditions of the masses are being reduced to or even below what they were in the most hellish days of colonialism. Not even at the height of its glory did the British Empire possess even a fraction of the power over its colonial subjects that the modem institutions of world imperialism—such as the World Bank, the IMF, GATT and the EC—routinely exercise over the supposedly independent states of Latin America, Asia, Africa and the Middle East. Reports of mass starvation have become so common that they barely attract attention. The proliferation of “Free Trade” or “Special Enterprise” zones has introduced such brutal levels of exploitation that the line between so-called free labor and what could be appropriately defined as slavery has become a very fine one indeed.

In fact, readers of the New York Times could learn recently as they sipped their morning coffee that the number of child laborers in India total 44 million. Nearly a million of these children function, to quote the Times, “as virtual slaves on the carpet looms of eastern Uttar Pradesh. For twelve, fourteen, sixteen hours a day, every day of the week, every week of the year, children as young as eight sit on rough planks, knotting colored yam around the stretched cords of the loom’s warp, creating the carpets that India sells around the world.” Nearly half of the $170 million worth of carpets that is created by children who are chained to their looms and regularly whipped by slave drivers is marketed in the United States. This is the state of affairs in India nearly forty-five years after it achieved what is ludicrously referred to as “independence.”

In the advanced capitalist countries, the position of the working class is steadily deteriorating. In Britain and in Australia, the unemployment rate is at depression levels. More than ten million workers are officially unemployed in the United States. There is not a single advanced capitalist country in which the working class is not presently facing a relentless assault on its living standards. Wage levels are being driven down, and social programs are being weakened or, as is the case particularly in the United States, entirely eliminated. In this country, tens of millions have been made destitute during the last decade. Take-home pay, adjusted for inflation, has fallen to its lowest level in more than four decades. Millions of workers cannot afford and cannot obtain decent housing. Adequate medical care is unavailable for the tens of millions who cannot afford insurance premiums. No one really knows how many millions of aged people are without care and await death in appalling poverty. And the majority of American youth are not even receiving a rudimentary education that would provide them with basic reading and arithmetical abilities, not to mention the more complex skills required to understand and operate modem technology.

Upon examining the conditions of the international working class, it is nothing short of obvious that the staggering decline in the world position of the working class represents a monumental failure and collapse of its traditional political and trade union organizations. Whether they defined themselves officially as “communist,” socialist or, as in the case of the American trade unions, avowedly pro-capitalist, all the old mass organizations have proven incapable of defending even the most elementary interests of the working class against the attacks of the capitalist class internationally. In fact, to say that they “have proven incapable” is somewhat euphemistic. Far from seeking to defend the working class, the old parties and trade unions have consciously collaborated with the ruling class in the destruction of the past conquests of the workers. The role played by the regimes of Gorbachev and now Yeltsin in the liquidation of the Soviet Union and the restoration of capitalism is only the most extreme and graphic expression of a general and international process. There exists, in essence, no fundamental difference in the role played during the past decade by the Communist Party in the Soviet Union, the Labour Party in Britain and Australia, the Socialist Party in France, the Social Democratic Party in Germany, the Parti do Trabajadores in Brazil, the Lanka Sama Samaja Party in Sri Lanka, the various mass Stalinist parties all over the world, and the AFL-CIO in the United States. All these organizations have either presided over or collaborated in the destruction of the living standards of the working class.

It would be difficult to decide which of the old parties and trade unions and which of the leaders are either the most corrupt, treacherous or incompetent. What measurement could determine whether the Labour Party in Britain is “worse” than the Labor Party in Australia; or whether Boris Yeltsin, who served for many years as a middle-level thug inside the apparatus of the Soviet Communist Party, is more reactionary than Owen Bieber of the UAW or Lane Kirkland of the AFL-CIO?

Such measurements are not really necessary; for the aim of our analysis is not to decide who deserves what place in the rogues’ gallery of Madam Tussaud’s wax museum. Rather, it is necessary to understand the objective significance of this international and universal phenomenon of betrayal and collapse. Under conditions in which the labor organizations in every country stagger from disaster to disaster, it is altogether inadequate to approach the problem as if it were merely the result of the individual characteristics of those who occupy positions of authority in the old organization.

When an uncommonly high incidence of cancer is detected in a particular locality, the causes for this disturbing trend are generally to be found not in the genetic history of the afflicted individuals but in specific environmental factors, such as the dumping of toxic waste into local rivers. The collapse of the old organizations of the working class is, fundamentally, the product of specific historic and economic conditions. Understanding these conditions does not mean that we absolve the leaders of these organizations of responsibility for what has happened. Rather, it enables us to recognize that the rottenness of the leaders is itself only a subjective manifestation of an objective process.

