Thursday, March 3, 2011

Whose New Deal?

The New Deal from the Standpoint of its Victims

A deal is by definition a compromise. It may be either an honorable bargain or a shady transaction, but any deal involves concessions. The New Deal, however, is remembered differently. Both its proponents and its detractors see and describe it as a unique moment in US history when the state gave a legislative and economic gift to the working class. Usually lost in both families of narratives is the deal itself. Lists of programs, statistics or events tend to conclude with rhetoric and eclipse a holistic or systemic analysis of the New Deal within the political economy of crisis in the 1930s and beyond.

The debate over the New Deal has gained new importance in the twenty first century as the United States finds itself poised on the edge of an economic crisis comparable to the Great Depression. In the mainstream, many politicians invoke the rhetoric of the New Deal, for varying reasons. Multitudes voted for Barack Obama with the New Deal in mind. On the Left as well, the New Deal and its programs are remembered nostalgically, while demands, proposals and manifestos are being drafted calling for a return to the New Deal. In the labor movement in particular, whose constituents straddle many of the usual political divides, calls for a new New Deal are now almost universal.

In today’s reigning political climate of austerity (similar in some ways to the late 1920s and early 1930s) when all notions of the state’s responsibility to its citizens are under attack, the revival of New Deal ideas and New Deal rhetoric can be welcomed as an important counter-weight to those groups who would see all vestiges of the welfare state demolished. A major economic and political reform is the bare minimum necessary for the survival of the United States in the impending crises. But most if not all of the New Deal revivalism suffers from some major blind spots about the actual political and economic history of the New Deal era. If we are to add our own voices to the call for any substantial policy change to address the current crisis, it is important for us to actually study the New Deal, and in particular its failures. If history is written by its victors, it is better understood by its victims.

The New Deal did not emerge from a vacuum or fall from the sky but reflected the political dynamics of the economic system that it emerged from. Why, after all, did the nation’s elite draft a new deal with the working class? Centuries of prior struggles had failed to move legislatures towards anything similar. It was only as a result of the combination of the Great Depression and the unprecedented organization of the working class into unions that created the critical mass necessary to pass the New Deal. But it was a deal, not a gift. So the question arises: whose New Deal was it really? In particular, what did the US labor movement and working class as a whole concede in the New Deal? By framing our examination in this way we are better oriented to address the prospects for major social and economic reform in the 21st century. This will be divided into two parts, firstly a more general overview of the immediate effects of New Deal programs, and secondly an inquiry into the long-term effects of the New Deal on the labor movement.

Part One. Immediate Effects
A great deal has been written about the New Deal, and it is not my intention to recapitulate all this literature here. To be clear, the point of this essay is not to utterly condemn the New Deal, but rather to put at center stage what is usually excluded from mainstream history.

For Native Americans, the most excluded group in the United States, the New Deal really did mark a turning point for the better; although the Bureau of Indian Affairs remains an apparatus of settler colonialism, the New Deal substantially scaled back the genocidal project against indigenous language and culture. (Nichols 2003) And for all of the downtrodden, the New Deal was a powerful symbol that the state could exist to serve the common people, and the implications of this should not be underestimated.

Yet there is a curious double consciousness about this era: If triumphant narratives are the hallmark of the New Deal, it is also universally acknowledged that it failed to end the Great Depression. Those who call for a new New Deal today argue, rather simplistically, that the New Deal was just too limited, and that if it were only given more time and money, things would have been different. Overlooked in this theory are the substantial problems and contradictions that surfaced within the limited terrain that the New Deal operated inside. In their book A New Economic View of American History, Jeremy Atack and Peter Passell write that “liberal economists today get a painful surprise when they look back and see what the first modern liberals attempted.”(p642) By putting the spotlight on some of the holes in New Deal hagiography, we can better see and comprehend its real dynamics and limitations.

The Relief Association and the Red Cross oversaw the first programs that the government enacted to address the growing social friction caused by the Great Depression. The Relief Association planned to resettle over 500,000 families with its initial budget, but actually reached less than 5,000. (Dickstein p94) But the problems with these first charitable relief organizations were not only those of inefficiency or possible corruption in the case of disappearing money. There was a more profound flaw that may be invisible to statistics but is immediately apparent from testimony. “In a letter to the Daily Worker,” writes Robin Kelley in his book Hammer and Hoe, “a black Birmingham worker complained that the “Red Cross boss stands with a pistol over us while we work, like we are prisoners working out a term.’” (p20) Kelley goes on to document how, in order to determine which families were eligible for aid, relief agencies resorted to forcing people to sell their possessions and even bribing people to spy on their neighbors. (Kelley p22) Relief and charity organizations have conflicted relationships with projects and programs of social change, and historically have almost always opposed any profound challenge to the status quo. Their role in the New Deal era confirms this history. Any attempt at such a change in the 21st century will have to understand and contend with these institutions.

