(2) Capitalism & the Trade Unions

We live in a capitalist society where the banks, the mines, the farms, the big factories and the big businesses – like Absa Bank, Anglo American, Rainbow Chicken, SCAW Metals, Vodacom, and Shoprite – are privately owned. This splits society into two main groups of people – the minority capitalist class (the bosses) that own the economy, and a majority working class who work for them. The working class includes workers’ dependents, e.g. pensioners, the unemployed, children etc.

 

Monopoly

The development of capitalism across the world over the past 200+ years has concentrated ownership of the economy in fewer and fewer hands. Today we live under monopoly capitalism. This is where just a handful of privately owned companies dominate the economy. For example, Shoprite Holdings Ltd. not only owns Shoprite, but also Checkers, Usave, OK Furniture, Liquor Shop, MediRite Pharmacies, House & Home, Transpharm and Computicket. The scandal hit Steinhoff group owns 32 different retailers, including Ackermans, PEP, HiFi Corp, Shoe City and Sleepmasters. Famous Brands owns the franchises of 27 different food outlets including Wimpy, Steers, Debonairs and Fishaways. If you go into a mall, most of the shops and restaurants are owned by the same capitalists.

These mega-companies are in turn usually owned by a handful of financial institutions and banks – e.g. Absa, Nedbank, FNB and Standard Bank. Further, capitalism has developed a world market dominated by a handful of imperialist countries. The major stakes in the South African banks are often owned by even bigger banks in the imperialist centres of the USA and Europe.

 

Inequality

With private ownership comes narrow self-interest and monstrous inequality. Capitalism is a system where production is organised for private profit and not for social need. The monopolies are not run for the ‘greater good’ of society but to make money for their owners. The so-called ‘market’ allocates resources to those who can pay not to those in need. In South Africa 14 million people go to bed hungry every night. But 10 million tonnes of food are wasted every year – that is one third of all the food in the country. The capitalist economy is incapable of something as basic as feeding the population.

Worldwide, just 42 dollar billionaires – who together would fit in three mini-bus taxis with space left over – have as much wealth as the poorest 3.7 billion people. And most of these 3.7 billion people, who together are more than half of the world’s entire population, live in poverty. As a result 22,000 children die every day simply because they were born poor.

In South Africa itself, 1% of the population owns 71% of all wealth. Out of a population of 57 million, just the richest three billionaires have as much wealth as the poorest 28 million. Because the poor majority are not a profitable investment the big monopolies hoard their wealth. The top 50 companies listed on the Johannesburg Stock Exchange are together sitting on R1.4 trillion. This is nearly 150% of the government’s annual spending on everything – schools, hospitals, clinics, houses, roads, wages etc. But this wealth just lies unused in bank accounts awaiting a profitable ‘investment opportunity’.

Super-wealth for a tiny minority means poverty for the majority. There are 30.4 million people, more than half of South Africa’s entire population, living in poverty. Many of them are the so-called ‘working poor’. There are 6.6 million workers earning less than R3,500 per month. But on this foundation of poverty-wages the bosses are enjoying life. The average income of a CEO is R24 million per year. And this is just the average. In 2017-18, the CEO of Naspers, Bob van Dijk, received a bonus worth a total of R1.5 billion.

South Africa’s racist history of colonialism and apartheid means class inequality goes hand-in-hand with racial inequality. Over 64% of black people live in poverty, compared to just 1% of white people; 74% of black children will grow up in poverty but less than 1.5% of white children will.  The class inequality of capitalism maintains racism by branding black skin as poor and inferior.

 

Competition

The pursuit of profit leads to wasteful competition. Rather than develop society, the capitalist economy is a ‘winner takes all’ casino game. This means chaos for workers. Jobs come and go and livelihoods are built and then destroyed over whether people should shop at Pic N Pay or Shoprite, buy Sunlight or Omo, drive Volkswagens or Toyotas, or eat Sasko or Albany. In 2016 R45 billion was spent on advertising to try and convince the working class that somehow this capitalist competition matters to them.

Capitalist competition compels every company to squeeze its workers as much as possible to gain any ‘competitive edge’ over their rivals. But in doing so they actually destroy the very market they are frantically producing for – low pay and mass unemployment means that the working class cannot buy back all of the goods they produce. This leads to recession and economic crises. But these are not ‘natural disasters’ as the capitalist class would have us believe. They are the normal outcome of production for profit and capitalist competition.

On a world scale capitalist competition can lead to the destruction of entire industries. For example, cheap clothing imports have seen the South African textile industry virtually disappear. The industry went from an employer of 200,000 workers to an employer of barely 19,000. The local capitalists were outcompeted by their overseas counter-parts. The competition between rival capitalists in different countries can lead to trade wars, like the one unfolding between the US and China today. It leads to real wars when the capitalist class use their state to defend their interests.

