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Marx's Revenge: How Class Struggle Is Shaping the World

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  • Romi Elnagar
    Marx’s Revenge: How Class Struggle Is Shaping the World By Michael SchumanMarch 25, 2013 Adam Berry / Getty Images The grave of German philosopher and
    Message 1 of 1 , Apr 1, 2013
      Marx’s Revenge: How Class Struggle Is Shaping the World
      By Michael SchumanMarch 25, 2013
      Adam Berry / Getty Images
      The grave of German philosopher and economic theorist Karl Marx, remembered as the founder of modern socialism and communism, in Highgate Cemetery
      in London Related
      Karl Marx was supposed to be dead and buried. With the collapse of
      the Soviet Union and China’s Great Leap Forward into capitalism,
      communism faded into the quaint backdrop of James Bond movies or the
      deviant mantra of Kim Jong Un. The class conflict that Marx believed
      determined the course of history seemed to melt away in a prosperous era of free trade and free enterprise. The far-reaching power of
      globalization, linking the most remote corners of the planet in
      lucrative bonds of finance, outsourcing and “borderless” manufacturing,
      offered everybody from Silicon Valley tech gurus to Chinese farm girls
      ample opportunities to get rich. Asia in the latter decades of the
      20th century witnessed perhaps the most remarkable record of poverty
      alleviation in human history — all thanks to the very capitalist tools
      of trade, entrepreneurship and foreign investment. Capitalism appeared
      to be fulfilling its promise — to uplift everyone to new heights of
      wealth and welfare.
      Or so we thought. With the global economy in a protracted crisis, and workers around the world burdened by joblessness, debt and stagnant
      incomes, Marx’s biting critique of capitalism — that the system is
      inherently unjust and self-destructive — cannot be so easily dismissed.
      Marx theorized that the capitalist system would inevitably impoverish
      the masses as the world’s wealth became concentrated in the hands of a
      greedy few, causing economic crises and heightened conflict between the
      rich and working classes. “Accumulation of wealth at one pole is at the
      same time accumulation of misery, agony of toil, slavery, ignorance,
      brutality, mental degradation, at the opposite pole,” Marx wrote.
      A growing dossier of evidence suggests that he may have been right.
      It is sadly all too easy to find statistics that show the rich are
      getting richer while the middle class and poor are not. A September study from the Economic Policy Institute (EPI) in Washington noted that the
      median annual earnings of a full-time, male worker in the U.S. in 2011,
      at $48,202, were smaller than in 1973. Between 1983 and 2010, 74% of the gains in wealth in the U.S. went to the richest 5%, while the bottom
      60% suffered a decline, the EPI calculated. No wonder some have given the 19th century German philosopher a second
      look. In China, the Marxist country that turned its back on Marx, Yu
      Rongjun was inspired by world events to pen a musical based on Marx’s
      classic Das Kapital. “You can find reality matches what is described in the book,” says the playwright.
      (MORE: Can China Escape the Middle-Income Trap?)
      That’s not to say Marx was entirely correct. His “dictatorship of the proletariat” didn’t quite work out as planned. But the consequence of
      this widening inequality is just what Marx had predicted: class struggle is back. Workers of the world are growing angrier and demanding their
      fair share of the global economy. From the floor of the U.S. Congress to the streets of Athens to the assembly lines of southern China,
      political and economic events are being shaped by escalating tensions
      between capital and labor to a degree unseen since the communist
      revolutions of the 20th century. How this struggle plays out will
      influence the direction of global economic policy, the future of the
      welfare state, political stability in China, and who governs from
      Washington to Rome. What would Marx say today? “Some variation of: ‘I
      told you so,’” says Richard Wolff, a Marxist economist at the New School in New York. “The income gap is producing a level of tension that I
      have not seen in my lifetime.”
      Tensions between economic classes in the U.S. are clearly on the
      rise. Society has been perceived as split between the “99%” (the regular folk, struggling to get by) and the “1%” (the connected and privileged
      superrich getting richer every day). In a Pew Research Center poll released last year, two-thirds of the respondents believed the U.S. suffered
      from “strong” or “very strong” conflict between rich and poor, a
      significant 19-percentage-point increase from 2009, ranking it as the
      No. 1 division in society.
