The Rate of Exploitation of the Workers of the Canadian Imperial Bank of Commerce (CIBC), One of the Largest Private Employers in Toronto and in Canada

Introduction

In two others posts I presented the twenty largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and the twenty largest employers in Canada according to profit (see A Short List of the Largest Private Employers in Canada, According to Profit). The largest employer, in terms of employment, is the Canadian Imperial Bank of Commerce.

I have tried to calculate the rate of exploitation of workers of Magna International in an earlier post (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

We have the following:

Income before income taxes: $6,656=s
Employee compensation and benefits: $5,539=v

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 6,656/5,539=120 percent.

This means that, for every hour worked that enables her/his to obtain a wage, a CIBC worker works 72 minutes (or 1 hour 12 minutes) for free for CIBC. Alternatively, in terms of money, $1 of wage or salary of a regular bank worker results in $1.20 surplus value or profit for free.

in a 5.75 hour working day, CIBC workers spend 157 minutes (2 hours 37 minutes) to obtain their wage for the day, and they spend 188 minutes (3 hours 8 minutes) in obtaining a surplus value or profit for CIBC.
For a six-hour working day, follow the same procedures as above, but replace 345 by 360: result: in a 6-hour working day, CIBC workers spend 164 minutes to obtain their wage for the day, and they spend 196 minutes in obtaining a surplus value or profit for CIBC.
7-hour working day: 420 minutes: in a 7-hour working day, CIBC workers spend 191 minutes to obtain their wage for the day, and they spend 229 minutes in obtaining a surplus value or profit for CIBC.
7.5-hour working day: 450 minutes: in a 7,5-hour working day, CIBC workers spend 205 minutes to obtain their wage for the day, and they spend 245 minutes in obtaining a surplus value or profit for CIBC.
8-hour working day: 480 minutes: in an 8-hour working day, CIBC workers spend 218 minutes to obtain their wage for the day, and they spend 262 minutes in obtaining a surplus value or profit for CIBC.
10-hour working day: 600 minutes: in a 10-hour working day, CIBC workers spend 273 minutes to obtain their wage for the day, and they spend 327 minutes in obtaining a surplus value or profit for CIBC.

CIBC workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract” and “decent work?” I think not. Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop organizations of resistance against the power of particular employers.

The ideology of unions–that somehow they can produce a “fair contract” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the left.

Data on Which the Calculation Is Based

Now, the calculation:

In millions of Canadian dollars:

Revenue: $18,611

Net interest income $ 10,551
Non-interest income $8,060

Provision for credit losses $1,286
Non-interest expenses $10,856

Employee Compensation and Benefits:

Salaries: $3,081
Performance-based compensation: $1,873
Benefits: $772

Total employee compensation: $5,726

Other expenses:

Occupancy costs: $892
Computer, software and office equipment: $1,874
Communications: $303
Advertising and business development: $359
Professional fees: $226
Business and capital taxes: $110
Other: $1,366

Total other expenses: $5,130

Income before income taxes (Revenue minus provision for losses minus non-interest expenses): $6,469 ($18,611-$1,286-$10,856=$6,469).

Adjustments

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

It is necessary, however, to make adjustments on the revenue side; From https://www.payscale.com/research/CA/Employer=Canadian_Imperial_Bank_of_Commerce_(CIBC)/Bonus :

How much does Canadian Imperial Bank of Commerce (CIBC) pay in bonuses?

Canadian Imperial Bank of Commerce (CIBC) pays an average of C$4,962 in annual employee bonuses. Bonus pay at Canadian Imperial Bank of Commerce (CIBC) ranges from C$1,014 to C$30,521 annually among employees who report receiving a bonus. Employees with the title Information Technology (IT) Director earn the highest bonuses with an average annual bonus of C$30,521. Employees with the title Customer Service Representative (CSR) earn the lowest bonuses with an average annual bonus of C$1,014.

Although there is no direct evidence to indicate whether such bonuses form part of “Performance-based compensation,” there is indirect evidence.

Bloomberg notes the following (https://www.bnnbloomberg.ca/canada-s-bankers-face-the-bleakest-bonus-year-in-almost-a-decade-1.1358606):

The Canadian banks pay bonuses based on performance, with most of the variable compensation going to capital-markets employees such as investment bankers, research analysts and those in sales and trading. …

Senior investment bankers will see a 10 per cent decline in compensation from last year, hurt by fewer financings and a decline in mergers-and-acquisitions activity, according to Vlaad & Co. Junior investment bankers will see little change in their payouts following three years of increases, while those in sales, trading and research will see compensation fall 15 per cent to 25 per cent, and fixed-income employees will face a similar decline, the firm said.

Most employees, whether executive or not, seem to be eligible to some support of bonus as a function of performance. However, the gap between executive pay and the pay of regular employees has widened over the years, so it is reasonable to infer that the category “Performance-based compensation” is divided into two parts: one part is a function of the number of hours worked by regular employees as well as the intensity of that work; the other is based on the extent to which bank managers and senior executives are successful in exploiting those regular employees. Evidence for such exploitation is indirect, via the level of compensation of some senior executives. For example, Victor Dodig, president and CEO, received $9,017,000 in total compensation in 2019 (salary, $1,000,000; share-based awards, $4,806,420; option-based awards, $1,201,560; Non-equity GPS awards, $1,501,950; Pension value, $505,000; all other compensation, $2,250) (CIBC Proxy Circular 2020, page 79).

It is impossible to determine the proportion of bonuses that form part of salaries and bonuses that represent the exploitation of bank workers. Some facts may, however, be relevant. From https://www.comparably.com/companies/cibc/executive-salaries:

The average CIBC executive compensation is $270,917 a year. The median estimated compensation for executives at CIBC including base salary and bonus is $253,828, or $122 per hour. At CIBC, the lowest compensated [executive] makes $52,000.

It is probable that even middle-level bank executives receive some surplus value or profit through the exploitation of regular bank workers. This means that part of their compensation is a function of how much work regular bank workers work for nothing or for free.

Given that the level of income for top executives is far beyond the level of income of even the lowest executive, as well as the fact that the average executive compensation is almost five times the level of the lowest executive (not even taking into account additional compensations for senior executives), it is probably reasonable to assume that a minimum of 10 percent of the “Performance-based compensation” comes from the exploitation by senior bank executives of regular workers.

It would be necessary to have more detailed information to determine whether more or less of the money obtained in this category were distributed between regular bank workers and management executives. If regular bank workers received more, then the rate of exploitation would be less than the rate calculated below. If management executives received more, then the rate of exploitation would be more than the rate calculated below.