By 1933 it was apparent that the piece-meal charity work of the relief organizations was having little measurable effect on the nationwide crisis. The first major program for national economic reform was the National Recovery Administration. The newly created administration was tasked with nothing less than planning of the economy. Under the purview of the NRA and its code system was everything from industrial pricing to labor management. In the two years of its operations, it helped monopoly corporations get back on their feet and kept the working class on its knees. For the working class, “[t]he NRA,” write Richard Boyer and Herbert Morais in their book Labor’s Untold Story, “proved the National-Run-Around as far as they were concerned.” (p291) The government-sanctioned unions that were chartered under the NRA were quickly recognized by the industrial working class as ineffective at addressing even their most immediate needs. “By 1935,” Boyer and Morais continue, “more than 600 federal locals had been disbanded in disgust. Wages in steel averaged $560 annually, a little more than a third of the $1,500 necessary, according to government figures, to maintain a family on a minimum level.” (p291) For African American workers, the NRA was even more of a disaster, prompting others to call it ‘the Negro Removal Act’. In his book Negroes in the Great Depression, Raymond Wolters recounts that

no minimum wage codes were drafted to protect domestic servants, and higher wages intended for black workers in code industries often were denied by employers who discovered that the codes could be evaded and ignored with impunity. Negro consumers were affected adversely, however, by the rise in the cost of living which occurred when businessmen passed along the higher cost of NRA wages for white workers. (p214)

Chafing at the dangerous idea of planning the economy, even in the interests of the industrial monopolies, the NRA was ruled unconstitutional by the Supreme Court in 1935. But the same problems that haunted it would recur again in subsequent New Deal programs.

Beginning almost exactly where the NRA ended, the Works Progress Administration (WPA), perhaps the most famous of the New Deal programs, was enacted in 1935. A nation-wide program that employed millions in everything from building transport infrastructure to recording blues musicians, the WPA has been documented and engraved across the country, in movies, documentaries, and in plaques that adorn public works from sea to shining sea. Perhaps more than any other part of the New Deal, it is the centerpiece of New Deal revivalism today. The government employment of millions on public works projects was undoubtedly the most successful aspect of the New Deal and may serve as a lesson for proposals for similar policies to address the current crisis. A massive public works program is desperately needed today to repair the nation’s decaying economic and cultural infrastructure. Unfortunately, today’s many invocations of the WPA appear to lack an understanding of the shortcomings and internal structural flaws that are evident to an earnest scholar of the period.

The WPA tended to reflect the already stratified labor markets that it was imposed upon. As large as the program was, it reached only a fraction of the country’s vast army of the unemployed. And WPA jobs weren’t necessarily great jobs. Robin Kelley documents the racialized and gendered bias of WPA work programs. Not only was it most difficult for black women to get WPA positions, but it was also most difficult for them to keep the jobs once they got them. (Kelley p156) If working for the WPA was a privilege, it was also a mixed blessing. WPA wage rates were not only below union rates, but frequently also below the prevailing nonunion market wage. There was also substantial disparity between rural and urban wages in the WPA programs, which, Kelley writes, “allowed local WPA administrators to pay a Birmingham worker the city’s prevailing rate and then send him or her out to the rural areas at a lower wage.” (Kelley, p152) The tendency of New Deal programs to reflect the structural inequalities of the economy rather than reform them should be an important lesson for today’s economic stimulus proposals. Atack and Passell go so far as to suggest that even in the WPA program,

the government contributed to the unemployment problem... participation in these programs was of limited duration, sometimes part-time, and at annual wages that were often far below those in the rest of the economy. (p626)

Probably the best indicators of the efficacy of these programs can be found not in statistics but in the experiences of those who participated in them. In particular, the history of labor unrest in the WPA and other public works programs deserves to be remembered. Robin Kelley documents a WPA strike in Alabama (one of many in the country), which is worth quoting at length because it demonstrates the extent to which New Deal recapitulated the Old Deal…

