Daily Times

The most popular mantra amongst the political elite and the middle class intelligentsia these days for curing the ailing economy of Pakistan is the infusion of private investment, both foreign and local, along with the new economic strategy of public-private partnership. Everyone from the PTI to the Islamic parties, so-called secular parties, semi-religious right-wing Sharif regime and even the incumbent leaders of the PPP are in unison with this economic doctrine. Privatisation, downsizing, liberalisation, deregulation and tax slashing for corporate investors have gone endemic. Yet these aggressive neoliberal capitalist policies have miserably failed to salvage economic decline and enhance growth rates in any country.
Not only have investments declined drastically, the ‘booms’ have also failed to recover any meaningful level of healthy growth, as seen in the recoveries from capitalist slumps in this system’s past history. The crisis has exposed the terminal decay of capitalism as an economic system and its obsolete historical character. Poverty, unemployment, disease, illiteracy and deprivation have soared. Claims have been made by the dominating corporate media about millions being pulled out of poverty by capitalism, while there is a stinging silence about the billions forced into absolute poverty and drudgery. While there has been a certain increase in the size of the middle class in some countries, the teeming millions of the toiling classes have been plunged into agonising deprivation. To lure these investors, not only are state exchequers being depleted, but also the workers’ wages, pensions, permanent employment and other basic hard-won concessions are being snatched away by these vicious policies.
This crisis also reveals the abject failure of capitalism to complete harmonious globalisation. The extent of globalisation that has taken place can be reversed to some degree but, on the whole, the process cannot be unwound. The protectionist tendencies among sections of certain experts of capitalism are doomed from the start. With the deep integration of national economies to the expansion of trade, crushing domination of the world market and economy, there is not one country that can claim to be self-sufficient nor can there be any. The crash of 2008 and the fall in consumer demand exacerbated the stashing away of cash, speculative luxuries and antique artefacts in safe havens, and a severe reluctance of corporate bosses to invest persists, especially in the manufacturing sector. This has delayed and retarded recovery. After 150 years, this reality has vindicated most profoundly Marx’s theories of surplus value and the fall in the rate of profit.
However, there is also another aspect that has led to a decrease in investment by corporate companies. The actual character of investment in the last one-and-a-half decades has changed from labour-intensive to capital-intensive investments. This means that even when there is investment in new industries, or the capitalists buy off state firms through privatisations at bargain prices, and even where there is increased production, instead of creating more jobs, it leads to reduction in employment. The changed role of capitalist investments brings about more redundancies of workers, price hikes and a resultant increase in poverty of the population in general. For example, an Indian-Italian corporate firm, Bajaj, which manufactures motor vehicles of all sorts, produced 25,000 units with 10,000 workers in 1999. In 2006, this company was producing about 45,000 units with just 5,000 workers. It is a process of replacing human labour with advanced technology, thus making the technology appear as a menace for the working class, rather than its potential to improve the lives of humans.
With the massive influx of manufacturing investment and advanced technology in China in the last two decades, labour costs have risen due to the greater proletarian consciousness and strengthening of the workforce. With large swathes of industrial areas in the west devastated by this shift in past decades, there are now rising demands by sections of the bourgeoisie to bring manufacturing back from China, which in theory would create millions of well-paid blue collar jobs. This argument is used quite often in Europe and the US. However, it just is not true, and the reason is the change in productivity of the modern manufacturing workforce.
An analysis on Forbes concluded: “In 1950, the average US factory worker produced $ 19,500 (in 2011 dollars) of output, and by 1976 the amount of output per worker had doubled to $ 38,500. Output per worker doubled again to $ 74,400 (in 2011 dollars) by 1997 (21 years later) and then doubled again to $ 152,800 by 2010, but it only took 13 years for the last doubling because worker productivity has been accelerating. Last year, manufacturing output per worker increased to a new record high of $ 156,500, and almost 10 times the output per worker in 1947. So we simply need ever fewer workers to manufacture those things. What if a company, say Apple, brought all of its Chinese manufacturing to the US. What effect would that have? We cannot quite assume that this particular task will be done at these two different productivity levels. But nor can we assume that the same amount of labour would be used at this much higher, US, price. That means that if Apple’s new US factories work with the productivity levels of current US manufacturers, the re-shoring would provide some 10,000 jobs. That is nice to have, certainly, but it is not exactly the solution to the country’s employment woes, is it? A factory using US labour to produce something at US labour rates would substitute capital for labour to the same extent: would, essentially, automate production. Manufacturing as a source of mass employment just is not coming back to the rich countries. It is over; the whole economic model is just gone.”
If one of the leading voices of corporate capital is so pessimistic about employment prospects under their system, it speaks volumes about the future of the planet under the rule of capitalism. In Pakistan, where a vast majority of the labour, even in multinational companies, has been shifted from regular to contract employment, the hiring of more workers by investors is not rising, and the sea of the unemployed continues to swell. With the putrid state of Pakistani capitalism, so-called mainstream political party leaders have only a greater economic and social disaster in store for the masses. No wonder the vast majority of the population has developed a disdainful indifference to these ‘masters’ of their fate. They instinctively understand what Karl Marx explained so many decades ago: “There must be something rotten in the very core of a social system which increases its wealth without diminishing its misery.” The masses are yearning for a real change and sooner rather than later they shall arise from this slumber to enter the arena of history, to construct their fortunes and destinies with their own hands. Now it is a question of life and death for human culture and civilisation.

The writer is the editor of Asian Marxist Review and international secretary of Pakistan Trade Union Defence Campaign. He can be reached at ptudc@hotmail.com