On the assumption of 10 percent, though, this means that 10 percent of the total of “Performance-based compensation, ” is reduced by 10 percent, or $187,300,000, and that amount is added to “Income before income taxes.” As a consequence, we have the following:

Adjusted Results

Income before income taxes: $6,656=s
Employee compensation and benefits: $5,539=v

The Rate of Exploitation of CIBC Workers

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 6,656/5,539=120 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.20 cn surplus value or profit for free (calculated as follows–you can skip this calculation if not interested in how the result was obtained). Alternatively, for every hour worked, a CIBC worker works 72 minutes (or 1 hour 12 minutes) for free for CIBC.

s/v=1.2
multiplying s/v and 1.2 by v (multiplying both sides by v does not change the equation), we have (s timesv)/v=1.2v;
Dividing v by itself in the left-hand part of the equation in 2 above results in 1 (any number divided by itself except 0 is equal to 1, and any number multiplied by 1 is the same number), so we have: s=1.2v
We can use this equation to calculate the division of the working day into time required to obtain the equivalent of the wage for workers at CIBC and the time they provide free of charge to obtain surplus value for CIBC.

According to a few people who have worked at CIBC, the length of the working day is:

8 hours a day

Work hours are manageable and flexible. The company is accommodating with every schedule.

They vary – just like it does anywhere.

8 hours in a day, 1 hour for break and lunch.

8-10 hours

I work 7.5 hours each day.

6 – 5.75 hours a day, 4 days a week. for the last 1.5 years

Evidently, the length of the working day varies for workers at CIBC. I will calculate the division of the working day from the shortest to the longest in the above quotes accordingly. I use minutes rather than hours. I provide more detail for the calculation for the first one so that others can more easily calculate similar rates in the cities where they live.

A 5.75- hour working day: 345 minutes;
We can use this information to create an equation:
v+s=345;
We also have the equation s=1.2v from above;
We can therefore replace, in equation 3 above, s by 1.2v since they are the same.
We now have: v+1.2v=345;
From 6, we have 2.2v=345
Dividing both sides by 2.2 does not change the equation, so the result is: v=345/2.2=157 minutes (rounded to the nearest minute).
Since v+s=345, we have 157+s=345;
Subtracting 157from both sides does not change the equation, so now we have s=345-157=188 minutes
So, in a 5.75 hour working day, CIBC workers spend 157 minutes (2 hours 37 minutes) to obtain their wage for the day, and they spend 188 minutes (3 hours 8 minutes) in obtaining a surplus value or profit for CIBC.
For a six-hour working day, follow the same procedures as above, but replace 345 by 360: result: in a 6-hour working day, CIBC workers spend 164 minutes to obtain their wage for the day, and they spend 196 minutes in obtaining a surplus value or profit for CIBC.
7-hour working day: 420 minutes:i n a 7-hour working day, CIBC workers spend 191 minutes to obtain their wage for the day, and they spend 229 minutes in obtaining a surplus value or profit for CIBC.
7.5-hour working day: 450 minutes: in a 7,5-hour working day, CIBC workers spend 205 minutes to obtain their wage for the day, and they spend 245 minutes in obtaining a surplus value or profit for CIBC.
8-hour working day: 480 minutes: in an 8-hour working day, CIBC workers spend 218 minutes to obtain their wage for the day, and they spend 262 minutes in obtaining a surplus value or profit for CIBC.
10-hour working day: 600 minutes: in a 10-hour working day, CIBC workers spend 273 minutes to obtain their wage for the day, and they spend 327 minutes in obtaining a surplus value or profit for CIBC.

It should be noted that I have used the verb “obtain” rather than “produce.” In Marxian economics, bank workers, as well as sales workers do not produce surplus value but rather transfer the surplus value already produced. This does not mean that these workers are not exploited capitalistically; they are used impersonally by the employer to obtain surplus value and a profit. Furthermore, things produced by others are used by employers such as CIBC to control their working lives in order to obtain surplus value or profit. (I leave the issue of how banks exploit workers as consumers to others more competent to deal with the issue; the point here is to focus on the exploitation of bank workers as workers and not as consumers.)

Critical Education Articles Placed in the Teacher Staff Lounge While I Was a Teacher, Part Six: The Reduction of the Nature of Teenagers to Their Brains

This is a continuation of earlier posts.

When I was a French teacher at Ashern Central School, in Ashern, Manitoba, Canada, I started to place critiques, mainly (although not entirely) of the current school system. At first, I merely printed off the articles, but then I started to provide a summary of the article along with the article. I placed the summaries along with the articles in a binder (and, eventually, binders), and I placed the binder in the staff lounge.

As chair of the Equity and Justice Committee for Lakeshore Teachers’ Association of the Manitoba Teachers’ Society (MTS), I also sent the articles and summary to the Ning of the MTS (a ning is “an online platform for people and organizations to create custom social networks”).

As I pointed out in a previous post, it is necessary for the radical left to use every opportunity to question the legitimacy of existing institutions.

The context of summaries related to the brain was that Neil MacNeil, the principal of Ashern Central School, where I worked, started talking about “brain research’ and how teachers needed to implement such research in their daily teaching practice. He even placed an article on brain research in our school mailboxes. As a consequence, I researched the issue and provided critical summaries that critiqued his reductionist view of human intelligence as “brain work.”

The relevance of the issue has to do with division of labour between intellectual labour and manual labour. Typically in schools, there is an emphasis on “academic learning”–which means purely intellectual pursuits at the expense of the use of the body as an essential aspect of the learning process. To ignore such issues is to ignore a cleavage in our society that needs to be repaired through the creation of a socialist society that eliminates such a division of labour.

I must emphasize that such work is necessary despite the possible negative repercussions by management. If we are afraid to question management and employers in our own workplace, how can we expect others to challenger their particular employer? How can we expect to unite to challenge the class of employers generally if we fail to challenge our own particular employer?

It is much easier to criticize other employers than one’s own–just as it is easier to criticize other nations than one’s own.

Such criticism is also necessary since the class power of employers is supported in various ways, including ideological means. To fail to challenge the power of the class of employers in diverse domains makes it all the more difficult to challenge them at the economic and political level. This is a typical weakness of social-democratic or reformist approaches to challenging the class power of employers. They idealize one or more domains (such as the public sector or education or law) without engaging in inquiry into the real nature of these domains (see, for example, Reform versus Abolition of Police, Part Two).

