Globally, we are not de-industrializing

The stats on the issue, excerpted from Michael Roberts:

“The world is not de-industrialising. Globally, there were 2.2bn people at work and producing value back in 1991. Now there are 3.2bn. The global workforce has risen by 1bn in the last 20 years. But there has been no de-industrialisation globally. De-industrialisation is a phenomenon of the mature capitalist economies. It is not one of the ‘emerging’ less developed capitalist economies.

Using the figures provided by the International Labour Organisation (ILO) we can see what is happening globally, with the caveat that there is a serious underestimate of industrial workers in these figures and such transport, communication and many hi-tech workers are put in the services sector.

Globally, the industrial workforce has risen by 46% since 1991 from 490m to 715m in 2012 and will reach well over 800m before the end of the decade. Indeed, the industrial workforce has grown by 1.8% a year since 1991 and since 2004 by 2.7% a year (up to 2012), which is now a faster rate of growth than the services sector (2.6% a year)! Globally, the share of industrial workers in the total workforce has risen slightly from 22% to 23%. It is in the so-called mature developed capitalist economies where there has been de-industrialisation. The industrial workforce there has fallen from 130m in 1991 by 18% to 107m in 2012.

The share of industrial workers in the mature economies has fallen from 31% in 1991 to 22% now. Indeed, according to McKinsey, manufacturing employment fell 24% in the advanced economies between 1995 and 2005.

The reason that the mature capitalist economies have lost their industrial base is that it was no longer profitable for capital to invest in British industry in the late 19th century or OECD industry in the late 20th century. So capital counteracted this falling profitability by ‘globalising’ and searching for more labour to exploit.

And profitability fell because capitalist accumulation is labour-shedding. Capitalists compete against each other to get more profit. Those capitalists with better technology can steal a march on others by boosting labour productivity and reducing labour costs by cutting the workforce. So the drive is always for reducing the amount of labour power to boost profits. The central contradiction here, as explained by Marx’s law of profitability, is that the reduction in labour power relative to mechanisation leads to an eventual fall in profitability. This reduces the industrial workforce in the mature economies and leads to expansion of industry globally. Capitalism is a mode of production for mechanisation, but mechanisation will also lead to its demise as it is a mode of production for profit not social need and more mechanisation eventually means less profitability. That shows that as we move towards a robot economy: profit for capital and meeting social needs will become more incompatible. And the leisure society just an impossible dream.

Employment growth is falling in the advanced capitalist economies. Employment growth is way less than 1% a year in the 21st century.”

Leave A Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.