Magdoff and Foster: The Great Capitalist Robbery: The Increasingly Severe Exploitation and Pillage Facing the American Working Class

Capitalism has always been built upon the exploitation of land, resources, and human life, in order to create the conditions for the exploitation of labor. As Marx predicted in the 19th century, the Industrial Revolution was achieved by Britain through the brutal Enclosure Movement ^[1] and the cruel colonization carried out by European powers abroad. This included "the discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins—all signalized the rosy dawn of the era of capitalist production." In short, these forms of primitive ^[2] exploitation shaped the historical foundation for the emergence of industrial capitalists.

From the 16th and 17th centuries to the present, capitalism has recklessly plundered natural and human resources, squandering resources such as fresh water, soil, forests, fisheries, and minerals. The world has become a sink for capitalism to dispose of industrial waste in the cheapest possible manner. The current ecological crisis is the direct consequence of capitalism's plundering and pollution of the planet.

The internal dynamic of the capitalist system stems from the exploitation of labor power, which is a more concealed form of plunder. The value created by workers is far greater than the value of their wages. Taking the worker's wage as a measure, a certain portion of every working day must be used to reproduce the value of labor power, while the remaining portion is used to produce surplus value for the owners of the means of production. Therefore, capitalists are constantly increasing the degree of exploitation of workers—that is, increasing the time in the working day used to produce surplus value while reducing the proportion devoted to the reproduction of the worker's labor power. The surplus value appropriated by capitalists in this way constitutes the basis of capital accumulation, directly increasing the power and wealth of the bourgeoisie relative to the working class.

Capital holds a dominant position through its command over land, workplaces, machinery, funds, and jobs. In contrast, workers possess nothing but their labor power; they can sell their labor power, but they cannot freely choose the terms of the sale. The vast majority of workers face a prominent disadvantage: a lack of the funds, tools, and equipment necessary for production. Consequently, they cannot make an independent living and must often submit entirely to the labor regulations set by their employers. Furthermore, employers possess the power to hire and fire workers, while almost no contractual relationship exists to protect workers from "layoffs." The rise of the gig economy, constantly changing work schedules, and the uncertainty and inequality of part-time and temporary work are also exacerbating the precariousness of workers' employment. The imperial role of the United States and other wealthy countries allows them to utilize a massive global reserve army of labor that exceeds the size of the world's active workforce.

I. The Structural Crisis of Capitalism

The first 25 years after the Second World War are generally regarded as the "Golden Age" of modern capitalism. During this period, historical conditions greatly promoted economic growth, primarily including the following aspects:

1. The emergence of the United States as the hegemonic power of the capitalist world economy, manifested in the global dominance of the US dollar, the expansion of the international trade system, and the establishment of a global oil market based on the dollar.
2. The accumulation of consumer liquidity during World War II, which greatly increased effective demand post-war.
3. The post-war economic reconstruction of Western Europe and Japan.
4. Massive military spending due to the Cold War and imperialism.
5. New technologies introduced due to the war and war preparedness, such as computers and jet aircraft.
6. The diversification of "promotional efforts."
7. A new stage in the American automation process, including the construction of the Interstate Highway System, which boosted the automobile, steel, and glass industries and drove suburban development.
8. The rapid growth of foreign direct investment by multinational corporations centered in developed capitalist countries.

In 1966, at the height of the post-war economic boom, mainstream Western economists declared that the business cycle was a thing of the past. Economists Paul A. Baran and Paul M. Sweezy, in their book Monopoly Capital, emphasized the temporary nature of this situation. They argued that stagnation is the normal state of a monopoly capitalist economy. As specific historical forces faded or weakened, the long-term explosive growth of the post-war economy would inevitably come to an end.

Compared to the free-competition capitalism of early industrialization, monopoly capitalism exhibits a trend toward slowing growth. High profit rates brought about by high rates of exploitation and monopoly prices, along with overcapacity and a considerable degree of underemployment, together constitute the conditions for the over-accumulation of capital. The economic surplus created in this way far exceeds the surplus that the "real economy" can absorb through new investment and capitalist consumption. The inherent overcapacity of monopoly capitalism leads to low rates of net investment in new capacity and slowing growth.

