revolutionary reflections | ‘On New Terrain’ – How Capital is reshaping the battleground of class war

Workers strike at Walmart stores nationwide in November 2014

Since the Great Recession there has been much debate on the nature of capitalism and the crisis of neoliberalism. Often this has resulted in theories which emphasise finance capital, precarious employment, and play to a generally left Keynesian politics, such as that being pursued within the Labour Party currently.

Kim Moody, has been one most of the most experienced working class organisers in the US over the past few decades. His latest book On New Terrain seeks to rethink both our understanding of capitalism today, and how the workers can respond. To mark the publication of the book, Ray M provides an extensive review that explores its ramifications in the US. A concluding section begins to discuss the implications for the UK.


Introduction

Kim Moody is one of the founders of Labor Notes 2 and author of many books on the labour movement. His latest book. On New Terrain, maps the way that capitalism has changed the world of work and develops strategies for the US labour movement. He also shows how these changes have recomposed the working class to align it with the changing needs of accumulation. Kim argues that the transformed industrial terrain offers new opportunities for building workplace organisation that can be integrated with independent working class political action to achieve real change. I draw out some of the key points here and add some thoughts of my own.

The theory of Real Competition

Kim applies Anwar Shaikh’s theory of “real competition“ 3 to help him explain how international capitalism has changed. Before discussing the book, it’s important to make a brief outline of the theory of “real competition” that informs Kim’s economic analysis. Real competition is a rejection of the idealised world of neoclassical economics that believes the ‘invisible hand of the market’ will create perfect competition and economic equilibrium. It’s also a rejection of Keynesian and post-Keynesian economics popular on the left, which believes the ‘visible hand of the state’ can correct deficiencies with the workings of the market.

The theory of real competition is developed from the classical political economy of Smith, Ricardo and Marx and is based upon Marx’s theory of value. Shaikh says, the profit motive is inherently expansionary making competition antagonistic by nature and turbulent in its operation. Real competition is as different from so-called perfect competition as war is from ballet. Some capitals will succeed, some just survive and others fail altogether. Competition forces individual producers within a sector to cut costs and raise productivity. Increasing the length or intensity of the working day are ways of achieving this but there are limits. Capital is forced to deal with labour’s reaction to these measures and Shaikh says that technology becomes the central means to making gains over labour and competitors. He says, “Real competition pits seller against seller, seller against buyer, buyer against buyer, capital against capital, capital against labor, and labor against labor…The  development and adoption of new technology is the arms race, and the struggle for profit growth and market share is the battle itself.” 4 This definition of competition is very reminiscent of Marx’s definition of competition as “the war of all against all”.5

The recomposition of the working class

The first part of On New Terrain examines the industrial and occupational restructuring of the US working class since the early 1980s. Kim shows how the working class has in recent decades been remade in its occupational, industrial, gendered and ethnic composition. He looks at the causes of decline in goods-producing employment and the rise of “service” jobs. The manufacturing sector, which was seen as the traditional location for the working class has shrunk due to the spread of lean production techniques that Kim has analysed elsewhere 6 and new technology that has resulted in huge gains in productivity at the expense of jobs.

Service jobs

Service employment surpassed goods production employment in the middle of the 20th century in the US. Jobs that have been defined as ‘service jobs’ have also grown due to the changing dynamics of capital accumulation with the increased needs of social reproduction and the growing need to maintain the growing capital infrastructure and deal with waste. The growth of jobs associated with social reproduction is primarily down to the increased numbers of women in the workplace. The growth in health, social care, and food services have been responsible for the majority of new jobs in the service sector. Historically, much of this labour was unpaid and performed in the home by women. Today much of it has been commodified and is performed by profit making enterprises as families buy more of the services that underlie social reproduction. Typically, the majority of those employed in performing these services outside of the home are women.

Workers in the service sector tend to work fewer hours than those in the manufacturing sector,  which is one reason for the growth in jobs in that sector. While lean conditions have improved productivity in some sectors, food services, accommodation and janitorial services have productivity rates well below those in manufacturing. The low rates of productivity make it possible to employ more part-time workers, typically on low rates of pay. Kim argues that as a consequence of low pay and productivity, any increase in output requires proportionally more workers than in manufacturing or transport.

