Michael Yates's Naming the System

by Louis Proyect

Book Review

March 1, 2004   


Michael Yates, Naming the System: Inequality and Work in the Global Economy, Monthly Review Press, 2003; ISBN 1-58367-079-3 - 288 pages.

Michael Yates's Naming the System is very much in the spirit of Monthly Review's "The Leo Huberman People's Library," a series that was designed to "assist new people ... achieve revolutionary consciousness." Huberman's classic Man's Worldly Goods was the best-known volume in that series and set the standard for clarity, scholarship and a commitment to working class politics. Naming the System is a work that Leo Huberman would have been proud to be identified with.

When Huberman wrote his classic in 1936, he was trying to help working people understand the roots of an economic crisis that was producing massive unemployment, fascism and war. Although Keynesianism has supposedly made such disasters a thing of the past, the world is faced with a seemingly new set of problems. Although they fall within the rubric of neoliberalism and globalization, it is obvious that they are function of capitalism, just as the ills of the 1930s were. In attempting to diagnose and find a cure for them, Michael Yates speaks to young people involved in global justice protests, working people in developed countries worried about downsizing and runaway shops, and a Southern hemisphere mired in poverty and hopelessness.

To a very large extent, Naming the System is about debunking the claim that capitalism is a system that can "deliver the goods" despite unfortunate side-effects in the march toward progress. If one were persuaded that India or China would eventually enjoy G-7 living standards in the long run, then it might be possible to tolerate peasants being driven from their land or rivers being turned into toxic dumps as a kind of growing pain.

You can find Berkeley economist Brad DeLong and NY Times columnist Paul Krugman arguing along these Panglossian lines. Capitalism will eventually make everybody middle class as long as the market is free to work its magic. Not only do poor people in a country like the USA have access to cheap consumer goods that were unavailable to the wealthy 100 years ago, the rest of the world will share in these riches eventually.

A question that neither DeLong nor Krugman ask, however, is whether or not people from poor countries were better off before capitalism was introduced. Yates cites a very revealing article by Charles Mann that appeared in the March 2002 Atlantic Monthly. According to Mann, the European conquest of the New World left indigenous peoples far worse off. While it is a fact that some citizens of Mexico City can purchase a television today at a Wal-Mart, it is also a fact that their ancestors enjoyed a better diet and more leisure time on average five hundred years ago.

Michael Yates cites one of the establishment's own experts. Not only did World Bank economist Lant Pritchett find that the ratio of per capita income between the richest and poorest nations grew by a factor of 9 to 50 between 1870 and 1960, he also projected that it would take India 377 years to erase this gap at current growth rates. If this is true for a supposedly dynamic country that is a pole of attraction for outsourced high technology, what hopes could possibly exist for the average African nation?

Even if India had the patience to wait nearly 4 centuries to catch up to the United States, the reality here and in other developed countries falls far short of the image created by its paid propagandists. The February 19, 2004 Economist assures its readers that job loss is only temporary. Globalization's power to reduce prices will "help spread new technology, new practices and job-creating investment through the economy." While American workers might not have to wait 377 years to get well-paying jobs once again, prosperity might be right around the corner, as they put it in the early 1930s.

After reading Michael Yates's discussion of unemployment, it would be hard to feel this way. To begin with, he points out that official data collection methods skew the findings in favor of those who rule society. For example, if black prisoners were counted as unemployed, the jobless rate would be much higher. Even in a welfare state like the Netherlands, the numbers are cooked to present a more optimistic picture. While it reported a lower unemployment rate than the rest of Europe, which was undergoing a neoliberal transition, there was a sharp increase in involuntary part-time workers as well as persons receiving disability payments. Some economists speculate that such payments are used to disguise long-term unemployment.

For those who are fortunate enough to have jobs in either rich or poor countries, the prospects are increasingly dismal as long hours and unsafe working conditions are dictated by the need to compete in the world marketplace, especially for assembly line workers. In the United States today there are several hundred thousand poultry factory workers, exceeding the number of steelworkers. Working at slightly more than the minimum wage, they fasten hens to shackles at the rate of more than 25 per minute. Yates cites a study that describes a woman wrapping her forearms "in plastic tape because bits of chicken penetrate her wounds and cause infection."

If Monthly Review publications have always been about speaking the plain truth about class relations in the Huberman tradition, they have also been about identification with the Third World, a category that Michael Yates characterizes as "poor countries." Much of Naming the System is taken up with an unstinting look at conditions there and can serve as a kind of handbook for global justice activists.

When a city like Bombay is touted in the business press as a high technology beacon, they are apt to neglect mentioning that it is also home to at least 20,000 child prostitutes. Many are displayed row after row in zoo-like cages. When one new victim refused to have sex, her head was banged against the floor until she lost consciousness. After she awoke, a rattan cane smeared with pureed red chili peppers was shoved into her vagina. If it is any consolation, such jobs are unlikely to be outsourced to India from the USA.

