I could kiss Oliver Letwin, if he weren't so physically, intellectually, and morally repellent.  Marxists could spend weeks, months and years trying to prove that the Tories, the party of the ruling class, are trying to restructure British capitalism in the interests of capital; that the extension of markets across the board is at least partly about improving the class power of employers; and that everything they say about trying to 'free' public sector workers from bureaucracy and central targets is so much cant when they actually mean to enslave them.  Save your breath.  Here's our Oliver:

'Providers' in this statement, as the newspapers have noticed, is synonymous with public sector workers.  Essentially, the idea is, through marketisation and competition, to introduce the usual discipline of the market - fear of losing one's livelihood - to drive up productivity and force down labour costs.  People will be working harder and receiving less for it.  In marxist terms, that's an absolute increase in the rate of exploitation.  That's their growth strategy for British capitalism. 

Letwin, of course, may calculate that this sort of provocation amid delicate negotiations with unions - it has been noticed - won't matter too much to the general public.  After all, if you want to sell markets to people, you address them as consumers rather than workers, talk about 'choice', better 'delivery', and persuade them that they will benefit from ratcheting up the rate of exploitation among fellow workers (even though, as users of trains, gas, water, PFI hospitals, etc., know very well, markets routinely fail consumers).  Even assuming that to be the case, he is still an incredibly stupid man and hence an asset for the Left.  After all, the government's strategy with the unions has been to separate the larger, more moderate unions from the smaller, militant ones.  Keeping them apart is absolutely essential to undermining the confidence and combativity of those workers who do want to fight.  So, to the former, the government offers some marginal and localised concessions, while seeking to marginalise the latter.  But in order to do so, it has to at least seem to be negotiating.  Every time Steve Hilton or Oliver Letwin or one of the coalition apparatchiks let slip what they're really about, this strategy is weakened.

The annual Merrill Lynch Cap Gemini World Wealth Report is a serious study of liquid, investable wealth held by the richest people on the planet: the High Net Worth Individuals who have at least $1m liquid wealth, and the Ultra High Net Worth Individuals who have at least $30m, both "excluding primary residence, collectibles, consumables, and consumer durables". As such it constitutes an invaluable starting point for understanding who the ruling class are, where they live and how they hold their wealth. This is from the 2010 wealth report (I'm afraid there doesn't appear to be a working online file):

The world’s population of high net worth individuals (HNWIs) grew 17.1% to 10.0 million in 2009, returning to levels last seen in 2007 despite the contraction in world gross domestic product (GDP). Global HNWI wealth similarly recovered, rising 18.9% to US$39.0 trillion, with HNWI wealth in Asia-Pacific and Latin America actually surpassing levels last seen at the end of 2007.

For the first time ever, the size of the HNWI population in Asia-Pacific was as large as that of Europe (at 3.0 million). This shift in the rankings occurred because HNWI gains in Europe, while sizeable, were far less than those in Asia-Pacific, where the region’s economies saw continued robust growth in both economic and market drivers of wealth.

The wealth of Asia-Pacific HNWIs stood at US$9.7 trillion by the end of 2009, up 30.9%, and above the US$9.5 trillion in wealth held by Europe’s HNWIs. Among Asia-Pacific markets, Hong Kong and India led the pack, rebounding from mammoth declines in their HNWI bases and wealth in 2008 amid an outsized resurgence in their stock markets.

The global HNWI population nevertheless remains highly concentrated. The U.S., Japan and Germany still accounted for 53.5% of the world’s HNWI population at the end of 2009, down only slightly from 54.0% in 2008. Australia became the tenth largest home to HNWIs, after overtaking Brazil, due to a considerable rebound.

After losing 24.0% in 2008, Ultra-HNWIs saw wealth rebound 21.5% in 2009. At the end of 2009, Ultra-HNWIs accounted for 35.5% of global HNWI wealth, up from 34.7%, while representing only 0.9% of the global HNWI population, the same as in 2008.

The total liquid wealth of the rich in 2009, at $39 trillion, was actually more than two-thirds of world GDP in the same year, almost triple the GDP of the US, and nearly ten times that of China. Another way of looking at it is that the increase in liquid assets from 2008 to 2009 held by the rich was about $6.5 trillion, more than 10% of total GDP in 2009. This was in a year in which world GDP actually shrank by 0.8%.