“On April 15, 1936, about twelve hundred WPA workers in Birmingham and Bessemer left their jobs, and two days later another one thousand relief workers in Jefferson and Shelby counties joined the strike. The principal demands included a reversal of the suspension order, a 10 percent wage increase, and the removal or Ray Crow, whom WPA workers felt expressed antilabor attitudes. Since the walkout technically constituted a ‘strike against the government’… police, armed foremen, and the local sheriff aggressively sought to restore law and order. One of the most violent confrontations occurred at a WPA-sponsored women’s sewing project, where Communists Belle Logan and Kenneth Bridenthal had organized pickets of black woman strikers. Police and gangs of white men toting ax handles arrived on the scene and beat several black women senseless. ‘The men in charge of the project,’ reported Belle Logan, ‘had a Government truck driven up onto the sidewalk into the midst of the women, and the [WPA] guards came over with sticks and clubs and began to beat the colored women, seriously injuring three of them.’ The repression hastened the strike’s end, which occurred within a few days. When it was all over, the county administrator agreed to withdraw the curtailment order but refused to raise wages. Less than a month after the strike, the state WPA administration laid off, without warning, five thousand workers, twenty two hundred in Jefferson County alone, and reduced monthly cash relief allowances from $4.89 to a paltry $1.59.” (p 154)

Despite the many problems with the WPA, it still stands out as the high point of the New Deal. The worst aspects of the New Deal era are undoubtedly to be found in the South, and in particular in the agricultural programs. This geographic disparity, needless to say, was also a racial one.

The Agricultural Adjustment Administration was created in 1933 and was replaced by the Agricultural Adjustment Act in 1938. Despite the proliferation of programs, the African American peoples of the South got shafted by the New Deal. Not only was agricultural labor excluded from the new laws protecting the rights of industrial workers to organize, but also even within the programs that reached agricultural workers, there were serious problems. It is not only that these programs were insufficient or that they failed to ameliorate the desperate conditions of the Southern plantation economy. More importantly, the ways in which these programs were conceived and carried out can teach us a great deal about the underlying ideology and economic imperatives of the New Deal.

By the early 1930s, US agriculture had already been in serious trouble for over a decade. The Great Depression began for farmers after the first world war, when prodigious production without wartime demand translated into a crash in prices of farm goods that lasted throughout the 1920s. The financial crisis of 1929 and the subsequent crisis in industrial production quickly spread to the countryside and deepened the already profound crisis in agriculture. Despite the long-term nature of the agricultural crisis, the policy response to it in the New Deal period was hasty and haphazard. Wolters writes that “the program was approved by the House of Representatives after only two days of debate.” (p 9)

The principle plan carried out by the AAA was to enforce a reduction in agricultural production – by decreasing the supply, or so the theory went, the market would reward the farmers with higher prices. On the ground, this theory translated into the widespread destruction of crops. Raymond Wolters writes that “the AAA’s 1933 cotton contract offered government benefits of $7 to $20 per acre to those farmers who would agree to plow up from 25 to 50 percent of their cotton acreage.” (p10) Not to be forgotten as part of this program were the mass slaughter of millions of farm animals. The immediate human consequence of this drastic reduction of agricultural production was the sudden unemployment of many thousands of the poorest farmers in the South. Thus, the face of the New Deal to many African American farmers was an eviction notice. The inability of the New Deal agricultural programs to develop a solution to crisis outside of this brutal market mechanism was characterized with some clarity at the time by Secretary Henry Wallace who called it “a shocking commentary on our civilization.”

The commitment to a new equilibrium in agriculture was unaccompanied by any programs to create a new structure for the plantation economy. “[T]he AAA program was concerned only with total farm income;” explains Wolters, “the Adjustment Act did not refer to any maldistribution of income within agriculture”. (p 9) Not only was agricultural labor excluded from minimum wage regulations, it was also excluded from Social Security and unemployment insurance taxes. (Atack and Passell p671) This was no coincidence. The poor and the non-white did not vote in the 1930s, and were excluded from real politics in general, especially in the South. The agricultural New Deal was forged in the gauntlet of a legislature beholden to the most rich and powerful Southern landowners who ensured that the new conditions of accumulation accommodate their interests. When the AAA began, Wolters writes,

the 500,000 wealthiest farmers, constituting about 8 percent of the total number, received 40 percent of the national agricultural income while the bottom 50 percent of the farm population received less than 15 percent of the total farm income. (p78)

This eight percent that the Southern New Deal served proved cynically callous to the catastrophes that the relief programs caused. Because the government offered financial incentives for acreage reduction, many big planters were able to make a great deal of money by evicting great numbers of tenant farmers.