In the years following the publication of Monopoly Capital, capacity utilization in the United States began to show a downward trend. During this period, consumer liquidity turned into debt, the Interstate Highway System was largely completed, and the economies of Western Europe and Japan had finished their reconstruction, subsequently trending toward slower growth. Meanwhile, US control over world oil prices was also declining. In previous decades, oil prices had been maintained at low levels, thereby fueling the expansion of the world economy. However, in the early 1970s, oil prices gradually rose from about $2 per barrel to about $3 per barrel. In response to US support for Israel during the 1973 "October War," Arab member states of the Organization of the Petroleum Exporting Countries (OPEC) cut oil production and reduced exports. This caused crude oil prices to rise from about $3 per barrel to over $12, eventually exceeding $30. The oil embargo led to a severe recession between 1973 and 1975, and even a period of stagflation (stagnation plus inflation).

In the 1980s, the US Federal Reserve eased inflation by substantially raising interest rates and further pushing the economy into a Great Recession, which led to a significant increase in unemployment. Subsequently, the progressive lowering of interest rates fostered a boom in the financial sector, indirectly stimulating economic development. Yet, it simultaneously created an entirely new debt superstructure imposed upon the "real economy," eventually leading to a half-century of persistent economic stagnation—the structural crisis of capitalism—and triggering financial bubbles in the United States and other developed capitalist countries.

Economic growth in the United States has slowed significantly, with its GDP growth rate falling from an annual average of 4.3% in the 1950s and 1960s to 3.2% in the 1970s through the 1990s, and further down to 2.0% in the first 20 years of the 21st century. Long-term weak economic growth is an inherent phenomenon of monopoly capitalism. In this regard, what we need to explain is not the trend toward stagnation, but rather the exceptional periods of high growth rates.

II. The Neoliberal Turn

The bourgeoisie has an ideological tendency to blame every economic crisis on labor, the government, and other factors unrelated to capital itself. Faced with the economic crisis and stagnation that began in the 1970s, corporations and the wealthy adopted various strategies to increase their power relative to other classes in society, specifically including the following:

1. Increasing unemployment by sharply raising interest rates and curbing inflation through "shock therapy" ^[3].
2. Gradually lowering interest rates again over a long period to stimulate production and the development of the financial sector.
3. Increasing marketing efforts to sell more commodities, including expanding consumer credit or debt through credit cards and other means.
4. Further concentrating and integrating capital through mergers and acquisitions.
5. Investing massive sums in military spending, even in peacetime.
6. Calling for tax-cut policies for capital and the wealthy, and providing other government subsidies.
7. Launching lobbying campaigns against laws and regulations that squeeze profits.
8. Shifting production abroad to exploit the advantage of low unit labor costs in poor countries.
9. Adopting various methods to weaken labor unions and the resistance of the working class.

The new synergy between the state and the market can be called the neoliberal turn. The tasks of social reproduction associated with the welfare state have become increasingly subordinate to capitalist reproduction—for example, the military-industrial-financial complex. Various branches of the state have broken away from effective government control and fallen under the dominance of financial capital.

One of the primary manifestations of this shift is the continuous strengthening of private enterprise power due to changes in federal laws and regulations. "Unicorn" companies such as Cargill, Koch Industries, Mars, Bloomberg, and Hearst have such low transparency that "unions bargaining for employee rights often cannot obtain key financial information about these companies that employ tens of thousands of workers."

Instead of restoring high growth to the US economy, the neoliberal turn has exacerbated the contradictions of over-accumulation and stagnation. This has necessitated the expansion of old support systems and the development of new ones. After World War II, government spending played an important role in laying the economic foundation, particularly evident in the massive US military budget. Currently, the officially announced US military budget is close to one trillion dollars per year, but if unofficial military spending hidden elsewhere is counted, it is far more than that. Military spending serves a dual purpose: on one hand, it supports corporate development and provides effective demand for the economy; on the other hand, it expands the American Empire and promotes the interests of concentrated capital on a global scale. However, the increase in military spending is limited. Current US military spending already equals the sum of the next nine military powers combined, and large-scale warfare would result in catastrophic destruction. Increasing military spending can no longer provide an effective stimulus to break out of economic stagnation.

