The Fourth Industrial Revolution and the Reserve Army of Labor

by Emiliano Vera



“The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society…All that is solid melts into air, all that is holy is profaned…” – Karl Marx, The Communist Manifesto


In 1972, thousands of auto workers at the GM factory in Lordstown, Ohio went on strike against a speed-up caused by the introduction of new automation technology on the production line in what was called the “factory of the future.” Less than a year later, the U.S. Supreme Court’s decision in Roe vs. Wade legalized abortion on demand in all 50 states. Since then, the automation of industry and services, or the Fourth Industrial Revolution, has created an economy where workers are less and less necessary to the productive process of capitalism. While often discussed as if they represent two completely separate political poles, the subsequent dismantling of the rights of both workers and the unborn — or rather, the working class at every age from conception to old age — has its material roots in this de-humanized economy and the inability of our current political system to provide for humanity’s basic needs.


Economics and Population

The link between economic systems and population patterns — in humanized language, between the way we produce the things we need and the people that produce and are supported by those things — has been recognized by economists since at least the time of Adam Smith. In The Wealth of Nations, Smith notes how countries with rapidly growing, industrializing economies, like that of England in the late 1700s, similarly had rapid rates of population growth. On the contrary, countries like India, which were declining economically (directly because of the deindustrialization imposed by the English during their colonial occupation of the subcontinent), experienced consistent population loss through famine and reduced birth rates. He attributes the high rates of infanticide in China to its stagnant agricultural economy that had fully reached its natural limits and could accommodate no more population growth.


This last case, applied to the people of Ireland, was what classical liberal economist Robert Malthus thought would be the fate of all developed economies, growing to the natural limit defined by the amount of population supported by its arable land, after which population would only be regulated by the increasing misery of the poor killing off the weakest and driving down birthrates — what he called “positive checks” on population growth. His outlook was pessimistic and blamed the poor for their own suffering, arguing against charity and for “moral” behavior.


However, Malthus was apparently unable to recognize the economic revolution that was taking place before his very eyes at the turn of the 19th century in England — the rapid transition from a subsistence agricultural economy to an industrial capitalist economy where the new law was unlimited growth. As Marx would criticize him 60 years later, “every special historic mode of production has its own special laws of population, historically valid within its limits.” Capitalist growth meant for the first time since the Agricultural Revolution 10,000 years before, the economic laws that regulated the limits of population were completely changed.


The Capitalist Law of Population

The new laws of the capitalist economy meant that now, population would be regulated by the demands of capital, not feudal agriculture. And capital demanded massive factories filled by tens of thousands of workers, crammed into crowded slums in London and Manchester for maximum efficiency. Contrary to Malthus’ expectations, in the two centuries since he wrote An Essay on the Principle of Population, as the capitalist mode of production spread across the world and replaced or destroyed agricultural and hunter-gatherer economies, the human population has increased from 1 billion to nearly 8 billion while at the same time producing enough food and necessary goods to provide for all of them (the poverty caused by failures of capitalist distribution is another aspect of the story that we will see later).


But the fundamental law of capitalism is the accumulation of capital, a demand which is completely unbound from the material capacities of human individuals, societies, or the environment. The competition between capitalists to dominate each branch of industry pressures them to constantly develop more efficient machines to undersell their competitors, allowing them to produce more goods with less labor. Capitalism’s need for massive factories with tens of thousands of workers under one roof shifts instead to automated factories worked by machines.


What happens to the former factory workers? They are thrown into what Marx terms the “reserve army of labor”:


The labouring population therefore produces, along with the accumulation of capital produced by it, the means by which it itself is made relatively superfluous, is turned into a relative surplus population; and it does this to an always increasing extent.

However, for most of capitalist history this “superfluous” population has also been “a condition of existence of the capitalist mode of production. It forms a disposable industrial reserve army…a mass of human material always ready for exploitation.” While creating poverty and misery for the workers unfortunate enough to be thrown into unemployment, the excess population has nevertheless remained useful to the capitalist class (i.e., the group of people who own capital). Not only does it function as a bargaining chip for employers to threaten unruly workers with destitution if they demand too much, but it also ensures a ready source of labor when a new industry pops up that might need it.


