Zombie Capitalism Global Crisis and the Relevance of Marx

Working in the formal sector certainly has advantages over working in the informal sector. In India workers in the "organised sector" get paid a good deal more (30, 40 or even 1 00 percent) than those in the "unorganised sector" .42 In China, workers in large-scale industry were provided until the late 1990s with the "iron rice bowl" of a guaranteed income plus certain housing, sickness and pension benefits-all things denied to people migrating from the countryside to seek jobs.

Employers have not, however, provided such things out of the goodness of their heart. They need a certain stability in their labour force, particularly when it comes to skilled workers who they do not want to be poached by rivals during times of boom.43 In many industries, the more stable and experienced a workforce, the more productive it is. Capital is prepared to concede higher wages to certain of the workers in those industries because by doing so it is able to make more profits out of them. Hence the apparent contradiction-some sections of the world's workers are both better paid than others, and more exploited. But by the same token, workers in the formal sector have the capacity to fight back against capital in a way which it fears.

The growth of the informal sector rarely means the destruction of the formal one. The informal workforce in Brazil's most important industrial city, Sao Paulo, grew by nearly 70 percent in the 1990s, but the number of "formal" workers employed in the private sector still remained more than four times higher than the number of "informal" workers.44 It is wrong, as people like Paulo Singer did, to write of "deproletarianisation" .45 Rather what is happening is a restructuring of the workforce, with the hiving off by big firms of some tasks (usually relatively unskilled and therefore easily performed by a floating workforce) to small firms, labour-only contractors and the supposedly self-employed.

Far from the growth of the informal workforce benefiting the workforce in the formal sector, it has been accompanied by an increased exploitation of workers in this sector-and in many cases by a deterioration in wages and conditions. This has been most marked in Africa, where the scale of the decline in real wages for those with jobs in the 1 980s was so great as to beggar belief. A report in 1991 told of:

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a sharp fall in real wages . . . an average 30 percent decline between 1980 and 1 986 . . . In several countries the average rate has dropped 10 percent every year since 1980 . . . On average the minimum wage fell 20 percent over that period.46

In Latin America real industrial wages fell by more than 1 0 percent in the 1 980s, while they did so in the formal sector in India in the late 1 990s.47

The use of the informal sector to batter workers in the formal sector has led to the widespread assumption that informal sector workers are powerless. But capital faces a problem here too. The more it relies on them, the greater their potential capacity to resist its demands. In India those parts of the informal sector that have been taking on work from the formal sector-"intermediate goods producing activities in the unorganised sector, eg basic chemicals, non-metallic mineral products, metal products, and equipment sectors, have witnessed rises in wages as well as productivity"-indicating that "workers' bargaining power in these segments is not as bad as it is made out to be". 48

The phenomenon of casual employment is by no means new in the history of capitalism. Casual employment has often played an important role in certain industries. And forms of contract labour are very old-it was common in the textile factories of the industrial revolution. In the mines in both the US and Britain in the 1 9th century overseers or foremen ( "buttymen") would recruit workers and pay them out of a sum given to them by the mine owners. Such casual workers may not always have felt themselves to be part of the working class. They were often detached from the struggles of other sections of that class for years, even decades, at a time. Yet the potential for struggling within those sections was always there, and when it turned into reality the struggle could be very bitter, with an almost insurrectionary tinge.

Frederick Engels observed precisely this development in 1889 when London's dockers struck for the first time. He wrote:

Hitherto the East End had been in a state of poverty-stricken stagnation, its hallmark being the apathy of men whose spirit had been broken by hunger, and who had abandoned all hope ...

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And now, this gigantic strike of the most demoralised elements of the lot, the dock labourers, not the regular strong, experienced, relatively well-paid men in steady employment, but those who have happened to land up in dockland, the Jonahs who have suffered shipwreck in all other spheres, starvelings by trade, a welter of broken lives heading straight for utter ruin . . . And this dully despairing mass of humanity who, every morning when the dock gates are opened, literally fight pitched battles to be first to reach the chap who signs them on, that mass haphazardly thrown together and changing every day, has successfully combined to form a band 40,000 strong, maintain discipline and inspire fear in the powerful dock companies . . . 49

Engels' point is very important in the 21st century. Internationally there have been three decades of defeat and demoralisation for workers right across the world. This bred a fatalism about the possibility of fighting, which was reflected in a mass of studies which depicted the suffering of the poor and the oppressed, showing them always as victims, rarely as fighters. Thus there are masses of materials sponsored by the International Labour Organisation on "social exclusion"-a theme which suits the bureaucrats who run such bodies. Themes like the "casualisation" and "feminisation" of the workforce become stereotyped, academic ways of dismissing possibilities of struggle-even if some of those carrying through the studies try to escape from the paradigm in which they are trapped. This tendency to see the urban poor and the permanent workers as two separate groups hermetically sealed off from each other is particularly prevalent among NGO activists.

