[OPE] Dan La Botz, The Economic Crisis, the American Working Class, and the Left The Situation Today and the Situation in 1930

From: glevy@pratt.edu
Date: Tue Mar 18 2008 - 08:33:13 EDT

>From MRZine.
Dan La Botz, "The Economic Crisis, the American
Working Class, and the Left: The Situation Today and the Situation in

The Economic Crisis, the American
Working Class, and the Left: The Situation Today and the Situation in

by Dan La Botz 

The world appears to
be on the verge of an economic crisis and, if it turns out to be as
serious as some think, one that could rival or exceed the great panics of
the late nineteenth century and the decade-long Great Depression. The
crisis began with unscrupulous mortgage lending on an enormous scale,
leading to mass housing foreclosures, then to a collapse of the securities
backed by sub-prime mortgages, and finally became a crisis of the banks
that held those securities. Over the past weekend government and banking
officials worked out J.P. Morgan's buyout of Bear Sterns, one of the most
important U.S. banks which stood on the verge of collapse, a development
that threatened to unleash an international financial crisis. 

This may turn out to be only another recession, painful as those are,
but if it turns out to be a genuine depression, what are we on the left
prepared to do? What will this crisis mean for the American working class?
What should be the response of the U.S. left? What can be learned from the
experiences of the past and how can those lessons be applied to the
present challenge? 

A Common Recognition of the Danger 

The crisis that faces us is now clear to all, even if President
Bush -- like President Herbert Hoover after the Crash of 1929 -- denies
that the economy is in danger. Already several months ago Lawrence
Summers, Secretary of the Treasury in President Bill Clinton's
administration, wrote in an opinion piece in The Financial Times warning
that "Even if necessary changes in policy are implemented, the odds
now favor a US recession that slows growth significantly on a global
basis. Without stronger policy responses than have been observed to date,
moreover, there is the risk that the adverse impacts will be felt for the
rest of this decade and beyond."1 

John Lipsky, the number
two official of the International Monetary Fund said this week that
government policy makers must be prepared to "think the
unthinkable." One presumes that by that he means a collapse of the
world economy.2 

Robert Brenner, the UCLA economic historian,
wrote recently in the leftist journal Against the Current that "The
current crisis could well turn out to be the most devastating since the
Great Depression." He concludes his article writing "banks'
losses are so real, already enormous, and likely to grow much greater as
the downturn gets worse, that the economy faces the prospect,
unprecedented in the postwar period, of a freezing up of credit at the
very moment of sliding into recession -- and that governments face a
problem of unparalleled difficulty in preventing this outcome."3 

A Crisis for Ordinary People 

There is a common
understanding of the serious nature of the crisis, even if no agreement on
ultimate causes and consequence, among a range of people with quite
different politics. Not only do banks, governments, and international
financial institutions face a crisis, so do the working people of the
world. The crisis has tremendous potential to cause widespread suffering
because it is taking the form of a crisis of stagflation, that is
simultaneous economic downturn and rising prices. 

Sheeran, World Food Program Chief for the United Nations, recently stated
that the world economy "has now entered a perfect storm for the
world's hungry." A series of developments -- soaring energy and oil
prices, climate change, production of biofuels, and rising demand from
India and China -- will make it increasingly difficult for millions to
afford food. 

"This is leading to a new face of hunger in
the world, what we call the newly hungry. These are people who have money,
but have been priced out of being able to buy food," she said.
"Higher food prices will increase social unrest in a number of
countries which are sensitive to inflationary pressures and are
import-dependent. We will see a repeat of the riots we have already
reported on the streets such as we have seen in Burkina Faso, Cameroon and

Impact on the United States 

When a
recession occurs, companies fail, plants close, those that survive lay off
workers, and unemployment rises. If the current crisis turns out to be
merely a recession, unemployment is expected to rise to 6.4 percent by
2009, according to Goldman Sachs, while African American unemployment
would reach 11.0 percent. (Blacks' unemployment is generally twice that of
whites.)5 However, if this turns out to be a more serious recession such
as those we have experienced in the last 25 years, then unemployment could
reach 8.84 percent as it did in 1975 or 9.71 percent as it did in 1982.