      The heightened conflict has dominated American politics. The partisan battle over how to fix the nation’s budget deficit has been, to a great degree, a class struggle. Whenever President Barack Obama talks of
      raising taxes on the wealthiest Americans to close the budget gap,
      conservatives scream he is launching a “class war” against the
      affluent. Yet the Republicans are engaged in some class struggle of
      their own. The GOP’s plan for fiscal health effectively hoists the
      burden of adjustment onto the middle and poorer economic classes through cuts to social services. Obama based a big part of his re-election
      campaign on characterizing the Republicans as insensitive to the working classes. GOP nominee Mitt Romney, the President charged, had only a
      “one-point plan” for the U.S. economy — “to make sure that folks at the
      top play by a different set of rules.”
      Amid the rhetoric, though, there are signs that this new American
      classism has shifted the debate over the nation’s economic policy.
      Trickle-down economics, which insists that the success of the 1% will
      benefit the 99%, has come under heavy scrutiny. David Madland,
      a director at the Center for American Progress, a Washington-based think tank, believes that the 2012 presidential campaign has brought about a
      renewed focus on rebuilding the middle class, and a search for a
      different economic agenda to achieve that goal. “The whole way of
      thinking about the economy is being turned on its head,” he says. “I
      sense a fundamental shift taking place.”
      (MORE: Viewpoint: Why Capping Bankers’ Pay Is a Bad Idea)
      The ferocity of the new class struggle is even more pronounced in
      France. Last May, as the pain of the financial crisis and budget cuts
      made the rich-poor divide starker to many ordinary citizens, they voted
      in the Socialist Party’s François Hollande, who had once proclaimed: “I
      don’t like the rich.” He has proved true to his word. Key to his victory was a campaign pledge to extract more from the wealthy to maintain
      France’s welfare state. To avoid the drastic spending cuts other
      policymakers in Europe have instituted to close yawning budget deficits, Hollande planned to hike the income tax rate to as high as 75%. Though
      that idea got shot down by the country’s Constitutional Council,
      Hollande is scheming ways to introduce a similar measure. At the same
      time, Hollande has tilted government back toward the common man. He
      reversed an unpopular decision by his predecessor to increase France’s
      retirement age by lowering it back down to the original 60 for some
      workers. Many in France want Hollande to go even further. “Hollande’s
      tax proposal has to be the first step in the government acknowledging
      capitalism in its current form has become so unfair and dysfunctional it risks imploding without deep reform,” says Charlotte Boulanger, a
      development official for NGOs.
      His tactics, however, are sparking a backlash from the capitalist
      class. Mao Zedong might have insisted that “political power grows out of the barrel of a gun,” but in a world where das kapital is more and more mobile, the weapons of class struggle have changed. Rather
      than paying out to Hollande, some of France’s wealthy are moving out
      — taking badly needed jobs and investment with them. Jean-Émile
      Rosenblum, founder of online retailer Pixmania.com, is setting up both
      his life and new venture in the U.S., where he feels the climate is far
      more hospitable for businessmen. “Increased class conflict is a normal
      consequence of any economic crisis, but the political exploitation of
      that has been demagogic and discriminatory,” Rosenblum says. “Rather
      than relying on (entrepreneurs) to create the companies and jobs we
      need, France is hounding them away.”
      The rich-poor divide is perhaps most volatile in China. Ironically,
      Obama and the newly installed President of Communist China, Xi Jinping,
      face the same challenge. Intensifying class struggle is not just a
      phenomenon of the slow-growth, debt-ridden industrialized world. Even in rapidly expanding emerging markets, tension between rich and poor is
      becoming a primary concern for policymakers. Contrary to what many
      disgruntled Americans and Europeans believe, China has not been a
      workers’ paradise. The “iron rice bowl” — the Mao-era practice of
      guaranteeing workers jobs for life — faded with Maoism, and during the
      reform era, workers have had few rights. Even though wage income in
      China’s cities is growing substantially, the rich-poor gap is extremely wide. Another Pew study revealed that nearly half of the Chinese surveyed consider the rich-poor divide a very big problem, while 8 out of 10 agreed with the proposition that
      the “rich just get richer while the poor get poorer” in China.
      (MORE: Is Asia Heading for a Debt Crisis?)
      Resentment is reaching a boiling point in China’s factory towns.
