Imperialism and the US Proletariat

Imperialism

Over the last 100 years, US capitalism has fully matured and reached its highest stage – the dominance by financial institutions of all industries by means of shareholding. It is in this mature stage that US financial institutions, burdened with surplus capital which can not be reinvested domestically, have expanded across the globe. Through a system of imperialism, US finance capitalists export surplus cash, raw materials, and manufacturing equipment to other countries and seize as plunder the profit from the resulting commodity production. Any country which resists is met with overwhelming military power.

But today, this system is in decline. Each month, the imperialists find themselves less and less capable of maintaining economic order through consent or coercion and must resort more and more to naked force. This was demonstrated by the mad rush to send arms and ammunition to the Israeli occupation, which has bombed Gaza, Lebanon, and Iran, and continues to bomb Syria (when listing imperialist wars of aggression we must always specify; as of this writing). Other countries in North Africa and West Asia, including Yemen, Iraq, and Somalia, have been bombed by the US directly during the last year. The death toll of these wars has been catastrophic, but no amount of blood is too much to secure imperialist hegemony. 

In spite of this, more and more countries are defying the imperialists and their client states; Burkina Faso, Niger, Mali, Chad, and Senegal are all moving to push French troops out of their countries, Yemen, Hamas, and Hezbollah have been undeterred, and China’s economic relationships have expanded rapidly – especially through BRICS – threatening the dominance of the petrodollar.

As a response, capitalists could attempt to rebuild US manufacturing. This would provide an outlet for surplus capital and make US weapons manufacturers less dependent on China for components — which currently renders them embarrassingly hamstrung when threatening military action against the PRC. Factions within the bourgeoisie who favor this strategy have used President Trump as their spokesperson. 

But there are serious obstacles to this approach. Higher labor costs and the complete restructuring of supply chains would lead to a massive reduction in profits. Rather than investing their capital, the bourgeoisie would be setting it on fire. For these reasons, the bourgeoisie is stuck with the basic economic structure currently in place. Finding the correct course of action requires a concrete analysis of concrete conditions as they are now, as any future changes will emerge from – and be influenced by – the current status quo. 

The Service Industry and the Proletariat

The current US economic structure can be described as a Service Industry based economy. The Bureau of Labor Statistics says that as of 2023, 74.6% of US economic output comes from the Service Industry. That is over 28.8 trillion dollars. The BOL further breaks down the sectors within the Service Industry this way; Professional and Business Services, 13.2% of total output, Healthcare and Social Assistance, 7.1%, State and local government, 7.4%, Leisure and Hospitality, 4.3%, Retail Trade, 5.5%, Financial Services, 14.4%, Construction, 4.1%, Transportation and Warehousing, 3.5%, Other services (except public administration), 1.9%, Wholesale Trade, 5.4%, Private Educational Services, 0.9%, Information, 6.5%, Federal Government, 3.3%, and Utilities, 1.3%.

‘Financial Services’ represents the banking sector, 5.5% of all employees, and ‘Professional and Business Services’, 13.6% of all employees, represents the bourgeois and petit-bourgeois consultant industry, which advises other capitalists on the most efficient means of realizing profit. The proletariat therefore is concentrated firstly in service work – Healthcare, Hospitality, Retail Trade, Transportation and Warehousing, Wholesale Trade, Private Education, and IT – totaling 79,728,655 workers or 47.5% of the workforce, and secondly in resource extraction, construction, and manufacturing, totaling 21,552,700 workers collectively (12.8%). There are also state and federal workers, who make up 13.5% of the workforce. Due to their importance in the day to day functioning of society, the bourgeoisie waged a determined struggle against their rights as organized labor. This struggle crescendoed in the 1980s when the strike of air traffic control workers was crushed. Currently state and federal workers face the most severe legal hurdles to militant organizing.

The sum total of the Service Industry’s economic output is 14.1 trillion dollars. Within this category, the consumer services subsector (Wholesale, Retail, Transportation and Warehousing, and Hospitality) has a combined output of 7.2 trillion dollars. This subsector makes sense as a focus for the bourgeoisie given the structure of our economy. A large domestic market for commodities is necessary to consume that which is being produced overseas.

Within the Service Industry, the most productive workers (in terms of economic output per worker) are Wholesale, Transportation and Warehousing, and Retail workers. Six million Wholesale workers are responsible for 2 trillion dollars of the US economy, an output per worker rate of 150%. Six and a half million Transportation and Warehousing workers are responsible for 1.3 trillion dollars of the US economy, an output per worker rate of 90%. Finally, 15 million Retail workers are responsible for 2.1 trillion dollars of the US economy, an output per worker rate of 59%. Making major inroads in organizing these three industries would give the proletarian struggle significant leverage over the US economy disproportionate to the actual number of workers organized. 