And, if this is the kind of economic crisis which many fear, a
crisis along the lines of the Great Depression, then we would be talking
about an unemployment rate of 25 percent, and for African Americans, 50
percent as it was in the 1930s. Deep recessions and depressions have
historically been accompanied by shorter workweeks and wage cuts, so
income also falls for those who have work. 

What would we
expect to happen if such an economic crisis with such high levels of
unemployment were to hit the United States? The United States today has a
social safety net such as did not exist in 1929 -- unemployment insurance,
social security, and Medicaid and Medicare -- but a tremendous strain
would be put on those systems and government at every level would soon
face a fiscal crisis. 

The Likely Failure of the Social Safety

With lowered corporate profits and declining incomes and
sales, Federal, state and local government would not have the revenues to
pay for those social programs and would also be unable to pay salaries and
wages of public employees. In fact this has already begun, as the New York
Times reports, "About half of the state legislatures are scrambling
to plug gaps in their budgets, shot through by rapid declines in corporate
and sales tax revenue. . . ."6 

With private sector and
public sector workers losing their jobs, more families would quickly
exhaust their savings, lose their homes, and increasing numbers of those
who rent would be evicted. Homelessness of working-class families would
rise beyond the capacity of government and charitable institutions. The
condition of the African American and Hispanic workers will be much worse
than that of the white workers, and that will be quite bad. Significant
numbers of recent Hispanic immigrants would return to their homelands in
Mexico or Central America, though most would probably stay here, since
things will be no better at home. 

The Political Response 

What will happen to American politics if there is a depression?
Whether we have a government headed by Barack Obama, Hillary Clinton or
John McCain, we will face similar issues. All three candidates share a
commitment to the neoliberal and global capitalist model that has
dominated our political economy since the 1980s. While a Republican
government might react more rigidly and a Democratic government more
flexibly to such a deep economic crisis, still it is unlikely that either
will at first take dramatic measures. 

Especially since the
crisis will probably be developing during the first year or two of a new
administration, one would expect that there will be foundering followed by
experimentation. The American experience of the 1930s under President
Franklin D. Roosevelt or the 1960s under President Lyndon B. Johnson might
lead a Democratic president to create a program of public workers, the
expansion of the social safety net, and broadening of social programs in
housing all paid for by deficit spending along Keynesian lines. Will
American capitalism today be able to afford such a political economy given
the relative weakness of production and the decline in profitability? 

McCain and the Republican Party are likely to seek economic
recovery through a program of tax cuts for corporations and the wealthy,
reduction of social programs, together with an increase in repressive
measures against social movements, immigrants, African Americans, and the
poor. Whether or not it will be able to find a mass base for such policies
after the George W. Bush administration's termination in the disaster of a
failed war abroad and economic crisis at home remains to be seen. 

When government and traditional party politics fail in times of
crisis, people tend to look for other alternatives, for options to the
right and left of the American mainstream. During the Great Depression
this took the form of the growth of right-wing, quasi-fascists such as the
radio-priest Father Coughlin and rise of left-wing groups, most
importantly the Communist Party. With the American dream turning into an
American nightmare, millions will begin to look around for other ethical
ideals, political values, economic programs, and social strategies. Some
will turn to far right organizations that scapegoat blacks and Hispanics.
Others will turn to the left looking for a humane organization of society,
a system that will improve life for all. What will be the possibilities of
the U.S. labor unions and left in such a crisis? 

A Comparison
of the Labor Movement, Then and Now 

The U.S. population today
is more than double what it was in 1930. In 1930 the population was 137
million, today in 2008 it is about 304 million. The United States had 3.6
million union members at that time, which represented 12.34 percent of the
nonagricultural workforce and 7.45 percent of the total workforce (there
being many more farmers at that time). Almost all of these workers were in
the private sector, since there were no public employee unions then. With
the exceptions of miners and garment workers, those union members were
almost all members of craft unions, like carpenters, that had few
foreign-born and African American members. The generation of the 1930s had
experienced its last major labor movement in 1918-1919, a movement for
industrial unions only about 15 years before. That industrial upheaval had
been crushed by the employers and the state, but had left behind
experienced leaders and dedicated activists. Since then the unions had
declined in membership, many were mere skeleton organizations, and strikes
were few. 

