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April 2004 • Vol 4, No. 4 •

The ‘Majesty of the Law’ and the Class Struggle

By Nat Weinstein

Among the many big lies introduced and perpetuated by the capitalist monopoly over the mass media of communication, is the capitalist pretense of equality under the law. This is the one requiring employers to also contribute a 7.5 percent tax on gross wages paid to the Social Security fund, matching the amount deducted from every employee’s paycheck. But wait, the law is one thing, its enforcement is another. This is how the majestic equality of capitalist justice works:

Capitalists, as is well known, have every right under the law to employ armies of tax lawyers, accountants and other “specialists” to find loopholes in the laws made by capitalist for capitalists. These specialists are paid to wade through some 17,000 pages of tax legislation on the books, to discover and devise new techniques to dodge taxes. In other words, they have the right to spend millions on lawyers and tax experts to cheat their own government out of billions in taxes.

But one of the most absurd manifestations of capitalist “equality under the law” is the one requiring so-called “self-employed” workers to pay both the worker’s and the employer’s share of the 15-percent SS tax—even though they more often than not employ no one but themselves.

But, again wait, “justice” prevails; self-employed workers also have the right to hire as many tax lawyers and tax accountants and other specialists as they please in order to enable them to “legally” evade paying these taxes. That is they too can “spend millions to save billions” in taxes.

Such super-regressive taxes on salaries, however, are only a small part of the intricate maze of tax loopholes provided the rich and superrich. Consequently, it has been reported that U.S. corporate taxes in 2003 accounted for only 7.4 percent of total federal tax receipts, the second-lowest level on record since 1983.

Jurriaan Bendien, an independent economic expert and researcher reports further, that “a Joint Committee on Taxation…discovered to everyone’s consternation that Enron claimed $2.3 billion in profits between 1996 and 1999 in reports to its investors, while reporting an astonishing $3 billion tax loss to the IRS. But that’s just the tip of the iceberg.”

Bendien also reports: “In a topical article in the Boston Globe (February 24, 2004), Stephen J. Glain takes the story further, and points out that nearly half of the estimated $233 billion in foreign earnings of all U.S. corporations in 2001 was held in foreign tax havens, up from 38 percent in 1999 and 23 percent in 1988 (Department of Commerce data, December 2003).”

Taxing wages twice and then once again

Also to be considered, as a part of the extension of the offensive against workers’ to all other spheres of the capitalist economic infrastructure, is the relentless rise in state and municipal sales taxes and other less obvious “value-added” taxes. Value added taxes are those paid by manufacturers directly to the tax collector but passed on to consumers in increased prices on commodities. Goods bearing such value added taxes range from tobacco and alcoholic beverages to automobile tires, gasoline and numerous other commodities.

Ironically, workers pay for the lion’s share of the cost of running the capitalist state and government even though the state is run by capitalists for capitalists who use its power to enforce capitalist property rights at home and abroad. Make no mistake, capitalist aims in war and peace have nothing in common with the needs and interests of the great majority of the people in every one of the world’s capitalist nations.

Although military action is mostly directed by the strong against the weak nations of the world, history is also replete with military action taken by strong nations against each other when their competing interests come into conflict. But the fighting, killing and dying is a “privilege” mostly reserved for workers, farmers and others excluded from sharing in the fruits of military conquest.

No free ‘circuses’ for plebes in the American Empire

There is yet another, far less obvious means by which the workers are made to pay an ever-larger portion of the costs of government and the state.

It started long ago when what were once free institutions, like museums, zoos and public parks, were turned into profit-making commercial enterprises. There are still many alive today who remember when museums, zoos and national parks were free and paid for by taxes and other government revenue. Many will also recall a time when there were few tolls on bridges and tunnels after the state had recovered the initial cost of their construction. Now even many of the nation’s roads, also the product of public financing, are also being used to milk the mass of ordinary workers for as much as the traffic will bear.

Using bankruptcy laws to violate labor contracts

To be sure, the attacks on the social wage of the working class and the shifting of the tax burden from rich to poor, are only a small part of the generalized attack on living standards. Let’s take a look at another front that capitalism has opened in its war on the organized section of the working class. The latest innovation is directed at the organized sector of the working class at the point of production.

Chapter 11 bankruptcy legislation is ostensibly designed to protect both the troubled company and the claims by various parties affected by a business unable to pay its bills. The process, of course, includes the possibility of restoring the troubled enterprise to profitability. But in recent years the courts are increasingly being used to force unions to renegotiate signed and sealed labor contracts—years before their expiration.

Experience proves that the courts routinely accept the claims made by companies filing for protection under Chapter 11 and routinely issue court orders voiding existing labor contracts and compelling unions to renegotiate their terms. The courts also have the power, and do not hesitate to impose terms that they decide are “fair,” if no agreement between the company and the union is reached. Obviously, that puts the bosses in the driver’s seat, which they use for all it’s worth.

Neither does it make any difference in the eyes of the capitalists’ courts that most of these giant corporations have been raking in superprofits for years and have prospered to the point that their total wealth has multiplied over the course of the last half-century. Meanwhile the workers who are the sole producers of the wealth of nations die virtually penniless.

Nevertheless, the courts have routinely backed up the “right” of an employer to tear up legal contracts with workers and their unions; and have also routinely ordered these unions to comply with capitalist demands. This has resulted in union after union suffering sharp reductions in previously agreed upon wages and benefits.

Unions, thus, have been faced with either accepting reduced wages and benefits or taking effective strike action. But effective strikes are impossible if union officials abide by the rules of class war imposed by the capitalist class. Thus, committed as they are to obeying the bosses’ rules of war, the labor officialdom has recommended acceptance of these “renegotiated” take-back contracts in almost every case. But the concessions demanded by the bosses and recommended by union bureaucrats have become so extreme that workers have often rejected the recommendations of their union officials.