But what if the reserve army of labor stops being useful to the accumulation of capital? Or if it starts to cost more than it's worth?


When the lives and deaths of the superfluous humans didn’t directly cost anything to the capitalist class, their suffering didn’t have to concern it other than a general feeling of pity or disgust for the unwashed masses.


However, the victories of militant labor and socialist movements after World War II fatally weakened the old order and paved the way for the creation of the welfare state. Now, for the first time, the humans superfluous to the capitalist production process actually cost the capitalist class money — unprecedented taxes to pay for social programs, including unemployment insurance and social security, which lifted hundreds of millions of people out of absolute destitution across the world. In some cases, the welfare state removed the necessity to participate in the market completely, such as the Aid to Families with Dependent Children program in the U.S. from 1935 to 1997, therefore removing those people from the reserve army, and on the capitalists’ tab.


This also helped drive up labor costs, already increasing due to the greater power of organized labor, by making a tight labor market that neared full employment. In what is widely known as The Thirty Glorious Years between 1945–1975, it looked like capital and labor could work together to end the permanent immiseration of the reserve army of labor. The Baby Boom was the consequence of this unprecedented prosperity.


Automation and the Taming of the Working Class

But by the 1970s the capitalist class was already organizing itself for a counter-offensive against the terrain that workers and the unemployed had won in the previous decades.


First, it invested more into developing new labor-replacing technologies like the “factory of the future” that workers rose up in protest against in Lordstown.


From its peak in the 70s to its closure in 2019, the number of workers at Lordstown Motors fell by nearly 90%, from over 10,000 workers to around 1000. The notorious Taiwanese manufacturer Foxconn later bought the plant, now with less than 500 permanent workers. Similarly, the national figures for manufacturing employment dropped from its peak in 1979 of 22% of all non-agricultural jobs, down to 9% in 2019. The absolute number of manufacturing jobs have also fallen by over a third since their peak, while manufacturing productivity and total output has continued to grow.


However, the official unemployment statistics do not paint a full picture of the economic effects of this automation-induced deindustrialization.


During the first 20 years, automation was limited to a few cutting edge industries that had high labor costs and easily automated tasks, like assembly line manufacturing. Rather than investing in costly new technologies, many companies could instead save labor costs by simply moving to states with weaker labor laws and union organization in the South and West. This pattern was later replicated by offshoring to countries like Mexico and China. On a national balance sheet, the economic and demographic devastation wrought by deindustrializing the Northern factory cities was largely balanced out by growth in other regions and the service sector. The shift from unionized industrial jobs to non-union jobs in the South and the service sector meant that, while unemployment numbers might not have been greatly affected, the real wages earned by workers have completely stagnated since 1979 despite rising labor productivity, in defiance of the established capitalist theories of wage growth.


The stagnation of wages in the U.S. and comparative rise of wages in manufacturing countries like China and Vietnam, along with new automation technologies that allow service sector jobs to be replaced, have pushed forward the pace of automation again. This Fourth Industrial Revolution could be a watershed moment in the basic rules of capitalism and may usher in a qualitative change in the economy — and therefore the people required to work in it.


Therefore, the capitalists’ second response has sought to tame the unruly reserve army. The capitalist class united around a strategy of austerity, privatization, and market dependence that they would brand as “small government,” also called neoliberalism. Thus it started the long fight to roll back the welfare state’s protection of surplus people. The first step was to stigmatize the recipients of welfare as immoral and undeserving — and they played upon racial stereotypes to do so:


This narrative began to be built toward racializing public assistance, and that was the key point of the transition. It was part of the tumultuous 1960s and it was fought really intensely by not just the think tanks, but by the corporations who were beginning to think that they were losing the battle big time, especially when the social programs of the Great Society came in. That’s when the alliance or fusion between the corporations and the think tanks and the conservative movement and funders, the four billionaires — John Olin, Richard Mellon Scaife, and the Koch brothers — took place.