The reality is more complex. Slum districts themselves are rarely homogenous in their social make up. Permanent workers live in them alongside casual workers, the poorest sectors of the self-employed, the unemployed and even some sections of the petty bourgeoisie. Mike Davis tells how:

The traditional stereotype of the Indian pavement-dweller is a destitute peasant, newly arrived from the countryside, who survives by parasitic begging, but as research in Mumbai has revealed, almost all (97 percent) have at least one breadwinner, 70 percent have been in the city at least six years . . . Indeed, many pavement-dwellers are simply workers-rickshaw men, construction labourers, and market porters-who are compelled by their jobs to live in the otherwise unaffordable heart of the metropolis.50

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Leo Zeilig and Claire Ceruti point out that recent research on Soweto in South Africa shows that "in 78.3 percent of households there was a mix of adults who were employed, self-employed and unemployed". They conclude that:

the South African township and slum might be viewed as a meeting point for trade unionists, university students, graduates, the unemployed and informal traders. Though the spectre of unemployment affects all layers of society, these groups are not permanently cut off from each other and can be found in the same household supporting each other. 51

The picture is similar for El Alto, the satellite city of the Bolivian capital, La Paz. It contains hundreds of thousands of mainly indigenous Ayama people who have moved to the city from the countryside or closed down tin mines, and whose efforts to somehow make a living for themselves are characteristic of the informal sector in such cities everywhere in the Third World. Yet El Alto is also "the principal industrial zone of the La Paz region" ,52 with 54 percent of the region's industrial workforce and an increase of 80 percent in the numbers employed in industry in the last ten years. What is significant is "the combination between 'informality' and/or small businesses based on family labour on the one hand and the degree of incorporation of the labour force in wage labour in productive tasks on the other", so that neighbourhood forms of organisation have a class (as well as an indigenous) content.53

Under these circumstances, struggles by workers have the capacity to act as a focus for all discontents of the great majority of those living in the slums. So in South Africa a series of protests and riots over the delivery of basic services created an atmosphere in which:

the public sector general strike in June 2007 was the largest strike since the end of apartheid, pulling many people into trade union action for the first time. The potential cross-fertilisation of these struggles-of community and workplace-does not live only in the mind of activists, but, as the survey suggests, expresses the real household economy of contemporary South Africa. 54

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In Bolivia, El Alto was at the centre of the near uprisings that drew together miners, teachers, peasants and indigenous organisations to overthrow two governments in 18 months. In Egypt late in 2006 a strike of 24,000 workers in the Misr Spinning factory in Mahalia al-Kubra:

triggered a wave of workers' protests across Egypt, crossing different sectors of the economy and industries, from Mahalia to Kafr al-Dawwar to Shibin al-Kum, from spinning and weaving to cement to the railways and underground and public transport workers. The strike wave went from the public sector to the private, to the civil service, from the old industrial areas to the new towns, in all provinces. It went from the textile sector to engineering, to chemicals, to building and construction, to transport to services. The strikes had a wide impact also, reaching sectors which do not have a culture of protest, such as teachers, doctors, and civil servants, and even to slum-dwellers such as those from Qala'at al-Kabsh and the villagers from Al-Atsh.55

Such examples show that the working class in the Third World is not condemned to the divisions and passivity emphasised by social exclusion and NGO accounts. The incessant tearing apart of old patterns of economic and social by capitalism as it restructures itself on a world scale does not simply cause suffering. It also creates the potentiality for resistance that can find sudden expression when people least expect it.

There is, in fact, a pattern of such struggles going back to the first impact of capitalist industrialisation in such countries, recorded, for instance, in the collection Peasants and Proletarians edited by Cohen, Gutkind and Brazier 30 years ago.56 There are innumerable examples from recent decades to bear out that picture. We must expect many more as economic crisis interacts with climate change and crises of food security throughout the rest of this century.

Fragmentation, bitterness and revolt

But it is also important to recognise that people's bitterness against poverty and oppression can burst out in other ways. The fragmentation of people's life experiences in the world's slums all too often leads to different groups turning on each other, as Mike Davis says:

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Those engaged in informal-sector competition under conditions of infinite labour supply usually stop short of a total war of all against all; conflict, instead, is usually transmuted into ethnic, religious or racial violence. The godfathers and landlords of the informal sector (invisible in most of the literature) intelligently use coercion, even chronic violence to regulate competition and protect their investments . . .