But the plight of these poor farmers was too great to be ignored. In response to the mass misery that resulted from the crop reduction program, in 1935, the Farm Security Administration (FSA) was created to help fight rural poverty (which was never part of the AAA’s mission). Unfortunately the FSA suffered from the same structural and ideological limitations as its predecessors. Harry Haywood in his book Negro Liberation writes that

while $5,328,800,000 was appropriated for A.A.A. policies during the period of 1934-41 (a disproportionate share of which went to the big landlords) the outlay for F.S.A. during the same period amounted to $1,120,600,000 -- about one-fifth of the A.A. A. appropriations. (p63)

Even this fifth was divided unequally, and along racial lines. Wolters writes that “[w]hile 192,000 Negro farm tenants were displaced during the 1930s, the FSA provided fewer than 2,000 tenant purchase loans to Negroes and resettled only 1,400 Negro families in its community projects.” (p79) In sum, therefore, it would be charitable to call the agricultural New Deal inadequate. Not only did it directly hurt those most in need, but the efforts made to redress this brutal irony were further compounded by the same contradictions.

At the beginning of the 1930s, the Southern economy was in severe decline. Perhaps, given that the system of land cultivation and ownership was a direct legacy of slavery, this wasn’t such a terrible thing. The Great Depression and the New Deal were an immense opportunity to redress the legacy of slavery and pick up where radical reconstruction left off. There were even several political radicals working within the New Deal bureaucracies to draft just such policies. But the final effect of the agricultural New Deal was precisely the opposite. Writing in 1936, Arthur F. Raper lamented that

The New Deal with its cotton restriction program, its relief expenditures, and its loan services... has rejuvenated the decaying plantation economy. Those who control the plantations are now experiencing relative prosperity. On the other hand the landless farmers... are not only failing to escape their chronic dependence but are actually losing status. Many tenants are being pushed off the land while many others are being pushed down the tenure ladder, especially from cropper to wage-hand status. (cited by Haywood p64-65)

Particularly from the perspective of African Americans, the high point for liberal progressives in American history is found to be decidedly low. African American columnist Kelly Miller reported at the time that, among the Southern black population, “the New Deal was criticized, denounced, and condemned... Nothing good was found in it.” (Wolters p356)

However, even from a macroeconomic standpoint that is largely deaf to disparities of race and gender, the New Deal as a whole is found severely wanting. Looking at the government budget throughout the interwar period as a whole, Atack and Passell document a rather startling fact for those of us who were taught that the New Deal was a golden age of welfare economics pioneered under the wise tutelage of the famous John Maynard Keynes. “On closer inspection,” Atack and Passell write,

it becomes clear that the expansionary stimulus of fiscal policy was very modest... the net impact of all government spending on aggregate demand was negative in four out of seven Roosevelt years and was surely less expansionary overall from 1933 to 1939 than it had been from 1930 to 1932! …Herbert Hoover was a better Keynesian than FDR.” (p639)

A great amount of New Deal revivalism suffers from the illusion that the political will and motivation behind the government policies of the era was generated by the altruism of Franklin Roosevelt. A thorough reading of his letters would perhaps go some way in dispelling these notions, but not completely. One curiosity that has haunted New Deal scholarship for generations has been the question of what method was used to determine the apportioning of the New Deal budget. It is an open secret that government relief was not awarded based on need. While there may never be a complete answer to why which states got more or less money than others, recent econometric research by Gavin Wright indicates that the best indicator for which region got most of the New Deal money was which state was a swing state. Atack and Passell summarize:

“It has been suggested that Roosevelt may have had something more prosaic – more Machiavellian -- in mind, too: getting himself and other Democrats reelected… The South, ever-loyal to the Democratic party, seemingly got little, while western states that switched allegiance frequently were heavily courted with dollars. Wright’s regression analysis... explains 80 percent of state-to-state variations in New Deal spending.” (A&P p644)

In this first part I have concentrated at length on the agricultural New Deal because it is most frequently excluded from accounts of the period. In general have I chosen to focus on that which is excluded not simply to rain on the parade, but because blind spots cast what is already well known into a different light. These lacunas throw a wrench in the gears of New Deal revivalism but they do not undermine it. The need for a major government-led economic stimulus program for industry and agriculture remains extremely urgent today. The best way to guarantee the success of such a program is to understand the failures of the New Deal. But in this we have only begun.

Part 2. Lasting Effects
Until now this account has run the risk of becoming a list. The risk is worth it I believe because, unlike the primrose accounts of the New Deal that list its successes, this information is not well known or comprehended. In this second part we will turn to some of the more lasting effects of the New Deal, in particular those relating to unions and the labor movement. The Great Depression was also the great leap forward for the labor movement in the United States, and this is commonly equated to New Deal legislation like the Wagner Act, which for the first time allowed unions into the economic and cultural fold of the American Dream. But there are no victories without sacrifices and no deals without concessions.

