Exploitation in the Era of Monopoly Financial Capitalism

Classical Marxist Theory

Wealth cannot be created by buying low and selling high. Everyone buying low and selling high will not make our society progress. Assuming that everyone is an honest man and is trading by exchange of equal values, then only the use of labor can create more value than the value used to buy it. This is the most important discovery by Karl Marx. The use of labor creates surplus-value, and labor is a commodity in the capitalist society.

Market Competition

In perfect market competition, a business will lower the price of products to expand its market and raise the salary to attract talents, especially in the high-tech sector. Modern microeconomics concludes that perfect competition will lead to near-zero profit. So profit exists in the market that there are barriers to entering the market. The extreme barrier is a monopoly. Since China entered the WTO, whatever made in China become cheap because of the competition. Yet the US is doing all it can to maintain its technology hegemony so as to have its monopoly profit. That’s why the US is using all its power to crash Huawei as Huawei is a threat to its technology monopoly. On the other hand, China is crashing monopoly in the dot-com sector and fintech sector to maintain market competition, reducing the profit, the exploitation of surplus-value. China makes the ideal of Adam Smith’s invisible hand come true. China has a faithful market economy, while the US is destroying market competition by maintaining a market monopoly.

Interest, Profit, and Rent

In a financial statement of a business, interest to the debt and rent are itemized as cost. This gives an appearance that only the profit is the surplus-value. However, in Marxist theory, only labor worked on production materials creates exchange value. Banks profit by interest spread, give low interest to customer savings and get high interest for loans. Or banks operate in buy-low-sell-high. There is no labor working on production materials. Landlord profit by owning the resources. Their collect rent with no labor working on production materials. Therefore, interest and rent are portions of the surplus-value.

Fiat Money

Marx used the dialectical philosophy of Hegel in his works, The Capital. It is a deductive inference that things behavior due to their intrinsic characters. The first chapter of The Capital is Commodity. That chapter is the foundation of the whole book of The Capital. Marx in his time knew money as a commodity assuming the universal equivalent form. In all history before Marx, money are silver or gold, the commodity that condensed labor work. Money has all the characters of a commodity, utility value, and exchange value, at that time.

Exploitation in the Era of Monopoly Financial Capitalism

Because of the fiat money, exploitation of employers to employees in the individual firms is insignificant. Many small business owners work harder and longer time than workers in unionized trades. Exploitation in the production process is insignificant than the exploitation in the transaction processes in the world trade.

Uneconomical of the Financial Hegemony Imperialism

The US hegemony is uneconomical in that it destroys wealth rather than creates wealth in order to collect the surplus value worldwide. The first is the military-industrial complex. This vested interest group profits from wars. The more it profits the less the world is in peace. So its interest is in direct conflict with the well-being of humans as a whole. The second is the financial hegemony. It gets its monopoly profit by squeezing the real economy, raising the cost of production and cost of living. It parasites in the world economy like cancer, suffocating the real economy. The third is the healthcare industry. It increases its market by creating more sickness. When people feel they are ill, they usually are diagnosed as a reason unknown and prescribed pain killers. So the small illness will develop into crisis or drug dependence. The more the illness, the worse the illness, the more profit it the system. A profit-driven health care system destroys public health. Obama knew the healthcare system is one of the problems of the US economy and wanted to reform it. Yet he is serving the interest groups more than serving the public. Obamacare had to satisfy every interest group and ended up more costly for the healthcare of people and less healthy of the people. All these are linked to financial monopoly. The dollar hegemony funds the Pentagon and the military-industrial complex wages wars to support the dollar hegemony. Insurance, the financial service, shares the interest of the healthcare industry. For capital, men are just resources for profit. If it can make more profit, let people die of wars and sick of illness.

What’re the Present Tasks of Socialists and Communists in the World

When the exploitation is systematic on a global scale, many socialists and communists are still focusing on the employer-employee level affairs. Some unions have become vest interest groups in the economic system so that they support the imperialist wars to exploit the developing countries. The US has H-2 visas for temporary workers in agriculture and construction, exploiting the people of the third world, and is a modern slavery system. Temporary workers are not covered by the welfare system and are not protected by unions. Especially those unions of public sectors, they are bargaining not against exploiters but the exploited. The result of their bargaining increased the overall cost of educations and healthcare in the form of more tax to the people and less public service to the people. The most exploited workers are temporary, on-call, short-term contract workers and they are not protected by unions. They are the marginalized population who easily fall into homeless.

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Xiaoming Guo

Ph.D. from McGill University. MBA from Queen’s University. A patriot Canadian believes that a good relationship with China serves our best national interest.