Hello everyone,

Attached is another article sent to the ESJ Ning. I prefaced it with the following summary and commentary:

The author of the following article, “The Gift and the Trap: Working the `Teenage Brain’ into our Concept of Youth,” (Howard Sercombe) argues that Michael Males’ criticisms of most of the research on youth’s so-called risk-taking behaviour, as reductionist and unscientific is justified. Most of the research ignores social environmental conditions that influence behaviour; the conclusions derived from such “brain research” should therefore be treated with suspicion. Youth, like all human beings, should be seen as a conjunction of biology, social environment and agency (self-determination). Youth, like all human beings, is irreducible to “brain states.”

Sercombe calls for research that unites the biological approach, the sociological approach and the role of agency (human beings as persons who make decisions). However, he argues that we lack a model that incorporates all three. Hence we need to focus on both the biological approach and the sociological approach in succession, with the one balancing the other until a new synthesis may arise.
Sercombe concurs with Males’ earlier view that, when sociological factors are taken into account (such as comparable levels of poverty between teenagers and adults), then the level of risk-taking is comparable.

The author points out that the issue of whether youth have inherent characteristics or have characteristics that are accidental (dependent on social circumstances) has had a long history, dating back at least to Aristotle. Hence, the issue has divided theoreticians for a long time.

What is new is the use of recent “brain research” to claim that teenagers have tendencies towards risk-taking when compared to adults. Such a view claims to be scientific but in fact expresses a prejudice by adults against teenagers. In other words, it is stereotyping in the form of alleged scientific inquiry.

Sercombe, by contrast, claims that modern brain research actually tells a different story. Brain research shows that the neural structure of the brain is subject to modification due to experience. Therefore, neural anatomy and physiology are functions of both maturational processes and environmental processes. The emergence of certain behaviours is a function of genes and the environment. If environmental conditions are not present, then the neural connections may not be established despite appropriate genetic timing. Conversely, if genetic conditions are not present, then the neural connections may not be established despite appropriate environmental conditions. Nature (genetics) and nurture (environment) are two sides of the same coin; they both need to be present for certain neural structures to emerge.

There is (contrary to such authors as David Dobb, in his article “Beautiful Brains”) no one-to-one correspondence between genetics and human behaviour.

Recent brain imaging shows that different connections between neurons are established as experiences differ. Furthermore, human beings, as agents, persons or subjects of their own lives make decisions which, in turn, influence both the environment and the neural structure of their brains (and those of other people).

Sercombe then provides some facts from the U.K. that question the so-called nature of adolescents for risk-taking. He points out that the recent financial meltdown was hardly due to teenagers but rather to adults. Such a meltdown has had much more devastating consequences than the so-called risk-taking behaviour of youth.

Sercombe calls for humility among researchers who favour nature over nurture, or nurture over nature. We do not, at present, he claims, have a model that integrates both in any consistent manner.

He only takes issue with Males’ apparent rejection of the tendential distinctiveness of adolescence as a transition towards adulthood as revealed in brain imagery.

He does criticize Males for apparently rejecting modern brain research and what it tells us about teenagers. The structure of modern teenage brains share certain commonalities with the structure of the brains of adults (since both share a common environment in, for instance, experiencing similar school structures), but there are distinctive aspects to the structure of the brains of teenagers. There is a change in the ratio of grey brain matter to white brain matter from the onset of puberty until the early 20s. Myelination occurs, making the brain more efficient as certain neural structures are selected for use(a function of genetics, environment and agency and not just genetics, as the reductionists claims), whereas synaptic pruning results in the elimination of connections and hence structures that are not used. The teenage years do bear witness to an evident restructuring that makes the neural structures more nearly approximate the more rigid structures of adult brains. By the age of 14, more or less, teenage brains are similar in structure to the structure of adult brains, but they need to be edited and organized into more efficient structures.

The author considers differences between the structure of the brains of teenagers and the brains of adults to be significant only in terms of tendencies. If certain environmental conditions are present (including specific kinds of agents), then there may be certain tendencies to act in certain ways. The specific environmental conditions will have a say in whether adolescents will act differently from their adult counterparts to any great extent.

Sercombe, like Males, points out just how bias the research is against youth. Interpretations of the data from brain research invariably treat youth as deficient when compared to adults. Sercombe queries why research never emphasizes the positive aspects of teenagers as exemplified in the data. (Although he does not specify, it can be inferred that such a characteristic as greater flexibility in rule rejection and reconstruction may be something which adults would do well to cherish.) The discourse on youth (by, of course, mainly adults) presupposes that youth are defective in some manner so that such discourse infects research as well. Such a view leads to the slippery slope of treating youth as pathological and in need of strict control by adults.

Although the author’s approach is noteworthy in the much needed attempt to take into consideration the biological and the sociological (and psychological) aspects of the problem, he seems to be unaware that such a synthetic approach to all three was proposed by John Dewey a long time ago. Sercombe’s view that we need to balance research that excludes sociology and psychology from biology (or vice versa) by referring to research that emphasizes sociology and psychology will never result in a synthesis. What is needed is a synthetic approach that incorporates all three from the beginning, even if implicitly—as does Dewey’s theory.

Dewey begins with human beings who are dependent on each other and on the world of which they are a part—a social, biological and physical-chemical environment. Emphasis on the biological, the sociological or the psychological assumes a functional character: we emphasize one or the other for particular purposes. At a lived level, though, there is no distinction. Human experience is never purely physical-chemical, or purely biological, or purely social. It is all of them together in an inseparable unity. Emphasizing the biological may be required to ascertain certain aspects of our experience, but it never exhausts it.

Educators would do well to study more carefully Dewey’s philosophy in general and his philosophy of education in particular. They may then avoid the reductionism characteristic of biological approaches to human beings or, for that matter, the reductionism characteristic of sociological (and psychological) approaches to human beings and the education process. They may also avoid pandering to prejudices against youth based on pseudo-science (such as that presented in David Dobb’s article, “Beautiful Brain”).

Educators, however, are adults, and as adults they tend to consider their standards to be sacrosanct. They may well avoid engaging with Dewey’s theory since Dewey long ago argued that, although children (and adolescents) need in some ways to become like adults, adults need to become more like children (and adolescents):

“With respect to the development of powers devoted to coping with specific scientific and economic problems we may say the child [and adolescents] should be growing in manhood. With respect to sympathetic curiosity, unbiased responsiveness, and openness of mind, we may say that the adult should be growing in childlikeness. One statement is as true as the other.” (Democracy and Education, 1916, p. 55)

Do Workers Work for a Particular Employer or for the Class of Employers? Part Two: Critique of Unions and the Social-Reformist or Social-Democratic Left

Introduction

This is a continuation of the previous post (see Do Workers Work for a Particular Employer or for the Class of Employers? Part One: A Limitation of Some Radical Left Critiques of Capitalist Relations of Production and Exchange (A.K.A. Capitalism)). In that post, I criticized some of the radical left for one-sidedly implying that workers only work for the class of employers; such a view is true, but it excludes the other truth, namely, that workers also work for a particular employer and indeed experience that fact immediately. Working for a particular employer is what workers are conscious of–and not that they work for the class of employers.