The distinction between "economic and market drivers of wealth" is very important, and very telling. Most of the new wealth held by the rich was, as you can see, not produced by economic growth, but by stock market capitalisation. In other words, market relations, sustained by state intervention, facilitated the transfer of wealth from the working class to the rich at a time when most of the world's economy was such that the direct exploitation of labour could not sustain high profit rates. That's what the bail-outs did; it's what they were intended to do. Another intended consequence is that there were not only more high net worth individuals, 10 million of them globally (0.014% of the world's population), but the 'ultras' did far better at increasing their share of liquid assets than mere millionaires - thus wealth became even more concentrated than it had been, among a mere 36,300 people, or 0.0005% of the population. The corollary of this has been, and will continue to be, a general decline in the living standards of the working class in most of the advanced capitalist economies: at the same time as the wealth of the richest grew, global unemployment rose by 14.4%.

The role of finance-capital in surplus-extraction varies considerably, of course - and here, China's contribution to the reproduction of the world's ruling class stands out. While financial bail-outs (temporarily) solved many of the problems of the rich in Europe and North America, growth driven by unprecedented spending commitments in China (and, to a lesser extent, India, whose stimulus actually began before the crisis) kept the rich from the Asia-Pacific region in dough, and contributed to the wealth of the US ruling class. This could happen partly because China's growth rates were, like those of many 'newly industrialising countries', already robust. This meant that China's per capita stimulus was greater than that of any other country, and as such accounted for 95% of economic growth in the first three quarters of 2009. But it was also in part because state ownership of the financial and banking sector in China has enabled the government to have more control over the coordination of its stimulus and its effects.

Much has been made of the regime's policy of driving up wages. In fact, what has happened is that China's stimulus enabled an increase in the total amount of surplus value, both by increasing the total employment of labour and by increasing the productivity of labour. Productivity growth has offset wage growth, thus allowing an increase in working class wages and living standards to take place, while continuing the long term strend for wages to decrease as a share of GDP [pdf]. The result is that the top 0.4% of the population controls 70% of the country's wealth. Chinese growth has actually depended on wages sliding as a share of national wealth, and the world capitalist system would be a lot worse off if that hadn't continued to happen. Indeed, according to a World Bank economist, China's stimulus alone contributed 1% to world growth in 2010 - an extraordinary figure. Its GDP by purchasing power parity is already larger than the US by some calculations. China's growth is enabling its ruling class to dramatically increase its demand for luxury goods, accounting for 49% of luxury market growth as the rich spoil themselves with the usual array of jets, mansions, and yachts. But it has also substantially paid for US growth, through direct investment and sovereign debt purchases.

The role of China's working class, the largest in the world by far, in the reproduction of the world's ruling class has, of course, been steadily growing since 1978. The interesting question now is whether this can continue. The World Wealth Report expects future growth to be led by the Asia-Pacific region, "excluding Japan" - despite the latter's substantial stimulus. This obviously means the rich expect China to continue to drive growth and thus profitability. During the last thirty years, China's growth rates have been significantly ahead of its record following the 1949 revolution, and more than double the world average. Its share of world manufacturing rose from 2 to 18%, picking up the slack as manufacturing jobs were lost in Europe and the US. Its expansion fuelled a regional growth surge, eg allowing Japanese capital to increase profits by outsourcing to Chinese labour, and was a significant driver of world growth since 1982.

But the Chinese economy is accumulating tremendous spare capacity as a result of its stimulus package, adding to a global problem and endangering its future ability to produce sustainable growth. It has constantly had to counteract overheating, and may have to substantially reign in growth just when the rest of the world's economies are doing exactly the same, thus undermining its ability to lead a new phase of capitalist growth. The tendencies toward over-accumulation and declining profitability are already evident. Despite the hype about wage increases, real wages are already so low (manufacturing workers in China get less than 5% of the average in the US) that they can't go much lower. Even if they could, the effect may be to contribute to global deflation, thus harming the economies on which China depends for its export markets. China may thus be closer to the end of a long-term wave of growth than the beginning - that growth having been predicated on a now expired global wave of neoliberal expansion based on 'primitive accumulation' and the subsequent record expansion of the country's working class.