In his 1983 article Dress Rehearsal for the New Deal, Steven Fraser investigates the history of the Amalgamated Clothing Workers Union under the presidency of Sidney Hillman in the early 1900s and into the New Deal period. Fraser demonstrates that the new model of unionism pioneered by Hillman and others like him was later adopted in the New Deal and eventually became the model of unionism in the United States. Fraser summarizes Hillman’s project as nothing less than “a new system of industrial labor relations, a system predicated on the restructuring of working class behavior and culture and on decisively enlarging the terrain of state authority.” To briefly summarize the thrust of Fraser’s article, at the turn of the century, increasing labor unrest was causing no small amount of concern among the nation’s business community and labor bureaucrats. In particular, one of the most stubborn obstacles to successful financial investment was the unpredictability of labor costs. Strikes and the large expenditures required to suppress them were a perennial headache for industrialists and financiers everywhere, and they didn’t make a union president’s job any easier either. “As often as not,” Fraser explains, “stability requires change.”

In the first few decades of the twentieth century, union leaders and businessmen in the textile industry, where labor unrest was most notorious, began working together to develop a new model of labor management. At the drawing board for the new kind of unions were a group that would come to define the character of the US labor movement. “The development of needle-trades unionism,” Fraser writes, “everywhere called for the contributions of interested businessmen, social workers and social engineers, political reformers, and agencies of the state.” The introduction of the new unions was by nature contagious. Once individual industrialists began to experiment with the new regime, market forces “encouraged them to seek ways of making it a legitimate institution throughout the industry.” (Fraser) The new coalition would grow in size and influence, and by the time of the Great Depression, was poised to expand its model of unionism across every industry. The carrot of a stable work force promised by the new unionism also carried a stick: “Hillman warned that if nearsighted opposition to industrial democracy continued,” writes Fraser, “the recent revolutionary doings in Russia would be repeated elsewhere.”

Through the alchemy of the new unionism, Hillman and other pioneers in the textile industry aimed to transform unions into a form of what many unions in US history arose to struggle against – the techniques of scientific management. Developed by the perverse genius Frederick Winslow Taylor, scientific management, also known as Taylorism, aspired towards absolute control over workers in the production process. The new unionism of Hillman, which was later to become the unionism of the whole country through the New Deal, was a novel liberal form of scientific management that aimed to achieve through consent and concessions what earlier regimes had imposed by force.

The coalition between labor leaders and enthusiasts of scientific management was not metaphorical or coincidental, and it remains on the record. Hillman became close friends with Morris Cooke, the president of the Taylor Society and another honcho in the New Deal labor bureaucracy. Together they worked, Fraser recounts, to get the clothing workers union to both “apply uniform production standards through the medium of union democracy,” and also “to play a major managerial and administrative role in modernizing the clothing sector.” Hillman and Cooke stand out in history as some of the most vocal proponents of turning unions into a mechanism of scientific management. But they increasingly attracted many others. A labor manager named Meyer Jacobstein, in a Taylor Society conference in 1920, marveled at this new idea that promised to transform stewards into foremen. Jacobstein prophesized that unions, which were understood by many at the time to be incubators of revolution, could ultimately deliver to capitalists a labor management regime that would be more efficient “than that type of Prussian discipline which is purely mechanical and superimposed by officials vested with superior authority.” (Fraser)

It wasn’t all talk. Together with the help of the Taylor Society and others, Hillman was able to deliver on his promises with the textile union that he dominated. Through the establishment of a limited industrial democracy for workers that the union established in conjunction with employers, Hillman and other like-minded labor leaders were successful in getting workers to cede their right to strike. In return for a limited autonomy, unions were able to offer employers uninterrupted production and predictable labor costs in one of the most volatile industries of the economy. But economics alone could not deliver this. To persuade union members to accept the new system, the new unionism also had to have a cultural front.

In 1919, Hillman ominously declared: “We have actually worked out the moral sanction behind work.” (cited by Fraser) In the textile mills of New England, built in the image of the famously Satanic mills of Britain, and home to the unspeakable misery that is readily apparent to even the most superficial survey of textile workers from this period, this was no small claim! The new system, Fraser explains, “depended on formulating a new language and ideology… to endure,” he continues, it would not be enough to tempt workers with economic incentives. The new unionism “had to sink its roots deep into the social psyche of the garment workers.” (Fraser) The mission of the new unionism was nothing less than to assimilate generations of workers both economically and socially into a subordinate position in the American Dream. Many of these workers were not only first generation immigrants who spoke little or no English, but many also had radical political and economic views. “To make citizens was not the work of the day,” writes Fraser, and it required the cooperation of both business and government. For the promise of uninterrupted production and a domesticated, homogenous tax base, both were willing.