Today, the union membership for private industry
workers is 7.5 percent, while that for public sector workers is 35.9
percent. Altogether, 15.7 million workers belong to unions, representing
12.1 percent of employed wage earners, roughly the same proportion as in
1930. The generation of 2008, however, has not participated in a major
labor movement since the period the late 1960s and early 1970s, now almost
40 years ago, when there was a wave of organizing by public employees and
farm workers and of wildcat strikes and opposition movements in the
industrial unions. Some activists and leaders came out of that generation
of 1968. Since then the industrial unions have declined while there has
been some growth in the organization of public employees and service
workers. Today only a small percentage of workers in unions have ever
attended a meeting or participated in a strike. 

The Left of
the 1930s and the Left of Today 

The left of the United States
in 1930s was made up of about 20,000 committed members of one or another
party and received support at the ballot box from nearly a million voters.
The Socialist Party had approximately 13,000 members at that time while
the Communist Party about 7,000 members, while the Trotskyists, who at the
time considered themselves an excluded part of the Communist Party, had at
most a few hundred members. The Socialists were a broad reformist party
whose presidential candidate Norman Thomas received over 800,000 votes in
1932, while the Communists were a virtually illegal revolutionary party
which had little or no public presence. The loosely organized Socialist
Party, a congeries of conflicting ideologies and tendencies, had many
talented and dedicated members but its efforts were diffuse.7 

The highly centralized Communist Party, believing that liberals and
socialists were fascists, focused its efforts on the organization of its
own labor federation, the Trade Union Unity League (TUUL), and its
independent industrial unions with perhaps a couple of hundred thousand
members. While its sectarian strategy isolated the Communists from much of
the American working class, it also gave them invaluable organizing
experience. The Communist party cadre of the 1930s -- and their Trotskyist
satellite -- were true believers in their parties' ideology, absolutely
dedicated activists tested in struggles against employers, rival unions,
and the government, survivors of beatings, proscription, and imprisonment.

The left of the United States today is made up the members of
various socialist organizations and broader movements. The largest left
organizations in the U.S. today, the Communist Party (CPUSA), the
Committees of Correspondence (CC), the Democratic Socialists of America
(DSA), and the International Socialist Organization (ISO) represent a few
thousand committed members. There are also smaller socialist groups such
as the Freedom Road Socialist Organization (FRSO) and Solidarity. Most
left activists, however, participate in broader movements such as those
that came together in the U.S. Social Forum last summer in Atlanta:
community groups, environmentalists, African American organizations,
feminist groups. There are also those academic leftists and campus-based
activists who gather at the Left Forum New York every year. Even taking
all of these together, the U.S. left represents a very small organized
force in American society. 

We could also gauge the left in
terms of its electoral support as measured by the 2.8 million voters for
the campaign of Ralph Nader on the Green Party slate in the year 2000, a
year in which he ran a campaign on what was virtually a social democratic
platform. Then too one should take into consideration the unions and
activists affiliated to the U.S. Labor Party inspired by the late Tony
Mazzocchi and local or state left-of-center political formations such as
the Working Families Party in New York. None of the organizations of the
left, however, has a significant public presence comparable to that of the
Socialist Party and none has the dedicated and tested cadres of the
Communist Party of the early 1930s. 

The Strategy of the Labor
Left of the 1930s 

The socialist left played a crucial role in
the labor movement of the 1930s providing leaders, cadres, and activists
for the Congress of Industrial Organizations (CIO) which organized the
industrial unions in steel, rubber, glass, auto, electrical, and other
industries. While there were important ideological differences between
Socialists, Communists, and Trotskyists in the 1930s, the three strains of
the left shared common strategies and tactics during the 1930s. At the
beginning of the 1930s all three groups had the same principal goals: the
organization of industrial unions; the creation of a labor party; and the
establishment of a socialist society in America.8 

With the
depression, all three organizations engaged in many of the same organizing
strategies. In all of the campaigns to organize industrial unions, it was
generally experienced skilled workers who had been leftists and members of
craft unions who played the key role. The Communist Party organized their
members industrially to coordinate their union and working-class
activities. In 1928 the Communist Party, which then had 10,000 members,
had almost 1,000 in the building trades, 1,500 in the needle trades, 850
metal workers, 1,200 miners, 400 auto workers, and 150 lumber workers.9
Many of the Communist union activists would play important roles in
organizing throughout the 1930s. 

