According to the Spartacists: “Wages in the advanced capitalist countries are not going to be driven down to anything close to Third World levels for two reasons: one political, the other economic.” ^[1]

The political reason centers on the claim that the various imperialist powers will not permit the shift of capital to take place to such an extent that military capacities are endangered and that at a certain point they will impose tariff and other restrictions on the movement of capital.

“In the next few years, the US, Germany and Japan may well impose—against the immediate interests and desires of sections of their own capitalist classes—high levels of trade protectionism, controls of foreign exchange transactions and strict limits on the inflow and outflow of capital.” ^[2]

Let us for a moment take the Spartacists’ assertions at face value. There is an ultimate floor on wage levels in the advanced capitalist countries, they argue, because at a certain point the imperialist powers will invoke measures to restrict the movement of capital around the world. Consequently, it will be possible for the trade unions to exert pressure (provided their leadership is sufficiently willing to play “hardball”) on the national bourgeoisie and carry out their designated task of the “defense of the workers’ interests within capitalism.” Once again, all will be for the best, and the necessity for social revolution will have been averted.

Now let us come back to reality and consider for a moment the consequences of the actions the Spartacists maintain will protect real wages. Such is the integration of the world economy that tariff and other protective measures would not only disrupt world trade, with a repeat of the disastrous consequences of the 1930s. They would also bring about a severe dislocation of the production processes of major corporations, which no longer operate national-based factories and processes, but integrate different aspects of production on a world scale. The introduction of such tariffs, combined with restrictions on the flow of capital, would bring about a financial and industrial collapse of staggering proportions.

This is not a matter of conjecture. Its outlines have already been made clearly visible. In 1995, for example, the trade war between the US and Japan, in which the Clinton administration threatened restrictive tariffs on imports of cars, resulted in a truce when the Japanese authorities threatened that such measures would provoke a withdrawal of the financial inflows holding up the American stock and bond markets.

Not only would the measures envisaged by the Spartacists bring about a financial collapse, they would create the conditions for a new inter-imperialist war, as each imperialist power sought to expand its position at the expense of its rivals.

In other words, the very political measures that the Spartacists insist will ensure the maintenance of relatively high wages in the advanced capitalist countries would, if enacted, bring about a breakdown of the world capitalist economy, leading inexorably to another war.

While the Spartacists’ arguments might appear at first sight to be a kind of madness, they reveal a social logic and method. As Lenin and other Marxists explained in the first part of this century, the material basis for the formation of a privileged labor aristocracy and trade union bureaucracy in the advanced capitalist countries lay in the super-profits extracted by the imperialist powers from the colonies and backward capitalist nations. This is the social layer for whom the Spartacists speak—a layer that will demand tariff protection, financial regulation by the national state and ultimately military action with the claim that this is necessary to protect wages, living standards and “our way of life.”

The same social outlook is revealed in the economic arguments advanced by the Spartacists in support of their “wages floor” thesis. Major firms, they insist, will continue to use more expensive labor in the advanced capitalist countries “because 15 unskilled workers in Indonesia (earning well under a dollar an hour) cannot replace a skilled machinist in the US (earning $15 an hour) or Germany (earning $25 an hour) in the process of industrial production.” ^[3]

Once again the unrestrained chauvinism, so characteristic of the bureaucratic layers for whom the Spartacists speak, comes bursting forth. It never occurs to them that there are skilled workers in Indonesia, India, China and elsewhere. Skilled workers only inhabit the advanced capitalist countries.

The issue is not the replacement of a $15 per hour machinist in the US with 15 workers in Indonesia paid $1 per hour or less, but the replacement of a machinist in the US with one in China or Indonesia, or in the case of Germany, with a machinist in Czechoslovakia or Poland, Spain or Russia, paid at a much lower rate.

In the past, when technical considerations required that entire production processes had to be carried out in one center, the location of these industries, was to a great extent, determined by the location of skilled labor and backup facilities for capital equipment. But skilled labor can be developed in any part of the globe. There is now an international market not only for unskilled labor, but skilled workers as well. A computer programmer in the US is thrown into competition with a computer programmer in Bangalore, an American machinist with a machinist in China or India.

Apart from revealing their utterly chauvinist outlook, the economic arguments of the Spartacists make clear their indifference to the vast mass of workers in the advanced capitalist countries who are earning nothing like $15 and $25 per hour. In fact, wages have fallen so low that manufacturers in the advanced capitalist countries have found that they no longer have to venture overseas to find “Third World” conditions—they exist at home.