The unions kept up their end of the bargain. Under the new leadership, unions like the Amalgamated Clothing Workers Union converted themselves into mechanisms for the homogenization of the US working class. Fraser writes how foreign language locals were dissolved and how English-only rules were enforced at union conventions. Unions also encouraged their members to formally become US citizens. Membership education programs were started to indoctrinate members about ‘American values’ and ‘American life’. But homogenization did not revolve totally around the notions of citizenship. More specifically, it was also about bringing about a mass ideological conversion of the working class.

It must be remembered in retrospect that at the turn of the century many unions were part a very radical social movement. The vision of unions as a liberal form of scientific management where the interests of labor and capital could be reconciled arose in direct contradistinction to other contemporary unions. The Industrial Workers of the World, who called for the abolition of the wage system and for a classless society, were at the height of their influence and infamy when Hillman was getting started. The fact that unions today are for the most part conservative defenders of the status quo is an indication of the success of Hillman and the Taylor Society in implementing their plans. There is an unbroken line stretching from the Amalgamated Clothing Workers Union into the New Deal labor legislation and ending in today’s business unions. The process of transformation, however, was not automatic or inevitable.

Many of the immigrant workers in the New England textile mills where Hillman directed what Fraser calls ‘the dress rehearsal for the New Deal’ arrived on North American shores with a deeply seated belief in socialism. Fraser explains that for many immigrant groups, particularly Jews, the relationship between unions and socialism “was practically organic.” Many left their countries of origin precisely to escape the miseries of capitalist exploitation. This was a formidable obstacle to the dreams of Hillman and the Taylor Society. The apostles of the new unionism, however, developed a plan to manipulate the congenital radicalism of the union membership to serve their interests.

The liberal scientific managers argued that the best way to enforce discipline in the factory and grant the capitalist class the legitimacy in the eyes of workers would be to concede to workers a limited measure of their demands. Unions, they argued, could appeal to the radicalism of the working class but simultaneously function to contain and police it. In this way, the radicalism of workers could be controlled and manipulated. For the new unionism to succeed, political ideas like the abolition of the wage system, Fraser writes, “had to be rechanneled, transformed, and encoded in a new rhetoric of workers’ demands and perceptions emphasizing economic self-interest and industrial equity.” To this end, Fraser explains, working class militancy and the rhetoric of injustice could even be promoted, “as it enhanced the credibility of the union not only among is own membership but also among elements of the industry less inclined to accept the new arrangements without a struggle.” All of this was theorized in advance by the coalition of labor leaders, businessmen and government functionaries. At the time, this idea of unionism was nothing short of alchemical. The goal was to co-opt the radical inclinations of the working class and turn them into a new and improved form of work discipline.

There was definite opposition to this new form of unionism, not only from businessmen and statesmen who thought it was a pipe dream, but also especially from those with radical politics who understood what was going on. The lyrics to a song composed by members of another textile union with more radical and democratic leadership ran: “The Hillquits, Dubinskys and Thomases / By the workers are making false promises / They preach socialism but they practice fascism / To save capitalism for the bosses.” (cited by Aronowitz) The Trade Union Education League (TUEL) founded by the Communist Party formed perhaps the most significant organized radical opposition to the new unionism and denounced it at every chance. (Fraser) But the crisis of the Great Depression set the Communist Party on a different course, resulting in the dissolution of TUEL. As the 1930s progressed, Hillman and his associates proved ever more convincing to labor leaders, businessmen, politicians and rank-and-file workers. Promising an end to strikes for capitalists and government and an end to the class war for the working class, the Amalgamated Clothing Workers Union and its allies made an offer that was difficult to refuse. This is the hidden story behind the Wagner Act and the New Deal labor legislation which was the foundation for the modern US labor market. The, price, Fraser discerns, was politics. “Politics itself,” he writes,

that is the politics associated with the traditional slogans and categories of the class struggle, was being interred... Gone were the millenarian enthusiasms and universalist yearnings that marked the union’s founding era. Gradually they were replaced with conceptions of economic interest and political pluralism and with a concern for reform modulated by a sense of social responsibility.

While many of the CIO unions were organized by very political members and leaders, the bargain of the New Deal locked them into the legal and economic relationship designed by Hillman and others. As such, “[l]ike the ACW in an earlier era,” writes Fraser,

the CIO became a consenting partner to a relationship which guaranteed it political legitimacy and material advantages, and to which it contributed its moral and institutional authority over a working class no longer amenable to traditional forms of patriarchal dependence.

