One of the central political motivations behind the Spartacists’ attempts to deny the far-reaching historical significance of globalized production is their defense of the trade union form of organization. The Spartacists center their attack on a passage from a report delivered by Socialist Equality Party [US] national secretary David North in 1992:

“The collapse of the old organizations of the working class is, fundamentally, the product of specific historic and economic conditions. Understanding these conditions does not mean we absolve the leaders of these organizations of responsibility for what has happened. Rather, it enables us to recognize that the rottenness of the leaders is itself only a subjective manifestation of an objective process... The global integration of capitalist production under the aegis of massive transnational corporations and the terminal crisis of the nation-state system have shattered the basic geo-economic foundation upon which the activities of the old organizations of the working class have been based. Nationally-based labor organizations are simply incapable of seriously challenging internationally-organized corporations.”^[1]

The chief indictment the Spartacists hurl against the International Committee and North is that “he asserts that the trade unions as such have been made impotent by objective changes in world economy.” According to the Spartacists, the betrayals of the working class by the unions are entirely attributable to the union bureaucracy, which has simply capitulated to the bourgeoisie and refuses to organize the union membership to “play hardball.”

“The decline of the American labor movement,” they declare, “is not fundamentally caused by the objective effects of ‘globalization’ but by the defeatist and treacherous policies of the AFL-CIO misleaders.”^[2]

The International Committee is the last to deny the treacherous role of the union bureaucrats or absolve them of responsibility for the deterioration in the social position of the working class. But it insists that, in the final analysis, the role of the trade union bureaucracy is the expression of deep-seated objective tendencies bound up, on the one hand, with changes in the structure of the world capitalist economy, and, on the other, with inherent features of the trade union form of organization itself.

We shall go further into these questions at a later point. At this stage, let us merely note that, like all subjective explanations, the Spartacists’ claim that the betrayals of the unions are due simply to the rotten nature of the bureaucracy can, in the end, explain nothing.

What is to account for the fact that all sections of the trade union bureaucracy, in all countries, have adopted the same policies at the same time? How is it that in the past the working class was able to win certain limited material gains through the unions, but is now continually pushed backwards? Does this mean that the vicious anti-communists of the 1950s were less rotten than the union bureaucrats of today? And what is to account for the fact that, whatever their political affiliations, the union bureaucrats play the same role.

In an attempt to back up their assertion that the International Committee is preaching defeatism and capitulation before the propaganda campaign of the corporations and their political spokesmen, and providing a rationalization for the betrayals of the trade union bureaucracy, the Spartacists cite the following passage from a report delivered by Socialist Equality Party (Australia) national secretary Nick Beams:

“To the extent that the extraction of surplus value still took place within the confines of a given state, it was possible to apply pressure to capital via the national state for reforms and concessions to the working class. This was the program of the trade union and labor bureaucracies. This is no longer possible.”

Commenting on this passage, the Spartacists reveal the nationalist orientation which forms the basis of their attack on the International Committee.

“In other words, the Northites maintain it is no longer possible for the working class to defend itself against the predations of capital through strikes or other actions, regardless of the tactics and policies pursued.”^[3]

Here we have one of the axioms of the politics of all forms of petty-bourgeois radicalism: the identification of the class struggle with the national-based trade union forms that it assumed in the post-war period.

The International Committee has explained that the era of national reformism, in which the working class sought to maintain and improve its social position through the application of industrial and political pressure on nationally-based employers and the national state, is over. According to the Spartacists, however, this is equivalent to denying that the working class has any means for defending its interests. In other words, the working class equals the trade unions, the class struggle is the trade union struggle, and to maintain that the economic power of the nation-state has been undermined is to say that the class struggle is over.

Having equated the class struggle with the specific, highly-constricted national forms it assumed during the post-war boom, the Spartacists must try and “prove” that it is possible for such struggles to continue. In an attempt to show that globalization of production has nothing to do with the decline of the trade unions, the Spartacists declare:

“In none of the major strikes which marked the decline and the defeat of the American labor movement in the 1980s the PATCO air traffic controllers, Greyhound bus drivers, Phelps-Dodge copper miners, Eastern Airline machinists, Hormel meatpackers did foreign competition or the operations of multinationals abroad play any significant role. Greyhound, Eastern Airlines and Hormel extract almost all of their surplus value from labor within the confines of the American state.”^[4]

There could hardly be a greater display of intellectual bankruptcy than this. In the first place, it should be recalled that the smashing of PATCO in 1981, which set the scene for the onslaught that followed, was organized and carried out by the United States government, the political leadership of world capitalism. It followed in the wake of the change in international economic policy organized by US finance capital, and initiated by US Federal Reserve chairman Paul Volcker in 1979, who raised interest rates to their highest ever levels and brought about the deepest recession in the post-war period.

Even setting aside this extremely important political fact, the Spartacists’ analysis displays an ignorance of the workings of the capitalist system, not to speak of Marxist political economy.

In Volume III of Capital, in the section entitled “Equalization of the General Rate of Profit Through Competition,” Marx demonstrated that the profit levels of an individual firm are not determined by how much surplus value that particular corporation extracts from the workers it directly exploits. Rather, each firm receives a portion of the total surplus value extracted from the working class, according to its share of the total capital used to extract it. This division of surplus value, in the form of profit, is a social process, which takes place through the competitive struggle between the different sections of capital. Those sections of capital that produce at below average cost will receive greater than average profits; those whose costs are higher than the average will receive profits at a rate below the social average.

These averages are themselves subject to change, as new production processes and techniques are developed. A production process that resulted in average or below average costs at one point in time will, as new methods are developed, result in higher than average costs in another period.

In the past, when firms operated to a great extent within national markets, the struggle over the appropriation of surplus value took place primarily within the confines of a given national state. The globalization of production has produced a new situation. Regardless of the percentages of their revenues that firms derive from the national market, costs, efficiency, productivity of labor, the rate of profit are today all determined on an international scale. It is irrelevant if a particular firm operates on a global, national or even only on a regional or city-wide basis. The cost structure it confronts is the outcome of world economic processes that operate quite independently of it.

Even where goods and services are produced and sold within a national market, they have to meet standards and costs which are set globally. It has been calculated that in the largest domestic market, the United States, whereas in the 1960s only 4 percent of domestic production was subject to international competition, today that figure stands at more than 70 percent.

Furthermore, whatever the market for their goods or services, all companies are subject to the dictates of international capital and financial markets. Those firms which do not meet international cost standards, that is, internationally determined profit rates, will find that capital is more expensive.