I am honored to write this preface to the Turkish edition of my book, Naming the System: Inequality and Work in the Global Economy. I thank Neset Kutlug and everyone else who helped bring this edition to fruition. I wrote the book with an international audience in mind, so it is gratifying to see it translated, put into forms readable by the world’s workers and their allies.
The book was written in New York City, immediately after the events of September 11, 2001. At the time, the political economy known as neoliberalism had been ravaging the lives of workers and peasants throughout the world for about thirty years. Turkey was no exception to the neoliberal agenda: An assault on the workers’ movement, the disenfranchisement of peasants, privatization of public enterprises, cutbacks in all types of public social welfare spending and subsidies to the poor, liberalization of rules restricting foreign capital and financial investment, reductions in the tax rates of the rich, and an increase in political repression (always the other side of the coin of economic “liberalization”). September 11 added to this mix the “war on terror,” presumably being waged to protect the United States and the rest of the world from the evil deeds of terrorists, but in reality aimed at securing U.S. economic and political hegemony worldwide. Already by 2001, workers, peasants, and their allies had begun to challenge neoliberalism, sometimes successfully. What 9/11 did was provide political cover for an attempt by capital to regain the high ground in the class struggle. The caveats of Joseph Stiglitz, Jeffrey Sachs, and a few other economists about the unfair outcomes of neoliberalism and the greater economic and political instability implicit in it notwithstanding, it is clear to me that the neoliberal project is alive and well today.
Naming the System took note of several trends present in capitalist economies since the 1970s, when accumulation in the rich capitalist economies began to lose its momentum and neoliberalism was implemented as the solution to this crisis. First, union membership was everywhere declining, and there was a corresponding weakening of labor’s political power. The trend toward lower union density has continued. In Turkey, for example, union density is nine percentage points lower today than it was in 2000. What this has meant in most countries is that the economic and political powers of unions have diminished, with harmful results for workers. Second, real wages (the buying power of the money workers get for their labors) had not kept pace with either the rise in prices or the gains in labor productivity. This trend has also continued. The Turkish economy has grown rapidly, but the real wages of Turkey’s workers have fallen, and today they are still lower than they were just after the 1994 economic crisis. Inflation has been reduced, but still real wages have not kept pace. Mainstream economists keep repeating their mantra that only higher productivity can ensure workers better living standards, but everywhere this claims has proven false. A greater output for a given labor force provides a larger output to be shared, but nothing except the collective power of the workers can guarantee that any of this extra output will go to them.
Third, capitalist economies had exhibited high amounts of unemployment and underemployment. Nothing that has happened since the book was published gives much hope that full employment will be the norm of the future. In the United States, even as the economy grows, more and more workers drop out of the labor force, unable to find work and forced to take early retirement, desperately seek disability payments, become marginally self-employed, or, as is the case for hundreds of thousands of black workers, get driven from the labor force by arrest and imprisonment. In Turkey, the official unemployment rate has risen steadily since 2000, while at the same time, the number of persons not in the labor force but ready to work has increased. Fourth, I found that so-called “informal” employment was increasing in the rich capitalist countries and ubiquitous in the poor nations. Has anything changed in the past five years? I challenge any economist to show me.
Fifth, The International Labor Organization (ILO) estimated that in the 1990s there were 250,000,000 laborers worldwide between the ages of five and fourteen. The latest ILO estimate is unchanged. Nearly half of the children work full-time. Adults, on the other hand, continue to do degraded and dangerous labor, and fewer of them have health insurance or pensions.
Sixth, in 2001, capitalist economies were marked by abiding, and in many countries worsening, inequalities of income and wealth. Again, what has changed? In the United States, “Over the years 1950 to 1970, for each additional dollar made by those in the bottom 90 percent of income earners, those in the top 0.01 percent received an additional $162. In contrast, from 1990 to 2002, for every added dollar made by those in the bottom 90 percent, those in the uppermost 0.01 percent (today around 14,000 households) made an additional $18,000.” Turkey’s income distribution has become slightly more equal over the past few years, but it is still the most unequal in Europe. And what does it say to argue that incomes are a bit less unequal when more than a quarter of the population lives below the poverty level of income. The tax system, which is one of the determinants of income equality, has become much more regressive: in 1980, direct taxes, such as the income tax, made up 63 percent of state tax revenues, but today they comprise a mere 18.7 percent. The distribution of income is highly influenced by the distribution of wealth, and here the Turkish economy shows extraordinary inequality. Les than 1 percent of bank depositors control nearly 65 percent of total bank deposits, and the 100 largest share holders on the stock exchange won 40 percent of all equity value.
All of these continuing trends have been and will continue to be exacerbated by the naked use of violence by the United States, as it tries to solidify and expand its global hegemony. Any attempt by countries to move too far away from neoliberalism, much less try to develop a noncapitalist economy, can expect unremitting hostility form the United States. One reason for the invasion of Iraq was to show the world that the United States can and will commit mass murder to ensure its dominance. It will ravage a country so severely that ordinary people in Iraq see that they were better off under a murderous scoundrel like Saddam Hussein. And if Saddam gave rise to such murderous frenzy, can anyone doubt that Hugo Chavez is in the gun sights of the agents of U.S. imperialism?