On the other hand, the social-reformist or social-democratic left often commit the opposite error of practically ignoring union representatives’ assumption that the relationship of workers to a particular employer by means of collective bargaining, a collective agreement, labour legislation and local union democracy, can express something fair. Such a view ignores the fact that, although workers at any particular time work for a particular employer–yet when considering, on the one hand, the whole working class, they do work for a class of employers and, on the other, when considering the whole life of an individual worker.

Dependent Local Unions Versus Unions That Are Independent of a Particular Employer

This can be seen in reference to Herman Rosenfeld, a self-declared Marxist here in Toronto and former worker in the automobile industry. For example, he justly criticizes a clause in the collective agreement between Magna International and the Canadian Autoworkers Union (CAW) (now Unifor), but he one-sidedly idealizes CAW Local 88 and fails to analyze critically either the collective-bargaining process or the resulting collective agreement.

Mr. Rosenfeld rightly criticized the Canadian Framework of Fairness Agreement when it first came out (see Magna Is Not CAMI):

This “Framework of Fairness” is based on Stronach’s time-tested system of anti-union structures. Rooted in the human relations practises developed in the 1920s to keep industrial unionism out of mass workplaces, Magna’s paternalistic system attempts to build-in loyalty and dependence on management. It also seeks to individualize worker concerns and issues. All of this is institutionalized in the CAW-Magna framework. [CAW was the Canadian Auto Workers union; it is now Unifor.]

As has also been pointed out, any real effort to create an independent union presence and structure is stymied by the time frame involved in the deal and the commitments embedded in it: it would take about 10 years to organize the various plants in increments of 3 or 4 per year. If the CAW tries to subvert the process at any time, Magna could end the entire project. Besides, the agreement itself commits the union NOT to subvert the process and build an independent union structure.

Needless to say, the collective shop-floor struggles that built Local 88, culminated in the successful 1992 strike and paved the way for the strong union local they are today are not possible at Magna. Workplace struggle would be policed there (according to commitments made in the framework), rather than led by the union.

I will assume, for the sake of argument, that Mr. Rosenfeld’s comparison of (at the time) CAW Local 2009 AP and CAW Local 88’s union are accurate. In other words, I will not dispute the accuracy of Mr. Rosenfeld’s comparison of the two locals (and their collective agreements).

To understand why Mr. Rosenfeld opposes the “CAW-Magna framework,” I searched for the most recent collective agreement between Magna International and any union on the Web. Unfortunately, the most recent one I found was the collective agreement between Magna International and Unifor Local 2009 AP that has already expired:

NATIONAL COLLECTIVE BARGAINING AGREEMENT
BETWEEN:
MAGNA INTERNATIONAL INC.
– AND –
UNIFOR, and its Local 2009 AP

The collective agreement lasted four years:

This agreement shall remain in effect for a four-year period, from the date of ratification, November 7, 2013 until November 6, 2017 at 11:59 p.m.

The most recent collective agreement would, of course, have been preferable.

The 2007 Canadian Framework of Fairness Agreement is incorporated into the collective agreement. Some of this Framework is reproduced below to get a flavour of its nature:

A. Background and Principles

1. Introduction

Canada’s automotive assembly and parts industry is our country’s most important high-technology, value-added, export industry and employs thousands of people directly and indirectly. It makes a crucial contribution to family incomes, productivity growth, and foreign trade performance. Because of the high productivity of the industry and because of the strong linkages between assemblers, parts producers, and the thousands of companies which supply them (with everything from components to materials to services), every new job in an assembly or parts facility ultimately generates several additional jobs for Canadians. Automotive manufacturing is one of Canada’s only industrial “success stories,” and has made a crucial contribution to diversifying our economy away from an exclusive reliance on the production and export of natural resources and energy. For all of these reasons, the auto industry holds an immense economic and social importance to Canada.

Within this context, Magna and the CAW are motivated by the shared goal of not only preserving but expanding Canada’s automotive sector through high-performance work practices; investments in both capital and human resources; effective and just labour relations; world-class quality, productivity, and reliability; developing and renewing top-quality skilled trades; and continuing to support and enhance social and environmental sustainability.

…

As each stakeholder – companies, unions, employees, communities and government – shares in the benefits of a successful and prosperous automotive industry, each stakeholder must also contribute, in a meaningful way, to ensuring that continuing success.

This responsibility requires that all parties seek new and innovative ways to deal with the industry’s challenges, working cooperatively to achieve these goals. To this end, Magna and the CAW are committing with this Framework of Fairness Agreement (the “FFA”) to develop a new, innovative, flexible, and efficient model of labour relations. This model will combine the best features of union representation, with Magna’s established culture of workplace democracy and fair treatment (as embodied in the Magna Employee’s Charter). The model incorporates aspects of existing North American and European labour relations practices, yet will also reflect a uniquely Canadian attempt to combine industrial and financial success with principles of fairness and social responsibility.

Given the exploitative nature of the relations between workers for Magna and Magna as their employer (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One), references to “fairness” and “social responsibility” ring hollow.

Mr. Rosenfeld, from the point of view of the interests of workers, is thus right to criticize such a clause in a collective agreement.

By contrast, according to Mr. Rosenfeld, Local 88, unlike Local 2009 AP, developed as an independent union that emphasized the opposition between the workers which it represented and

CAMI [GM assembly plant in Ingersoll, Ontario, Canada) included an elected workplace committee of union representatives, a democratic structure independent of management, to defend workers’ interests. The CAW as a whole maintained a commitment to an independent union presence in the workplace, expressing a different ideology and set of interests than that of the employer. The CAW national representative who serviced the CAMI union was an experienced working class fighter, who helped to mentor the new union reps. (That was only made possible by the existence of the elected body of union representatives, independent of management and beholden only to the members who elected them).

