In the last few months the ruling class has unleashed an incredible barrage of democratic campaigns to confuse and disorient the working class. The democratic mystification is used skillfully by the bourgeoisie in diverting political discontent within the working class into harmless traps that keep workers tied to the state and dilute the working class within a broader "civic movement" (interclassist people’s movements). Notable democratic campaigns in recent months include not only the union reform campaigns and the ongoing presidential campaign mentioned above, but also those centered on anti-police brutality and corruption movements, the ideological campaign around investing in the stock market, the Elian Gonzalez affair, and the anti-globalization movement.

The anti-police brutality campaigns respond to growing discontent, especially among minority workers, provoked by the strengthening of the state’s repressive apparatus. The movement serves the bourgeoisie by tying the movement to the state and bourgeois legality. The central slogan of these movements, "No Justice, No Peace," contains within it the false notion that somehow justice false notion that somehow justice is possible under capitalism, that somehow police who shoot and kill unarmed, innocent civilians will be punished in the courts. The demands of this movement that call for consultation between police officials and black community "leaders", i.e., local businessmen, clergy, etc., for the hiring of more minority officers, etc. express the bourgeois nature of this movement.

The ideological campaign around stock market investment is not confined simply to the U.S., but occurs in Europe and elsewhere as well. In Germany, the unions are now demanding that workers receive part of their wages in stocks, for example. The phenomenon of workers dabbling on the market via the Internet is all too common, and is accompanied with an ideological campaign pressing the false proposition that there is no class struggle, workers "own" the companies too and have a vested interest in capitalist prosperity – the essence of democratic capitalism.

The Elian Gonzalez campaign has been used successfully to promote a false democratic framework(i.e., the Cuban exile community’s desire to keep the child in a "free America"), and the Clinton administration’s invocation of the natural rights of parents and cherished democratic "rule of law." For five months this law." For five months this affair has the subject of intensive media coverage, reflecting the ruling class’s recognition that it is better to stir passions and public debate about a total sideshow, rather than .focus on the central contradictions in capitalist society.

Anti-globalization and the Development of a False Anti-capitalism

After the union reform campaign, the most pernicious of the recent democratic media blitzes has been the anti-globalization movement, and the accompanying fanfare about the rise of a new "anti-capitalism," which has provoked serious confusions within the libertarian and De Leonist milieu. Groups like the De Leonist New Unionist seem mesmerized by the confrontations in the street in Seattle last November, incapable of offering any political analysis of the movement whatsoever. News and Letters sees Seattle as the birth of a new revolutionary movement.

An article in Discussion Bulletin by Lauren Goldner acknowledges the anti-globalization movement’s reactionary protectionism on the one hand, but on the other sees it as offering the greatest potential since 1968, bringing together militant lesbians, tree huggers and industrial workers in a new movement. Such an outlook precisely serves the bourgeoisie’s intereststhe bourgeoisie’s interests by denigrating the autonomy of proletarian struggle and by diluting the working class’ grievances within a list of perceived social ills, i.e., gay rights, feminism, ecology, animal rights, and workers rights, as if all were equivalent in weight.

Three council communist groups endorsed an anarchist call to create an "anti-capitalist" wing within the anti-globalization movement, apparently in the belief that it would be possible to have a proletariat wing of a capitalist movement. The media’s coverage of the new anti-capitalist movement, as exemplified by interviews with John Zerzan, the theoretical guru to the masked anarchists in Seattle who smashed Starbucks windows during the anti-WTO protests, represents a cynical attempt by the bourgeoisie to define anti-capitalism as purposeless violence and rioting, which is designed a)to cut it off from working class support and b)to mislead younger generations of workers away from the terrain of proletarian struggle into a political dead-end.

A significant aspect of the bourgeoisie’s current offensive is designed to accentuate the isolation of current minoritarian reflection and struggle within the working class by blocking the younger generations of workers from the historic experience and class terrain of the prolet and class terrain of the proletariat. It can be seen in the derision of history, the dismissal of marxism as a "philosophy of dead white men,", in the notion of the "end of history," and the denigration of the meaning of historical historical experience making inroads amongst working class youth.