The reality of such developments cannot be denied by anyone who has read accounts of the interethnic and Sunni-Shia riots that periodically paralyse the Pakistan city of Karachi, of the history of attacks on the Chinese populations of Malaysia and Indonesia, or of the wave of attacks on Zimbabwean refugees in the very South African cities described by Leo Zeilig and Claire Ceruti.

The city of Mumbai provides a graphic example of how the mood can shift. A semi-spontaneous upsurge from below by the workers in the city's textile mills in 1982 developed into one of the biggest prolonged strikes in world history, lasting a year, involving hundreds of thousands of workers and dominating the political life of India's commercial and industrial capital as it built networks of support going right back into the villages from which many of the workers had originally come.57 During the strike there was unity between the different religious and caste groups that make up the mass of Bombay's lower classes. But the strike was defeated. In the aftermath Shiv Sena, a political organisation built by turning the local Marathi speakers against other groups and then Hindus against Muslims, rose to a dominant position in wide areas of the city. This culminated in murderous riots against the Muslim population in 1992-3.

Unity in struggle had created a sense of solidarity which then exerted a pull on the vast mass of the informal workers, self-employed, the unemployed poor and the impoverished sections of the petty bourgeoisie. The defeat led to the sectional attitudes and communal conflicts of the petty bourgeoisie influencing the self-employed, the unemployed and wide layers of workers.

This was a vivid example of how there are two different directions in which the despair and bitterness that exist among the "multitudes" in the great cities of the Third World can go. One direction involves workers struggling collectively and pulling millions of other impoverished people behind them. The other involves demagogues exploiting the sense of hopelessness, demoralisation and fragmentation to direct the bitterness of one section of the impoverished mass against other sections. That is why the working class cannot simply be seen as just another grouping within "the multitude" or "the people", and of no intrinsic importance for the struggle against the system. Nor can workers' struggles be seen by those who organise them as important simply because of their economic content. Their struggles are important precisely because they have the capacity to provide a direction for all the bitterness among the mass of people otherwise without hope as they try to survive in the slums of the world's megacities.

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The peasantry

The development of the capitalist form of production has cut the life-strings of small production in agriculture; small production is irretrievably going to rack and ruin . . . We foresee the inevitable doom of the small peasant . . . 58

So wrote Engels in the mid-1 890s. The massive growth of the world's cities over the last half century has vindicated much of the reasoning behind Engel's statement. The peasantry is as absent today from North West continental Europe as it was from England in Engels' day. But the shrinkage globally has been much slower than Marx and Engels expected. Peasants still amount to about a third of the world's population. The reality, across much of Latin America, as in nearly all of Africa and South and East Asia, is that hundreds of millions of individual small farmers are clinging on to the land which they own or rent. They find themselves caught again and again in a vice, as rising prices for energy and fertiliser inputs squeeze them from one side and competition from capitalist farms with modern equipment presses them on the other. And the discontent bred by this can still make the peasantry an important political fact in major countries in the Global South. Even in Latin America, where the peasantry shrank by half between the 1960s and the 1980s,59 it has been peasant-based rebellions against capitalism that have caught the imaginations of people around the world, with the Zapatistas in southern Mexico, the MST landless workers' movement in Brazil and a big section of the movement which swept Evo Morales to the presidency of Bolivia in 2006.

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These movements have led many activists to adopt what are sometimes called "neo-populist" views.60 These see the peasants as the agent of social change, or at least a component in the agency of the "multitude". And sometimes the future of world food production is also seen as lying with them, since food production per hectare is often greater on small peasant plots than on larger holdings.61

But missing from this recognition of the persistence of the peasantry as a force, even if a declining one, is the way in which it has been changed profoundly by capitalism, although not necessarily in the way which Marx and Engels expected. Hamza Alavi and Teodor Shanin pointed out in the late 1980s that "two alternative forms of agricultural production" had developed within capitalism-on the one hand "farming based on wage labour", and on the other "a form of organisation of production based on the family farm which is incorporated into the capitalist mode of production". In this second form, "The peasant economy is structurally integrated within the capitalist mode of production" and "surplus value is extracted from the peasant through the agency of commercial capital and credit institutions" and "contributes to capital accumulation-but outside the peasant economy from which it is drawn" .62

The peasantry that has been drawn into the circuits of capitalism in this way is not a homogenous group, but differentiated internally on the basis of size of landholding, ownership of equipment and levels of debt. At one extreme are those who have managed, by one means or another, to transform themselves into petty agricultural capitalists, at the other the landless labourers. Between them lies a bigger or smaller layer of those who rely on family labour, perhaps employing wage labour occasionally, perhaps supplementing their household incomes by agricultural labour for others.