1974 saw the defeat of a national health insurance program in Congress and began the gradual starvation for funds of existing welfare programs. Reagan’s administration would make the term “Welfare Queen” a household word and began the systematic attack on the welfare state just as deindustrialization increased the amount of unemployed workers and the Federal Reserve triggered a recession by restricting credit. Yet it would take until the 1990s — under a Democratic president, no less — for capital to strike a decisive blow to the U.S. welfare state and “end welfare as we know it,” shedding millions from the welfare rolls and forcing people into precarious work or absolute poverty.


Homelessness saw a sharp spike during the 1980s as the Reagan administration instituted a draconian cut to Department of Housing and Human services funds for public housing and mental health hospitals. In cities like New York, homelessness more than doubled between 1983 to 1988 and then continued to rise over the next decades. Over six times more people are homeless now than at the beginning of the 1980s in New York, despite slow overall population growth. Similarly, the number of households earning under $2 per day, the UN’s standard for absolute poverty, has nearly tripled since Clinton’s 1996 Welfare Reform to 1.5 million in 2010.


The increase of mass incarceration, known as “The New Jim Crow,” has similarly served to violently control the surplus population, with a 500% increase in the number of incarcerated people in the last 40 years, disproportionately affecting poor people and people of color. The United States by far exceeds all other countries in both the rate and absolute number of incarcerated people, with over 2 million incarcerated people and incarceration rates five to ten times that of Europe, and making up nearly a quarter of the total prison population of the world. Furthermore, up to 4 million more people are under some form of court supervision, raising the total number of Americans whose lives are controlled by the prison system to over 6 million, not counting the millions of non-citizens detained and deported by the immigration system each year. Incarceration has therefore been one of the chief ways the U.S. has dealt with the reserve army of labor since the 1970s.


Yet the greatest immediate cull of the surplus of the working class was proclaimed by seven unelected, mostly white, male judges on January 20, 1973 with the verdict of Roe v. Wade.


Culling the Reserve Army of Labor

The Roe decision cut short a period of state legislation on the issue of abortion that had closely followed the civil rights campaigns and urban uprisings of the 1960s. California liberalized abortion laws under none other than Republican Governor Ronald Reagan in 1967, two years after the Watt’s Rebellion. Then in 1970, New York’s Republican Congress passed a law allowing for elective abortions up to 24 weeks of pregnancy, and a legislator had to dismiss “hopes that the new law will cause a major reduction in welfare case loads — especially in aid to dependent children.” It was signed by the billionaire Governor Nelson Rockefeller, who then vetoed two Democratic attempts to reverse the situation, before becoming Vice President in 1974.


States across the South moved to legalize abortion and criminalize Black childbirth before Roe using stereotypes of Black promiscuity and welfare dependence. For example, in the early 1970s, Mississippi “passed a measure that made it a misdemeanor for unmarried women to have multiple children and included jail time among the possible punishments, [while] public discussions involved efforts to limit the number of children born to poor women.” The liberalization of abortion law in the South came at the same time as Southern states were repealing their previous preferred eugenic method of regulating the growth of the Black and poor reserve army of labor, in the form of forced sterilization. Nixon would later privately express his support for abortion to control interracial births.


While the abortion debate today is typically characterized as the right-wing being against abortion and the left-wing supporting it, the debate was much more diverse before Roe unilaterally decided federal policy. Marxists, progressives, and feminists, well aware of the eugenic potential of widely available abortion on poor and minority women, criticized the surge of abortion laws often impulsed by business interests and all-male legislatures. Marxist materialist analyses correctly predicted that legalized abortion would simply allow the logic of the capitalist economy to shift the burden of regulating the reserve army of labor from direct state violence to the indirect, individualized violence of a forced “choice” between abortion or poverty.


