Capitalism prepares misery for billions of workers

Marxist Analysis · 2020-04-29

Core Argument

The article argues that capitalism's apparent success in reducing global poverty over recent decades was always a fragile and superficial phenomenon, resting on the expansion of precarious informal labour rather than genuine economic security. The COVID-19 crisis has ripped away this veneer, exposing the underlying reality: the same system that pulled hundreds of millions into urban informal work is now, in a matter of weeks, plunging them back into absolute poverty. The central claim is that this is not a temporary disruption but the logical outcome of capitalism's treatment of labour as a disposable cost — migrant and informal workers are brought in when profitable and discarded when the system enters crisis.

Theoretical Grounding

The analysis draws on the Marxist understanding of the reserve army of labour — the mass of workers who are only partially or precariously integrated into capitalist production, serving to depress wages and discipline the employed workforce. The informal sector, encompassing over two billion workers, represents the contemporary form of this reserve army on a global scale. The article also implicitly deploys the concept of primitive accumulation in reverse: the process by which capitalism tore millions from rural subsistence and threw them into urban wage labour is now being reversed, as workers flee cities for villages when their income collapses. This is a concrete illustration of how capitalism simultaneously creates and destroys the conditions of working-class existence, treating human labour-power as a commodity to be used and discarded according to the needs of accumulation.

The piece sits within the Marxist tradition's long-standing critique of developmentalist and reformist narratives that measure progress by rising GDP or declining World Bank poverty lines. It rejects the notion that capitalism can deliver sustained improvements for the global working class, arguing instead that periods of apparent prosperity merely mask the underlying instability and exploitation that periodically erupt into open crisis.

Conjunctural Relevance

The article was published in May 2020, at the height of the first wave of the COVID-19 pandemic, and draws on an ILO report released on 29 April 2020. The data is stark and specific: 1.6 billion informal sector workers facing a 60 percent income loss after one month of lockdown; median earnings in low and lower-middle-income countries falling from $480 to $88 per month; relative poverty among informal workers projected to rise from 18 to 74 percent in the poorest countries. The article names South Asia as the region most affected, with around one billion informal workers concentrated there.

The conjuncture is defined by the simultaneous health crisis and economic shutdown, which exposed the extreme precarity of global labour markets. The article connects this to the broader pattern of neoliberal globalisation: the expansion of informal work as a structural feature of capitalism in the Global South, not a temporary aberration. It notes that even in advanced capitalist countries, relative poverty among informal workers is set to rise from 28 to 80 percent — a figure that underscores how the crisis has blurred the traditional distinction between core and periphery.

Where the Argument Continues

The article is a snapshot of the immediate impact of the pandemic, but the argument it opens requires further development in several directions. The question of what happens next — whether the crisis leads to mass unemployment and permanent immiseration, or whether it generates new forms of working-class resistance and organisation — is left open. The In Defence of Marxism corpus has continued this analysis through subsequent articles examining the uneven recovery, the inflation crisis, and the return of class struggle in various countries. The broader Marxist tradition offers theoretical resources for understanding how crises of overaccumulation and the falling rate of profit create the conditions for both intensified exploitation and renewed militancy.

The article also implicitly raises the question of political strategy: if reformist and developmentalist approaches have failed, what is the alternative? This connects to the RCI's consistent argument for revolutionary socialist organisation as the only way to break the logic of capitalist crisis.

Connections

This article should be read alongside Marx's analysis of the reserve army of labour in Volume I of Capital, particularly the chapter on the general law of capitalist accumulation. It also connects to contemporary Marxist work on the informal economy and the global labour market, such as Mike Davis's Planet of Slums, which documents the explosive growth of urban informal settlements under neoliberalism. Within the In Defence of Marxism corpus, articles on the COVID-19 crisis, the global supply chain disruptions, and the inflation of 2021-2023 extend the analysis of how capitalism manages — and fails to manage — periodic crises of overaccumulation.

Key Quotes

1. "Over the past few decades, apologists for capitalism have trumpeted its success in reducing poverty. As hundreds of millions were brought from the countryside into the cities, their incomes (at least on paper) grew. Many of these were brought into informal work in the cities, a sector that grew to encompass more than two billion workers. Now, that same system is reducing these workers to abject poverty."

2. "In one fell swoop, the workers that had just been supposedly lifted out of poverty have had their livelihoods decimated."

3. "This is how capitalism treats migrant workers, in particular, when times are good they are pulled out of rural life to serve in the factories on pittance wages. When times are bad, they are thrown on the scrap heap."

4. "Whatever crumbs of the table the world's capitalists granted the poorest in this world, they are now being taken away."

5. "The ILO is estimating median earnings of informal workers to fall from $480 to $88 in the lower-middle and low-income countries, and from $1,800 to $450 in high-income countries."

6. "This collapse in income has already forced millions of impoverished workers to leave the cities to attempt to return to the villages. The ones that remain are left in a desperate situation, with no income and at the mercy of shantytown landlords who are not likely to obey government edicts."