The growth in jobs needed to maintain capitalism’s facilities and buildings, its ancillary functions and clean up its growing mess has also grown significantly. Many of these jobs were outsourced from manufacturing. Aside from managerial and professional jobs, 90 percent of the growth in major private sector service employment came from the need to reproduce and maintain capitalism’s workforce and fixed capital. Most of these jobs are physical and low paid. They are likely to be done by women, immigrants, Latinx or African Americans. Most of these jobs exist in facilities like hotels, hospitals, food services, building cleaning, waste management, maintenance and repair, entertainment etc. There’s a commonly held view that these workers are vulnerable with little power. However, these services are not prey to offshoring – they are land locked and these workers are essential to the day-to-day running of capitalist enterprises.

More precarity?

The ‘job for life’ is increasingly a thing of the past and more jobs are dead end, low paid and low skilled. While Kim rejects the idea of an underclass or precariat 7, he does acknowledge that precarity of employment has grown alongside the increased unemployment that has resulted from the growth in productivity. Shaikh shows that since the early 1980s in the US, not only has the average unemployment rate doubled, but the duration of each experience of unemployment quadrupled with over half of this increase attributed to the recession of 2008. Kim argues that the experience of precariousness since the last recession is likely to have been formed as much by this different experience of unemployment between jobs as by the contingent nature of many jobs that people hold. It’s notable that this precarity particularly impacts on migrant workers, African Americans, Latinxs  and women in the US. The problem has grown with most of the 2 million manufacturing workers who lost their jobs from 2007 to 2010 unable to return to full-time traditional employment.

With more than 22 million workers in precarious or contingent jobs the impact on those who remain in traditional employment won’t be negligible. However, for Marx and Engels precarious work was a far more common and generalised experience amongst working class people 150 years ago. Today, younger workers experience more jobs mostly of shorter than average duration, while older workers tend to have fewer with longer duration. But both a lifetime job with the same employer and endless multiple short-term jobs remain the exception. Kim argues that enthusiasts for the precariat concept or gig-ariat have taken job trends for a few years since the Great Recession and projected them into the future. It’s also worth adding that those who compare job precarity today with that of the ‘long boom’ after the Second World War are drawing comparisons with an exceptional period in capitalist history. So while there is more precarity, it’s important not to see this as the dominant experience of working people.

Greater diversity

Most workforces in the US are very mixed.  In the last 30 years a large number of migrant workers have been drawn into the US, particularly into lower-paid jobs. Most immigrant workers join African American, Latinx, and women workers in the lower-paid ranks of the workforce. Blacks, Asians, and Latinxs composed over a third of the US population in 2010 compared to 20 percent in 1980. These groups of workers now make up a large and growing proportion of working-class occupations. For example, Blacks, Latinxs, Asians, and immigrants, composed about 15–16 percent of the workers in production, transportation and service occupations in 1981. They now make up close to 40 percent of each of these occupational groups.

Many young people entering employment have high expectations but are increasingly ending up in in poor jobs. Migrant workers, women and young people often have little memory or experience of defeat and the traditions responsible for decades of setbacks. Migrant workers often also bring positive traditions of struggle to the West. For example, New York taxi drivers, who are mainly South Asian workers have recently won union recognition. They organised strike action at the airport after Trump’s Muslim ban. They are now organising taxi drivers nationally.

Organising against racism in the workplace against sexism and rotten jobs is the best way to build diverse unions that reflect society. The relative success in the US in recent years in organising building cleaners, hotel workers, and hospital employees gives testimony to the opportunities.

The reorganisation of capital

In the second part of the book, Kim outlines the enormous changes in how US capital organises. This is due to the combination of the wave of mergers and acquisitions that accelerated in the 1990s and the “logistics revolution” that reorganised transportation and production this century.

Mergers and Acquisitions (M&A’s)

In the US there have been several waves of mergers. M&As are generally pursued by a desire to increase profits through increased efficiencies and by expansion into new or old markets. Kim shows how each wave tends to have its own characteristics. Mergers in the 1980s were noted for outsourcing and divestments, often with leveraged buyouts and hostile takeovers financed by increasing levels of debt. The wave of mergers that began in the early to mid-1990s, in contrast, were characterised by strategic mergers and acquisitions within specific industries. Measured by the number of M&As, the waves  since the 1990s have surpassed all previous waves. They have, unlike the rest, also been transnational in both Europe and the US with corporations acquiring firms at home and abroad as the impact of increased global competition has forced business consolidation across the advanced economies in the last 25 years.