To be clear, the loyalty of the CIO to the new system of labor management and to capitalism itself was not masterminded by a few conspirators. Hillman and his friends at the Taylor Society, influential though they were, were not alone. At least since the founding of the American Federation of Labor by Samuel Gompers, there have been no shortage of US labor leaders going on the record about their devotion to class collaboration. No less a figure than John L. Lewis, founding father of the CIO, was blatant in his views on the subject, writing that

[t]rade unionism is a phenomenon of capitalism quite similar to the corporation. One is essentially a pooling of labor for the purpose of common action in production and sales. The other is a pooling of capital for exactly the same purpose. The economic aims of both are identical -- gain.” (cited by Moody p56-7)

While these ideas have never been without opposition, they have been carried on in unbroken procession through the decades. George Meany, president of the AFL in the 1950s, proudly remarked that he never walked a picket line in his life. “We are dedicated to freedom,” he wrote in 1955, “through a system of private enterprise. We believe in the American profit system.” (Moody p56) David Dubinsky, president of the International Ladies Garment Workers Union (ILGWU) went even further in announcing the complete subservience of labor to capital when he wrote that “[t]rade unionism needs capitalism like a fish needs water.” (Murolo and Chitty p241) Indeed, renouncing the existential struggle between labor and capital on both economic and ideological terms seems to be a prerequisite for the presidents of the largest US unions. United Auto Workers (UAW) president Walter Reuther insisted once and for all that “[w]e make collective bargaining agreements, not revolutions.”(Murulo and Chitty p240) Many of these quotations are well known, but they are not always understood within the context of the New Deal. They illustrate perhaps more clearly than any statistics the price that the working class paid for the New Deal.

The loyalty of unions to their state and system was tested in both the second world war and in the cold war. They passed both trials with flying colors. They proved more effective than foremen, spies and thugs had ever been at disciplining workers, discouraging strikes, and eliminating radical leadership. Meanwhile, union membership soared to unprecedented levels throughout the next few decades. Measured in union density alone, the post-New Deal era may seem like a golden age for the working class. But by other indicators the picture is less favorable. Great Depression scholar and Federal Reserve Chairman Ben Bernanke writes that “employment growth in the prewar manufacturing industries... tended to exceed that in their post-war counterparts... real wage growth was significantly larger during the prewar in all eight industries, as well as in the aggregate.” (p 171, 173) If the legacy of the New Deal was not an increase in employment or wages, what was it? To return to the question we posed at the beginning, whose New Deal was it really? While millions of working class people have had their lives improved by the New Deal, both statistics and testimony reveals that they were not the principal beneficiaries. The real victor was monopoly capital, which emerged from the New Deal and the second world war more powerful than ever. Harry Haywood is worth quoting at length:

Before the war one hundred large corporations accounted for about 30 percent of the nation’s manufacturing output. Now they put out 70 per cent of it. More than 500,000 independent business concerns went out of existence during the war. That the war strengthened Wall Street’s grip on the nation’s economy is so obvious that even an official of the Justice Department had to admit: “The concentration of economic power in the hands of a few small vested groups is today higher than ever before in our history.” (p 101-102)

The feat carried out by the New Deal was not to rejuvenate US capitalism – only the second world war was able to accomplish that. The real miracle of the New Deal was in convincing the US working class that the rejuvenation of capitalism was in their interests, and in the creation of a form of unionism which would continue to carry out this massive economic and ideological mission into the distant future. It was successful before the New Deal and remains effective today.

In 1914, textile baron Joseph Schaffner of the Hart, Schaffner and Marx company testified that

[i]n our own business, employing thousands of persons, some of them newly arrived immigrants, many of them in opposition to the wage system and hostile to employers as a class, we have observed astonishing changes in their attitudes during the four years under the influence of our labor agreement.” (cited by Fraser)

In the summer of 2009 I had the opportunity to visit a Hart Schaffner Marx textile factory outside of Chicago. I was at the time working as an intern with the United Electrical workers. We visited the factory to attend a celebration rally held by Workers United. This union was hosting a catered and televised event to publicize a recent victory – the company threatened to close the factory, but were convinced by the union leadership to reconsider. I arrived to the event late, and was surprised upon entering the plant to find that at least half of the employees were still working at their sewing machines while victory speeches were being made in the next room. I made my way into the room where the rally was being held. White men in suits were on stage making speeches for the cameras and the audience of mostly female East Asian union members was largely silent. Only once did the workers erupt into cheers without being prompted to -- when one of their coworkers took the stage and addressed them in their native language. It immediately became apparent to me that many of the workers did not speak English, and that their victory rally was in fact literally unintelligible to them. Only once was another worker brought up on the stage, not as a speaker but as a spectacle. A man congratulated the woman who was probably in her sixties on having worked several decades for the company. He then told the audience that he hoped she would be working there several decades more (!). Workers, businessmen, labor leaders, press and politicians then all adjourned for a catered lunch on the lawn. (The other half of the work force continued to work through this lunch.) This surreal celebration was a direct descendant of the kind of unionism institutionalized by the New Deal. It is emblematic of the price that the labor movement paid for inclusion into the status quo. The New Deal gave the workers of the United States unions, but it cut the heart out of the labor movement.