That was reinforced by a CAW Statement on Work Reorganization that asserted:

As we mobilize against regressive taxation, the weakening of unemployment insurance or plant closure legislation, we are reminding our members that the “team” they are on is not the same as their employer, and the ‘adversary’ is not other workers but those who are on the other side of these issues. Similarly, as we take on other collective bargaining issues – like opposing profit-sharing, or demanding indexed pensions or insisting on some movement towards reduced worktime, the message that the needs of working people are quite different from those of management is constantly articulated.

Such a union–and a corresponding collective agreement that reflects such a union–is certainly much more preferable to the union established at Magna–and its corresponding collective agreement:

As has also been pointed out, any real effort to create an independent union presence and structure is stymied by the time frame involved in the deal and the commitments embedded in it: it would take about 10 years to organize the various plants in increments of 3 or 4 per year. If the CAW tries to subvert the process at any time, Magna could end the entire project. Besides, the agreement itself commits the union NOT to subvert the process and build an independent union structure.

A union that can oppose its particular employer is certainly much more preferable to one that cannot–and hence Local 88 and its structure serves much more the immediate interests of the workers than union represented by workers at Magna International:

Needless to say, the collective shop-floor struggles that built Local 88, culminated in the successful 1992 strike and paved the way for the strong union local they are today are not possible at Magna. Workplace struggle would be policed there (according to commitments made in the framework), rather than led by the union.

The CAW President of Local 88 at the time, Cathy Austin, wrote a letter to the editor, dated of the Toronto Star (a major newspaper in Toronto, Ontario, Canada), saying similar things:

The first collective agreement at CAMI was negotiated before production started. It offered the barest of guidelines of how ideas such as team concept were actually to be worked out in practice in a unionized environment. The agreement represented a tactical compromise. On the one hand, the contract departed from standard agreements in the auto industry. It committed the union to the principals of the Japanese Production System including team concept, substantial management flexibility and kaizen (continuous improvement). Additionally, the union agreed to an economic package on wages and benefits that fell below the industry norm. However, despite these tactical compromises the first contract contained provisions for important union principals such as union security, recognition of union elected and independent workplace representatives, union committee persons and a true grievance procedure.

Our local wasted little time in establishing an independent presence in the plant. Over time the union began to demand changes and workers fought back. By contesting CAMI policy and practice, the members increasingly came to see the local as an independent force that championed the cause of workers’ dignity and rights.

Fighting to Make Gains Against the Class of Employers?

Mr. Rosenfeld, however, then makes some assertions without explaining what he means:

Another major difference from CAMI is the larger role of the CAW. In the CAMI era, the union was clearly committed to challenging the ideology of partnership and competitiveness, fighting to make gains against employers and defending workplace rights as well as wages and benefits and embarking upon ambitious political projects that questioned the logic of competitiveness and globalization [my emphasis].

What does it mean to fight “to make gains against employers?” Since he did not elaborate, I searched further to see what he might mean. I found the following written by Mr. Rosenfeld, from Labour Notes, July 31, 2005, titled Reflections on the Birth of the Canadian Auto Workers :

This July marks the 20th anniversary of the founding of the Canadian Auto Workers. The CAW was created out of a split from the U.S.-based United Auto Workers, at the beginning of a difficult era that is still with us.

The CAW split with the UAW over a series of fundamental differences. The CAW’s leaders believed that unions—and the workers they represent—have interests that are independent and different from those of their employers; that the role of a union is to fight for workers’ interests—not to sell the agenda of employers; that the competitiveness of employers is a constraint on unions and workers, not something that unions should see as their goal.

The CAW’s birth marked a major shift in the Canadian labor movement. The split was seen both as a statement that Canadian workers can build their own union movement free of U.S. tutelage and as a bold challenge to the employer offensive that sought to change the very nature of unionism.

CONFLICT OVER CONCESSIONS

In the early 1980s, U.S. auto companies and the UAW agreed to radically change the role of unions. Accepting the Big Three’s argument that U.S. automakers’ success against offshore competitors could only be assured by worker concessions—like replacing wage increases with lump-sums and profit sharing—UAW leaders saw their role as selling this perspective to their members.

It began in 1979, with Chrysler on the verge of bankruptcy. Both the UAW and its Canadian leadership agreed to temporary concessions. But when the U.S. Congress demanded more concessions as the price of further aid, the Canadians balked.

In subsequent negotiations, as Chrysler’s outlook improved, the Canadian UAW demanded and won back the concessions in the face of opposition from UAW leadership.

When GM and Ford followed suit, calling on the union to re-open their collective agreements in 1982 bargaining, the UAW leadership accepted. But they had to organize a campaign to “sell” concessions to their own members, and quash or marginalize any opposition.

In fact, when GM and the UAW first tested the waters amongst GM workers in the United States, the workers rejected concessions. Traditions of resistance remained in the union and it took years of effort by the leadership to try and root it out.

Again, unions that are independent of particular employers, that oppose concession bargaining, that have a democratic structure, have the ability and willingness to strike, fight for more general rights (such as easier access to unemployment insurance, improved federal pensions and similar reforms) are certainly preferable to more conservative unions.

Independent Local Unions Need Not Oppose the Class of Employers

Nonetheless, there is a qualitative difference between such unions and efforts to go beyond the class power of employers. Mr. Rosenfeld does not address this issue at all; alternatively, he implies, without evidence, that unions that aim for certain general rights (outlined in the previous paragraph) somehow fight against the class of employers consciously as a class of employers.

Independent unions at the level of the particular company or firm need not be independent at the level of classes.

Actually, it is Ms. Austin’s letter to the editor which expresses in a compact manner, both what is right and what is wrong with Mr. Rosenfeld’s position. She specifies three aspects that are characteristic of what her and Mr. Rosenfeld would probably call progressive unions:

There are three fundamental differences between our ‘foot in the door’ collective agreement at CAMI in 1988 and the current Magna deal; first a democratically elected independent union representation directly elected by and accountable to the membership, secondly a grievance procedure, third the right to strike (which we did for 5 long weeks in 1992). The differences between the proposed Magna deal and CAMI are monumental in the lives of workers. At the October 28th membership meeting the members of Local 88 unanimously endorsed a resolution opposed to this flawed agreement. The workers at Magna need and deserve the royal blue colour of the CAW not the yellow of a company union. •

A union democratically elected by its membership may be independent of the influence of the particular employer, but the union itself, within the collective bargaining regime set up since 1944 in Canada (during the Second World War) hardly makes unions independent of the class power of employers. They operate on the basis of laws that establish their legitimacy and limits of action. Such laws and limits influence what unions do and how they act.