This process of M&As confirms how both the tendencies and counter-tendencies operate on the processes of concentration and centralisation of capital. In the 1980s with greater divestment and outsourcing we saw the emergence of a growing number of new business formations. In the latest phases these capitals have tended to grow or merge. Therefore, since the mid-1990s M&As have been primarily a means of increasing profitability by capturing increased market share in specific lines of production. These recent mergers have not led to conglomerations across different sectors, like the mergers in the 1960s and 1970s, but have instead focused on consolidation along industrial and product lines. In order to survive the increased competition of the era, firms have had to increase in size, productivity, and market share. What began as a process of fragmentation in the 1980s – the counter tendency, has become one of concentration and relative centralisation – the return of the tendency – that is impelled by increasing global and domestic competition since the mid-1990s 8.

Millions of workers are increasingly employed by bigger, urban based national and more commonly transnational concentrations of capital. Added to this, more workers are employed with greater capital – labour ratios. Marx foresaw these developments – the advance of new technology, the greater concentration of capital, as consequences of the process of accumulation9.

The “Logistics revolution”

While sectors involving transportation, warehousing and other aspects of logistics have all grown in recent years, supply chains have also become more concentrated, with fewer companies supplying most chains. In the US, the “key nodes” in these systems are mostly located on the edge of major cities. They depend upon large concentrations of low paid labour that tends to live in the nearby inner-cities. Kim says that these are ‘enclosed’ urban concentrations of “value adding workers” similar to those formerly involved in manufacturing. Both domestic and imported goods are dependent upon the timely movement of goods through these “logistics clusters” and the transportation links between them. It isn’t just production facilities that are dependent upon these supply chains but those categorised as service industries too. Streamlined supply chains in the production of goods and services also increase the vulnerability of capital to disruption where workers become organised at points across the supply chain. Kim shows how today, logistics workers are part of the overall production process of goods output and argues that these logistics workers have at least as much leverage in the economy of today as workers in car plants did in the 1970s.

Kim says that the changes in production have created long supply chains, which in turn have created huge clusters of warehouses and workers. There are about 60 logistics clusters in the US. The three biggest are in New York and northern New Jersey, Chicago and Los Angeles. In the Chicago-Joliet-Naperville metro area there are around 250 warehouses with around 150,000 workers, including 40,000 heavy truck drivers. Warehouses are no longer places you store things, they’re where you move things—continuously. A truck arrives, it’s unloaded by hand, the goods are loaded by hand on to another truck and out it goes. Put it together—concentration of firms, long supply chains, just in time methods, clusters. It’s possible to organise at the hubs and then go down the spokes to the supply chains. The model is the Teamster revolt in Minneapolis in the 1930s. Through militant struggles they organised the truckers in the city and then went to organise the over-the-road truckers. 10 

Concentration and centralisation of capital and the immiseration of workers

Kim Moody shows how in the recent waves of M&As, companies are expanding their market share by combining units of capital with varying levels of capital intensity, efficiency and profit rates. As competition drives companies to reorganise to achieve greater levels of efficiency in the sector, the newly combined company must attempt to raise the level of efficiency of each unit. Closing down and selling off less efficient units is not desirable as the point of recent M&As is to increase capacity and market share. Instead, companies will invest in new technology thus increasing capital intensity and the capital – labour ratio. This process has occurred across sectors in the US economy that produce both goods and services – from manufacturing and logistics to IT and health care.

Over the past few decades, we have seen the application of new technology and an intensification of labour to increase productivity. Larger companies control increased masses of fixed capital, much of it sunk into equipment that can’t be adapted, giving employers high up-front costs. Marx noted that as capital accumulates, the immiseration of the working class grows. As the capital – labour ratio grows, the conditions of increasing numbers of workers deteriorate. Concentration and centralisation are functions of competition. This process does not lead to fewer capitals competing less, as in “monopoly capital”, but to fiercer competition, with existing companies seeking to capture more market share partly by absorbing some of the competition by increasing fixed capital while increasing the productivity of labour. So the increased competition means that pressure on the workforce will continue and grow.