Under these circumstances, an increasing number of enterprises are taking advantage of rising asset prices and using financial activities as the primary means of managing accumulated cash. The result is that monopoly finance capital has entered a new stage dependent on low interest rates and periodic government bailouts. Financialization involves the expansion of debt and speculation. Within the private sector, various forms of debt have exploded. Financial capital has turned part of the economy into a giant casino where you can bet on anything imaginable, fueled by the continuous emergence of new types of financial "tools." "Vulture capitalists" use leverage to carry out acquisitions, sometimes selling off portions of equity. Through this "buy-strip-flip" method, large units of capital extract cash while weakening the company, often filing for bankruptcy after workers have lost their jobs.

Financialization is inextricably linked to the trend toward generalized monopoly. Western governments have actively promoted this trend as official policy, breaking with previous anti-monopoly practices. To facilitate mergers and acquisitions, the US federal government abolished a whole set of restrictive policies that had been in place since the New Deal Era, most notably the separation of commercial banking from investment banking. However, this has led to a new wave of corporate monopolies triggered by finance. As fewer companies control large market shares, monopolies or oligopolies possess greater power to raise prices and create higher profit margins, while also possessing greater power to drive down wages. At the time of the 2008 global financial crisis, the top 200 largest companies alone accounted for about 30% of total profits in the US economy (an economy that includes 5.5 million corporations, 2 million partnerships, 17.7 million non-farm sole proprietorships, and 1.8 million farm sole proprietorships).

It must be reiterated that economic crises in capitalist societies are always blamed by capital on high wages, low labor productivity growth, and government intervention. Regardless of the actual circumstances, this has been the main narrative of the bourgeoisie in responding to economic crises since World War II. Although the trend toward economic stagnation has been quite obvious, mainstream economics ignored it until 2008 and continues to try to downplay the seriousness of the problem today.

This failure to face reality was reflected in mainstream economic thought in the 1980s, which was originally known as supply-side economics.

This economic thought provides a rationalizing justification for shifting income and wealth from the poor to the rich as a solution to economic slowdown. One view argues that the wealthy face a "profit squeeze" and a subsequent shortage of investment funds; another suggests that corporations and the wealthy are simply not rich enough (even when the wealthy are already sitting on vast sums of capital without investing). Consequently, the corresponding remedial strategies become: (1) increasing the economic surplus at the disposal of corporations and the rich through measures such as increasing profits or cutting taxes; and (2) removing regulations to promote corporate expansion and privatization.

Under the influence of neoliberal thought, a larger share of the overall economic "cake" has been sliced for the rich, stimulating their luxury consumption. They utilize a small portion of their increased assets to purchase private jets, yachts, and luxury mansions, thereby stimulating economic growth in the short term. Although financialization briefly drove economic development through the "wealth effect," the pace of economic growth has become increasingly sluggish.

Currently, financialization is deeply entrenched in the economic sphere and has developed to the point where it can manipulate the flow of individuals' personal funds beyond their fixed incomes. This is achieved primarily through techniques that are more systematic and predatory than in the past—for example, the looting of private and public pensions and health insurance, setting higher interest rates for the poor, and inflating pharmaceutical prices.

During the peak of the Wall Street bubble, the majority of people were swept up in it. Before the bursting of the real estate bubble during the 2007–2009 Great Recession/financial crisis, low interest rates allowed homeowners to refinance and take out second mortgages based on the appreciation of their property values. In this way, their spending could increase even if their incomes did not. However, when the crisis arrived, mounting household debt pushed many into bankruptcy.

In the wake of the global financial crisis, it has become increasingly clear that the essence of the new monopoly-finance capital system is to extract more income from a greater number of people. Various forms of support and welfare provided to the general populace—such as income, pensions, medical insurance, public education spending, and welfare benefits—have been negatively impacted. Neoliberal measures for addressing the structural crisis of capitalism all serve to increase the power, income, and welfare of capital relative to the working class and the lower-middle class, dealing a heavy blow to labor.

When proposals to increase taxes on the rich and corporations receive majority support, today's capitalists declare it to be "class struggle" ^[4] directed against them. But the real class struggle that has persisted for over half a century is the struggle launched by capital against labor. As billionaire investor Warren Buffett said when asked if class struggle existed: "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning."