The leftists of all
persuasions in cities throughout the country built unemployed councils
that engaged in protest demonstrations and confrontations with government
officials to demand relief and public works jobs from the government. The
few hundred leftists active among the unemployed soon came to lead groups
of thousands of jobless workers. The unemployed councils proved key to
preventing scabbing and building solidarity. 

By 1934 the
various leftist parties active among industrial workers succeeded in
leading three great strikes in 1934, all of which led to union recognition
and contracts: the Communists leading the longshore strike in San
Francisco, the Socialists directing the Autolite strike in Toledo, and the
Trotskyists heading up the Teamsters strike in Minneapolis. The leftists
brought to these strikes the same tactics of coordination with the
unemployed councils, the use of mass picketlines, the dispatch of flying
squads, and violent confrontations with scabs and the police to defend the

When John L. Lewis, the conservative head of the
United Mine Workers, created the CIO, all three socialist tendencies
became involved either as paid staff or as volunteer organizers in the
organization of the unions in heavy industry. The Communist Party, which
began with the largest number of union activists, played the largest role
in the CIO, coming to be the leadership of some unions such as the United
Electrical Workers. Throughout the 1930s the Communist Party grew while
the Socialist Party declined, losing members to both the Communists and
the Trotskyists. The CIO succeeded in organizing millions of workers in
basic industry, and the AFL also grew by adopting many of the strategies
and tactics of the CIO. 

The Left and the Labor Movement Today

The labor movement today is divided into two rival
federations, the AFL-CIO and Change-to-Win. The AFL-CIO, historically
dominated by the more conservative building trades unions, failed during
the 1980s to stop the decline of organized labor. This led in the 1990s to
the rise of a new leadership under John J. Sweeney which during the 1990s
and early 2000s also proved unable to stop the hemorrhage of union
members. Then in 2005, frustrated by the continuing decline in union
membership, seven unions left the AFL-CIO to form Change-to-Win, a new
federation with the goal of developing new strategies and dedicating
greater resources to organizing. 

Among those Change-to-Win
unions, the Service Employees International Union has played the leading
role. SEIU's leader Andy Stern, who has little use for union democracy,
developed a top-down strategy, brought in young college-educated
organizers, and was accused by some of using workers like cannon fodder.
SEIU succeeded in bringing significant numbers of new members into the
union, but it also faced mounting criticism for his treatment of the
members, for example, consolidating huge local unions, large beyond the
possibility of membership control. Stern has also been criticized recently
by leaders of his own union for organizing and getting union contracts by
making deals with employers and government officials, sometimes behind the
back of the union members.10 

The Workers Centers and Jobs with
Justice also represent important centers of union activism. The Workers
Centers, usually led by and assisting immigrant workers, attract young
activists interested in the labor movement. Jobs with Justice (JwJ), the
national campaign for workers rights, is a large network of labor
activists that takes up labor issues through local campaigns. JwJ
represents an important venue for radicals and militants of all stripes
within in the labor movement. Many radicals work in the labor movement,
and whether in their unions, workers centers, or solidarity groups such as
JwJ, they defend union democracy, organize militant campaigns, and
challenge the employers. They do so, however, without a broader labor,
social, and political strategy? 

The left today has thousands
of members active in the working class and in the labor unions either as
union staff, elected officers, or as rank-and-file members. Events such as
the Jobs with Justice conference, the Labor Notes conference, and the U.S.
or World Social Forum provide opportunities for the labor left in the
working class to come together. There is, however, virtually no
coordination of the left in the labor movement; in fact, there is very
little communication as each left group goes its own way. 