Growing labour productivity

Using empirical evidence from Shaikh, which shows that labour productivity in manufacturing generally increases with the length of the working day, Kim demonstrates how employers have worked out how to increase the “absolute surplus value” 11 extracted from the production of goods by lengthening the working day beyond the previous norm of 8 hours to 11. These alternative work schedules that began in the automotive industry had spread across manufacturers by the late 1990s along with the inevitable job losses.

Alongside lengthening the working day, employers have also become adept at increasing work intensity by cutting back on break times. Marx identified this problem thus, “These ‘small thefts’ of capital from the labourer’s meal and recreation time, the factory inspectors also designate as ‘petty pilfering’s of minutes,’ ‘snatching a few minutes’, or, as the labourers technically called them, ‘nibbling and cribbling’ at meal-times” 12

In the US, Kim shows how the “small thefts” from workers continues today –  “Total break time went from 13 percent of the work day in the 1980s to 8 percent in the 2000s, which is to say that within the average eight-hour day capital gained approximately twenty-four minutes or almost half an hour of extra work at no extra cost!”

Lean methods in manufacturing have resulted in most jobs being characterised by declining working conditions with longer hours, greater work intensification, job standardisation, falling real wages and declining benefits. Lean production techniques have spread beyond manufacturing to most sectors of the economy with digital and biometric techniques such as global positioning systems (GPS), radio frequency identification and barcoding for measuring and monitoring workers. So for example in the US, GPS is used to track the movement of nurses and electronic clinical decision support systems remove clinical judgements from those giving care. Electronically guided Just-in-Time supply chains have added further external pressures on a growing number of workplaces involved in the production of goods and services. These internal and external pressures have resulted in a growing intensification of labour and the further ‘degradation of work’ 13, throughout the production of goods and services leading to significant increases in “relative surplus value”14. In a growing number of workplaces, these techniques make labour – management cooperation programmes superfluous. The increasing rate of exploitation has led to increasing levels of productivity that have not only destroyed millions of jobs but when combined with stagnant or shrinking wages dramatically increased the surplus value that lies behind the significant transfers of wealth to the 1 percent.

Growing inequality and rising exploitation

Kim Moody argues that the debate over precarious employment misses the bigger change in working-class life over the past three decades—the decline in living standards and working conditions of workers. He points out that working class wages have stagnated in the US and remain below their 1972 level. The share of total income that went to the top 10 percent increased from 35 to 51 percent between 1982 and 2012. Finally, the labour share of income in GDP has declined in relation to capital, whose share climbed from 18.8 percent in 1979 to 26.2 percent in 2010. Kim argues that the growing rate of exploitation has led to growing profit rates since the early 1980s up until the Great Recession. Shaikh says “The overall degree of income inequality ultimately rests on the ratio of profits to wages, that is on the basic division of value added.” 15. For all the concern expressed about the evils of growing inequality in society, one of the main sources of the gulf in wealth has been the changes made in the workplace to guarantee capital’s ability to extract greater surplus value from workers.

The disappearing working class?
While the average manufacturing workplace has shrunk in size, most workplaces in other sectors have grown in size, with greater capital investment and higher capital – labour ratios. Today, millions of workers are employed by companies that are larger than they were a quarter of a century ago, work in more capital intensive workplaces, work and live in large urban areas, and are even more diverse.

Workers in call centres, hospitals, hotels, large retail stores, and internet retailers that are really warehouses with call centres, work in numbers and under conditions similar to those of factory workers. The growing number of workers employed to maintain and clean capital’s fixed assets, have power not only because they are fixed assets but as a result of the massive and constant reproduction of dirt and emissions they create when profit is more important than the prevention of waste and pollution. The same is true of much of the labour of reproduction now performed by businesses: many of them also have large concentrations of workers. So much for the disappearing working class!

These workers often create products or work in processes with increasingly similar methods. These larger masses of capital are potentially more vulnerable to union drives along industrial lines. Capital-intensive industries have high levels of fixed costs, they therefore become more vulnerable to industrial action. As labour costs are likely to be a smaller portion of total costs, these industries will also be more able to absorb wage increases.