In the face of all the bad news, mainstream economists, both real and ersatz (here I have Thomas Friedman of the New York Times in mind), point to China and India as hopes for the future of poor countries and the United States of the rich nations. If the United States offers us any hope, we are in deep trouble. As for China and India, these two nations have more people living in abject misery than the total population of just about any nation the world. China has the distinction of going, in a single generation, from one of the world’s most egalitarian economies to one of the least. In India, the economy grows by leaps and bounds but misery remains the lot of the vast majority of people. Both nations are polluting the environment to such as extent that the health of the entire world is at stake.
My students often complain that what I tell them is so extremely bleak that it depresses them. Are there hopeful signs? Capitalism is a system riven with contradictions, and these always play out in such a way that some of us struggle against our oppression. The present day is no exception. Protests regularly erupt against neoliberalism, from the efforts by informal workers in Turkey to organize to massive strikes by French students and workers in protest against changes in employment laws. On the rooftop of the world in Nepal and in the jungles of Colombia, communist revolutionaries continue their efforts to build a new world and have already won control of large swathes of the countrysides of their nations. Perhaps the most significant struggles to empower the working masses, including, of course, peasants, are now occurring in Venezuela, under the charismatic leadership of Hugo Chavez. His example may be spreading throughout the continent, into Bolivia and perhaps Peru, Ecuador, and Mexico. Argentina showed the world that an economy can develop even if it repudiates its foreign debt. In China there are encouraging signs of peasant and worker revolt against the government’s thorough repudiation of the egalitarian legacy of the 1949 revolution.
I recently read an as yet unpublished article by Laurence H. Shoup, titled “Another World is Being Born: ‘Operation Miracle’ Restores the Sight of over 200,000 People.” Shoup tells us of the joint Cuban-Venezuelan program to transport to Cuba poor, sightless people from throughout Latin America for surgical operations that will restore their vision. Venezuela pays for the air flights, hotel accommodations (Cuba has had to close several foreign-exchange- generating tourist hotels to house the patients), and food, while Cuba’s world-renowned doctors perform the operations. In the past eighteen months some 210,000 persons have begun to see again. 300,000 operations are planned for 2006, and eventually 4.5 million vision restorations will be done. These selfless acts by two countries and their people show what a good world could look like and will look like if we keep our revolutionary shoulders to the wheel.
The explanatory chapters of Naming the System have been criticized as being too elementary, that is, that they gloss over the nuances and complexities of both the neoclassical and radical theories of economics. With this criticism I happily agree. Before anyone can understand the trends discussed above, he or she must firmly grasp the most fundamental aspects of a theory. Neoclassical economics is built on a foundation of individual maximizing decisions in markets. And it claims that when every person acts out of self-interest, society as a whole achieves a social optimum. If we don’t understand this, we don’t understand neoclassical economics, and we won’t be able to grasp the more complex versions of the theory or make the most devastating critique of it. By the same token, Marx argued that classes, not individuals, must be the building blocks of our analysis of capitalism. Capitalism is a system of class exploitation, one in which wage workers must be controlled so that profits can be extracted from them. And it is wage labor that must be ended if a nonexploitative economy is to be constructed. Without an understanding of these basic principles, we cannot know much about capitalism, much less bring about its demise. An attack on neoclassical economics will not be successful if it begins with the neoclassical theories of noncompetitive markets and the intricacies of game theory. Neither will the Marxist analysis of capitalism be grasped nor the revolution be made if we devote our intellectual labors to the solutions to the transformation problem. Before we can write, we must learn the alphabet.
Michael D. Yates
Estes Park, Colorado, United States
June 26, 2006
Neset Kutlug graciously provided me with official data on union density, unemployment, income distribution, and poverty in Turkey. Real wage trends in Turkey are discussed in Sinan Ikinci, “Turkey: IMF Plan Demands New Attacks on Working People,” May 30, 2005, available at <wsws.org/articles/2005/may2005/turk-m30.shtml>. The ILO data are available at <hrw.org/children/labor.htm The quote on income distribution in the United States is from John Bellamy Foster, “Aspects of Class in the United States: An Introduction,” Monthly Review, July-August, 2006. The information on income and wealth distribution in Turkey is available at <morganstanley.com/GEFdata/digests/2005011-tue.htm>. On deteriorating economic and social conditions in Iraq, see William Blum, “The Anti-Empire Report: Some Things You Need to Know Before the World Ends,” available at <members.aol.com/bblum6/aer34.htm>. For dissident voices in China see Robert Weil, “Conditions of the Working Classes in China,” Monthly Review, June 2006.
|The Turkish edition of Naming the System (published in September 2006) is available to the reader in Turkey from Chiviyazýlarý Yayýnevi, a publishing house based in Istanbul. Chiviyazýlarý has a mission of reflecting and exploring the world without accepting the commonsense “truth” promulgated by the mainstream press. Curiosity is its main motive in selecting the books to be published from all over the world. The publishing house is also guided by the following imperatives: respect the people of the world who cannot speak up for their rights; challenge the system that condemns them to unbearable destiny; extend a multicultural approach and ethnic understanding; expose realities beyond the surface; and help produce the knowledge base for the creation of tomorrow. For more information about Chiviyazýlarý, please contact firstname.lastname@example.org.|
Michael D. Yates is associate editor of Monthly Review. He was for many years professor of economics at the University of Pittsburgh at Johnstown. He is author of Longer Hours, Fewer Jobs: Employment and Unemployment in the United States (1994), Why Unions Matter (1998), Naming the System: Inequality and Work in the Global System (2004), and Cheap Motels and a Hotplate: An Economist’s Travelogue (2006), all published by Monthly Review Press.