Whether and however the ruling class succeeds in overcoming the present barriers to further accumulation, it's hard to see future waves of growth proceeding in this self-same way. Instead, for the foreseeable future, it looks like there will be heightened competition over a diminishing share of surplus value. And Obama has just announced that America's approach in this will be a revamped 'open doors' policy, advised by a new panel headed by the chief executive of General Electric. This will basically involve coercing other economies into accepting US exports at whatever cost to the national or regional economy being thus prised open. It probably presages a new wave of aggression in the global south, especially where popular movements succeed in establishing governments that are interested in independent development based on some concessions for the working class. One would also expect things like this to happen more often, as white supremacy in its various forms is a well-established praxis for weakening the bargaining power of labour and breaking the political threat from the Left. And, especially in a period like this, when growth is thin on the ground and profits have to be wrested through acts of accumulation-by-dispossession, that is how the ruling class makes its money.

From the New York Times: "The nation’s workers may be struggling, but American companies just had their best quarter ever. American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or noninflation-adjusted terms ... Corporate profits have been doing extremely well for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history. As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output. ... This breakneck pace can be partly attributed to strong productivity growth — which means companies have been able to make more with less — as well as the fact that some of the profits of American companies come from abroad."

What the New York Times doesn't explain is that the struggles of the "nation's workers" bear a direct relationship to high corporate profits. Strong productivity growth here basically means an increase in the rate of exploitation. As the Daily Finance explains: "That productivity boost came as workers spent more hours working, and getting paid less to do it. Specifically, between the third quarter of 2009 and the same period on 2010, productivity was up 2.5% as output rose 4.1%, hours worked increased 1.6%, and unit labor costs fell 1.9%, according to the Bureau of Labor Statistics. The profits of U.S. corporations are growing much faster than their revenues. S&P's Howard Silverblatt estimated that corporate profits in 2010's third quarter would rise 18% from 2009, while sales would be up a mere 5.5%. "

Since domestic demand remains relatively weak in the US, despite some boost from the stimulus and despite some weak wages recovery, corporate investors are also using the cheap money made available by quantitative easing to invest in their overseas operations. And as the NYT acknowledges, much of the increase in profits is coming from abroad. Thus, US capital has used two key advantages to revive profitability. First, it has used its overwhelming strength - political, economic, institutional - over workers to extract more labour from a smaller workforce. The flip-side of high profits are more gruelling work, tighter work discipline, more people unemployed, lower wages, longer lines at the soup kitchens, and so on. Second, it has used its overwhelming international dominance, which we might call imperialism, to extract more value from emerging markets, which remain dependent on and subordinate to the US. The obverse of this increased yield is, of course, violent territorial struggle in Afghanistan and Iraq, as well as violent subversion in Honduras and Haiti.

These, aspects of an increasingly brutal, exploitative and repressive capitalist system, are among the reasons why Obamamania has bitten the dust. Obama's electoral coalition was built around the promise of amelioration, a better deal for workers and peace abroad, and neither has been delivered. Obama has been far more completely Wall Street's president than anyone expected. This also helps explain why the corporate media has felt it necessary to act as a mouthpiece and booster for a layer of corporate-funded middle class Poujadists. It is to pre-emptively colonise a political space that might otherwise be filled by the millions of working class Americans who are angry over wages, unemployment, the banks, repossessions, and the endless war. It is to drown out the rational concerns of more popular political constituencies with pageantry, noise and fury, irrational howling, and home-made bigotry. It is to stage the fight that capital wants to see - between ostensibly liberal, cosmopolitan, internationally-oriented, capital-intensive industry, and a parochial, nationalist, bigoted populace, often small business owners working in labour-intensive industries. And the viewer's role is to pick a side, and forget that neither represents their interests.