Labour outside agriculture can be important for the poor and middle peasants. Figures from 1 5 developing countries in the 1980s showed non-agricultural income amounted 30 to 40 percent of total rural household income; in China it increased from 10 percent in 1980 to 35 percent in 199563 and "acquiring nonagricultural jobs has become crucial to avoiding the fate of peasant life and escaping rural poverty";64 in Egypt 25 percent of rural household income came from "wages outside the village" in the 1 980s.65

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Not all peasant households are integrated into the wider economy in the same way. For many there are only the most menial forms of wage labour. But a minority may establish links with those in privileged positions-delivering support for politicians, doing favours for big landowners or moneylenders, manipulating supposedly traditional family, clan or tribal networks. A differentiation arises between peasant households as struggles over land are tied into the conflicts in the wider economy, at a local, a national or even a global level. 66

Such differentiation means that what are conventionally described as "peasant movements" do not have a single automatic trajectory of opposition to capitalism and the ruling classes. The leadership in peasant movements often comes from those who have been most successful in enlarging their holdings and accumulating enough capital to employ labour power rather than sell i�. They have sufficient freedom from daily toil and sufficient connections to wider society to take the initiative when it comes to mobilising others. Hamza Alavi noted long ago that peasant revolts tend to be led by middle peasants, not poor peasants or landless labourers.67 The penetration by capitalism of the countryside means that it can, in fact, be the petty agricultural capitalists who head peasant movements, putting forward demands like lower prices for fertilisers that benefit themselves disproportionately.

That is not the only direction in which revolts from the countryside can go. The differentiation of the peasantry often means that the middle and poor peasants are under pressure from those who will use political connections to drive them from the landcaste Hindu landowners in India, local party cadres in China, chiefs connected to state apparatuses in Africa, soya barons in Brazil. The result can be uprisings directed against the petty agrarian capitalists and not led by them. But such uprisings then have to confront the forces of the state, which try to isolate them in particular localities, relying upon the very way in which the peasant household gets a livelihood-by labouring to produce a harvest from its own plot of land-to disperse the protests. So the Zapatista insurgency rocked the Mexican state, but that did not prevent the state effectively sealing the movement off in the Lacandon jungle where it remains isolated a decade and half later. The various Maoist movements of dalits (the former "untouchables" ), tribal peoples, the landless labourers and poor peasants in

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India are annoying to Indian capitalism, but so long as they are restricted to remote country areas no more annoying than a gnat bite is to a healthy adult.

Yet the very penetration of the countryside by capitalism makes it more possible than ever before for links between the poorer sections of the peasantry and the urban workers. For it means that the poor peasant households have, through migration, family members in the cities. Just as workers' struggles can provide a focus for the bitterness felt by all the groups who live in the slums of the cities, so too they can do so for the hundreds of millions who still toil on remote patches of land. But whether that possibility becomes an actuality depends on workers fighting to win with demands that reach out to the poorer layers in the towns and countryside alike.

Who can overcome?

It is the very development of capitalism that shapes and reshapes the lives of those it exploits, creating the objective circumstances that can turn a disparate mass of people who sell their labour power into an increasingly self-conscious class "for itself" . This class is the potential agent for challenging the chaotic and destructive dynamic of capitalism because capitalism cannot do without it. The mistake of Mouffe and Laclau-and thousands of other sociologists, philosophers and economists who write that the working class has lost its central place within the system-is that they do not grasp the elementary point made by Marx. The system is a system of alienated labour that has taken on a life of its own, and capital cannot survive without more labour to feed it, just as the vampire cannot survive without fresh supplies of blood.

There have been phases in the history of the system when it has had the means to bind the mass of people to it, either by repression or by keeping them relatively content. Hitler on the one hand and Stalin on the other did seem to rule on the basis of mass repression during what the Belgian-Russian revolutionary Victor Serge called the "midnight in the century" .68 It was possible for a British prime minister, Harold Macmillan, to tell people they had "never had it so good", and for most workers to concur, even if grudgingly, during the 1950s. I have tried to show that the dynamic of the system is going to make it difficult for capitalism to cement its control permanently over the mass of people by either means.

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