If Naming the System served only to expose such conditions, it would be worth having. But just as Karl Marx's exposures of the factory system in 19th century Great Britain were accompanied by a penetrating analysis of the underlying economic system, so does Naming the System deal with modern-day economics. The final half of the book is both a refutation of neoclassical economics of the kind put forward by Krugman and DeLong as well as a defense of classical Marxism. Since so much of modern Marxist theory, especially that taken up at academic conferences, is devoted to arcane controversies solely of interest to specialists, it is refreshing to see a defense of basic ideas put forward in such a lucid and systematic fashion.

Yates explains the core ideas of neoclassical economics with the kind of clarity that would even be of use to the reader simply looking for some kind of introduction to the topic:
The main actors in the marketplace are business firms (which sell outputs and buy the means of production), consumers, and workers. Each business firm, consumer, and worker is assumed to be a maximizer. The business firm is assumed to be trying to maximize its profits. The consumer is assumed to be trying to maximize his or her "utility," the subjective satisfactions that are obtained by consuming the goods and services purchased. A consumer faced with two bundles of goods that yield the same utility will always choose the cheaper one. If the two bundles of goods have the same price, the consumer will always choose the bundle yielding the most satisfaction. Workers are assumed to maximize their utility, by allocating their time between wage labor (which is presumed to yield negative satisfaction that is, to be "painful") and not working (taking what the economist call "leisure") in such a way that they are subjectively better off than if they had chosen any other combination of work and leisure.
Such assumptions underlie the promotion of free trade agreements like NAFTA, the "lean and mean" competitiveness of USA business over the past 25 years or so, the undermining of trade unions and of many welfare state protections. Supposedly when the consumer, worker and businessman all participate as equals in such an environment, everybody should benefit under a regime of "consumer sovereignty."

Unfortunately, such a theory does not address real-world class relations. In Pittsburgh, Yates's former home town, a black child from the poverty-stricken Homewood section will have few of the advantages of a child born in the billionaire Hillman household on the fashionable Fifth Avenue. When these children seek their fortune in the cold and rational marketplace, whose education, skin color and social ties will lead to success?

If this is true of children from rich and poor families, it is also true of countries. In the February 22, 2004 NY Times, there is a report on how the USA is overhauling assistance to developing nations. It is a "performance driven" system that will leave some countries in the cold, just as the current set-up within the country's borders is leaving the children of single mothers to fend for themselves as the safety net continues to be cut. Mary E. McClymont, the chief executive officer of InterAction, the largest alliance of American-based relief groups like CARE and Save the Children, said "The Millennium Challenge Account will fund select, top-performing countries. That is good. But what about all the other poorer, weaker countries that could become failed states?"

Perhaps some of the "poorer, weaker countries" could lift themselves up by their bootstraps by taking the advice of Lawrence Summers, the former chief economist of the World Bank and now the President of Harvard University. In a gesture reminiscent of Jonathan Swift's A Modest Proposal, Summers suggested that "dirty industries" be migrated to the Third World, where pollution will be less harmful in relatively pristine environments. Since cancer, a frequent byproduct of pollution, tends to hit the elderly most frequently, it will be less harmful in the Third World where the life expectancy is lower to begin with. Yates's contempt for this inhumanity is barely disguised: "... his marginal analysis of costs and benefits appears impeccable in logic. A poor life is indeed worth less than a rich one."

Yates presentation of radical economics (and especially the labor theory of value) avoids jargon and is full of valuable insights. In a sidebar titled "Time is Money," he writes:
Most workers have a good intuitive grasp of the labor theory of value. They know that employers are in a war with them each day at work, and they know that this war is all about time. When employers purchase the labor power of workers, they see this labor power as their property and assume that they have the right to get as much labor out of this labor power as they can. Most workers also know that employers will go to any length to extract labor from labor power. They will threaten, bribe, maim, and sometimes murder to get it.

There are many examples of the time war. Industrial engineers design workplaces so that rest areas are located where the distance between workers on average and the rest areas is a minimum. Workers on automobile assembly lines have to ring a bell to go to the bathroom. Some employers impose a rule of silence, so that workers don't get distracted from their work. Elementary school teachers have to take their students with them when they (the teachers) have to go to the bathroom. In a Nabisco plant in California, some workers had to wear Depends (diapers designed for the elderly when they become incontinent) because they could not go to the bathroom at all while the assembly line was moving.
When theory and the reality of class relations are tied to each other in such a seamless and convincing fashion, the end result is ammunition for social and political change. Naming the System belongs on the bookshelves of everybody who believes that "a better world is possible."

Michael Yates, Naming the System: Inequality and Work in the Global Economy, Monthly Review Press, 2003; ISBN 1-58367-079-3 - 288 pages.

The book can be ordered on-line directly from Monthly Review Press at, http://www.monthlyreview.org/storefrnt.htm.

It can also be ordered from your local independent bookstore through Booksense.
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