This limitation can be seen, for example, in how union representatives view collective agreements and how they justify them. On the Unifor Local 88 website, for instance, there is a history section, with the following (my emphasis):

1992-Strike

The 1992 Collective Agreement was a struggle to achieve. These set of negotiations were very tough. Both the Union and the Company had many differences that could not be settled. As a result the membership of CAW Local 88 endured a five week strike against CAMI Automotive. The membership grew up very quickly and was determined to negotiate a fair and respectful collective agreement. Shortly after the October 1992 Thanksgiving weekend a collective agreement was voted upon and ratified by the membership.

How can any collective agreement express “a fair and respectful agreement?” Since workers are exploited at work (see, for example, The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One) how can any union “negotiate a fair and respectful collective agreement?” Unions, by persistently referring to the negotiating process and the resulting collective agreement as somehow fair, are not independent of the class of employers. They become ideologues of the class of employers objectively even if they are unconscious of doing so.

Therefore, Ms. Austin’s three criteria for an effective union (and Mr. Rosenfeld’s likely agreement with such criteria)–an independent and democratically structured union, a grievance procedure and the right to strike–by no means necessarily make unions independent of the class of employers (although may well make the union independent of the particular employer they face during negotiations).

Either Mr. Rosenfeld, like many unionists and leftists, simply ignores the issue of the class power of employers and the need to consciously aim for the abolition of the power of such a class, or he falsely assumes that unions that fight for general rights of workers somehow also aim to abolish the class power of employers.

The Chairperson of the Organizing Committee of Local 88, Barry Smith, also expresses the limitations of the union point of view. Admittedly, the following quote is in the context of consultation by the Ontario government of employment-law reform, but there is no evidence that what he wrote was merely a tactical move:

“Changing Workplaces Review”
London Consultation
July 8, 2015

Dan Borthwick, President
Colleen Wake, Chairperson Union In Politics Committee
Barry Smith, Chairperson Organizing Committee
Ingersoll, Ontario
July 8, 2015

…

I believe that if those hard won protections were afforded to all, through improvements in the language of both these Acts, employers would have a stronger, more dedicated workforce that would improve the situation for all parties. It wasn’t until September 17/2013 after completing contract negotiations that the S.W.E.s [Supplement Workforce Employees] got the advantages we needed. Thanks to strong contract language, we got vacation, better benefits, a pension plan and almost equal treatment as any long term employee at CAMI and gained Full Time status.

I truly believe that if it wasn’t for Unifor and General Motors coming to a fair agreement at the Bargaining Table, I would still be a S.W.E. and having to worry on a daily basis about how I will be supporting my family next week. [my emphasis]

Indeed, a document by Unifor, submitted on September 2015, to the Ontario Changing Workplaces Consultation, was itself titled Building Balance, Fairness, and Opportunity in Ontario’s Labour Market. This document in its very title expresses the ideology that somehow the labour market can be fair–whereas the existence of a labour market is itself an expression of the unfair situation in which workers who work for an employer find themselves (see The Money Circuit of Capital).

This document, furthermore, implies that workers who work for employers cannot, somehow, be exploited–as if employment law (governing non-unionized workers), labour law (governing unionized workers) and collective bargaining legislation and collective-bargaining structures, along with unions, can somehow eliminate exploitation and oppression at work. From page 6 (my emphasis):

Yet the institutional bulwarks which are essential for working people to attain better outcomes from the labour market (such as ambitious and actively-enforced employment standards, strong and widespread collective bargaining structures, and even a positive common-sense understanding of fair practice in the world of work) have become less capable of moderating these trends, instead of being strengthened to meet these challenges. The result is a labour market marked by pervasive inequality, underemployment, and all too often hopelessness. [my emphasis]

What is this “positive common-sense understanding of fair practice in the world of work?” I guess I lack this “positive common-sense understanding of fair practice.” On page 104, they ask:

The Changing Workplaces Review must address a fundamental challenge for the future of labour market policy: what measures can effectively provide Ontario workers the dignity, security, and fair treatment they deserve, while maintaining the efficiency and success of Ontario’s economy?

An honest answer to that question–given the context of an economy structured according to the demands of a class of employers–is that only measures that aim to eliminate the power of the class of employers can achieve those twin goals. The dishonest answer is that the twin goals can both be achieved within the structure of the employer-employee relation.

Mr. Rosenfeld is therefore right when he affirms that unions, such as the original CAW Local 88. as a union that was independent of its particular employer, are much better than the union that represented Magna workers.

However, both sets of workers were exploited and oppressed locally at work due to their class situation, and their unions were not independent of the class of employers even in the case of the original CAW Local 88–unless Mr. Rosenfeld can show evidence to the contrary by showing that the local not only tried to become independent from its particular employer but from the class of employers (by, for instance, showing the limitations of the collective-bargaining process and the resulting collective agreement–and even then such a situation is only the beginning of a process towards becoming independent of the class of employers through the elimination of all classes). I doubt that he can. This is where Mr. Rosenfeld is wrong–a union independent of a particular employer does not mean that such a union is independent of the class of employers.

Finally, let us look at the collective agreement between CAMI Automotive and CAW Local 88. I could not find the 1992-1995 collective agreement (which would have been the most relevant since there is reference to the 1992 strike above), but I did find the collective agreement for 1995-1998, which has the following:

3. MANAGEMENT RIGHTS

The Union recognizes the right of CAMI to hire, promote, transfer, demote and lay off employees and to suspend, discharge or otherwise discipline employees for just cause subject to the right of any employee to lodge a grievance in the manner and to
the extent as herein provided.

The Union further recognizes the right of CAMI to operate and manage its business in all respects, to maintain order and efficiency in its plant, and to determine the location of its plant, the products to be manufactured, the scheduling of its production and its methods, processes, and means of manufacturing. The Union further acknowledges that CAMI has the right to make and alter, from time to time, rules and regulations to be observed by employees, which rules and regulations shall not be inconsistent with the provisions of this agreement.

The Union recognizes the right of CAMI to formulate, revise and publish Personnel policies, which shall be administered in a fair, impartial and consistent manner to all members of the bargaining unit [bold in the original–although I am uncertain if that was intentional.]

Of course, unions may be forced to include such clauses in the collective agreement. If, however, they were really independent of the class of employers, they would question the legitimacy of such a clause openly to their members and promote discussion of the clause whenever they could. Does Mr. Rosenfeld have any evidence that CAW Local 88 did that? If not, his idea that CAW Local 88 was an independent union, though true in relation to its particular employer, was false in relation to the class of employers.