The Canadian Party of Labour, a Marxist party, wrote in the early 1970s regarding quickly changing abortion policy as Canada followed the U.S. example,


“If the police were to march into a working class community to take away the pregnant women to a hospital and force them to undergo an abortion, everyone would be up in arms over this outrage. Yet when the ruling class sets things up economically to have the same effect, many so-called leftists even encourage this outrage. Marxists have always recognized that the economics of capitalism is the major force oppressing the working class; the police and military power is only secondary. The economics of capitalism right now is forcing millions of working class families to undergo abortions to exterminate their future offspring. Far from a step toward the liberation of women, this is another horrible oppressive chain around our neck. …When the ruling class makes abortion easy and cheap, relative to childbirth, what do we have — forced abortion… Under these conditions abortion is no more voluntary than working in an unsafe auto plant is voluntary…Instead of fighting for conditions that make it easier for working class families to have kids, the abortionists play into the hands of the ruling class that wants to limit our offspring at this point in history.”

Nearly 50 years since Roe, evidence of the eugenic effects on the working class and the reserve army of labor, especially affecting people of color, is strong.


Of the over 60 million abortions performed since 1973, the vast majority have been on poor people and people of color. Nearly 80% of abortion facilities are located in minority neighborhoods. Nationally, Black people obtain 34% of abortions while only making up 15% of the population, a rate nearly 4 times that of white people. 72% of abortions in Mississippi are performed on Black people, despite only making up 37% of the population. More Black children were aborted than born in 2016. Latinas and Native Americans are similarly overrepresented.


Even as overall abortion rates have decreased since the early 2000s, the abortion rate for poor people has nevertheless increased. ¾ of abortion patients cite financial hardship as their primary motivation. Furthermore, abortion rates increased with unemployment and economic precarity during the pandemic. Poor and working class women, the groups most likely to undergo abortions, are also the groups that most strongly identify as anti-abortion. The fact that economic status and race are the strongest determinants of abortion in contrary to the stated beliefs of those women should cast a dark shadow on the idea that abortion is an exercise in freedom of choice and bodily autonomy.


While statistics alone make a strong case for the eugenic function of abortion to the capitalist class, capitalists themselves have made their pro-abortion position clear. Neoliberal economists gleefully argued that the legalization of abortion in the 70s strongly influenced the decline of crime rates in the 90s by killing off a large number of poor people who would have otherwise committed crimes.


Abortion centers are a popular recipient for billionaire philanthropy. “[Warren] Buffett is the leading provider of abortion access for poor women in the U.S.,” with over $1.5 billion donated through the Susan Thompson Buffett Foundation, “making it the largest single funder in the area.” In 2022, “Billionaire philanthropist and novelist [and ex-wife of Amazon CEO Jeff Bezos] MacKenzie Scott has donated $275 million to the reproductive health care nonprofit Planned Parenthood — the largest-ever gift made to the organization.” Internationally, the Bill and Melinda Gates Foundation spent millions on abortion funding in the Global South until 2013.


With the increase of abortion regulations in Republican states, corporations repeatedly expressed their opposition to regulating abortion and in some cases threatened capital flight should regulations be implemented. After the leak of the Supreme Court opinion that may overturn Roe v. Wade, numerous corporations have declared special funds to help their employees procure abortions.


When corporations like Amazon — which is at the same time using both covert tactics as well as outright violence to prevent its workers from unionizing and demanding pay raises — suddenly invest material support into aborting their worker’s children, there should be little question that the motives of such an investment are not philanthropic aid to the working class but rather an insurance policy against it having to pay later for maternity leave and lost productivity.


Politically, it should be of no surprise that the Democratic Party emerged as the champion of abortion rights at the same time as it decided to wholeheartedly adopt neoliberalism and the interests of the international wing of capital, shedding both its previously ambivalent but often anti-abortion position and its commitment to unions and working class voters. The Democratic Party has since emerged as the preferred party of capital, receiving more donations from billionaires and corporations than the Republicans, and making abortion its one non-negotiable "progressive" position.