 

Unemployment

But the madness of capitalism does not end there. It is often more profitable for the bosses to make their existing employees work long hours instead of creating new jobs. This means that in South Africa long hours exist side-by-side with mass unemployment. One in ten workers works for more than 60 hours every week. This is despite laws setting 45 hours as the maximum.

But workers know this ‘working day’ is just the tip of the iceberg. Long journeys to and from work every day, unpaid lunchbreaks and unpaid overtime must also be added. There is little time for workers to relax, spend time with family and friends, or develop and educate themselves. At the same time, more than nine million people sit with nothing to do – South Africa’s vast army of unemployed.

This is capitalism. It is a system of permanent crisis. This is the system that pushed workers to organise trade unions.

 

Exploitation

So how are the bosses able to get away with this? To begin to understand this we need to look at exactly how the bosses exploit workers under capitalism. The starting point is the private ownership of the economy we have already mentioned – ownership of the land, the buildings on it, the equipment and machinery in those buildings, packaged with a nice company logo. This allows the bosses to say to workers:

 “You need money to live? I can give you a job and pay you a wage. But let us be clear that this is my business and you will be working in my building on my land using my equipment. Therefore all the wealth you create will also belong to me and it is up to me what I do with it.”

Workers have no choice but to accept this – the other choice is to starve. But this ‘normal’ boss-worker relationship – exchanging labour for wages – hides the big con-trick at the heart of capitalism. Every time workers perform a day’s work they create new wealth (or ‘value’ as Karl Marx called it). In doing so, workers create more than is needed to cover their own wages and the bosses’ other fixed costs, e.g. buying materials, replacing equipment, paying electricity bills, etc. Something is left over which Marx called surplus-value. When the capitalists take this surplus for themselves it is called profit. But profit is simply the unpaid labour of workers.

Understanding that it is only workers’ hard-work day-in and day-out that creates the bosses’ profits is very important. Without the products workers make, the services they provide, and the buildings they clean and guard, the bosses have nothing. But they try and hide this. Backed up by the media they sell the false idea that they are rich because they have ‘worked hard’. They tell workers to stop complaining and do the same. But this is comparing apples and oranges. A worker can exhaust him or herself through overtime, working every hour possible. But they will never be able to achieve wealth even close to that of the bosses because they are selling their own labour, not exploiting the labour of many others. This is the ‘legal’ mechanism by which the capitalist minority enriches themselves with the wealth created by the working class majority. In 2017 82% of the world’s new wealth was taken by the richest 1%.

Any struggle for higher wages is a struggle over surplus-value. The same is true of demands for more jobs to be created, for more spending on health and safety, to modernise equipment, for longer breaks and leave-days, for more money to be placed in education, pension and other funds, or demanding that government raise taxes on profits to fund hospitals and schools. The division of surplus-value between the capitalist class and the working class is the engine of the class struggle. Trade unions are on the front-line in the class struggle because they organise workers where wealth is created – in the workplace. This arms workers with their most basic weapon: the withdrawal of labour, i.e. a strike.

 

Control

But there is another side to the class struggle. Workers also want to be treated as human beings when in the workplace. Many workers were pushed to join a trade union because of the petty dictators in the workplace – the supervisors, HRs and various managers. We have all felt outrage that one or two people are allowed to push-around tens, hundreds, even thousands of people day-in and day-out.

Workers are employed in huge numbers. For example, Absa Bank employs 40,000 workers, Anglo American 135,000, Rainbow Chicken 20,000, SCAW Metals 7,000+, Vodacom 7,000+ and Shoprite 130,000. Together, the 25 biggest companies listed on the Johannesburg Stock Exchange employ a staggering 1.3 million workers. These figures do not even include all the contractors, outsourced and labour broker workers, or the workers in the small and medium-sized businesses that depend on these giants for their existence.

But the bosses have the final say on everything. The CEOs and company boards, mere handfuls of individuals, have unchallenged authority over the lives of workers, and because of their dominance of the economy, all of society.  If a worker is brave enough to raise an issue they may be accused of ‘insubordination’. Maybe they will be identified as a ‘trouble maker’ and even dismissed.

Such control by the bosses over the workplace is absolutely necessary for capitalism. The majority of workers cannot be allowed a real say because they would never voluntarily agree to run the workplace solely to maximise the profits of the bosses. The capitalist class justifies this because the workplace is their private property. But a trade union is a direct challenge to the bosses’ control as workers demand a greater say in how the workplace is run.

Continue to (3) How the bosses control and co-opt the workers’ movement. Part I: the capitalist state