III. Striking at Trade Unions

From the mid-1940s to the mid-1950s, due to the rapid development of the labor movement during and after the Great Depression, union membership expanded to approximately one-third of the total labor force. This momentum continued into the 1960s, the so-called "Golden Age." During this time, wages rose much faster than the rate of inflation; workers' real wages (adjusted for inflation) increased to some extent alongside the improvement of productive forces, and the lives of most workers grew increasingly prosperous. During this period, the steady growth of real wages allowed capitalism to expand the scale of the economy by increasing effective demand and stimulating capital investment. However, the business community viewed this as a mixed blessing: although after-tax profit rates reached double digits during the peak of business cycles in the 1950s and 1960s, profit rates declined to some extent due to the continuous rise in real wages. Vested interests (usually business owners and investors) believed that during the so-called "Golden Age" of capitalism, there were difficulties in increasing the rate of exploitation ^[5] of workers, which had an adverse effect on corporate profits.

In the 1930s—namely during the Roosevelt New Deal and World War II—power shifted toward labor. This led to a backlash during the McCarthy era, targeting the communist/socialist-led unions within the Congress of Industrial Organizations (CIO). Conservative "business union" leadership, seeking alliance with capitalists, joined the struggle against radical unionism, eventually leading to the expulsion of ten radical unions from the CIO. Furthermore, the activities of all radical unions were relentlessly suppressed, particularly weakening their capacity to organize and strike. The decline of American unions began with the passage of the Taft-Hartley Act in 1947. This was followed by a series of other anti-labor measures, leading to a gradual decline in union membership starting in the mid-1960s. In the 1980s, after Ronald Reagan fired the air traffic controllers who went on strike, the rate of decline in union membership accelerated. Since then, anti-union propaganda and actions have become more socially "acceptable" within the government and mass media. The capitalist attack on labor caused the proportion of unionized workers to fall from about one-third of the total workforce to about one-tenth.

Due to the general influence of unions on wage levels and benefits, capitalists even in non-unionized sectors of the economy feared that unions posed a threat to their profit margins. Because financialization requires the continuous extraction of more economic surplus from workers in the "real economy" ^[6] of production to sustain its own development, the struggle against unions has intensified within the new financialized economy since the 1980s, leading the state and capital to adopt even more aggressive means to weaken the power of labor.

The impact of high union density (and the higher income union workers receive compared to non-union workers) extends far beyond the unionized workers themselves. When unions win contracts favorable to their members, the wages of many non-union workers performing similar jobs also gradually increase. Similarly, when the minimum wage is raised, workers whose earnings are already at or above the new, higher minimum wage also receive corresponding pay increases.

Since entering the 21st century, the capitalist struggle against unions has accelerated. For example, companies such as Amazon and Starbucks have used new surveillance tools to "launch a fierce attack on union movements." A 2023 report by the Economic Policy Institute was titled "Employers are charged with violating federal law in nearly 40% of union elections." As an article in the British Financial Times noted: "Fierce resistance to unionization is becoming the norm in the US and is having profound effects. Strong opposition from many large US employers to workers joining unions is a primary reason for the recent decline in US union density. Compared to other industrialized nations, the US has one of the lowest union densities."

IV. The Growing Plight of the American Working Class

During the first two decades of the 21st century, the American working class endured a very difficult period. The first decade began with an economic recession following the bursting of the dot-com bubble. After a brief recovery, the financial and real estate crisis of the Great Recession broke out from December 2007 to June 2009. Following the recession, it took more than six years for the total US employment rate to return to pre-recession levels, while the full-time employment rate took even longer to recover. It was nine years before the US unemployment rate dropped to the pre-recession level of 4.7%. Millions of people lost their homes, and personal bankruptcy rates soared. For ten years, the homeownership rate in the US continued to decline as investors flocked to buy properties and convert them into rentals. "When housing prices were depressed, investors purchased at least 2 million homes (though likely far more), and large institutional investors bought tens of thousands of homes at prices below construction costs." Between 2021 and 2022, soaring rents and inflation in other areas—including rising food prices—brought disastrous effects to millions.

Under these circumstances, the struggle against workers' wages and working conditions has only intensified. In addition to conventional exploitation, corporations cut workers' wages through various means. First, they assign managerial-sounding titles to workers, using "title inflation" to avoid paying overtime (which is 50% higher than the base wage). For example, when a front desk clerk becomes a "Director of First Impressions," a barber becomes a "Grooming Manager," or a food truck employee becomes a "Food Truck Manager," the employer no longer needs to pay additional overtime to these "managers." Second, to avoid paying overtime or even any clear wages or compensation, corporations classify workers as independent contractors rather than employees. Finally, corporate means of suppressing wages include outsourcing a portion of necessary labor, such as administrative work, to other firms. These companies hire workers at low pay without health insurance or pensions. In this way, when issues such as the illegal use of immigrants or child labor for dangerous tasks arise, the responsibility is often shifted to the subcontractor rather than the large corporation.