Conclusion: The long walk out of crisis
To see the New Deal from the standpoint of its victims is to glimpse an altogether different perspective of US history and hence the current crisis. While many radicals at the time recognized that the New Deal was a profound defeat for their ideas and organizations, radicals today often fall into the same trap that Sidney Hillman and his friends at the Taylor society created for their union members. The popular idea that the struggle for improvement in basic living conditions is automatically a struggle against capitalism is shown to be an illusion by the history of those excluded from the New Deal. Even the social democrat Norman Thomas (the same Thomas ridiculed in the song quoted above) was highly critical of the New Deal. When asked by a reporter if Roosevelt’s New Deal had carried out the Socialist Party program, he responded famously that yes, the New Deal had carried it out, “on a stretcher.”

The New Deal reveals to us today that capitalism cannot be reformed. Even a nation-wide public works program like the size of the WPA proved completely inadequate to address the profound crisis of the Great Depression. The solution to the Great Depression was found the same way all crises of capitalism are found; through renewed accumulation on a larger scale. The second world war, the cold war, and finally neoliberal globalization have all been responses to the innate need of capital for relentless expansion. In the last few decades, this expansion has encountered planetary limits.

The result in the United States is that the system has turned on itself, and is now embarked on a course of cannibalizing what remains of the welfare state created in the New Deal period. Ironically, this makes a new New Deal more necessary than ever for capitalism. If the middle class continues to disappear at its current rate, the domestic consumer market for service industries (which is now the core of the US economy) will collapse. “The question for monopoly capitalism,” wrote Paul Baran and Paul Sweezy, “is not whether to stimulate demand. It must, on pain of death.” (p 111) US capitalism today is caught between equally pressing needs to help the working class and to devour it.

This contradiction will determine the course of struggle ahead. And while it is insoluble, as Bertold Brecht said, “in the contradiction is the hope.” A new New Deal is necessary to save the current economic and social order, even while this order militates against it. From this impossible contradiction arises the unique opportunity for the construction of a radically new social and economic order. In formulating plans of action for the immediate future, we must both learn from the past and also seize the current opportunity to transcend it. A new New Deal will not deliver us from shadow of capitalism any more than the first New Deal could. Similar calls today for the reindustrialization of the United States suffer from similar amnesia. According to the Bureau of Labor Statistics, eleven times more US workers were killed in industrial accidents during the second world war than US soldiers in combat. (cited by Boyer and Morais, p336) There is no politically simple or economically accommodating way to address the current crisis. The long walk out of crisis is a walk of revolutionary struggle larger than any yet attempted by humankind. While there is no map indicating a precise path out of today’s exceptional planetary contradictions, an acknowledgment of the path that we must walk upon and a clear headed critique of the past will be essential, perhaps in the very near future.

1 The names of other labor and political leaders whose praxis of unionism rested on collaboration with employers and the state.
2 The popularity of the (apolitical) ideas and organizing strategies of Saul Alinsky in today’s labor movement can be understood historically from this perspective.

BIBLIOGRAPHY (in order of appearance)
American Indians in U.S. History, by Roger Nichols, 2003
A New Economic View of American History, Jeremy Atack and Peter Passell, 1994
Dancing in the Dark: A Cultural History of the Great Depression, by Morris Dickstein, 2009
Hammer and Hoe, by Robin D.G. Kelley, 1990
Labor’s Untold Story, by Richard Boyer and Herbert Morais, 1955
Negroes and the Great Depression, by Raymond Wolters, 1970
Negro Liberation, by Harry Haywood, 1948
Dress Rehearsal for the New Deal: Shop-Floor Insurgents, Political Elites, and Industrial Democracy in the Amalgamated Clothing Workers Union, by Steven Fraser, 1983
False Promises, The Shaping of American Working Class Consciousness by Stanley Aronowitz, 1992
An Injury to All, The Decline of American Unionism, by Kim Moody, Verso, New York 1988
From the Folks Who Brought You the Weekend, A Short, Illustrated History of Labor in the United States, by Priscilla Murolo and A. B. Chitty, illustrated by Joe Sacco, The New Press, New York 2001
The Authoritarian State, by Max Horkheimer, [1940] Telos Press, Spring 1983
Essays on the Great Depression, by Ben Bernanke, 2000
Monopoly Capital, by Paul Baran and Paul Sweezy, 1966

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