Capitalism and Class Conflict in U.S. History

US economy has faced a lot of challenges white it became firm and stable. In 1970 there was a decade of poor economy. In this period the American economy started its transformation from industrial to finance-driven capitalism.The American working class overcome many changes and the questions about labor was asked for the last time. Due to Stein, it was the only decade when Americans grew poorer. By the end of 1960, a lot of investments, made by American companies in electrical and non-electrical machinery, rubber, different equipment and chemical production were being made abroad. That is why the USA faced trade deficit since 1893. The productivity was slow and the US share of the world market for manufactured goods reduced greatly. In 1970 America transmitted from the Age of Compression to the Age of Inequality. There were specific historical events, ideas, and transformations which have influenced inequality within the U.S. negatively.

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The great compression had several factors: the supply of educated labor, high demand for unskilled labor, and strong unions and minimum wage laws. The main reason for the compression is Keynesian idea that the state could promote employment with the help of some policies which caused the Great Compression. The history of American bipartisan cooperation on trade liberalization is very long. At the end of World War II there was signed a bipartisan consensus on expanding global trade. Due to that consensus, General Agreement on Tariffs and Trade (GATT) was approved in the USA in 1947. There was an idea that lowering tariffs and expanding free trade would help many people to overcome poverty. A free market system was based on fairness, transparency and obeying the laws. After the creation of GATT, the importance of trade expansions geostrategic dimension raised greatly. President John F. Kennedy considered that freedom of people improved the level of economy and that led to great tariff cuts and trade development. Two decades later, Ronald Reagan decided that the trades improvement was connected with the "tides of human progress". He signed the Uruguay Round which established the World Trade Organization.

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One of the most popular kind of employment in the USA was fissured employment. It was based on a coordinated strategy for business. The main instrument of these strategies is to develop security loyalty from the side of customers to a companys products or services as it will help to develop inelastic demand and price premiums. After that the company can concentrate on its core functions such as the production of products of services. Thus, it is possible to say that fissured employment is a reflection of larger integrated strategies. It is clear that the labour cost strategy can be impossible or hard without affecting the income strategy. During many years, workers have been fought for their rights. Labor leaders demanded from employers to sign a collective bargaining and to give workers a greater share. Such conditions make workers work better and to raise the national wealth. But workers were not educated to deal with organizing and bargaining and they had a lot of challenges with these issues. They had no time to educate. Nowadays, commodity trade has still a great meaning for American economy. The situation with farm production which are quite fungible and with such materials as copper, iron ore and waste paper is the same as with the agriculture two centuries ago but there is one interesting ability of modern people to transform just ordinary products into something expensive and fetish.

Another side of this story is that during many years people have learned how to converse rare and expensive things into common ones. People hunted for exotic products and then turned luxury into ordinary commodity. For example, in 16th century, Spanish conquistadores found out that the local Totonac people in Mexico derived some aroma from their orchids. It was a great discovery of those times. That aroma was rare and expensive, but nowadays it is just the aroma plain vanilla, which is not expensive and available for everyone, made in the laboratories or shipped from Madagascar. Another reason of the growth of contemporary merchant capitalism is the sophistication of modern manufacturing techniques. More and more devices appear in the sphere of modern technologies. The manufacture of computer design, information updates, flexible machine tools is highly developed. Many rare and complicated dives are produced in great amounts and are available for many people. All of this achieved with the help of skilled labor, who designed them and with the help of unskilled workers, who produced them in huge quantities. Such devises as silicon chips, hard drives, computer monitors, sports equipment, flat screen TVs and others have undergone a process of commoditization; as such products have lost their high value which made them different from other products. A good example of such commoditization can be shown with a mobile phone. When it appeared for the first time, it was used only by special services and it cost too much. Nowadays, this device is usual. Every person owns it and does not think that it is unique. Over 1, 2 billion of cell phones are produced worldwide. This device is complicated, but it is assembled by the teenagers now from poor families in China. The unskilled labor, used for its production is cheap that is why its value is also low nowadays. The value of this labor is nearly the same as it was of labor for manufacturing clothes or shoes 2 centuries ago.


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It is necessary to analyze what forces can change the situation with the power of the merchant capitalists, who rule in modern times. China factories help executives to double their income as it is a cheap source of manufacturing labor. A lot of rich people depend on such countries where there is a cheap labour force. Nowadays there are more and more strikers from the side of workers, who are not satisfied with their conditions of work. Such strikes occur at Honda, Toyota and other huge companies. Every year the Chinese government faces more than 100,000 mass incidents from the side of unsatisfied workers, peasants, and other ordinary citizens who do not want to supply local elite with money based on their hard work. Such elite used their land and labor to increase its income through the corrupted municipal government, or making working conditions inappropriate. Such strikes led to increasing of wages for workers in China during the last decade. Even though the wages were raised in South China, the merchant capitalists of Europe and North America were able to find new sources of supply. Such a great producer and supplier as Wal-Mart try to sell their production to Bangladesh, Vietnam, and some districts in Chine with a cheap working force.

Despite China, there are other countries such as Brazil which have also a cheap labor and they can produce iPhones and iPads as the demand on these devises is increasing greatly. Moreover, if the value of dollar will decline against the yuan and other currencies the situation in the US will change gradually, a lot of sourcing will return to America where wages are stagnant the level of unemployment is high. All these factors will make American labor more competitive. But, if such changes happen in the global supply chain, there is no guarantee that other conditions will remain the same. Such a geographical switch will reduce a working labor and the character of merchant capitalism in general. Such a transformation will make the manufacturers offer better salaries and working conditions. Of course, the power for manufacturing executives will not necessary transform into better conditions for the workers as they are at the last place in the supply chain. There are different organizations which monitor and expose the working conditions and environmental standards in different factories of such retailors as Wal-Mart and others. The work of such monitoring organizations does not influence the way how Wal-Mart purchases its goods or its contractors produce them. Like in the period before the Civil War, states are weak with less potent labor movement.

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It is possible to sum up, that the situation with inequality within the US is still terrible. There were different transformations and events during the history of America which exacerbated inequality within the U.S., moving ordinary Americans a long way from The Great Compression. Government executives were getting a huge income from factories, using a cheap working force. Workers had no possibility to get knowledge and worked for nothing. Because of such unfair working conditions there were a lot of working strikes. The government tries to improve working conditions and wages for ordinary workers but to change situation. It is necessary to change the whole supply chain which can lead to great changes in the whole economy of the US.

Mar 4, 2021 in Economy
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