There are two aspects of the degeneration of the old organizations of the working class that are of fundamental significance. First, decades of international class collaboration, which assumed an ever more openly corporatist character, transformed the various labor parties and trade unions, regardless of their official identities, into adjuncts and appendages of the capitalist state. Moreover, the staffs and officialdom of the huge labor bureaucracies steadily developed material social interests that are not only at variance with the long-term interests of the working class as a revolutionary social force, but, as has now become clear, entirely incompatible with the immediate needs of workers and even with the traditional functions and elementary reformist aims of the labor organizations.

None of the traditional reformist functions commonly associated with trade unions as organizations of the working class are carried out by the bureaucratic apparatuses, even in an extremely limited and restricted form. The trade unions collaborate with the corporations in the destruction of jobs, the lowering of wages, and the general intensification of exploitation. They seek to block strikes or, where that is not possible, ensure that they are defeated. When workers are replaced in the aftermath of defeated strikes, the trade unions seek to preserve their legal relations with the companies by offering to represent the scabs. The bureaucracy does not consider that its fate is in any way dependent upon that of the working class. In fact, the trade union apparatus has been thriving despite the appalling decline in the conditions of the working class.

As the balance sheets of the AFL-CIO clearly demonstrate, the income of the bureaucracy is entirely insulated from the effect of the capitalist system on the wage levels and living standards of the working class. Even though the membership of what is called “organized labor” is, if one excludes public employees, a smaller percentage of the work force than it was in 1933, the financial coffers of the AFL-CIO still runneth over. Even though the membership of the UAW has fallen by a half million over the last decade, the financial resources controlled by the bureaucracy are greater than ever. Moreover, as has been illustrated so graphically by the outcome of the Caterpillar strike, the UAW does not consider the maintenance of its legal relation with the corporate entity to be incompatible with the de facto destruction of collective bargaining and union representation of the workers on the shop floor.

The second aspect of the degeneration of the old organizations is, of course, related to the first, but has even more far-reaching implications for the fate of the working class. The global integration of capitalist production under the aegis of massive transnational corporations and the terminal crisis of the nation-state system have shattered the basic geo-economic foundation upon which the activities of the old organizations of the working class have been based. Nationally-based labor organizations are simply incapable of seriously challenging internationally-organized corporations.

Even if we were to forget about the corruption of the bureaucrats and attribute to these gangsters the purest of motives, it would not change the fact that their nationalist outlook and program are completely out of step with the global character of modem economic organization and, therefore, as ineffective as they are reactionary.

Some five years ago, the International Committee of the Fourth International placed at the center of its perspective the far-reaching historical implications of the development of the transnational corporation and the globalization of production. Since then, an ever larger number of bourgeois economists have been writing books and articles on this very phenomenon. One of the most recent books, The Work of Nations (New York: A.A. Knopf, 1991), by Harvard economist Robert Reich, states bluntly that American workers “are in direct competition with millions of routine producers in other nations. Twelve thousand people are added to the world’s population every hour, most of whom, eventually, will happily work for a small fraction of the wages of routine producers in America” (p. 209).

Now, Reich is one of the principal economic advisers to Bill Clinton. He gives a number of examples of the fratricidal competition that is the outcome of the globalization of production. He does not use the term “fratricidal.” That is our characterization of this process. Reich welcomes it. But the points he makes are well worth considering. The production of telephones, which had been located for many years in Shreveport, Louisiana, was shifted by AT&T in the early 1980s to Singapore, where AT&T could assemble the product for a fraction of the cost. By 1989 AT&T again shifted its telephone assembly operations when it discovered that it could pay still lower wages in Thailand than it had been paying in Singapore.

Keypunch operators in the United States earn, at best, about $6 per hour ($12,480 per year). But Reich points out that a data processing firm headquartered in Kansas City, Saztec International, brokers work out to data entry firms in Manila, where workers are paid $2,650 annually to do the job. Similarly, American Airlines employs 1,000 data processors in Barbados and the Dominican Republic to enter passenger billing information. The Chicago publisher R.R. Donnelley sends entire manuscripts to Barbados, where they are entered into computer terminals. The New Life Insurance Company sends its claims to Ireland, where they are entered and the necessary payments are calculated. Even more complex operations can be easily shifted to faraway production sites. Texas Instruments operates a programming facility in Bangalore, where fifty Indian programmers perform operations for which American technicians would receive much higher compensation.

“The point is,” Reich declares, “that Americans are becoming part of an international labor market, encompassing Asia, Africa, Latin America, and, increasingly, Eastern Europe and the Soviet Union” (p. 172).

