THE Manifesto was written at a time when the proletariat in Europe and America was rapidly developing from a class-in-itself to a class-for-itself – a class that is conscious about the conditions of its own emancipation and its world-historic mission. Its two characteristics, as noted in this document, were quite conspicuous: chronic pauperisation and revolutionary zeal. What is the situation today in these respects?

As in our time, so in those days, there were considerable wage differentials across and within countries, with certain sections of workers getting relatively better pay packets. In fact capitalism never entailed a secular and linear decline in wages; nor did Marx and Engels ever say so. Such a theory about the “iron law of wages” was actually propounded by Lassalle and thoroughly refuted by Marx.

Marxists recognise that under certain conditions and in certain periods – e.g., during periods of boom, when enhanced demand for labour tends to augment the bargaining power of workers and enables them to extract higher wages while higher profits prompt the capitalists to grant that rather than face a strike; during periods of exceptional growth of productivity; during high tides of working class movement – real wages may rise, while in opposite circumstances they tend to fall. Obviously, such upward and downward trends vary considerably from country to country and even between industries in the same country, the most important among the determining factors being the relative strength of the belligerent classes – the capitalists and the workers.

Under this general rule, impoverishment/pauperisation is possible in both absolute and relative terms. The former can happen among sections like (a) “the reserve army of labour”, i.e., the unemployed, (b) the old, disabled etc, who are permanently thrown out of employment, and (c) certain sections of the unorganised or the lowest rungs of even organised workers. As noted earlier, before our very eyes the process of primary accumulation of capital or accumulation by dispossession is leading to pauperisation of large sections of already marginalised working people.

As for relative impoverishment, first of all we must remember that poverty, like affluence, is a thoroughly relative term. The minimum needs of the workers and employees increase steadily as a result of intensification of labour; higher skills, education and training required; higher costs of living thanks to growing urbanisation and also in response to overall improvements in standards of living throughout society. So, when nominal wages go up or even real wages (wages measured not in money terms but in terms of the goods and services they will buy, i.e., the nominal wages adjusted for changes in the price index) remain constant or rise slightly, there can be relative impoverishment of workers, whose real needs rise faster. This is what actually happens in most cases, and can be measured in terms of the relative share of wages vies-a-vies profit in national income or, at a disaggregated level, in specific sectors of the economy. A few practical examples will help clarify the matter.

In our country, the brief periods of high manufacturing growth in the mid-1990s and the 2000s were propelled by increased productivity of labour. But labour was denied the fruits of growth. Wages as a share of net value added in the manufacturing sector were close to 30% in the 1980s, declined to around 20% in the 1990s and dropped to an all-time low of 10% by 2008-2009. Naturally, the share of profits in net value added, which was around 20% throughout the 1980s, climbed above 30% in the 1990s, and rose to an incredible 60% in 2008. The same story was repeated in the service sector. Here the share of wages declined from more than 70% in the 1980s to less than 50% by 2009 while profit- share increased from 30% in the 1990s to more than 50% after 2004-05.

Aspects of India’s Economy No. 55 http://rupe-india.org/55/wages.html tells a fascinating story about the growing deprivation of Indian workers, their fight-back, and partial success.

In the decade ending 2009-10, real wages – particularly in the automobile sector – had fallen steeply. But the Annual Survey of Industries (2011-12) indicates that reversing a trend of many years, the real wages of factory workers rose by 8.5 per cent in 2010-11 and 6.3 per cent in 2011-12. However, wages still remained below 1995-96 levels. This is true for the automobile sector also, where real wages rose by 6.3 per cent and 3 per cent respectively in the last two years. As a price for this, Maruti workers had to face unprecedented repression: 148 of them rotting in jail for months on end and over 2,000 dismissed.

The story of workers’ deprivation can be studied from another angle: the relative share of workers’ wages, vis-à-vis that of managerial salaries, in ‘total emoluments’. From 64.8 per cent in 1991-92, the former fell to 56.9 per cent in 1997-98, to 48.4 per cent in 2007-08 and then to 46.5 per cent by 2011-12. That is, less than half the ‘wage bill’ of industry now goes to workers.