In 1979, Erik Olin Wright produced a book on the relation between class and income inequality with the aim of persuading social scientists working in the field of inequality to take marxist ideas seriously. He was, to put it mildly, in the wrong place at the wrong time. But his procedure was to rigorously conceptualise class as an antagonistic relationship centred on exploitation, rather than a system of gradations, or a competitive system based on the technical division of labour, market position, or authority relations. Having done this, he proceeded to show that with this understanding of class divisions in mind, it was possible to provide a powerful explanatory framework for understanding how income inequalities are perpetuated. I don't know whether much work is really being done on this subject these days, but here's one recent sociological attempt to situation inequalities in terms of production, which should be the basis of further research:

"These growing inequalities are clearly related to changes in employment relations. The work of entrepreneurs, managers and a top elite of professionals and technical experts has been considered increasingly worthy of high economic rewards, while rank and file workers have been subjected to pay restraints and wage cuts. Gosling et al. (1996) report on the widening gap between skilled and unskilled workers, along with increasing disparities within skill categories. Generally the picture is one of polarization between the well qualified and unqualified; between 1997 and 1993, the median wages of those with higher education rose by one third, while for those who left school by sixteen the figure was 10 per cent.

"Throughout the 1980s and 1990s, chief executives and directors received massive pay rises, along with huge bonuses and stakes of shareholdings in their companies; for example, in 1998 Sir Richard Sykes of Glaxo Wellcome had a 53 percent increase to bring his salary to £1.7 million, sir Geoff Mulcahy of Woolworths and B&Q a rise of 39 per cent to reach £1.5 million. In America Rifkin (1995) reports that the 4 per cent of what he terms the ‘knowledge elite’ earn as much as the bottom 51 per cent of wage earners: their gains were made at the expense of the mass of employees, who faced lower pay levels, loss of jobs and declining state benefits: ‘While millions of urban and rural poor languish in poverty, and an increasing number of suburban middle-income wage-earners feel the bite of re-engineering … a small elite of American knowledge workers, entrepreneurs and corporate managers reap the benefits of the new high-tech global economy’ (p. 180). The prosperity of the super-rich is shown in the fact reported by Kirby (1999a) that the ten richest men in the world earn more than the total wealth of the forty-eight poorest countries in the world, whose populations total some 560 million people. The UN estimates that $40 billion would be needed to achieve basic education and health care for everybody in the world, along with adequate food, water supplies and sanitation: $40 billion is less than 4 per cent of the combined wealth of the world’s 225 richest people."

—	Harriet Bradley et al, Myths at Work, Polity, 2000, pp. 138-9

Occasionally, if you open the Economist or the FT, you'll read an argument that runs something like this: people shouldn't be bigoted toward immigrants, because by they do jobs that British workers won't do for pay that British workers won't accept. In a similar way, you often hear members of the Institute of Directors or the CBI explain that 'globalisation' and international outsourcing is an excellent thing because it gives jobs to hard-working people in Third World countries who work much harder, and are much less demanding, than spoilt, recalcitrant Western workers. This is the zenith of ruling class anti-racism, and it's just another argument for exploitation. And it is, of course, deeply racist toward the recipients of its supposed benediction.

I mention this by way of introducing a popular BBC programme that aired the other day, called The Day The Immigrants Left. Featuring the economics commentator from Newsnight:

This programme begins with a series of vox pops involving working class, usually unemployed, white people regurgitating scaremongering headlines. The explicit remit of the programme is to challenge the racism of those workers by proving to them that they couldn't do the jobs that immigrant workers do. It essentially shares the purview of the employers of migrant labour, who explain that they would be out of business if they had to recruit from the local unemployed. Of course there's a heavy selection bias in the programme, because it can only feature those employers of migrant labour who are happy to have their workplaces filmed and have their practises discussed on air. And the programme backs up their claim that the reason they have turned to migrant labour is because, somehow and at some point, local workers just stopped being interested in such jobs and opted for the dole instead. Unemployment, in this light, is voluntary, and arises from some sort of psychic shift in the workforce. The truth behind this convoluted tale is much more simple: the politico-legal oppression of migrant workers makes the cost of their labour (ie, the cost of reproducing their labour) much less expensive, and it usually works to render those workers much more submissive. Employers like that.