But in those cases where labor bureaucrats have been forced by their members to take strike action, as in the recently concluded Southern California grocery strike, these toothless strikes have in every instance gone down to defeat—sometimes despite heroic efforts by rank and filers and their local leaders to put some real force behind their strikes.

Workers still have what it takes to change the world

The problem is not that the working class no longer has the power to stop and reverse the decades-long working class retreat, as is argued by apologists for the labor officialdom. Rather it’s a problem that can only be solved by a change in working-class leadership. That is, there is a pressing need to construct a leadership that understands that leaders must lead. But not only to lead retreats, at which the current crop of labor fakers are exceedingly effective. And certainly not when the real relation of forces between labor and capital calls for a powerful offensive in defense of workers’ class interests.

Consequently, the only way forward for the workers is by selecting and electing a leadership that will lead workers toward exercising their full power as a class when an offensive by the workers is called for as well as when retreats cannot be avoided.

However, those who rationalize both for bosses as well as their labor lieutenants, argue that the working class is no longer what it used to be. They point to the decline in the proportion of workers in manufacturing and other sectors of the industrial workforce as having sharply reduced the power of the working class; while the power of the capitalists has been multiplied by the natural course of events in a capitalist world system.

These apologists for the capitalists and their labor lieutenants also note that it was the industrial workforce that had served as the engine that drove the great labor upsurge of the 1930s to victory after victory for workers in all sectors of the economy including the unorganized. These arguments cannot be denied. They are facts that can be easily verified.

But it’s far from the whole story. While workers in the service and commercial sectors do not have the concentrated power of the industrial workforce, there are more workers today than ever before. Moreover, even though the heaviest battalions of the working class, those in basic industry are fewer than before, their power to bring the entire economy to a halt is undiminished. And since the workers as a class are an even larger majority of society today than ever before, their potential power is greater both absolutely and relatively!

Labor slogans like Solidarity Forever, An Injury to One is An Injury to All, and the Workers United Can Never Be Defeated, are not mere morale-building slogans without content. They are real and fully meaningful. It all comes through with full force in the words of the labor song, Solidarity Forever, which starts off with these words: “When the unions inspiration through the workers’ blood shall run, there can be no power greater anywhere beneath the sun,” and ends with the words, “Solidarity forever, for the union makes us strong.”

These slogans and these words are just as true today as when literally millions of workers sang this song on the picket lines of America in the great labor strike victories of the 1930s.

The problem is that the labor officialdom is no longer interested in inspiring workers with the facts that will help make them free. They no longer believe these slogans, if ever they did, and only a few of them once did. But even those that once led their fellow workers in battle under these slogans are no longer who and what they once were. They have become soft and comfortable in their position as highly privileged labor bureaucrats who are only interested in preserving their privileges and are no longer concerned with defending the source of their privileges, as labor officials once did.

Understanding why this is so will help explain why the labor bureaucrat today is less concerned with defense of his privileges as most still were to one degree or another prior to Taft-Hartley. This is why:

An informal deal had evidently been concluded between bosses and bureaucrats promising the latter that if the labor officialdom abided by the rules of war set down by Taft-Hartley, even if strikes might be crushed, employers would grant the defeated union a union contract—something they never did before 1947.

In other words, those union officials that played ball with the bosses, would not see their union destroyed leaving them jobless. But they evidently were also told that if you try to use the class struggle methods that resulted in the great strike victories of the past, your union will be smashed and defeated union leaders left jobless. They were also promised that victorious employers would grant cooperative bureaucrats the dues checkoff—something they had never voluntarily done before 1947.

In the first place, although this “understanding” is not documented anywhere to my knowledge, the simple fact is that the only unions that lost strikes and were crushed out of existence, where those—like the airline controllers (PATCO) in 1981-82, who defied the new rules of class war and tried to win their strike as best they could.

Worse yet, part of that unwritten agreement was a promise by capitalism’s labor lieutenants to deny striking workers their solidarity when class solidarity is the only real defense of workers on strike. The fact is that the airline controllers’ strike was defeated with the help of the top leadership of the IAM and other unions in the industry and most of all by the AFL-CIO top officialdom. Furthermore, the ruling class holds the latter responsible for seeing to it that their affiliated unions do not honor the picket lines of sister unions. That’s also an essential part of the unwritten agreement between bosses and bureaucrats.

But why, it is logical to ask, did the bosses grant union contracts to those defeated strikes whose leaders played ball with capitalism and grant them the dues check-off to boot? It had to be part of the deal because workers have a habit of not paying dues to leaders of unions who betray them.

No. The problem of leadership can only be solved by workers themselves constructing a leadership that will lead their rank and file in a struggle to win. And that cannot be done by obeying the rules of class war established by the class enemy, although one must always avoid biting off more than one can chew.

Finally, in principle, workers must have the right to match every blow directed at them by the class enemy. That means that just as workers struck when striking and picketing was just as “illegal” in 1934 as now, workers were able to win these battles only by defying laws, which by the way, violate the rights enshrined in the U.S. Constitution; i.e., the first ten amendments, which are theoretically still in force.

In this light it can be seen that it is the capitalists, their bipartisan Congress, the President of the United States and all the forces of “law and order” are in violation of the highest law of the land!

Finally, the only strategy that can win is the strategy of class struggle. An for that workers need to construct a leadership that understands that no solution is possible within the framework of capitalism. Only a revolutionary overthrow of the capitalist class and the reconstitution of society on the foundation of the worl socialist society can do that.





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