Racialized Variant of Marx’s Reserve Army of the Unemployed

nakedcapitalism |  Back to NAFTA (North American Free-Trade Agreement) for a moment: imagine yourself working a line job at an auto factory with a family, a mortgage and kids to raise. One day in 1995 the boss comes forward with three displaced Mexican immigrants in tow to tell you that they have been offered your job at one-third of your wages as other factories are being closed to be reopened with ‘new’ workers in Mexico. This type of manufactured economic ‘competition’ breeds social divisions even without Bill Clinton railingagainst ‘criminal aliens.’

This isn’t to understate the social iniquity of institutional racism. But it is to question the liberal / progressive canard that working class racists have any material bearing on its existence or persistence. Racial animosity certainly exists— four hundred years of white terrorism against blacks is historical fact. But as argued below, capitalism can cause institutional racism outside of racial animosity.  And the ‘deplorables’ canard is especially offensive given the role of liberal economists in engineering the economic facts that racism and xenophobia are being exploited to explain.

In the current era, when NAFTA was passed, Mexico was floodedwith American industrial corn. Its lower cost destroyed the peasant economy in Mexico by rendering locally grown corn ‘uncompetitive.’ This cut the peasants whose livelihoods depended on selling their corn out of the cash economy. Millions of suddenly ‘freed’ peasants went to work in maquiladoras or fled North in search of work as undocumented workers. Without racial or national animosity, NAFTA created a new sub-class of industrial labor.

In the context of labor coerced through manufactured circumstances (work for us or starve) and control of government by the industries doing the employing, the idea of market wages is nonsense. And therein lies the point. The ‘free-market’ way to entice labor is to pay the wage that people are willing to work for— without coercion. The ‘capital accumulation’ theory behind NAFTA— that sacrifice is required to accumulate the capital that makes capitalism function, (1) begs the question: function for whom and (2) was also used to justify slavery.

A crude analogy would be to set the CEOs of major corporations on life rafts in the middle of the ocean and let them ‘compete’ with one another for bread to eat. A ‘market’ would have been created for bread, so how is this not ‘free-market economics?’ These CEOs could be dubbed a ‘criminal flotilla’ intent on invading the U.S. and political talking points could be traded regarding whether or not they are actually human. As with NAFTA, few, if any, would likely volunteer for the privilege. This is how ‘natural’ the economics behind NAFTA are.

By the time NAFTA was fully implemented the powers-that-be behind its central policies busied themselves creating racialized explanationsof Mexican immigration to the U.S. In their telling, NAFTA had nothing to do with the millions of Mexicans leaving Mexico for the U.S. or for the rapidly declining fortunes of American workers who suddenly faced competition for their paychecks from people willing to work for whatever they could get. ‘Criminals’ and ‘freeloaders’ were coming for American jobs went the carefully-crafted storyline.

The actual engineers of NAFTA were corporate lobbyists, ‘free-market’ economists, industrialist-friendly Republicans and Wall Street-friendly Democrats. There wasn’t a working class racist, a ‘deplorable,’ to be found amongst those crafting these policies of mass economic displacement. Liberal / progressive champions Paul Krugman and Bill Clinton were enthusiastic supporters of NAFTA and ‘free-trade.’ Paul Krugman, in particular, rode herd over critics of so-called free trade claiming superior knowledge. And Bill Clinton decries Trumpian xenophobia while being one of its major causes.

Of current relevance: (1) different classes of workers were created and placed in competition with one another to benefit a tiny ruling elite, (2) the interests of this elite were / are centered around pecuniary and political gain, (3) after implementation racialized explanations were put forward in lieu of the original economic explanations used to sell these programs and (4) these explanations followed the creation of the racialized ‘facts’ they were conceived to explain. The temporal sequence is important— mass immigration from Mexico and the destruction of the American working class were well-underway before racialized explanations were put forward to explain it.

What bearing does this have on institutional racism and its causes? The neo-colonial economic model is about coercing labor apart from whatever racial and / or national animosity might exist. American industries could have offered market wages to the Mexican peasants that NAFTA targeted until they agreed to work for them— this is the way that labor ‘markets’ work. But instead they chose to ‘free’ several million people from subsistence economies to compete with previously displaced Mexican labor and American industrial workers with the result that wages were lowered all around.

The argument was made at the time, and is still made today, that ‘everyone’ benefits from massively disrupting the lives of millions of people with trade agreements. Theoretical proof is put forward in terms of dollars / pesos of GDP gained. Left out is that the Mexican peasant economy wasn’t monetized and therefore its loss wasn’t counted. Even on its own terms NAFTA was a loser. And imposing these outcomes from above makes them profoundly anti-democratic. In other words, even if the outcomes were as promised, the decisions were made by its largest beneficiaries, not those whose lives were disrupted.