Noncompete clauses further intensify the capitalist exploitation of workers. It is estimated that approximately 20% of the individual labor force is required to pledge that they will not leave their jobs voluntarily and, upon leaving, will not work for another company in the same or similar business. These clauses make it difficult for workers to jump to similar positions with higher pay or better working conditions, thereby depressing overall wage levels. Other methods of controlling labor include requiring workers to provide four months' notice before resigning, otherwise paying liquidated damages to the company; requiring workers to repay training costs upon departure; and forcing foreign workers to pay exorbitant exit fees.

Furthermore, there is the phenomenon of capitalists directly stealing workers' wages. It is estimated that approximately $50 billion in wages is looted from American workers every year. This type of exploitation includes withholding overtime pay, paying below the minimum wage, forcing workers to work off the clock without pay, and stealing tips. An article by Forbes Advisor noted: "Wage theft is particularly acute for low-wage workers in industries such as construction, childcare, and food services."

To increase profits by raising the rate of labor exploitation, a common technical means utilized by capital is systematic job cutting, reducing staff to fewer than the actual number of people required to complete tasks safely and without abnormal stress. This leads to the remaining workers being rushed and subjected to immense pressure. Similar situations have appeared in many industries, such as for-profit hospitals, nursing homes, and warehouses. Staffing in railroad companies has been reduced so drastically that it is difficult for workers to take sick leave or schedule medical appointments.

Although the freight trains operated by railroad companies are getting longer—sometimes stretching for miles—companies have nonetheless slashed employee numbers significantly. This has led unions to warn that measures aimed at increasing profits may jeopardize safety and even lead to disaster. Since 2017, Union Pacific, CSX, and Norfolk Southern have cut more than 22% of their jobs. At that time, US railroad companies implemented a cost-cutting system called "Precision Scheduled Railroading" (PSR), a model subsequently emulated by most other railroad companies in the US. BNSF Railway, the largest railroad company in the US, is the only one that has not explicitly adopted this model, yet it is also conducting layoffs to improve efficiency and maintain competitiveness.

The factors leading to the difficult plight of workers also include the loss of industrial jobs (deindustrialization) across large swaths of the United States. This has led not only to the loss of high-wage unionized/

The loss of manufacturing jobs has also led to the hollowing out of entire communities and even cities. This was driven by increasing levels of automation and robotization, the migration of manufacturing to the non-unionized American South, and the impact of international trade agreements that encouraged overseas production. These trade agreements accelerated the process by which U.S. multinationals rely on "global labor arbitrage"—the exploitation (and over-exploitation) of workers in the Global South—meaning the shifting of production to countries where unit labor costs are lower (i.e., where the wage differential is greater than the productivity differential compared to advanced capitalist countries). This system is maintained by the overall economic, political, and military structure of U.S.-centered imperialism.

Global labor arbitrage has triggered a massive global "race to the bottom" in wages, leading to a near-ubiquitous despair within the capitalist world economy and making life increasingly difficult. In the United States, this has sparked an alarm over "deaths of despair." It should be noted that despair has long existed in Black communities due to high unemployment, low-wage work, and persistent discrimination across all sectors, but it only garnered sustained mainstream attention when the phenomenon began to spread into white communities.

It is estimated that nearly one-quarter of U.S. workers are engaged in low-wage labor. Beyond low wages, the poor and other low-income workers suffer from additional forms of exploitation. Rents for workers' housing are high relative to property values and have continued to skyrocket over the past decade (landlords operating properties in poor communities typically earn double the profit of those in affluent ones). In the United States, because workers have little to no savings, they are forced to pay a large portion of the $11 billion in bank overdraft fees. Those unable to access the banking system pay $1.6 billion in check-cashing fees and $8 billion in payday loan fees. Paradoxically, there is money to be made even from the poor.