Moreover, few organizations of the left active in organized labor put
forth a strategic vision for labor independent of that of the union
leadership in the two major federations. (There is Solidarity, a small
socialist group which came out of a merger of several left organizations
in the early 1980s. It upholds an alternative vision for the labor
movement based on the notion of rank-and-file power built within unions to
transform them into more democratic, militant, and class-conscious
organizations capable of mounting a broader working-class struggle.
Solidarity's members have been particularly active in building Labor Notes
and in support for Teamsters for a Democratic Union.) 

the leftists of the 1930s, virtually none of the labor activists in the
union movement defends revolutionary socialist politics. Within the
working class there is virtually no socialist presence. Socialism exists
principally in the academy, while the working class remains tied to the
Republican and Democratic parties and is seldom offered a political

The Labor Movement and Politics in the 1930s 

While the labor left of the 1930s started out fighting for
industrial unionism, a labor party, and socialism, they had by the early
1940s settled for the first and given up on the other two. By the second
election of Franklin D. Roosevelt in 1936, the Socialist Party and the
Communists had both reoriented toward the Democratic Party; by 1942 they
had been subsumed by it. The Socialist Party found that Roosevelt had
largely adopted their program of social reforms, while the Communist Party
decided that membership in the Democratic Party was the American version
of the Popular Front. The Democrats swallowed the left. 

the Nazi attack on the Soviet Union in 1941, for Communists the defense of
the socialist homeland blended with American patriotism and found
expression in loyalty to Roosevelt, the Democrats, America, and the war.
The Progressive Party campaign of Henry A. Wallace in 1948 represented the
last hurrah of the Communist Party and its Popular Front before it went
down to ignominious defeat. After the war, Roosevelt, Truman, and
Eisenhower succeeded in cohering and consolidating a new political economy
based on the limited welfare state, military Keynesianism, war, and
imperialism. By 1950 or so, with the consolidation of the new political
economic system and the beginnings of the Cold War, the American
government began the purge of the Communist left from the unions, society,
and politics. McCarthyism meant the end of the left for a generation,
until the revival of the 1960s. 

The American Left and Politics

The election of Barack Obama or Hillary Clinton as
president in the midst of the greatest economic crisis in 75 years will
present the small socialist left of the United States today with an
enormous challenge. The left will have to find a way to build an
independent labor, social, and political response to the crisis without
becoming drawn into the Democratic Party. Obama, with his charisma,
creativity, and flexibility, may prove to be a Rooseveltian figure who
will be able to lead the social forces that can cohere and consolidate a
new life for American capitalism. The responsibility of the left is to
fight to prevent such a consolidation of a new social pact between capital
and labor, government and the people, and to build an independent working
class movement and political party that can fight for socialism in the
coming decade. 

The Challenges for the Left Today 

The principal organizational problems for the revolutionary socialist
left today are its numerical weakness, its division into too many small
rival organizations, and its lack of dedicated cadres in the labor
movement. The political problems are equally serious: the left lacks an
inspiring vision, lacks a political program, and perhaps most important at
the moment, lacks a strategic plan for intervention in the working class
and society more broadly. The list of deficits more or less constitutes
the list of tasks of the American left in this period, though logically
the latter political deficits have to be addressed before the
organizational weaknesses can be addressed. 

First, we need a
left that clearly defines itself as revolutionary socialist, that is, that
sees change coming through the overthrow of capitalism and the state and
the creation of a new social order. That such a revolutionary socialist
left fights for reforms goes without saying, but that it participates in
struggle for reform with its eye on the revolutionary future must be
stressed. Socialism means the liberation of the full potential of the
individual through the liberation of the working class from exploitation,
of the oppressed from the weight of the state with its police, courts, and
prisons, and of humanity from the mass murder of warfare. The fulfillment
of individual and collective potential comes from the democratic
experience of creating a new economy, a new society, and a new form of
human self-government. 

Second, such a revolutionary left needs
a program for American society, that is a broad statement of principles
that addresses the fundamental problems faced by Americans today in our
government, our economy, our society, and our foreign policy in a way that
points to their solution through fundamental social change. The problem of
health care for the 50 million uninsured, for example, can be solved by
taxing corporations and the wealthy to pay for a publicly funded health
care system -- without insurance companies or private hospitals --
democratically administered by organizations of patients, workers, nurses,
doctors. Such a program of transitional demands should have the character
of a set of proposals that address the problems of today and propose
solution in ways that project fundamental structural changes in the
system, the sum total of which would amount to another system, a
democratic socialist system. 

