United States capitalism faces next crisis

By Gus Hall

   This article was reprinted from the July 11, 1998 issue of the
   People's Weekly World. For subscription information see below. All
   rights reserved - may be used with PWW credits.


   (Gus Hall is national chair of the Communist Party USA. The following
   is the second excerpt of his report to the full national board of the
   CPUSA June 27.)

   I want to put together the new, mainly economic, mainly negative,
   developments and processes I have been talking about over the past
   months.

   These developments are having a profound impact on the working class
   and trade union movements, as well as the overall class struggle.

Megamergers and acquisitions

   First, the size, number and extent of the continuing process of
   mergers and acquisitions is greatly expanding the power, influence and
   domination of the monopolies over every area of economic activity and
   life in the United States.

   Just this past week the tobacco industry and Microsoft won victories
   over attempts to impose some restraints on monopolies, even though in
   the case of tobacco it will cost the health and lives of countless
   people.

   The acquisition of TCI Communications by AT&T signals the rebuilding
   of AT&T's worldwide empire. This merger frenzy has led to
   conglomerization and globalization - the internationalization of
   production.

New structure, new strategies

   'Globalization' is a new word that also describes the new form and
   content of imperialism. Global corporations have different features
   than other monopoly corporations.

   Their structures, policies and actions are different. And, the new
   global giants have developed new strategies to fit this new structure
   and these processes.

   One is the strategy of fragmentation by diversifying their production
   locations so that the work force is scattered in different plants
   owned by the same corporation, producing the same product or products.

   Also, multinationals are constantly spinning off subsidiaries to
   create the appearance of different ownership to make it difficult to
   determine who really owns, controls and runs the corporation.

   Then there is the rise of huge financial empires which are mainly the
   result of bank deregulation and bank mergers. It is these relatively
   new, bigger banks and financial institutions that make mergers and
   globalization possible.

   And, there is the privatization process whereby various schemes are
   used to privatize education, hospitals, schools, prisons, sanitation,
   public transportation, postal services, social services, welfare,
   social security and more. This is to turn public, socially-owned
   institutions over to private, for-profit corporations.

   Then, of course, there is the scientific and technological revolution,
   perhaps the most dramatic and profound because it is increasingly
   replacing human labor with chips and robots.

   These processes have increasingly narrowed the already thin line
   between finance capital, corporate capital, the monopolies, the
   military and the state.

   Together, these developments are changing the basic economic structure
   of U.S. capitalism and the form and content of U.S. imperialism

   Another scheme is the operation of a plant assembly line entirely by
   subcontractors so that in an auto assembly plant, for example, one
   station making wheels and tires is run by one company; another
   station, run by another company, adds suspension.

   Then another company adds chassis modules and so on until many major
   subcontractors have added their products.

   The purpose is to make it easier for all the contractors to keep out
   unions and enables the overall plant owner to put pressure on the
   subcontractors to keep down wages and costs by threatening to switch
   to cheaper subcontractors.

   Yet another strategy makes it possible for a U.S. corporation to
   subcontract its production to other U.S. companies operating
   sweatshops in low-wage countries where workers are paid, for example,
   7 cents ($1 a day) to make a shirt sold back in the United States for
   $11.99.

   Another scheme is subcontracting all production to foreign- owned
   sweatshops. For example, Nike sneakers subcontracts all its production
   to companies operating in low-wage, non union countries.

Machines replace human labor

   The issues of outsourcing and imports are two of the main issues in
   the GM strike. The third - new technology - is the most devastating
   and crucial issue.

   The General Motors strike is an example of the new kind of economic
   problems workers face. The new technology keeps replacing workers so
   GM keeps laying off workers, while it increases productivity and
   profits. This process is new.

   It is estimated that the strike is costing GM $75 million dollars a
   day in profits. That gives us an idea of what corporate profits are,
   year in and year out.

   Increasingly, GM sets up production facilities where the wages of
   workers are as little as $100 a month in some countries.

   Thus, the exploitation of workers by GM is becoming more and more
   global.

   The 115,000 auto workers who are out of work because of the GM strike
   and plant closings are being forced to think what the future will be
   like.

   In a sense, the GM workers are striking also for future jobs, for
   their families and all future workers.

What is to come

   An example of what is to come is the fact that right in the middle of
   the strike GM signed a contract with China to build a production
   facility that can eventually produce up to 100,000 trucks a year.

   This will obviously have an impact on truck production in the United
   States.

   Because of the new technology it is now much easier for corporations
   to transfer their production facilities to low wage, non-union areas.

   The strike slogan 'GM is leaving America" says it all.'

   It is clear that to fight these new conditions the trade unions will
   have to come up with new global forms of struggle.

   The international labor movements must find some new methods and forms
   of struggle. Issuing statements is not enough.
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                           PEOPLE BEFORE PROFITS!