The reformist parties and the trade unions are incapable of developing any viable, let alone progressive, response to the global organization of production. Historically, all the old labor organizations have linked their fate to that of the traditional nation-state within which they developed. At the beginning of the Second World War, the CIO, under the opportunist leadership of Walter Reuther, placed itself at the service of American imperialism. The “strategy” of the CIO bureaucrats—to the extent that the word can be used in relation to their dull-witted pragmatic calculations—was to base the position of the working class, and especially their own incomes, on the dominant role of American industry in the world market. Now, confronted with the consequences of the dramatic decline in the economic fortunes of the United States, the AFL-CIO bureaucracy has nothing to propose except the defense of “Fortress America” on the basis of trade and, eventually, military warfare.

This policy is utterly reactionary; for it is directed both against the workers of other countries and against the irresistible growth of the productive forces beyond the once useful but now archaic nation-state form within which they once developed. The jingoistic tirades of the trade union bureaucracy offer no way forward. It is ironic that the capitalist class is far more attuned to the dynamic of economic development than the bureaucratic dinosaurs. The capitalists are far less devoted to the traditional “nation-state” than their servants in the labor and trade union bureaucracies.

Consider, for a moment, the developments that have taken place in the semiconductor and computer industries during the past week. IBM of the United States, Toshiba of Japan and Siemens of Germany announced that they were forming an alliance to build a new type of computer chip. On the same day, Advanced Micro Devices announced a $700 million joint venture with Fujitsu of Japan to develop, build and market flash memory technology.

In explaining the move by IBM, its president, Jack D. Kuehler, stated:

“Survival is the first priority. Nationalistic factors are the second priority.” That statement reveals a more profound insight into the nature of present-day economic development than the nationalistic ramblings of the labor bureaucracies.

This process of globalization is inexorable. The question is, however, under what conditions and in the interests of what class will it be realized? The working class as the progressive class in history does not oppose the integration of the productive forces which have been built up by mankind. It is by no means a partisan of historically archaic forms of social organization. One hundred forty-five years ago Karl Marx and Friedrich Engels in the Communist Manifesto anticipated the global organization of the productive forces and, on this basis, called upon the proletarians of the world to unify their ranks. The working class, they said, has no country.

The scientific outlook of Marxism is profoundly historical. It does not make a fetish of the nation-state. The nation, as far as Marxism is concerned, is a historical, not a biological category. The formation of nations and the creation of nation-states are not the spiritual emanation of some intangible mystical essence. However varied and complex this process, it is, in the final analysis, the outcome of a definite stage in the historical development of the forces of production. In the course of its historical evolution over several thousand years, mankind has known many forms of social organization quite distinct from the nation-state, which, from the standpoint of history, is a rather modem phenomenon. There was a time when neither language nor, to use a rather vague and often misleading term, “ethnic” origins played any role whatsoever in the constitution of the state.

It may surprise some of you to learn that in many cases, the existence of distinct languages did not lead inexorably to the creation of national movements. The opposite was far more often the case: the establishment of national movements for the creation of new states led to the development and even the invention of many modem national languages.

The formation of nation-states, rooted in the development of capitalism as a world system, represented a stage in man’s development. It is one which must be transcended if civilization is to survive and rise to greater heights. The development of the productive forces has already created the material prerequisites for the unrestricted internationalization of man’s economic, political and cultural life. But whether this is actually achieved will depend on the struggle of classes—above all, upon the conscious political intervention of the working class in this historical process.

The globalization of the world economy is proceeding inexorably. But whether or not this process will ultimately benefit mankind or lead to its ruin depends upon the social forces which guide it. Under the aegis of imperialism, the globalization of production collides against the nation-state form within which capitalist rule is rooted. The efforts of the imperialists to overcome the restraints placed by the nation-state system upon their global economic ambitions lead to war.

The web of alliances being formed by various transnational corporations, such as Toshiba, IBM and Siemens, expresses the organic drive of the productive forces to organize themselves on a world scale. But the other side of this same process is the growing antagonism among nation-states and the eruption of various forms of national and communal conflict.

Even as Siemens in Germany, Toshiba in Japan and IBM in the United States signed an agreement to develop new forms of computer and semiconductor technology, the political representatives of these corporations found themselves, at the recent G-7 talks, at loggerheads over a whole host of economic questions. The discussions held by the G-7 were a complete failure. They were dominated by undiplomatic and nasty wrangling between the United States and France, among the Europeans themselves, between the Europeans and the Japanese and the Japanese and the United States.