Regulating Capitals

Developing this point further, Kim Moody introduces the notion of the “regulating capital” which provides an important breakthrough in understanding how capitals compete and how workers can respond. Kim points out how each firm attempts either to compete with or become the most efficient firm in their industrial sector. Shaikh says that these firms are the “regulating capital”. 16 He says the regulating capitals in any given industry are a set of capitals representing the best generally reproducible condition of production in that industry. Regulating capitals tend to be large, employing the latest technologies with low costs. In terms of Marxist discussions of the organic composition of capital, in which, over time, the portion of capital going to non-labour costs increases over that going to labour costs, it is noteworthy that regulating capitals have a high organic composition. This means that across the board capitals are required to be able to invest in non-labour costs to keep up with the regulating capitals. Howard Botwinick has developed this concept further. He says, that it’s critical to note that regulating firms are able to raise their prices in order to achieve a competitive rate of return – not because they possess monopoly pricing power, but because they represent the regulating, or competitive conditions of production within the industry.17  Botwinick gives an example of how the CIO organised in the 1930s within industrial sectors understanding the role of the “regulating capital”. He says:

When the CIO organized meatpacking, steel and auto in the 1930s, capitalist competition was alive and well.  Nevertheless, these unions effectively neutralized that competition by establishing industry-wide wage standards which all regulating firms were forced to follow…Workers in those CIO unions had essentially imposed a new competitive cost structure on the entire industry, and as long as the unions maintained effective levels of organization in all of the regulating firms, relative prices eventually had to adjust…This is an important point, because this analysis of regulating capitals argues that any reasonably healthy industry (whether it’s steel, auto, health care, trucking, or fast food) can ultimately be forced to incorporate higher wage rates within its cost structure.  They simply need to be properly organized on an industry-wide basis.18

From an organising perspective opportunities are positive. However, most unions don’t think in industrial terms. To deal with membership decline, many have merged into more general unions. In the US, the steelworkers’ union (USW) 19 has around 20 sectors from health to travel and hospitality to public sector employees, groups of manufacturing workers and a minority of steel workers. We’ve seen a similar process of ‘managing decline’ in Britain, with the growth of UNITE.

Changing Politics in the USA

In the final part, Kim Moody looks at the changes in US politics, with the growing influence of money, the reshaping of the Democratic Party, and the potential for a new radical, class politics in the US. The most significant shift has been the huge increase in money buying influence in party structures and elections. This is hardly a hidden process as capital is increasingly seen to buy policy outcomes such as tax breaks for business and the 1 percent, which makes the existing political set up vulnerable to challenge. The growing dependence from both Republicans and Democrats on big money has reduced the role of the activist led campaign in favour of purchased forms of campaigning. The focus of mainstream politics on purchased technology and expertise has made electoral politics more vulnerable to well organised grassroots campaigns from both the right and the left.

Kim Moody points out that although the Bernie Sanders campaign really shook things up, his version of socialism was pretty weak. However, the trade union group Labor for Bernie was a really exciting development. These changes make it possible to talk about socialism in the US again. There have been other developments, most notably the growth of the Democratic Socialists of America (DSA), which has grown from about 6,000 in 2015 to at least 30,000 today. It brings together a wide range of activists who consider themselves anything from social democrats to anarchists! 20.

For socialists in the US, Kim argues that the key to success is developing strategies that combine the unionising potential in the workplace with urban-based mass working class political activism outside the Democratic Party. Today in the US there are no guarantees that organised labour will take advantage of this new landscape. Despite the growing controversies surrounding Trump, in the absence of any alternative, his appeal will remain. Kim Moody points out that workplace organisation may not be the only social force that can wage this battle, it is, however, the most powerful social force, with its ability to stop the production of goods and services, an ability that has grown with the increasing concentration of capital, increased capital investment across sectors and the ‘logistics revolution’ in the US. The relocation, consolidation and integration of capital has overcome many of the barriers that have fragmented labour.

Conclusion

In summary, Kim Moody argues that, as a consequence of rising trade and foreign direct investment, competition became more intense both globally and within the major developed economies, leading to an unprecedented business consolidation and the rise of the “logistics revolution.” Global migration brought enormous changes to the ethnic composition of the working class in the US. New technology, increased productivity and a failure to respond to these changes are responsible for much of the decline in manufacturing employment and workers’ falling share of income. These changes were accompanied with rising employment in services which have altered the terrain of class conflict and the composition and power of the working class. These trends have had an enormous impact on the shape of capitalism both in the US and here in Britain.

