The Capital/labor Relationship is Central to Capitalism

Similarly, American computer production giants Intel decided to build its European manufacturing operations plant in Lexlip, Co. Kildare in 1989 which formed Intel Ireland providing hundreds of jobs for the Irish population. Just like Dell, Intel was drawn to Ireland by the low tax policies and highly skilled work force. To base its European operations centre in Ireland Intel was given around €110 million in grants from IDA Ireland. Intel also opened up a new branch in Shannon called Intel Shannon in Co Clare which provides around two hundred jobs for people. Intel currently employs approximately 4,500 in its Leixlip branch which includes both skilled and contract workers offering a massive boost to Irelands then rapidly growing economy. Intel in Leixlip is currently Intels biggest manufacturing plant outside of the United States and in April 2005 announced the manufacturing of its one billionth micro chip. In total, Intel’s investment has been an immense €6 billion.

As we are talking about labor/capitol relationships in a capitalist context it is important to understand just what a capitalist society is.

A capitalist society is a social system based on the private ownership of the means of production, where all land is privately owned and a free market for the purchase and sale of goods and services exists.

In a capitalist society the ideas of “Formally free” labor exists meaning that the laborer is free to own property and free to reproduce their own labor power.

Another characteristic that exists in a capitalist society is the pursuit of profits by entrepreneurs who, pay wages to the laborers, who in turn manufacture the products they sell on the market.

From the beginning of capitalistic times, the people at the top had the most power and controlled the lower classes. In capitalist society, workers have no rights in any means of production and must sell the only thing that they have that has any market value, which is their capacity to labour, for the best price they can get. However a society cannot survive without people to take on roles of production as society will always need individuals for production.

Today the recession has had a major effect on the capitol labor relations. It has been established that the amount of people currently unemployed in Ireland is approximately 350,000. Ireland is currently experiencing the fastest rise in unemployment in its history and it is warned that these numbers could reach 450,000 before long. An average of almost 10,000 men has added to the dole every month since this time last year. The current amount of unemployed is now 10.4% of the work force. This has had a serious effect on the labor force in Ireland and as a result has affected the relationships between labor and capital in a profound way. The recession was brought about by a number of key factors. A main one being a collapse in the housing boom. After record levels of the rises in house prices the Irish housing market turned and house prices began to fall rapidly causing a serious decline in population spending. This lead to homes entering negative equity which had a bad effect on home owners with mortgages as many were left paying off a loan that was worth more than the house itself. Another major factor is the decline in the construction industry. Since the nineties the construction industry has been the backbone of the Irish economy by providing 25% of the GDP. The decline in the housing market has led to a falling in construction resulting in a decline in spending. Perhaps the largest factor in the emergence of the recession is the banking crisis. Irish banks have lost money in bad debts and are now struggling to fix this problem. Many of these banks have been nationalized such as Anglo Irish Bank. All this has led to a decline in global demand for Irish exports all of which adds up to a reduction in consumer spending.

This slowing down in the Irish economy has led to a decline in foreign investors such as companies similar to Dell and Intel thus leading to fewer jobs for Ireland’s skilled workforce. This increase in competition for existing jobs coupled with reductions in wages and benefits has led to a situation where making a living is more difficult than in previous years which has had quite a negative effect on the labor capitol relationship and systems of production in capitalist society Ireland. It is forecasted by economists that the financial situation in Ireland will soon improve by mid to late 2010 and hopefully Ireland will revert back to a more productive and abor rich state.

To reiterate, Adam Smiths view that ‘labor, rather than the nation’s quantity of gold or silver is the cause of increase in national wealth’ has formed the basis of this essay. Some may argue that this Marxist view is somewhat outdated and perhaps in need of review but the reality is that for a consumer based society to exist there needs to be those who are responsible for the production of resources to fuel that society. As for the relationship between labor and capitol, we believe that capitol is a fuel for labor and vice versa.