The working people of the United States and other affluent economies face severe challenges, a problem that has even sparked extensive discussion in the mainstream business media. Economic data clearly shows that the purchasing power of a significant portion of the population has begun to stagnate or decline. The U.S. government collects information on all wage earners as well as those classified as "production and non-supervisory" workers. This category accounts for approximately 80 percent of the total U.S. private-sector workforce, or about 100 million people. From 1950 to the mid-1970s, the average "real compensation" (inflation-adjusted wages plus fringe benefits) of production and non-supervisory workers grew roughly in step with GDP and productivity increases. However, over the past 40 years, while labor productivity (output per hour) for all workers increased by 75 percent and real GDP per capita grew by nearly 100 percent, the average compensation for production and non-supervisory workers grew by only 15 percent. In fact, median compensation has actually declined.

Indeed, from the 1960s to 2020, the wages of production and non-supervisory workers in the private sector fell from approximately 30 percent of GDP to about 20 percent. Consequently, only a small fraction of economic income is used to pay wages, especially for low-income earners. In contrast, capital has appropriated a larger share of income, resulting in the accumulation of massive capital surpluses at the top of the economy. As of August 2022, U.S. corporations held $5.9 trillion in cash that was not used for investment (much of which is stashed offshore to evade taxes). The tendency of economic entities to accumulate financial assets and hoard cash for that purpose, rather than engaging in productive investment, is a defining characteristic of monopoly-finance capital. It is estimated that major corporations in the S&P 500 will use $1 trillion in 2023 to buy back their own shares to prop up stock prices.

Stagnant real wages have had profound effects on the working class. It is estimated that in 1985, a male worker over the age of 25 earning the median income had to work 40 weeks full-time to maintain a so-called middle-class life for one year—i.e., the cost of living necessary for the social reproduction of a family labor force, including food, housing, childcare, education, healthcare, transportation, and communication. Today, however, due to the decline in real median income (after inflation), they must work a full 62 weeks to achieve the same standard of living. This means that to reach this income level, a worker must either hold multiple jobs or come from a dual-income household. For male workers over 25 with only a high school education, the working time required to reach this standard has increased from about 43 weeks in 1985 to 80 weeks today. Given that half of all workers earn less than the median income (or median pay), it is unsurprising that so many people are struggling today. More than 60 percent of workers live "paycheck to paycheck," with little to no reserves available for emergencies.

Over the past half-century, while capitalists have continuously suppressed workers' living standards and subjected them to higher degrees of exploitation, the wealthy have used their influence to enhance their political power, ensuring their wealth grows exponentially. Estate taxes and income taxes for high-income groups and corporations have been reduced. However, the reduction in corporate and excise taxes has led to an increase in personal income taxes to compensate for the lost revenue. Thus, in 2022, if dedicated Social Security and Medicare taxes are excluded, personal income taxes accounted for over 70 percent of U.S. federal government tax revenue. As personal income tax comprises a larger share of federal revenue and the tax rate for high-income groups as a percentage of their income declines, middle-income earners face increasing regressive tax pressure.

The estate tax, which affects only the affluent, has been a specific target of wealthy lobby groups. An article published in The New Yorker in 2023 noted: "The lobbying campaign has been a massive success. In 1976, about 139,000 American households were required to pay estate tax. By 2020, the estate tax had been so riddled with exemptions that only 1,275 households in the entire country had to pay it. Donald Trump’s former economic advisor Gary Cohn, who helped masterplan a move to relax estate tax provisions, reportedly told members of Congress: 'Only sops [fools] pay the estate tax.'" The U.S. Treasury Department estimates that in 2019, tax evasion by the top 1 percent cost the government $163 billion. Tax lawyers continuously invent new methods to reduce the tax liability of the wealthy, while the Internal Revenue Service (IRS) is understaffed and unable to properly audit the complex tax returns of the rich, resulting in an ever-heavier tax burden on workers, particularly middle-income earners.

Tax law reforms favoring the rich have been so "successful" that the 400 wealthiest households now pay taxes (the sum of federal, state, and local taxes) at a lower rate than the bottom 50 percent of households.

V. The Comprehensive Plunder of the Working Class

The limitations on the growth of most workers' wages and salaries have led to the stagnation of real wage growth. Since the early 1960s, there has been almost no growth in the real purchasing power of workers' wages. At the same time, the wealthy have created new methods to earn and maintain their income, resulting in a massive transfer of income. Income that in earlier circumstances would have flowed to workers now falls into the hands of the wealthy. According to a RAND Corporation study on income changes across various levels from 1975 to 2018, the income of the highest earners grew much faster than economic growth, while income growth slowed as one moved down the income ladder. Between 1975 and 2018, the taxable income of the top 10 percent as a percentage of total U.S. personal income rose from 34 percent to 50 percent. The report also noted that for the bottom 90 percent, "the gap between the actual income of a portion of the population and what they should have received if they had grown along with the overall economy" was approximately $2.5 trillion in 2018. From 1975 to 2018, the cumulative gap exceeded $47 trillion.