Third, the revolutionary left
must have a strategy that connects with the American working class and the
American people. Such a strategy must be able to bring about a fusion
between the left and the most critical and active sections of the
population, of whom African Americans have historically been at the
forefront. Many of those that we will want to recruit will be found in the
movement which at the moment is rallying to Barack Obama. We have to offer
the people attracted to his message of change the principles, program, and
strategy of genuine change through the creation of a socialist movement.

The most important part of a strategy will be the development
of strategy for labor. The contemporary American working class is not that
of the 1930s or even the 1970s. Industrial workers, while remaining quite
significant, no longer have the economic power, social weight, or
geographical compactness that they did 80 or even 40 years ago. While the
strike remains the classical working-class form of fighting, it was not
then and is not now the only form of struggle. Though unions are the
fundamental working-class organizations, neither unions nor working-class
communities have the same character they did in other decades. The
globalization of the economy, the international character of production,
the dispersion of workers throughout industrial regions, and the
revolutionary transformation of communication technology mean that while
we have much to learn from the past, we have to find and to create the
institutions and forms of struggle appropriate to our own era. 

The creation of a contemporary working-class and socialist political
movement will not be based on an attempt to recreate the American left of
the mass Socialist Party of 1912, the Communists Party of the 1930s and
1940s, or by passing once again through Students for a Democratic Society
(SDS) or the Student Nonviolent Coordinating Committee (SNCC). What we
once called internationalism and anti-racism, and which the universities
today call multiculturalism and diversity, will form a more central part
of the new working-class party. The respect for the integrity and autonomy
of every sector of society's exploited and oppressed form the basis for
the unity and solidarity of the class. We will have to discover, invent,
and construct the right principles, political program, and strategy for
the socialist party of our time. The depth of the crisis suggests that the
task is an urgent one. 

1 Lawrence Summers,
"Wake Up to the Dangers of a Deepening Crisis," The Financial
Times, Nov. 25, 2007. 

2 John Lipsky, "Dealing with the
Financial Turmoil," speech to the Peterson Institute, March 12, 2008.

3 Bob Brenner, "Devastating Crisis Unfolds," Against
the Current, No. 132 January/February 2008. 

4 Reuters,
"UN Sees More Hunger, Unrest over Food Inflation," March 6,

5 Algernon Austin, "What a Recession Means for
Black America," Issue Brief #241, Economic Policy Institute, Jan 18,

6 Jennifer Steinhauer, "As Economy Falters, So Do
State Budgets," New York Times, March 17, 2008, p. 1. 

Communist Party membership figures from: Nathan Glazer, The Social Basis
of American Communism (New York: Harcourt, Brace and world, Inc., 1961),
114-5; Harvey Klehr, The Heyday of American Communism: The Depression
Decade (New York: Basic Books, 1984), 91; David Shannon, The Socialist
Party of America (New York: The Macmillan Company, 1955), p. 215. 

8 David Milton, The Politics of U.S. Labor from the Great
Depression to the New Deal (New York: Monthly Review, 1982), 9-23. 

9 Glazer, 115. 

10 Mark Brenner, "Health Care
Local Charges SEIU Is Shutting Members Out of Bargaining &
Organizing," Labor Notes 348, March 2008; Mark Brenner,
"California SEIU Leader Mounts Battle for Local Control, Union
Democracy: An Interview with Sal Rosselli," Labor Notes 348, March
2008. For a more strident attack on Stern, see: Matt Smith, "Local
Union Leader Rosselli Blasts SEIU Boss Andy Stern," SF Weekly,
February 20, 2008. 

Dan La Botz is a Cincinnati-based teacher, writer, and activist. He is
the author of Rank-and-File Rebellion: Teamsters for a Democratic Union
(1990), Mask of Democracy: Labor Suppression in Mexico Today (1992), and
Democracy in Mexico: Peasant Rebellion and Political Reform (1995), Made
in Indonesia: Indonesian Workers Since Suharto (2001) and the editor of
Mexican Labor News & Analysis, a monthly collaboration of the Mexico
City-based Authentic Labor Front (FAT), the Pittsburgh-based United
Electrical Workers (UE), and the Resource Center of the Americas. His
writing has also appeared in Against the Current, Labor Notes, and Monthly
Review among other publications. 

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