[OPE-L] debate on labor aristocracy

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Thu Mar 22 2007 - 19:40:07 EDT

Data on foreign investment and earnings are always tricky... to quote a bit
from an article I wrote once,

A Joint Committee on Taxation report discovered to everyone's consternation
that Enron claimed a $2.3 billion in profits between 1996 and 1999 in
reports to its investors, while reporting an astonishing $3 billion tax loss
to the IRS. But that's just the tip of the iceberg. In a topical article in
the Boston Globe (24 February 2004), from which I've shamelessly borrowed
bits here, Stephen J. Glain takes the story further, and points out that
nearly half of the estimated $233 billion in foreign earnings of all US
corporations in 2001 was held in foreign tax havens, up from 38 percent in
1999 and 23 percent in 1988 (Department of Commerce data, December 2003).
The DoC data in fact suggest that corporate earnings held in offshore tax
havens like Luxembourg or the Cayman Islands have doubled over the last 15
years. Those two countries have tax rates of around 0.9 percent and 5.2
percent, respectively, compared with 28-35 percent in the United States.
Martin A. Sullivan, an economist and columnist for TaxNotes, the daily
journal on tax law and legal issues, concluded from his analysis of the
Commerce Department data for 2001, that the US companies recorded 46 percent
of their total overseas profits, i.e. nearly half, in these tax havens, even
though these countries accounted for only 19 percent of the overseas
economic activity of these companies, if measured by the value of their
assets, sales, costs of equipment, and number of employees. (...) In 1998,
the National Bureau of Economic Research, a nonprofit research institute,
discovered that $154 billion (half the gap between "book value" and
"tax-declared" income for that year), could not be reconciled using
conventional accounting methods, and attributed at least part of the
difference to deceptive accounting practices.
http://info.interactivist.net/article.pl?sid=04/03/27/232230&mode=nested&tid(in that article I vastly underestimated the cost of the Iraq adventure).

The main question really is whether you can infer anything about the
political behaviour of workers from the size of their pay packet and assets,
or to what extent the size of their paypackets shapes their behaviour - what
useful generalisations could be made. I for one would be very reluctant to
generalise about that, unless I had a good understanding of the total
context of their lives, and the historical background.

For example, yesterday I heard that horrible man John Bolton on BBC radio.
He was waxing about America's "vital strategic interest" in Iraq, and argued
the religious conflicts happening there could not be blamed on US
intervention, because they had been there for thousands of years. Point is,
how many US "labor aristocrats" would agree with him?

The related question is, suppose that there is, or there isn't a labor
aristocracy. What can you really conclude from that, politically, given that
it is always possible to identify a privileged stratum of some sort?

In a wiki I have listed some of the typical conceptual criticisms of the
labor aristocracy idea:

*The average rate of surplus-value is typically higher in rich countries,
because of higher labor-productivity;
*high-paid, skilled workers can be very militant and display class
*the differences in wages between rich and poor countries are far greater
than the differences in wages within rich countries, so, if anything, the
whole working class in rich countries is a "labor aristocracy" from a global
point of view.
*it is not clear that workers in the imperialist country directly share in
repatriated profits from overseas dominions;
*the actual amount of repatriated profit from overseas investments that
could "trickle down" to the working class as salary income is not large
enough to sustain a "labor aristocracy", if there is one.
*Probably the main economic benefit that workers in rich countries obtain
directly from poor countries is cheap consumer goods, but in fact the
monetary value of these goods is statistically only a small part of their
total budget. The "big ticket" foreign-made items in workingclass budgets
are foreign computer hardware, foreign-made appliances and foreign cars
(i.e. durable consumer goods). But out of that total expenditure, only a
small fraction represents goods from poor countries.


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