      “People from the outside see our lives as very bountiful, but the real
      life in the factory is very different,” says factory worker Peng Ming in the southern industrial enclave of Shenzhen. Facing long hours, rising
      costs, indifferent managers and often late pay, workers are beginning to sound like true proletariat. “The way the rich get money is through
      exploiting the workers,” says Guan Guohau, another Shenzhen factory
      employee. “Communism is what we are looking forward to.” Unless the
      government takes greater action to improve their welfare, they say, the
      laborers will become more and more willing to take action themselves.
      “Workers will organize more,” Peng predicts. “All the workers should be
      That may already be happening. Tracking the level of labor unrest in
      China is difficult, but experts believe it has been on the rise. A new
      generation of factory workers — better informed than their parents,
      thanks to the Internet — has become more outspoken in its demands for
      better wages and working conditions. So far, the government’s response
      has been mixed. Policymakers have raised minimum wages to boost incomes, toughened up labor laws to give workers more protection, and in some
      cases, allowed them to strike. But the government still discourages
      independent worker activism, often with force. Such tactics have left
      China’s proletariat distrustful of their proletarian dictatorship. “The
      government thinks more about the companies than us,” says Guan. If Xi
      doesn’t reform the economy so the ordinary Chinese benefit more from the nation’s growth, he runs the risk of fueling social unrest.
      Marx would have predicted just such an outcome. As the proletariat
      woke to their common class interests, they’d overthrow the unjust
      capitalist system and replace it with a new, socialist wonderland.
      Communists “openly declare that their ends can be attained only by the
      forcible overthrow of all existing social conditions,” Marx wrote. “The
      proletarians have nothing to lose but their chains.” There are signs
      that the world’s laborers are increasingly impatient with their feeble
      prospects. Tens of thousands have taken to the streets of cities like
      Madrid and Athens, protesting stratospheric unemployment and the
      austerity measures that are making matters even worse.
      So far, though, Marx’s revolution has yet to materialize. Workers may have common problems, but they aren’t banding together to resolve them. Union membership in the U.S., for example, has continued to decline through the economic crisis, while
      the Occupy Wall Street movement fizzled. Protesters, says Jacques
      Rancière, an expert in Marxism at the University of Paris, aren’t aiming to replace capitalism, as Marx had forecast, but merely to reform it.
      “We’re not seeing protesting classes call for an overthrow or
      destruction of socioeconomic systems in place,” he explains. “What class conflict is producing today are calls to fix systems so they become
      more viable and sustainable for the long run by redistributing the
      wealth created.”
      (MORE: Is It Time to Stop Green-Lighting Red-Light Cameras?)
      Despite such calls, however, current economic policy continues to
      fuel class tensions. In China, senior officials have paid lip service to narrowing the income gap but in practice have dodged the reforms
      (fighting corruption, liberalizing the finance sector) that could make
      that happen. Debt-burdened governments in Europe have slashed welfare
      programs even as joblessness has risen and growth sagged. In most cases, the solution chosen to repair capitalism has been more capitalism.
      Policymakers in Rome, Madrid and Athens are being pressured by
      bondholders to dismantle protection for workers and further deregulate
      domestic markets. Owen Jones, the British author of Chavs: The Demonization of the Working Class, calls this “a class war from above.”
      There are few to stand in the way. The emergence of a global labor
      market has defanged unions throughout the developed world. The political left, dragged rightward since the free-market onslaught of Margaret
      Thatcher and Ronald Reagan, has not devised a credible alternative
      course. “Virtually all progressive or leftist parties contributed at
      some point to the rise and reach of financial markets, and rolling back
      of welfare systems in order to prove they were capable of reform,”
      Rancière notes. “I’d say the prospects of Labor or Socialists parties or governments anywhere significantly reconfiguring — much less turning
      over — current economic systems to be pretty faint.”
      That leaves open a scary possibility: that Marx not only diagnosed
      capitalism’s flaws but also the outcome of those flaws. If policymakers
      don’t discover new methods of ensuring fair economic opportunity, the
      workers of the world may just unite. Marx may yet have his revenge.
      — With reporting by Bruce Crumley / Paris; Chengcheng Jiang / Beijing; Shan-shan Wang / Shenzhen
      Read more: http://business.time.com/2013/03/25/marxs-revenge-how-class-struggle-is-shaping-the-world/#ixzz2PGunns6q

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