The last two to three decades of mergers and acquisitions have led to a growing concentration  and centralisation of capital along industrial lines. In the US, the “Logistics Revolution” is well advanced. These developments present new opportunities for labour. Increased capital investment has also taken place beyond manufacturing and logistics in the spheres of social reproduction and capital maintenance. These developments have given workers greater potential “workplace bargaining power”21  across the economy. Understanding how “regulating capitals” can set and raise prices allows us to work out how unions can force “regulating capitals” to factor in higher wage rates into their cost structures. Applying our understanding of how “regulating capitals” operate in industrial sectors can help us develop a more coherent industrial strategy making it possible once again to “take wages and working conditions out of capitalist competition” 22.

Kim Moody looks at Hal Draper’s formulation of the working class being defined in concentric circles with industrial workers in the core and non-industrial workers outside of this core 23. He argues that the 3.5 million workers in logistics previously would have been viewed as service providers and therefore non-core. Following the changes brought about with the “logistics revolution”, they can now be identified as productive workers who are core. I don’t think Draper’s formulation is useful today and I think the lack of clarity when defining workers in logistics demonstrates this.  The disagreement however, doesn’t detract from the observation about the growing potential power of  workers in logistics. The formulation is however, a barrier to helping us conceptualise the growing potential power of workers deemed ‘non-core’ who Kim has shown increasingly work in large, capital-intensive workplaces and who are still more likely to be female, migrant and non-white. As well as defining the new terrain, it’s also important to reassess, modify or reject models that may have been more appropriate for an earlier period.

Despite decades of retreat, defeat and very modest successes, strike figures in the US have been growing. Kim Moody cites Eric Hobsbawn who showed how social movements develop in ‘leaps’ or explosions. He said these leaps are caused by ‘accumulations of inflammable material’, which only ignite periodically, as if it were under ‘compression’. Kim shows how the term ‘compression’, can be applied to a growing number of workers today. The pressures on working people have spread to groups who would be previously thought of as middle-class professionals, such as lecturers or health care professionals meaning it’s difficult to predict where the next major conflagration will develop. Indeed, some of the most militant strikes have been conducted and led by women in what were deemed ‘professional occupations’ such as the month long strike by 1,500 members of the Pennsylvania Association of Staff Nurses and Allied Professionals against Temple University Hospital and the nine-day 2012 strike of the 30,000-member Chicago Teachers Union.

Many of the barriers we face in dealing with “the new terrain” are less to do with changes in the configuration of capital and more with strategies within the labour movement. Partnership or business unionism with decades of failure is largely responsible for the decline of union membership. Partnership is a barrier to organising the increasingly diverse workforce who face worse pay, benefits and conditions at work.  Furthermore, most union bureaucracies still have the outdated and damaging view that the way you get better pay and benefits is by achieving productivity improvements. So they see don’t the intensification of work as a problem, in fact it’s seen as a desired aim alongside boosting company profitability. In the workplace this is a disastrous approach which undermines workers, independence and self-activity, it’s a barrier to growth and turns workers off trade unions. While many unions have run campaigns to sign up migrants and workers of colour, the entrenchment of partnership continues to make building workplace organisation more difficult. Any effective strategy needs to move beyond corporate ‘diversity’ initiatives to combating racism and building working class unity.  To harness the power of workers in the workplace will mean challenging the hold of union bureaucracies’ partnership strategy through building inclusive, independent rank and file organisation.

Kim Moody says we need to recreate what the revolutionary syndicalists and Wobblies called the ‘militant minority’. He argues that we have had no effective group of radicals in the US labour movement comparable to those during the 1930s and 1940s who were able to join individual struggles into a movement for political change. The labour movement of today may be smaller than in previous high points but it is broader in the range of occupations, ethnic and gender composition and it is more political. Opportunities for rebuilding a socialist movement with real social power are possible if socialists build democratic, grass roots structures in campaigns and movements in the streets and workplaces today. This way we can also begin to attract those working class people currently seduced by right wing ‘populism’ and prepare for the struggles ahead.

The New Terrain in Britain

On New Terrain analyses developments in the US and its an essential resource for any activist organising there. Many of these changes have also occurred in Britain. However, there are important differences. The logistics network is relatively underdeveloped here compared to the US. Kim says:

In the UK there are clusters around Liverpool-Manchester, the Midlands, Glasgow, and London. The London Gateway port and its 9m square foot logistics park opened in 2013 and will employ 27,000 workers when fully operative, extending an east London cluster that also includes Dagenham Dock, Tilbury Docks and London Thamesport. In addition, major UK freight railways are upgrading to create a Strategic Freight Network similar to the huge rail corridors in the US. Altogether, the UK logistics sector employs 1.7m workers.24.

