Wallerstein: End of the Road for Runaway Factories? and capitalism

Commentary No. 351, April 15, 2013 “End of the Road for Runaway Factories?”

Ever since there has been a capitalist world-economy, one essential mechanism of its successful functioning has been the runaway factory. After years of significant accumulation of capital by so-called leading industries (usually about twenty-five years), the level of profit has gone down, both because of the undermining of the quasi-monopoly of the leading industry and because of the rise in labor costs due to syndical action of some sort….

The bottom line is that the combination of already enormous and still increasing de-ruralization and the rapidity with which workers can learn of their relatively low wages and therefore begin to take syndical action has resulted in a continuing rise in the pay levels of the least skilled workers, and therefore a worldwide negative pressure of the possibilities of accumulating capital…. This is all one element in what has become the structural crisis of the modern world-system. We are experiencing a combination of ever-increasing austerity pressures on the 99% with a capitalist system that is no longer so profitable for capitalists. This combination means that capitalism as a world-system is on its way out….

We are collectively facing a “choice” over the next decades. One possibility is a new non-capitalist system that replicates (and perhaps worsens) the three essential features of capitalism – hierarchy, exploitation, and polarization. The other possibility is a new system that is relatively democratic and relatively egalitarian. The latter system, one should underline, has never existed in the history of the world. But it is possible.

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