The same trends are visible almost all over the world, at least on the longer term. Take the case of the world’s wealthiest nation for example.

Between 1979 and 2007, the average inflation-corrected hourly wage of non-supervisory workers in the US declined by 1 percent, while inflation-corrected non-financial corporate profits after taxes rose by a stunning 255 percent. According to the Bureau of Labor Statistics, in that country productivity rose by 93 percent between 1980 and 2013, while pay rose by 38 percent (all inflation-adjusted). Real wages for most US workers have virtually stagnated since the 1970s, but salaries and perks for the top 1 per cent have risen 165 per cent, and for the top 0.1 per cent have risen 362 per cent. At the same time, over the last 40 years, the top marginal tax rate in the US has declined from 70 to 35 per cent. But the biggest tax reductions have come on capital income, including corporate and inheritance taxes.

Like pauperisation, the revolutionary character of the working class was never seen by Marx and Engels as an abstract, absolute truth. They were aware of various non-proletarian tendencies in the working class; Engels even spoke of a “bourgeois proletariat” in England bribed by the British bourgeoisie out of the excessive profits made from its colonial exploits and industrial supremacy.See Engels’ letter to Marx, 7 October, 1858 where he reports from London: “...the English proletariat is actually becoming more and more bourgeois” (Marx Engels Selected Correspondence)

Lenin later elaborated the concept of “workers’ aristocracy” – a small section raised in all imperialist countries on the strength of super profits made in colonies, locating here the economic basis of reformism/right opportunism.See, in particular, Imperialism and the Split in Socialism (Collected Works of Lenin, Volume 23) At the same time, however, he showed that in Russia the highest-paid metal workers played the most advanced role in the revolution of 1905. In our country too we have seen many instances, in yesteryears as well as in the recent past, of organised and better-paid workers in ports and docks, the rail, coal and power sectors, banks, the automobile sector, etc. playing a vanguard role as a bloc. On the other hand, we know of innumerable instances – in Russia, in our country and elsewhere – of the most pauparised sections of workers playing an exemplary role in revolution.

So facts of history tell us that there is no mechanical one-to-one relation between poverty and revolutionism, that everything depends on the summation of various aspects of the objective situation and, equally important, on adequacy of subjective preparations and correctness (or otherwise) of principles and tactics adopted.

Now to sum up our discussion on the proletariat. The Manifesto traces the revolutionary role of the working class mainly to its objective position in capitalist organisation of production and distribution, in its status in the class hierarchy of the capitalist system. Being “the lowest stratum of our present society”, it “cannot stir, cannot raise itself up, without the whole superincumbent strata of official society being sprung into the air.” (Section I) In The Holy Family the authors of Manifesto had given an even clearer exposition of the matter:

“If Socialist writers attribute this world-historic role to the proletariat, this is not at all because they regard the proletarians as gods. ... It is not a matter of knowing what this or that proletarian or even the proletariat as a whole conceives as its aim at any particular moment. It is a question of knowing what the proletariat is and what it must historically accomplish in accordance with its nature”.

Proceeding from this theoretical premise, and in the light of experience gained over the past nearly 170 years, we can conclude that (a) the composition of working class (the relative numerical strength of “blue-collar” and “white-collar” workers, and formal and informal sector workers, for example) has been, and will be, changing inevitably with the changing structures of capitalist production and distribution, (b) such changes, as well as those in their working and living conditions, do help or render more difficult the process of movement and organization, (c) despite the changes, being the class with no stake in the preservation of private property in the means of production, the proletariat is objectively best placed to fight for abolition of that private property, i.e., of leading capitalism’s transformation into socialism, and (d) subjectively the working class needs to be trained and organized for this historic mission by its revolutionary party, the communist party, in which this objective destiny attains self-conscious and concentrated expression.

This brings us to the question of strategy and tactics to be adopted by communist parties.