Similarly, economists Emmanuel Saez and Gabriel Zucman found that if income growth from 1980 to 2018 had been equitable, the bottom 10 percent of earners would have had incomes nearly 80 percent higher in 2018 than they actually did, and the median pre-tax income would have been about one-third higher. Conversely, if income growth had been equitable, the 400 wealthiest households in 2018 would have seen their incomes reduced by 85 percent compared to their actual earnings; they would have had to "scrape by" on an average pre-tax income of $66 million instead of $456 million.

The bourgeoisie emphasizes its role as the ruling class of society more than ever before. Capital has poured vast sums of money into elections and used lobby groups to draft laws and regulations. In effect, the U.S. Supreme Court has eliminated almost all restrictions on campaign contributions by the wealthy, making it easier for the bourgeoisie to manipulate U.S. elections. The bourgeoisie has not only weakened the enforcement of many regulations but also successfully reduced union membership and suppressed wage growth. With the implementation of NAFTA and the establishment of the World Trade Organization (WTO), multinationals gained greater freedom to invest overseas and repatriate capital. Furthermore, the creation of value chains allowed commodity producers to source components from different countries and companies and assemble them in areas with lower unit labor costs, thereby dramatically increasing corporate profits. Meanwhile, the condition of U.S. workers continues to deteriorate, with many living in distress. As wage growth fails to keep pace with inflation, workers can only barely manage to subsist.

Although the relative contributions of what is considered "normal" capitalist exploitation and actual robbery ^[7] remain uncertain, the combined effect has indeed placed a massive squeeze on worker income. If the relative gaps between different income levels had remained at the levels seen in the 1960s and early 1970s, the income of workers—especially those classified as production and non-supervisory (about 80 percent of the total workforce)—would be higher than it is now. It is estimated that between 1975 and 2018, the bottom 90 percent "lost" $47 trillion in income. Workers could have used this income to pay for food, rent, utilities, healthcare, transportation, internet, and education, and could have avoided debt. If the government could levy more taxes on the wealthy, it could easily develop programs and create jobs to help those low-income earners who have little hope for a better future. Of course, if the United States could reduce military spending, scale back the number of overseas bases, and stop launching foreign wars, a vast amount of resources would be freed up for society.

As Bernie Sanders states in his new book, It’s OK to Be Angry About Capitalism, capital has waged an intense class struggle against the working class for decades, with catastrophic consequences for everyone except the wealthy. This explains why workers are now reorganizing and fighting back with new union struggles. One thing is certain: only a mass bottom-up uprising like that of the 1930s can galvanize a stronger working-class power to create a more fair and just society.

(This article was originally published in the first issue of Monthly Review, 2023, Volume 75, under the original title "Grand Theft Capital: The Increasing Exploitation and Robbery of the U.S. Working Class.")

The ongoing economic crisis within the capitalist world-system has further exacerbated the structural predicament of the American working class. Since the late 20th century, the logic of financialization has increasingly dominated the global accumulation process, leading to a profound transformation in the relations of production ^[8]. Within the United States, this transition is manifest as a dual assault: on one hand, the intensified extraction of surplus value through stagnant wages and increased labor intensity; on the other, a "great pillage" of the social wage and public resources. This process is not merely a quantitative change in exploitation but a qualitative shift toward what might be termed stagnant-monopoly capitalism.

The systemic "pillage" described herein reflects a deeper contradiction within the economic base ^[9]: the inability of productive investment to absorb the massive surplus generated by monopolistic enterprises. Consequently, capital has turned toward speculative financial channels and the aggressive dismantling of the remnants of the welfare state. For the American working class, this results in a precarious existence where the security of the "Fordist" era has been replaced by indebtedness and the erosion of public services. This reality necessitates a rigorous application of historical materialism to analyze how the superstructure—including the legal and political apparatus of the American state—has been restructured to facilitate this transfer of wealth from labor to capital. Only through such a dialectical understanding can the internal crises of contemporary capitalism be fully grasped.