I predict that Mr. Rosenfeld will not provide any evidence to show that CAW Local 88 was an independent union at the level of the class of employers.

Social democrats like Mr. Rosenfeld do the opposite of what some Marxists and radical leftists do: social democrats correctly emphasize the need for unions do be independent of the particular employer, but they neglect how unions, at the level class, are not independent of employers.

Some Marxists and other radicals, on the other hand, neglect the importance of the independence of unions from particular employers by referring merely to workers working for the class of employers–as I tried to show in my previous post).

A Little Theory

To round off this post, I will refer to a book by a German author that may not appear to have much relevance to the issue of the independence of the working class, but nevertheless does address the issue indirectly (theoretically).

The quote is a very rough translation from the German of Maxi Berger (2012), Labour, Self-consciousness and Self-determination in Hegel: Towards the Interdependence of Theory and Praxis, page 23 (I include the German after the quote for those who read German):

In order to be able to understand that the individual cannot escape from economic coercion, it is crucial to emphasize the total social character of the capitalist mode of production. This total social character is manifest in social organization, that is to say, that the legal foundations and administrative institutions as well as the organization of the economic sphere as a whole are appropriate in the sense of accumulation for the sake of accumulation–not however in the sense of a reasonable organization of human life. As a result of this the action of the members is placed under constraint: Whoever wants to obtain his means of life, whoever therefore who wants to live, must accommodate themselves to the conditions of commodity and labour markets, not the opposite.

(Um verstehen zu können, daß sich Einzelne den ökonomischen Zwängen nicht entziehen
können, ist es entscheidend, den gesamtgesellschaftlichen Charakter der kapitalistischen
Produktionsweise zu betonen. Dieser gesamtgesellschaftliche Charakter ist in der
gesellschaftlichen Organisation manifest. D. h. daß die juristischen Grundlagen und verwalterischen
Institutionen ebenso wie die Organisation der ökonomischen Sphäre insgesamt
zweckmäßig im Sinne der Akkumulation um der Akkumulation willen sind – nicht
aber im Sinne einer vernünftigen Organisation menschlichen Lebens. Dadurch wird das
Handeln der Mitglieder unter Sachzwang gestellt: Wer sich seine Lebensmittel beschaffen
will, wer also leben will, muß sich den Bedingungen des Waren- und Arbeitsmarktes anpassen,
nicht umgekehrt.)

Unions and the social-reformist or social-democratic left that fail to take into account the fact that the freedom of the worker to shift from one employer to another does not prevent economic coercion need to be criticized. Independent unions at the level of a particular employer go hand in hand with such economic coercion.

Do Workers Work for a Particular Employer or for the Class of Employers? Part One: A Limitation of Some Radical Left Critiques of Capitalist Relations of Production and Exchange (A.K.A. Capitalism)

While doing some research for a post on this blog, I became aware of how many Marxists claim that workers really work for the capitalist class or the class of employers rather than a particular employer. I asked my wife, who worked in Guatemala as a saleswoman, whether she thought that she worked for a particular employer or for the class of employers. She replied that she worked for a particular employer.

Although this is true in one way, it is also false in another way (I will elaborate on this below). Nonetheless, from the point of view of the experience of workers, they generally conceive of the relation between their working lives and their employer as a particular relation and not as a class relation. Marxists often ignore this concrete experience of workers and, as a consequence, limit their capacity to communicate with workers and to organize them.

First, I would like to provide quotes from several radical socialist sources to show that they often ignore the concrete experience of workers in relation to employers. All words in boldface are my emphasis.

From Alexander Berkman (2003), What is Anarchism, page 11:

Are you not compelled to work for an employer? Your need compels you, just as the highwayman’s gun. You must live, and so must your wife and children. You can’t work for yourself; under the capitalist industrial system you must work for an employer. The factories, machinery, and tools belong to the employing cl ass, so you must hire yourself out to that class in order to work and live. Whatever you work at, whoever your employer may be, it always comes to the same: you must work for him. You can’t help yourself You are compelled.

In this way the whole working class is compelled to work for the capitalist class. In this manner the workers are compelled to give up all the wealth they produce. The employers keep that wealth as their profit, while the worker gets only a wage, just enough to live on, so he can go on producing more wealth for his employer. Is that not cheating, robbery?

Again: From Socialist Party of America, National Platform, Adopted by the Thirty-Sixth National Convention, University of Akron, Akron, Ohio, July 18-23, 1983, page 1:

Under capitalism, society is divided into two principal classes–the capitalist class and the working class. The capitalist class consists of the wealthy few who own the means of production and distribution. The working class consists of the vast majority who own no productive property and who must in order to live, seek to work for the capitalist class, or for the present government it controls.

Another example is from Great Britain (from the website Socialist Party of Great Britain):

Today, a world working class is forced to work for a wage or salary, and confronts a world capitalist class who live off unearned incomes from rent, interest and profit.

This one-sided emphasis on the capitalist class also can be seen in the following 1904 report by James Moroney, Report of the Australian Socialist League to the International Socialist Congress at Amsterdam:

The Working Class, in order to secure food, clothing, shelter and fuel, must sell their labor-power to the owning Capitalist Class — that is to say, they must work for the Capitalist Class [my emphasis]. The Working Class do all the useful work of Society, they are the producers of all the wealth of the world, while the Capitalist Class are the exploiters who live on the wealth produced by the Working Class.

To be sure, there is recognition that the workers do work for a particular employer. From James O. Moroney (1904), the Australian Socialist League. Report of the Australian Socialist League to the International Socialist Congress at Amsterdam:

In most of the Australian States the railways, and in some the tramways, are owned and managed by the government on strictly commercial principles. In other directions the State has extended its functions and employs labor direct. But the worker remains in Australia, whether employed by the State government or the individual private employer, and exploited wage slave, as is his exploited fellow wage slave in other countries.

These two views are often not integrated in a coherent manner. Workers do both. The reality of working for a particular employer in the private sector hits home when the private employer closes shop for whatever reason–as the workers working for GM in Oshawa, Ontario, relatively recently experienced; around 2,500 direct workers were out of work due to the shutting down of the GM auto plant in Oshawa in December, 2019.

Workers who work in the public sector may also experience severance from their particular employer as government departments are down-scaled or reorganized. They do not just work for “the government,” but in a particular field, department or political division.

