Friday, April 26, 2013

Capital Always Needs More Cheap Labor

The current immigration crap sandwich feels like another big money attempt to rush in more bodies into the continental 48 to push wages down. Capital just sticking it to the common man and woman again. This is not anything new, and capital's asymmetric knowledge of finance compared to the common man as well as ability to buy politicians gives them an advantage. The classic formula is something will be cheaper for the common man, and the common man's work will sell more (hint hint job creation and security). This is tried and true product of our democratic ways and the earliest instance I can find of it is the repeal of the Corn Laws in England in the 19th century. Unlike landed interests, capitalists always need more cheap labor.


The Corn Laws were repealed under the con that English manufacturing would be more competitive in the world market, free trade would expand, those evil landowners would give back some ill gotten profit and bread would be cheaper for the English. The politicians were supported by the manufacturing interests that were growing in England. Facing competition from a growing Germany that had lower living standards, they needed help reducing costs. They needed lower wage demands to cut costs and stay competitive. More cheap labor. The repeal of the Corn Laws depressed wages for the English and was a boon to manufacturers. Weird, this corn law website doesn't say it, but wikipedia's entry on Corn Laws mentions it. The manufacturers could afford the propaganda and get out the vote efforts to swing enough MPs and PM Peel to their side. The British landed gentry didn't recover and saw their power slide continuously for the next century; almost lock-step with the continuous expansion of voting rights.

 
Something feels familiar about this, even within my lifetime. Let's see: change the laws so that we can open up free trade. American products will find new markets to sell more. It will be great for American manufacturing. They sold globalization and free trade on abstract ideas that people would only see as us sending goods over there. Hi Mexico. Hi China. Let our products in. Not really. American manufacturing jobs have disappeared due to automation and outsourcing. Location centric jobs have seen wages anchored by never-ending immigration. IT guys get screwed by the H1B Visa helots. Those sectors have their wages capped, allowing the remaining American manufacturing jobs to suffer from sticky wages. Capital had it much easier. American capital crossed borders effortlessly with the aid of Wall Street consulting. Wall Street lent money to foreign nations to build up their industries, which surprisingly would lead to monetary problems in those countries requiring bailouts from the developed nations' governments. The free trade is good mantra hurt other things as well. While America's land and air quality scores went up + forests filled in, the rest of the world saw a worsening situation. Capital doesn't care. It just needs more cheap labor. At least we got cheap toys.

No comments: