Welcome, friends, to another edition of Economic
Update, a weekly program devoted to the economic
dimensions of our lives.
I’m your host, Richard Wolff, and today’s
program takes into account the fact that Americans
are beginning to look into the election — the
big one for president coming up next year,
2020.
Because this election is becoming an issue
and will of course become more of an issue
as the months roll on, I thought it would
be a good time to stop and take a look at
the broader historical picture of American
politics right up to the present.
So I call today’s program “American History
and the 2020 Election.”
If you’re interested in this argument that
I’m going to be presenting during this program,
I should also mention to you that an article-form
version was published in the digital magazine,
Counterpunch, which you can find online at
https://counterpunch.org, dated June 3, 2019.
Of course, when I’m talking about the American
working class, I don’t mean to suggest that
everybody who’s in that working class, roughly
150 million Americans, our fellow citizens,
agree on everything or act in the same way.
There are important divisions of the working
class: men and women, whites and blacks, skilled
and unskilled, more educated and less educated
workers.
The regional character of the working class
in the South is different from that in the
West, and so on.
But there were things over the last 75 to
100 years that brought all working people
together.
And by “working people” I mean what the
government calls “non-supervisory employees,”
the workers who do the work that makes this
country function, producing and distributing
goods and services.
There are roughly 150 million non-supervisory
workers employed in the US today, and they
are important not only because they make everything
go around and produce the goods and services
without which we couldn’t live but also
because they play a vital role within our
current economic system, capitalism.
Capitalism is an economic system in which
a relatively small minority of people — owners,
CEOs, the people at the top of corporations,
boards of directors, and so on — have the
majority of power, wealth, and income in society,
and such a system could not continue to function
unless the mass of people, the vast majority,
the non-supervisory working class allowed
it.
Thus, for capitalism to survive, it has always
been necessary for those at the top to find
allies in the working class, and the history
of this relationship is what we’re going
to be sketching in what follows.
Our story starts back in the 1930s at the
height of the the Great Depression.
It starts there because capitalism crashed
big time in 1929.
Suddenly, in this country, an economy that
had been booming along basically since the
Civil War crumbled.
During this period, America had grown richer
faster than even its old parent Britain could
do, had grown richer as fast or faster than
the only other quickly growing national economy
at the time, Germany’s, could do.
America was a success story of exploding net
wealth — we killed off enough of the Native
Americans in this country to allow an immense
expansion of the immigrants from Europe across
this country.
Such wealth created the great names of that
time: the Rockefellers, the Carnegies, and
all of those people who got called by the
name that most others understood applied all
too well: “robber barons.”
Such people became extremely wealthy, and
they celebrated the system that made them
so.
They also convinced everyone else pretty well
that the wealth and the growth in this country
were somehow their doing — not the work
of the mass of people but the result of the
genius of the “captains of industry,”
the robber barons themselves.
They did a pretty good job of convincing people
of this until, that is, the crash of 1929,
when suddenly this great capitalist system
with all of these rich Rockefellers and so
on at the helm fell apart.
Between 1929 and 1933 there was a continuing
collapse, and by 1933 the unemployment rate
in the United States had reached 25%.
That means that one out of four people were
without a job.
Every family had either a mama or a papa or
a cousin or an uncle without work and, therefore,
all were affected.
Whatever savings people had accumulated were
quickly used up, because there was no support
for unemployed people.
There was no unemployment compensation system
then, and thus people had nowhere to turn.
The desperation of the times was captured
in novels like Of Mice and Men, Grapes of
Wrath, or the other great works by Steinbeck,
Dreiser, and the other novelists of the time,
which you might remember reading as a high
school or college student.
In that collapse, the mass of the American
working class finally saw through the pretenses
of capitalism.
They saw that capitalism could deliver not
the goods but the really bads, and the American
working class drew a conclusion.
The conclusion was that the political party
that represented capitalism the most, the
party supporting both capitalism and the wealth
of the rich capitalists, that is, the Republicans,
were the people who were not working men and
women’s friends.
Working people turned and placed their hopes
in new directions.
Some of them decided to go with the Democratic
Party: at least it wasn’t the Republicans,
and at least the Democrats showed some sympathy
for workers’ situation.
Many workers decided to do something much
more dramatic.
They joined labor unions in a way that Americans
had never done before.
Indeed, the greatest wave of labor organization
in the history of the United States took place
in the depths of the Depression of the 1930s.
Millions of Americans who had never been in
a union before, whose parents had never had
to do with unions before, decided that the
best way to get through the hard times of
the terrible Depression was to unify with
other workers and work together to make something
happen.
Those who were even more upset by what was
happening to them and by the economic system
they thought they could rely on joined either
the two main Socialist parties of the period
or the Communist Party.
These parties became very important in American
history at that time, and indeed a powerful
coalition formed from them, an alliance between
the Communist Party, the Socialist parties,
and the labor organizers under the heading
of the CIO, the Congress of Industrial Organizations.
Members of this coalition went to the then
newly elected president of the United States,
Franklin Roosevelt, a Democrat brought in
out of frustration with the Republicans, the
latter of whom had been boasting most loudly
of the great achievements of capitalism.
The members of this labor coalition went to
that new president, and they said, “We put
you in office.
You’re here to help us through this terrible
Depression.
If you do, we will celebrate you, and if you
don’t, we will vote you out.”
The Communists, the Socialists, and the other
organizers of unions together represented
tens of millions of people.
The president, Mr. Roosevelt, got the message.
He went back to the rich people he came from,
the big leaders of business like himself,
and he said, “I just had a meeting with
the Communists, Socialists, and the unionists,
and they basically read me the riot act.
I had better help those people, the mass of
Americans, through this Depression, or I’m
out of here.
And gentlemen,” he said looking at them
— there were very few ladies present in
that room — “I advise you to go with me
in this effort because if you don’t, these
people are very angry.
They’re already talking — particularly
those Socialists and Communists — about
a revolution here, you know, like the one
they had in Russia just a few years ago, back
in 1917” (which wasn’t that long ago when
you're talking in the early 1930s).
So he finished this conversation, Mr. Roosevelt
did, and he said to the rich people with him,
“The government has no money.
With millions of people unemployed and businesses
falling apart, nobody’s taxes are being
paid.
The only way to help these people is to get
money, and the only people who have money
are you, you corporate leaders, you wealthy
millionaires.
So you’ve got to give me the money so I
can take care of the mass of people, and I
urge you to do it because if you don’t,
there’s a good chance those people will
remove whatever money you have, and you won’t
be in a position to give anybody anything
anymore.”
Half of those business tycoons gathered bought
Mr. Roosevelt’s argument, and they agreed
to his proposition.
Mr. Roosevelt then went and did something
unprecedented in the US, and what he did was
to take money from the rich, taxing them very
highly and borrowing what he didn’t tax
from them, basically telling them that they
had no other choice.
He used this money first to create the Social
Security system, which suddenly offered a
safety net for all American families.
It was as if Mr. Roosevelt had said, “You’re
elderly, you’re 65 years of age and older,
so I’m gonna give you a check, a government
Social Security check every month for the
rest of your lives.”
Second, Mr. Roosevelt created an unemployment
compensation system for the first time.
If you lost your job through no fault of your
own, the government would give you a check
every week for a year or two to help you through
until you found new employment.
Third, he instituted a minimum wage.
We never had that before in America, just
like we never had a Social Security system
before or unemployment compensation.
Suddenly, if you had a job, you couldn’t
be paid below a certain amount because it
was indignant for you and indignant for society
to treat people this way — what an idea!
Finally, with his massive government hiring
program, it was as if Roosevelt told the American
people, “If the private capitalists of this
country can’t or won’t hire millions of
Americans who only ask for a job, then I will,
as president.”
And he did this.
He hired roughly 15 million people between
1934 and 1941.
The American working class could not believe
what they had accomplished through the alliance
of the Communists, the Socialists, and the
unions.
They had pressured a president to tax the
rich and the corporations in order to provide
a vast program of help and support to working
men and women, the working class.
And the working class made a commitment: this
is our guy, Mr. Roosevelt.
And so they turned to his party, the Democratic
Party, and said, “This is the party of the
working class, and we’re gonna support you.”
How powerful was this support of the working
class?
Well, let’s see: Mr. Roosevelt was president
four times.
He was reelected three times, that is, by
overwhelming support of the American working
class.
The working class became the Democratic Party,
and the Democratic Party became it.
It’s an extraordinary story, and it’s
when the politics of this country were shaped
in a profound way.
The role of the Democratic Party and of Roosevelt
was simple.
Capitalism as a system, if left in the hands
of private enterprises, capitalists, and big
corporations, can and will blow itself up
and produce catastrophes like the Great Depression.
The only way to manage that, to prevent such
catastrophes from happening over and over
again, is to bring the government in through
a massive intervention of an ongoing sort,
like Social Security, unemployment compensation,
minimum wage legislation, and federal jobs,
when the private sector can’t provide a
living wage to everybody who needs and wants
one.
What a commitment!
And who’s to pay for it?
Big business and the rich.
That set the tone for what the Democratic
Party did, but it also set the tone for what
the business community would do next.
Confronted by a massive defeat, they had to
pay.
They had to pay taxes like they had never
paid before to fund a program of helping the
mass of people.
They had been made out to be the problems
of our society, the “robber barons,” who
cared only for profits and not for the well-being
of the American people.
Capitalism had given itself a black eye, and
the Democratic Party pointed at it and said,
“Never again!”
The business community was horrified.
Would they have to pay high taxes forever
in this system?
Would they not be on top of it?
Would they be held responsible forever?
“No!” they said, and the rest of this
story relates how American politics were changed
after Mr. Roosevelt was gone.
We’ve come to the end of the first half
of this program, so having teased you a bit,
before I take you to the next step, bringing
the story up to our current president, I want
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Stay with us, and we will be right back!
Welcome back, friends, to the second half
of today’s Economic Update.
We had taken our story of the American working
class’s history through the Great Depression
and even to the end of World War 2.
That was the crucial time because the Depression
was now over.
The working class had embraced the Democratic
Party of Franklin Roosevelt, and vice versa.
The war had put Americans back to work — half
of the unemployed took on a uniform, and the
other half went to work producing the uniforms,
guns, ships, and all the rest.
So 1945 marks the crucial end of the Depression,
the return of people to jobs, and the death
of Mr. Roosevelt, and that was the opportunity
for action, that is, for the Republican Party
to lead the way in pushing back against all
that had been accomplished in the 1930s, undoing
what had been done: that thing called the
New Deal.
Now the agenda was to undo the New Deal, and
the way the Republican Party and the business
community, working very closely together,
did that was to destroy the New Deal coalition,
that combination of Communists and Socialists,
on the one hand, and unions, on the other.
The working class’s leadership congealed
in those groups: Communists, Socialists, and
labor unions had to be destroyed so that the
Republicans could then find allies within
the working class to pull over to their side.
That way the Republican Party wouldn’t face
a largely united working class, as it had
in the devastatingly successful run of the
Democrats under four presidencies of Mr. Roosevelt.
So here’s how Republicans did this.
First, they went after the Communists by claiming
that they were not leaders of the working
class but rather evil agents of a foreign
power.
That way they justified getting rid of them,
and the minute they finished that, they did
the same to the Socialists and said that they
were the same as the Communists — they just
spelled things in a different way.
They taught Americans to be very frightened
of all of that, very hostile, and Russia became
the great enemy.
This was step one: break the working class
coalition.
Step two: hobble the labor movement.
This especially took place with the passing
of the Taft-Hartley Act of 1946, a law that
stipulated that anything that a trade union
won at a workplace had to be given to everybody
who worked there, whether or not they were
members of the union, whether or not they
had gone out on strike when the union called
them to do that, and whether or not they paid
dues to the union.
This gave everybody an incentive to be a free
rider, that is, to get the benefits of labor
struggles without being part of the union
movement.
That marked the beginning of the downhill
run of the labor movement, which was eviscerated
in this way.
Third, businesses decided they could make
more money by going out of the country.
They began that hemorrhaging of jobs out of
the country to cheap labor somewhere else,
which the unions couldn’t fight because
they were fighting desperately to survive
the onslaught of the government’s attack
on them.
All of this worked.
The long and the short of it is that this
worked.
The New Deal coalition was broken up.
Part of this effort also involved forcing
women back into the house, women, that is,
who had been pulled into the labor force during
World War 2 when the men went off to fight.
Women like Rosie the Riveter had become workers
everywhere in America.
Now, after the war, the Republicans led the
charge: women must go back in the household.
A woman, they claimed, wasn’t a hero if
she was doing the work that the men used to
do and doing her part for the war effort.
No, no, she became a person who ought to be
at home, who ought to be taking care of children.
The whole Women’s Liberation movement was
born out of the attempt to push women back
to a subordinate household role that was not
valued, and yet they were told that they had
to do this.
Simultaneously, black people, who had begun
to emerge from the Jim Crow segregation of
the past into the modern American working
class alongside white people, were pushed
back and made subordinate in various ways.
White workers were told that they really were
different from black workers — the opposite
of what the message of the 1930s had been
in many cases.
The idea now among Republicans and their allies
was to build up the divisions within the working
class to break them apart, to stop them from
being unified around the idea that capitalism
was their problem and that the Democratic
Party would be the party that would save them
from what capitalists would otherwise be prepared
to do to them again.
This strategy worked in large part.
The working class, the labor movement, fell
apart.
Women and men started playing the old roles
again and not the new ones they had taken
on during the war.
Segregation and race hostilities were revved
up again where they had not survived so well
before.
And so the working class fractured, and the
Republicans were able to make real gains,
to be the champion of white against black,
as well as the champion of the male worker
on the job against women.
You can see the situation that gave birth
to modern identity politics in this onslaught
of the New Deal.
What did the Democratic Party do?
Did it go to its roots and say, “No, we’re
gonna be the united working-class”?
No, it didn’t know how to fight this battle.
The Democrats, too, were hobbled.
They didn’t rely on their left wing because
it was tarred with the brush of “Communism”
and “Socialism.”
So they fell for that kind of splitting of
the labor coalition, and they themselves helped
split it further.
Indeed, a new generation of Democrats led
by people like Bill Clinton emerged, who said,
“Okay, if we can’t hold on to the working
class, maybe we can gain power for the party
by appealing to the capitalists.
The party not of Franklin Roosevelt but the
party of the other side — the Republicans
— split the working class and hurt us.
We’ll split the capitalist class and pull
over a bunch of them to support us.”
And what you have in recent decades is the
result: two political parties, both of whom
are begging for money from the rich, the powerful,
and the capitalists, and each of them with
a hand on part of the working class — the
Republicans more and more appealing exclusively
to white, male workers, and the Democrats
more and more to female, non-white minorities.
This is the modern picture of party affiliation
among the working class that we’re used
to.
But both parties are unwilling and unable
to challenge capitalism, because both depend
on the same funders.
They depend on the same support from the same
small part of society.
The Democrats thus could not maintain their
oppositional position that they had developed
in the 1930s.
And the man who comes to power and puts it
all together — Ronald Reagan — he takes
the crucial step to finish this job of decimating
the labor coalition.
He begins his presidency by throwing the air-traffic
controllers out of their jobs, showing that
he is gonna crunch down on what remains of
the labor movement and that he is gonna celebrate
globalization.
Of course he will help American companies
that want to go abroad!
Of course he will help American companies
that want to use this new invention of the
computer to get rid of millions of jobs, throwing
people into the chaos of unemployment and
hunting for a new job!
The power of the business community was rebuilt
as it was before the Great Depression, and
the American working class split.
Mr. Reagan gets enough of particularly white
male workers to pull away from the Democratic
Party to get power.
Mr. Clinton, who comes afterwards — he has
given up.
He supports the same capitalists, he supports
globalization, he supports all of it.
His only claim to the mass of the working
class is: “Look, you should vote for me,
not those like Mr. Reagan, because I’ll
soften these developments.
I mean, I’ll do the same stuff that he did,
but I won’t do it so harshly.
I won’t do it so quickly.
Yeah, you’ll lose your job to a computer,
but I’ll give you some help along the way
so it won’t be as bad as those Republicans
will let it be.”
The Democrats become Republican Light, and
that’s not a winning strategy, not at all.
Because the white working class — the men,
and particularly the white men, who increasingly
supported mostly the Republicans — helped
the Republican Party win.
The Republicans appealed to them.
But the white working class was getting frustrated,
as were women, blacks, and others across all
this period.
Whether it’s Reagan or it’s Clinton, whether
it’s the old Republicans or the Democrats,
the underlying reality is that both of those
parties are letting capitalism do what it
does: replace people with machines, move jobs
abroad, build up the profits of the few, and
neglect the conditions of the mass of people.
And people get angry.
It takes a while, even decades, but across
the 1980s and 1990s and the first decade of
this century, all of these processes are at
work until finally the working class is angry
enough to say, “We don’t care whether
it’s the Reagan Republicans or the Clinton
Democrats!
This is all the same!
We want something different!”
There is a memory, an echo, a historical trace
of what the working class remembers, even
if it was their parents who told them about
something different back in the 1930s.
And they want something different.
For a while in recent presidential campaigns
you began to see this, as each candidate for
President said to the audience at the beginning
of the campaign, “I’m not like every other
politician!”
You might have thought to yourself, “Oh,
I wonder why they’re saying that they’re
something new and different?”
Because that’s what people wanted to hear!
And then along comes a character, a narcissist,
a baby, a boaster, a bully, Mr. Trump, and
he says, “I’m different from all the Republicans!”
He looks it and acts it, and he speaks it.
So he defeats all of the old Republicans inside
that party, and then he defeats the other
side associated with Clinton in the other
party, and he becomes the president.
Because the working class was so angry at
what had been done to them in the rollback
of the New Deal by Republicans and Democrats
alike, with the only difference being the
Democrats did things a little slower.
They were so angry they wanted somebody different,
and since the only offer of something really
different was Mr. Trump, well, they surprised
everybody by raising their collective middle
finger.
They voted for him, really hoping that he’d
make a change now — maybe.
What’s to lose? as Mr. Trump himself said.
So here we have it.
We have the working class, which has been
crucial at every step of the way in this history
— in coming forward, in retreating, in allowing
the destruction of its institutions that had
formerly protected it.
You know, in Europe none of this kind of thing
happened in the same way.
Why?
Because the working class did not suffer the
kind of crushing that happened here.
They held on to their Socialist parties, they
held on to their Communist parties, and they
held on to their unions, which is why you
couldn’t do in Italy or France or Germany
or Scandinavia what the capitalists could
do here after the war.
This is why these countries have universal
health insurance and subsidized colleges and
all the things that Americans vaguely dream
of, which they have and they will not let
go of.
So the American working class is at a kind of cross roads, isn’t it?
What’s it gonna do now?
Is it gonna realize the unity of white and
black workers, of men and women, and on and
on?
Is it gonna pull that all together?
And why should it?
Because this tactic won large concessions
the last time in the 1930s, concessions that
have been lost since then.
No way is Mr. Trump gonna bring you any of
that back.
He’s one of them, even if he acts the bully
and acts the crazy.
He’s one of them.
He’s part of the rollback of the New Deal.
Regarding the Democratic Party in 2020: we’ll
have to face all of this even more so if Democrats
go for someone like Mr. Biden.
With him, the Democrats are saying to the
American working class, “We’ve learned
nothing from this history.
We’re gonna give you more of what you’ve
shown us you will reject, first when you voted
for Reagan, and again when you voted for Trump.”
Are Democrats going to choose another one
of those losers, or are they gonna go in a
direction of unity — unity of the working
class across all these divisions — by choosing
someone more like Mr. Sanders or others in
the primary.
It doesn’t have to be Mr. Sanders, and it
doesn’t even have to be any of the declared
people right now.
It has to be a person representing something
new and different in terms of the recent history
but something old that we’ve learned from
in terms of what the Democratic Party was
in the 1930s.
What it was, it can be again, but the question
is when, and how, and who will make that happen.
And this election coming up in 2020 is a first
step in figuring out whether the Democratic
Party can rise to this present situation.
If it can’t, perhaps new and different parties
will have to emerge that do learn the lesson
of the history of the American working class
and its relationship to politics, and therefore,
can make a difference and surprise everybody
from the left the way that Mr. Trump’s victory
surprised everyone from the right.
I hope you found this interesting as a way
to think about the election coming up.
That’s what this program was designed to
help you to do.
Thank you very much for your attention, and
I look forward to speaking with you again
next week.