Compared to the US, logistics networks are at an earlier stage of development here although they are likely to grow significantly.

In Britain, capital’s response to the ‘great recession’ has resulted in high levels of sovereign and personal debt which leaves the British economy more exposed than most other countries to the next economic downturn. Manufacturing is underdeveloped because of chronic underinvestment and it’s well recognised that British productivity is well below that of the US. For the last decade productivity figures have slowed to levels that are, according to the Office for National Statistics deputy chief economist, “without parallel since records began”.25 Orthodox or neoclassical economists have termed this the ‘productivity puzzle’ as their models are incapable of helping them understand the negative impact of the changes they are making to the economy. Shaikh provides a wealth of empirical data to show how different ‘vintages of capital’, based upon the age of plant and equipment have differing levels of productivity. Older vintages have lower capital intensity, higher costs are less productive and have lower profit margins as they age.26 This is an historical problem and it’s difficult to see how it can change direction from being an increasingly low-wage, low-skill economy.

The picture Kim Moody paints of the changing terrain in the US offers important insights for activists organising in Britain. Despite the differences between the US and here, On New Terrain with the application of Shaikh’s theory of “real competition“ provides a framework to help us begin the process of mapping the “New Terrain” in Britain today.

Thanks to Kim’s latest book we are gaining a new picture of the changing relation between capital and labour a decade on from the Great Recession. Some of the narratives in left circles that have been developed during that period will be challenged by his account. Certainly in the UK the questions his approach raises are barely covered in this piece, yet we can see in broad outline how such a discussion could look. Likewise, Shaikh’s model should stimulate us to search for ideas about how we can explain what is going on and to develop class strategies reflecting opportunities in different parts of the world.


  1. Kim Moody, On New Terrain, How capital is reshaping the battleground of class war, Haymarket 2018
  2. Labor Notes (http://labornotes.org/)
  3. Anwar Shaikh, Capitalism, Oxford University Press 2017 (p14)
  4. Shaikh, Capitalism, (p260)
  5. Marx, Capital v1, Ch14, Division of Labour and Manufacture
  6. Kim Moody, Workers in a Lean world, Haymarket (1997)
  7. Guy Standing, The Precariat, Bloomsbury (2014)
  8. Guglielmo Carchedi, Behind the Crisis : Marx’s Dialectics of Value and Knowledge (p20)
  9. Ernest Mandel, Karl Marx, The Laws of Motion of the Capitalist Mode of Production (https://www.marxists.org/archive/mandel/19xx/marx/ch08.htm)
  10. Socialist Worker interview with kim Moody, 12 December 2017( https://socialistworker.co.uk/art/45805/This+is+no+time+to+retreat)
  11. Marx, Capital v1, Ch16, Absolute and Relative Surplus-Value
  12. (https://www.marxists.org/archive/marx/works/1867-c1/ch16.htm)Marx, Capital v1, Marx on break times
  13. Harry Braverman, Labor and Monopoly Capital and the Degradation of Work in the 20th Century, Monthly review press (1975).
  14. Marx, Capital v1, Ch16, Absolute and Relative Surplus-Value
  15. Shaikh (p755) on declining wage share
  16. Shaikh (p263) on regulating capitals
  17. Howard Botwinick, Persistent Inequalities on regulating capitals
  18. Howard Botwinick, Persistent Inequalities , new afterword.
  19. USW (https://www.usw.org/union/our-industries-and-work-places)
  20. Conversation with Kim Moody.
  21. Beverley Silver, Forces of Labour.
  22. Howard Botwinick, Persistent Inequalities
  23. Hal Draper, Karl Marx’s Theory of Revolution V2 (p37), Monthly Review press
  24. Kim Moody, The Conversation, Modern capitalism has opened a major new front for strike action – logistics, (https://theconversation.com/modern-capitalism-has-opened-a-major-new-front-for-strike-action-logistics-89616)
  25. ONS deputy chief economist, Richard Heys (https://www.theguardian.com/business/2018/jan/05/uk-productivity-jumps-at-fastest-rate-for-six-years)
  26. Shaikh, Capitalism, (p264)

Ray M is a Unite Rep in the aerospace and shipbuilding sector in the UK. 

 

 

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