New Labor Forum, Vol. 18 #1, Winter 2009 issue
Team Statement
On a December day in 1932, with the country prostrate under the weight of the Great Depression, ex-President Calvin Coolidge—famous for declaiming that the “business of America is business” and who had presided over the reckless stock market boom of the 1920s Jazz Age—confided to a friend: “We are in a new era to which I do not belong.” He punctuated those words a few weeks later by dying.
The bell is tolling and the train has left the station. Like Coolidge, we are entering a new era. A deep recession—dare we say the “D” word, “Depression”—is already gathering steam. Actually it has been underway for some time, since at the least the first intimations of the subprime mortgage meltdown well over a year ago. No rescue of the financial establishment can any longer stop it, no more than FDR’s emergency bank legislation back in 1933 could arrest the economy’s irresistible descent. The underlying real economy has been diseased for a long time and we will face the consequences for years to come. In addition to mass foreclosures and evictions, we are already witnessing or will soon witness accelerating unemployment and part-time employment, sharp production cutbacks, severe triage of municipal and state budgets, record numbers of bankruptcies of firms both large and small, the drying up of consumer demand, and eventually an economy-wide deflation which is capitalism’s way of saying America’s second Gilded Age is over along with all the speculative fantasies that kept it aloft for too long.
What awaits us no one can know and, in part, is up to us. One thing is certain: Champions of the free market from both parties have had their comeuppance and are in bad repute. That’s good because it opens up the vocabulary of public debate. Suddenly words like “regulation” and “government intervention” evoke applause rather than political obscenities. Wall Street, lionized for a quarter century as the engine of economic growth, is now universally despised for its parasitism, chicanery, wolfish appetite, and, above all, its disastrous incompetence. As the old shibboleths and icons bite the dust, the room for imaginative progressive reform will widen immeasurably.
A door is opening. But under the extraordinary pressures of economic collapse, anything can walk through that door. Despair, apathy, resignation, and kindred emotions overwhelmed American working people during the early years of the Great Depression and may again. And worse is also possible. Sarah Palin became a kind of political joke and an entertaining diversion during the campaign. However, her surfacing at such a high level of national politics is ominous. It suggests the potential power of the politics of resentment and fantasy, bearing its full repertoire of xenophobia, anti-intellectualism, racial animosity, bellicose chauvinism, rampant paranoia, hatred of the city, and all-around suspicion of the heterodoxy of modern life. When the Sarah Palins of the world denounce “Wall Street greed,” as the governor did, the acrid odor of authoritarian populism fills the air. Yeats comes to mind: “We had fed the heart on fantasies/The heart’s grown brutal from the fare.”
We are entering dangerous times. But our economic trauma also offers an extraordinary prospect, one close to the heart of the labor movement. It is true that hard times are hard times in which to organize as growing numbers of the unemployed weaken the leverage of the labor movement. But that’s not the whole truth. The historical record also displays the opposite. Brutal economic conditions in the late 19th century were accompanied by labor insurrections of extraordinary reach and power; some were defeated, others triumphed. And, while the Great Depression hardly lifted all during the long decade of the 1930s, it did witness the birth of the CIO and the modern industrial labor movement. What determines the outcome is less the particular disposition of forces in the labor market and much more the surrounding political and cultural environment that can turn resignation into rebellion.
What this means today is that once again the country may be compelled to come to grips with the “labor question” as the overriding dilemma of our times. The reason financial panic is turning into universal depression is that the whole rickety edifice of financial capitalism was premised on 30 years of relentless downward pressure on the social wage. The chimera of growth and prosperity of the second Gilded Age was organically linked to the underdevelopment of the actual productive wherewithal of the country: deindustrialization, cannibalizing the nation’s infrastructure, privatizing public institutions and services, malign neglect of our urban centers, despoiling the environment, and the parasitic siphoning of capital away from investment in new technology, plant and equipment and into useless forms of speculation and corporate-bureaucratic aggrandizement.
Above all, our late lamented Gilded Age depended on the depression of the general standard of living through deunionization, the systematic undermining of the whole social welfare apparatus from public health and housing to the minimum wage and aid to needy families, extending even so far as the privatization of such essential common goods as water and education. Even the vaunted prosperity of the Clinton era rested on low wages, long hours, double shifts, and the surgical amputation of social protections, not to mention the tribute exacted from the dispossessed peasantry of the Third World slaving away in the global sweatshops of Asia and Latin America.
Now the only way out of this catastrophe is to address the “labor question” and all of its ramifying implications. The recent elections are a hopeful, although by no means a convincing, demonstration that this may be on the agenda. Democratic victories in the House and Senate were to some substantial degree powered by a frank acknowledgment of popular anger directed not only at Wall Street, but also at the great oil companies, at the bailout of those who perpetrated the financial meltdown, and at a business class more widely that kidnapped the economy and held it for ransom for a whole generation. Still, the Employee Free Choice Act received little attention during the electoral season, a sobering reminder about how far we still have to go to heighten the public visibility of the “labor question.”
On the political front, the labor movement can seize the moment to accelerate the momentum that clearly already exists by championing the realignment of the Democratic Party. President Obama is an unknown variable in this equation who may be compelled to break his ties to the neoliberal establishment if labor and allied movements can muster the social energy to change the country’s political chemistry.
The air is filled with worthy programmatic ideas about relief, reform, and recovery, many originating within the house of labor. Massive aid to destitute working people will be essential; so too the rigorous re-regulation of the market, and not just the financial marketplace. Counter-cyclical deficit spending is imperative. But history, along with the changed circumstances of our own historic moment, should remind us of two things. First, Keynesianism did not solve the Great Depression (unless one counts the military Keynesianism of World War II). Today, the solution to the “labor question” must advance further than that in the direction of public, democratic control over the flow of investment capital. There is no other way to overcome the inherent tendency of private economic institutions to channel the country’s capital resources into old and new forms of parasitic waste, to perpetuate scandalous inequalities in the distribution of wealth and income, and to punish working people as a consequence.
Second, our Gilded Age “prosperity” has depended on the primitive accumulation of capital at the expense of the new global working-class and dispossessed peasantry. Back home in the U.S., if some fared very well and others escaped penury, it was, in part, thanks to this relationship of exploitation. This helps to account for at least some of the popular support for a half century of imperial bullying. And it keeps America’s chronic warfare state humming. One might call this the political economy of social imperialism.
However, beyond our borders the blowback from this iniquity has generated everything from moral condemnation to terrorism and war. The Obama regime’s inclination to upend this iniquity remains up for grabs. Obama has Afghanistan in his sights, and promises an even more muscular military apparatus. Moreover, such military globetrotting will place severe constraints on the financial and economic resources available for domestic relief and recovery.
For these reasons, tackling the “labor question” must include a radical rupture with the orthodoxies of American foreign policy. Foreign policy is always, to some very considerable degree, the expression of domestic preoccupations. Let our current and urgent preoccupation with rescuing the country from the trauma instigated by our financial and business elite lead the labor movement to challenge as well this elite’s disastrous preeminence abroad. For the labor movement to do otherwise is to leave the door open to its enemies.
Editor’s note: From this issue hence, New Labor Forum will be directly published by the Murphy Institute of the City University of New York, on its regular schedule. Beginning with our May 2009 issue, we will become a refereed journal. We encourage scholars, journalists, and activists to submit article proposals or drafts of articles to newlaborforum@qc.edu.