As an economic unit, the nation-state is being transcended by the global character of production. But the political structures of capitalism, historically rooted in the nation-state system, move in opposition to this economic process. The more the productive forces demand unification, the more the bourgeoisie internationally is driven into conflicts that must lead, unless prevented by the political intervention of the working class, to war.

The commercial alliances of various transnational corporations have very definite limits. The alliances which they enter into today are part and parcel of their struggle for global domination. One can be certain that no sooner had the chairman of IBM signed this agreement with Toshiba and Siemens, he began to work out plans for breaking it. Such agreements set the stage for future struggles; and out of the commercial struggles of powerful transnational corporations arise the terrible military conflicts that pit entire nations against each other.

The eruption of bloody national and ethnic conflicts are part of this process. The tragic events in the Balkans and throughout Eastern Europe arise out of the reintroduction of capitalism and the reactionary and hopeless efforts of petty-bourgeois politicians, most of them veterans of the old Stalinist regimes, to secure a more favorable niche for their weak national economies in a world market ruled by imperialism.

The conflict between Moldova and Trans-Dnieper, or between Georgia and South Ossetia, between Russia and the Ukraine, between Czechs and Slovaks—all these are the manifestations not of a new upsurge of progressive nationalism, but of the complete inability to find a coherent, rational and progressive framework for the development of the productive forces. In the late eighteenth and early nineteenth centuries, nationalism was the political expression of the democratic struggles of the masses against feudal particularism. Nationalism was proclaimed not as an ideology of exclusivity, but as a means of broadening the scale of human civilization.

Today, it has become a justification for pogroms and for oppression. No one except an idiot can seriously believe that the interests of mankind will be served by creating a new host of national borders any more than one can believe that the interests of peoples can be advanced by setting one ethnic, religious, racial or national group against another. Aside from the generally superficial, arbitrary and even false character of these categories, they have nothing to do with the development of the productive forces of mankind and the creation of a higher form of civilization.

The development of the productive forces has exposed the obsolescence of the old forms of social organization. Mankind cannot advance within the nation-state system. But only to the extent that the working class understands that it must organize its struggle on the basis of an international revolutionary strategy can it surmount the crisis it presently confronts. The crisis of the working class is the crisis of mankind. At the same time, the crisis of the working class is the crisis of leadership.

It is foolish to believe that a great new orientation can be introduced into the working class through old, discredited, bankrupt leaders or that such a new policy can be built up on the framework of old, discredited, bankrupt organizations. New forms of organization are needed to accommodate the new perspective. The revival of the working-class movement, that is, its rebuilding, in the United States, and, indeed, in all other parts of the world, is bound up with a new orientation, a new program—that of revolutionary socialist internationalism. That is what this party and its comrades in the International Committee of the Fourth International are fighting for.

And, indeed, in analyzing the developments taking place in world economy, we draw confidence from the objective tendencies which they reveal. The working class in America is growing closer and closer to its brothers and sisters in all parts of the world. The days are really past when it was possible for imperialism to insulate within its own borders a privileged section of the working class and fatten them on the basis of the super-profits being extracted from its colonies. A different process is, in fact, taking place, a general lowering of the living standards of the working class in all parts of the world.

The Special Enterprise Zone, which imposes the most brutal forms of exploitation upon the workers of China, Sri Lanka or India, is also emerging as a category of economic exploitation in the United States. The formation of such zones within American cities is advocated by both the Democratic and Republican parties. As the previous social limits on exploitation placed upon capitalism by the past struggles of the old labor movements are swept away, the working class in all countries is being reduced to raw material from which profit is extracted.

It is impossible for the workers to take a step forward without organizing themselves on an international scale and approaching all questions from the standpoint of the international interests of the working class, without engaging in a struggle against all forms of nationalism and chauvinism, including the chauvinism which seeks in this country to pit one race against another.

The program of working class internationalism, the slogan “Workers of the world, unite,” is not a utopian panacea. It is a practical possibility and a practical necessity. This is the basis upon which the program of our party is built. We will be discussing in the course of this conference the program of the Workers League, the importance of a break with the Democratic Party, the necessity to build a Labor Party as a political weapon of the working class, understanding at all times that the fundamental basis of our program is this fight for the international unity of the working class. This perspective provides the working class with a road forward, and it will inspire the best and most courageous elements in the working class.

Today, confusion prevails among broad sections of workers. That is the legacy of the past betrayals. But this confusion will give way under the pressure of events. It is our task to prepare the most advanced elements of the working class for the upsurge which is inevitably coming and to provide the masses of workers who will enter into explosive struggles with a program which focuses and directs their revolutionary determination. This is the perspective which we wish to bring to this conference, and I hope that it will provoke serious discussion at this conference.