Historically, systems of migrant and segregated labour work very similarly in that the costs of reproducing their labour power are reduced by the conditions of oppression. In pre-apartheid South Africa, for example, segregated and migratory labour were combined. African workers were imported from the rural economy, housed in cramped, collective living quarters, fed a standardised diet purchased in bulk, and transported collectively to the mineral mines (where they were admitted only to the most menial jobs on account of 'colour bar' policies). They may have had a family to support, but not in the city centre, and thus the remittance they needed to provide their family with was not elevated by city prices. All of this was much less expensive than the process of feeding, housing and transporting the white workers who lived in individual houses in the Witwatersrand core with high rents, ate in individualised units, had families to support and travelled individually. Hence, the politico-legal oppression of African workers meant that the cost of reproducing their labour was reduced, thus increasing profits.

In today's migration economy, similar principles apply. Migrants often have shaky legal status, even if they have documentation. The TUC points out that even where the legal status of migrant workers is insuperable, they are made unaware of their rights and are usually unable to enforce them short of high-risk militancy. This is a situation that is maintained on purpose as it provides low cost labour to both private and public sector institutions. Most migrants live in cramped, collective accomodation, are transported collectively, eat collectively, and any families they support are based in poorer countries where average incomes and prices are lower, thus reducing the amount of any remittance that needs to be sent. Hence, the cost of their labour is reduced. This means that more jobs are created that otherwise could not possibly have been created. The effect of the last big wave of labour migration in the UK, consistent with this outline, was to increase total employment without decreasing unemployment or job vacancies. New jobs were created because employers could afford the cheaper labour, but the old jobs were not filled because they weren't available to migrant workers and because a set of geographical and skill factors excluded local workers from taking those jobs.

What this means is that British workers could not, even if they were masochistic enough to want to, work in the same conditions that most migrant workers have to accept. To attempt it would be to attempt a perverse hoax in which one abandoned one's status as a British citizen, fled with one's family to a relatively poor country and gained citizenship there, accepted lower living standards, and then left one's family behind to try to get into the UK, legally or otherwise. Oh, and one would have to forget almost everything one had ever learned, because the first sign that one was socialised in the UK might alert any handler or employer that there's something awry. And the only thing that one would learn from such zaniness is that a worker's position in the global labour market is socially produced, maintained by politico-legal institutions and social forces much larger than any individual worker. The cost of labour is determined by all of these factors, and unemployment is not voluntary. The BBC's programme is an argument for exploitation.

One last point. Ruling class ideology on this subject oscillates between two mutually reinforcing poles. On the one hand, there is a patronising concern for the 'white working class', which scapegoats migrants, black people and 'politically correct' policies for the supposed alienation of white workers from politics. On the other hand, there is a condescending endorsement of the 'work ethic' of immigrants, as if their oppression and exploitation was a fact about their personalities or culture. From a different perspective, this attitude also blames immigrants, in this case for being more available for undignified, hyper-exploitative, low-paid labour than their local counterparts. What neither attitude can admit, what the ruling dogma can never allow, is that workers of whatever status have more in common with one another than with their bosses.

Capital can survive any crisis, so long as it can make the workers pay. Amid the premature triumphalism about a recovery in the economy, the 'encouraging' profit data from major corporations has been among the cues for optimism. Rick Wolff draws attention to the processes underlying this:

The first set of numbers came from the US Department of Labor's Bureau of Labor Statistics. They showed some remarkable facts about (1) US workers' productivity -- the physical quantity of goods and services produced per employed worker, (2) the compensation paid to US workers, and (3) the hours they actually worked. These numbers showed how the economy had changed from the first quarter (January-March) to the second (April-June) of 2009. The average number of paid hours worked per employee fell by 7.6 per cent, but the total output fell only 1.7 per cent. That was because the workers who had not (yet) lost their jobs were fearful, so they worked harder and faster doing some of the jobs previously done by laid-off workers. With fewer employed workers doing more, the BLS reported a gain of 6.4 per cent in the productivity of US labor.

For their harder, faster, and thus 6.4 per cent more productive labor, those still employed saw their money wages rise by only 0.2 percent from the first to the second quarter of 2009. When the BLS took into account the rising prices workers had to pay, their real wages (the goods and services they could actually buy) fell by 1.1 per cent.

When workers produce more for less real wages, the technical term for this is an increase in the rate of exploitation.