The Power of Strikes

The means by which this enormous economic power can be leveraged is through the capitalist mode of production itself — or by the cessation thereof. Commodities cannot be produced or sold without labor. Further, profits are drawn from the surplus value produced by workers; without human labor there is no profit. Therefore, organized workers can go on strike — they can withhold their labor as a group — to halt capitalist production and the accumulation of profit.

The loss of profits affects not only the individual firms, but the shareholders — the largest of whom, US banks, exert their ownership stake in various industries to wield power as the true ruling class. The fate of these investments, more so than the fate of individual firms, is the primary concern for the ruling class. 

The prominent capitalist think tank, the National Bureau of Economic Research (NBER) published a study of major strikes between WWI and WWII, and the effects those strikes had on company share prices. Examining how the resolution of a strike — whether the workers won or lost — impacted the market they concluded, “when wages fell [as a result of] the strike, the estimated positive impact on the value of the industry was roughly 9 percent…” Put more simply, if a strike was defeated and workers returned to their jobs at a lower wage, the stock price of the company went up. Investors at the time viewed the defeat of the strike, and the impoverishment of workers, as an absolute victory for capital. 

Unsurprisingly, victory for the workers was viewed as a market liability, “when wages remained the same or increased… our point estimates indicate that the value of the industry fell between 3 and 5 percent”. I hasten to add that the research showed a weakening not just of an individual company, but of the entire industry of which the firm was only a part, “[T]he size of the effects when the union wins are consistent with the view that the effects of strikes were not limited to the single firm being struck, but felt industry wide by investors. Our analysis suggests that financial markets viewed union victories in the inter-war period as very important determinants of the share of firm profits going to stockholders.”

NBER found that (1) strikes affected the market value of an entire industry rather than just the individual firm being targeted, (2) that the effects were pronounced, and (3) that the impact was consistent with other historical periods. “Given our concentration on industry returns, the magnitude of our estimates might be surprising, since we expect industry wide reactions to strikes to be smaller than the effect on specific firms (as business moves from struck to unstruck firms, for example). Moreover, our evidence is roughly consistent with Kramer and Vasconcellos (1996) who find effects on unstruck firms that are statistically indistinguishable from those on struck firms from 1982-1990.” 

Transportation and Warehousing and the Service Industry

The labor movement is weak and struggling to be reborn, but already the working class has begun to probe for weaknesses in the leviathan of capital. Modern manufacturing and shipping practices like just in time logistics – “keeping ultra-low quantities of parts on hand to avoid holding expensive stocks of parts” – have major vulnerabilities which were exposed by work stoppages at the ports. In October, a three-day strike by the longshoreman resulted in a 63% wage increase for the workers. At the start of the strike, analysts projected that the financial cost of a prolonged struggle “could range from $4.5 billion to $7.5 billion per week, translating to a potential 0.1% reduction in annual GDP for each week the strike continues”.

In the service industry, the struggle is even more nascent and tentative. But in December, the Starbucks Workers United union sent a clear message to the coffee company when they shut down 300 stores for 4 days. In the same month, delivery drivers from Amazon also went on strike to flex their power during the holiday rush. 

The data shows that more and more workers are being pushed into the service industry. The common refrain that these jobs are temporary must be abandoned. This employment is transient precisely because the work is so precarious. Changing the nature of the work is of the utmost importance, which can only be achieved by determined mobilization. 

Between production and consumption, workers in the transportation and warehousing, wholesale, retail, and food service industries control what is called the ‘realization’ of profit. Commodities must reach the buyer’s hands before the capitalist is able to extract their profits. The hand of the proletariat is wrapped around this vital airway, and through political education and collective mobilization it must be squeezed.

This in turn would affect the struggle in the Global South by reducing the flow of arms and other war machinery, curbing the rapacious violence faced by workers in other countries. This  is our internationalist duty and we must take it seriously.

Agitation

Spreading this message is the duty of all cadre and class-conscious workers. Welding together the strength of the collective proletariat requires constant political education. The apathy and learned helplessness displayed by so much of the working class is but a thin layer of dust, easily cleared by agitation spoken confidently from one’s chest. 

We must continue to explain to workers that their collective power is greater than they previously realized. When bourgeois illusions have been cleared away, and workers understand the true power dynamics at play in the economy, the internal calculus shifts from ‘how’ to ‘when’. Workers can grab hold of the means of production, they can stop the flow of profits, they need only organize and strike.