This experience of working for a particular employer needs to be recognized when radicals write and give speeches. Marx recognized that the form in which workers work for the class of employers, which constitutes their immediately lived experience, needs to be taken into account. From the notebooks Marx drafted in 1857-1858 called the Grundrisse (Outlines), in the Collected Works of Marx and Engels (Marx’s best friend and comrade), Volume 28, pages 392-393):

To start with, the first presupposition is the transcendence of the relation of slavery or serfdom. Living labour capacity belongs to itself and disposes by means of exchange over the application of its own energy. The two sides confront each other as persons. Formally, their relation is that of equal and free exchangers. That this form is mere appearance, and deceptive appearance at that, appears, as far as the juridical relationship is concerned, as an external matter. What the free worker sells is always only a particular, specific measure of the application of his energy. Above every specific application of energy stands labour capacity as a totality. The worker sells the specific application of his energy to a specific capitalist, whom he confronts independently as a single individual. Clearly, this is not his [real] relationship to the existence of capital as capital, i.e. to the class of capitalists. Nevertheless, as far as the individual, real person is concerned, a wide field of choice, caprice and therefore of formal freedom is left to him. In the relation of slavery, he belongs to the individual, specific owner, and is his labouring machine. As the totality of the application of his energy, as labour capacity, he is a thing belonging to another, and hence does not relate as a subject to the specific application of his energy, or to the living act of labour. In the relation of serfdom, he appears as an integral element of landed property itself; he is an appurtenance of the soil, just like draught-cattle. In the relation of slavery, the worker is nothing but a living labouring machine, which therefore has a value for others, or rather is a value. Labour capacity in its totality appears to the free worker as his own property, one of his own moments, over which he as subject exercises control, and which he maintains by selling it. [my emphasis]

John Sitton draws out the effect of the immediate experience of working for a particular employer on individual members of the working class. From John Sitton, editor, (2010), Marx Today Selected Works and Recent Debates, pages 19-20:

Since the wage-laborer must sell his or her labor to someone in the class of employers, Marx often states that this “freedom” is an illusion. “The Roman slave was held by chains; the wage-laborer is bound to his owner by invisible threads. The appearance of independence is maintained by a constant change in the person of the individual employer, and by the legal fiction of a contract.” But Marx himself admits that this “appearance” of individual freedom is reinforced by the fact that the worker, unlike the slave, is also an autonomous consumer. “It is the worker himself who converts the money into whatever use-values he desires; it is he who buys commodities as he wishes and, as the owner of money, as the buyer of goods, he stands in precisely the same relationship to the sellers of goods as any other buyer. Of course, the conditions of his existence—and the limited amount of money he can earn—compel him to make his purchases from a fairly restricted selection of goods. But some variation is possible as we can see from the fact that newspapers, for example, form part of the essential purchases of the urban English worker. He can save or hoard a little. Or else he can squander his money on drink. But even so he acts as a free agent; he must pay his own way; he is responsible to himself for the way he spends his wages.” Given this reality, Marx did not anticipate how class identity could be effaced by the status of consumer. The status of independent— although severely constrained—owner of the commodity labor-power, and of owner of money who can spend it as he or she pleases, makes it easy to see how in people’s minds class differences come to be considered as merely differences in income.

This “appearance” of freedom is bolstered in an additional way. As Marx acknowledges, although class situation greatly reduces the range, there are some differences in individual wages depending on skill. For a worker, there is therefore “an incentive to develop his own labor-power” so as to increase his or her wages. “[T]here is scope for variation (within narrow limits) to allow for the worker’s individuality, so that partly as between different trades, partly in the same one, we find that wages vary depending on the diligence, skill or strength of the worker, and to some extent on his actual personal achievement. Thus the size of his wage packet appears to vary in keeping with the results of his own work and its individual quality. . . . Certain though it be that the mass of work must be performed by more or less unskilled labor, so that the vast majority of wages are determined by the value of simple labor-power, it nevertheless remains open to individuals to raise themselves to higher spheres by exhibiting a particular talent or energy.” Marx is not explicit, but, combined with the possibility of changing one’s employer, this opens up the prospect of some, although small, measure of social mobility. Marx is correct that this does not abolish the essential nature of wage-labor as oppression. However, Marx greatly underappreciated the effects that even these limited opportunities have on an individual’s perception of life under capitalism and the sense of belonging to a class.

The possibility of advancing one’s economic situation by developing one’s individual talents or simply through greater “diligence” encourages many members of the working class to believe that one can “make it” through hard work. It is no surprise that many people believe that an individual’s prospects are not determined by class structure but by individual virtues or the lack thereof. These facts of working class existence, raised by Marx himself, make the class analysis of capitalism, whatever its broader theoretical cogency, less convincing to great numbers.

In the Manifesto, Marx asks, “Does it require deep intuition to comprehend that man’s ideas, views and conceptions, in one word, man’s consciousness, changes with every change in the conditions of his material existence, in his social relations and in his social life?” What Marx failed to understand is that freedom to choose employers, the equal autonomy of consumers, the limited but real possibilities for individual and generational advancement, and the limited but real political possibilities of democratically managing the economy are the lived experiences of individuals under capitalism. These shape how people today perceive their lives and how they perceive the legitimacy of the existing order. For the Marxian tradition to find a larger audience, it must be able to connect its broad theory of capitalism as a class-structured society with the actual experiences of individuals in capitalist society, rather than dismissing those freedoms as illusory. Workers do not experience them as illusory, and this makes it plausible for them to blame their economic situation on themselves, rather than on a class structure.

It is not only Marx who underestimated the importance of the lived experiences of individuals under capitalism. The radical left here in Toronto (and probably elsewhere) fail to take into account the importance of the often ideological nature of that experience and how it must be subject to criticism when any opportunity arises. The radical left here do not engage in any systematic recognition of the limited nature of the lived experiences of workers and the need to engage in criticism of such experience in order to connect up systematically the lived experiences of workers critically with the class structure. Often they call for revolution–without considering the need to engage systematically and in the long-term with the lived experiences of workers.

Alternatively, they indulge the beliefs of the workers (fearing to criticize them), practically becoming social democrats or social reformers, thereby failing to develop the critical capacity of workers and community members. Either way the lived experiences are not transformed but remain as they were before.

Indeed, social democrats and social reformers often limit themselves to focusing on the immediate exchange between workers and employers–as I pointed out in another post (see Basic Income: A Critique of the Social-Reformist Left’s Assumptions and Analysis: Part Two). The social-democratic or social-reformist left often pay lip service to class relations and workers working for the class of employers, but they then commit the opposite mistake to those among the radical left who one-sidedly focus on working for the class of employers.

I will address the issue of the one-sided error of focusing mainly on individual employers or group of employers while not really addressing the issue of working for the class of employers in the next post.