The bourgeoisie’s efforts to postpone as long as possible the outbreak of class confrontations is in part linked to an attempt to break the younger generations from the experience of the older generation of workers. It is now over thirty-years since the generation of ’68 experienced the first upsurge in class struggle following the end of the reconstruction period, and near twenty years since the onset of the significant struggles of the third wave in which workers challenged union control of their struggles and openly posed the question of extension.

Stalling the class struggle as the generation of 1968 ages and the encouragement of early retirements are all part of the bourgeoisie’s attempt to set up a situation in which it will confront a working class cut off from the experience of ’68 and the third wave. This all the more heightens the necessity for the revolutionary minorities within the class to direct its efforts towards the new generations of workers to assure that the lessons of past struggles can serve as guideposts in the confrontations to come.

JG

Prior to the 1930s, only the AFL, organized in craft unions, represented a significant organization, though it represented only a small minority of the working class and pursued conservative policies. Industrial unions, organizing workers in mass production industries, such as auto, steel, rubber, electrical, aviation, etc., were created only in the 1930s, by the CIO, under state sponsorship, as part of the New Deal run-up to World War II, for which they were needed to assure a reliable, disciplined workforce.

While the Stalinists played a key role in the CIO and actually controlled unions representing 4 million workers by the end of the War, the onset of the cold war with Russia created serious problems for the American bourgeoisie. As the bloc leader in Western imperialism’s confrontation with Russia, it was intolerable for the U.S. to have unions loyal to the rival imperialist power control significant sectors of the American proletariat, and by 1948, the CP was driven out of the labor movement. Thus, for nearly fifty years there has not really been a left presence in the unions; nor have the leftists been able to play a significant role. All of this has complicated the process of radicalizing the American unions.

The first element in the process was revamping the national union leadership, with the replacement of the moribund, Cold War Kirkland-Donahue leadership four years ago with the energetic, younger and more demagogic John Sweeney, who brought a commitment to organizing campaigns, and militant-sounding, confrontational rhetoric, threatening to revive the strike weapon, that had been all but abandoned by Kirkland-Donahue.

The next phase was the displacement of corrupt mob-controlled union leaders and other union leaderships compromised by blatant collaboration and cronyism with the bosses during the ‘80s and early ‘90s. The commitment to revive "union democracy" from the Sweeney led bureaucracy at the top, was supplemented by a concurrent revival of base unionist activity by leftists. In New York, this was exemplified by the efforts of the Association for Union Democracy, working in concert with Trotskyists from the ISO and dissident union bureaucrats, to launch reform caucuses throughout the public sector in NYC. Indeed the rise of left movements within unions across the country is reaching epidemic proportions.

The struggle in transit in New York City in November-December revealed clearly the strengths and weakness of the proletariat in the present conjuncture. On the one hand there was a tremendous combativeness among transit workers, the beginnings of a conscious reflection among a minority of the workers, a conscious willingness to violate the Taylor law, which forbids public sector strikes in New York State, and a growing distrust of the unions.

On the other hand, this process evolved within an overall balance of forces that favored the bourgeoisie. The working class throughout the world, and particularly here in the U.S. still suffers from the disorientation that ensued following the collapse of stalinism and the bourgeoisie’s propaganda campaign about the end of communism, the end of class struggle and the triumph of capitalist democracy.

The reflux in consciousness within the proletariat is real and has important consequences for the class struggle. All the positive elements present in the transit struggle were more than offset by the general characteristics of the period, which meant that the transit workers carried on their struggle under extremely unfavorable prevailing conditions which did not favor either an open confrontation with the unions or the extension of the struggle.

The struggle did not develop in a totally isolated fashion. Workers in other industries, particularly within the public sector, were widely sympathetic to the transit workers. However, the fact that bourgeoisie was able to inflict the incredibly repressive court injunction without repercussion, without workers in other sectors rushing to the support of the transit workers, demonstrates the serious limits for the active expression of solidarity by other workers at the present conjuncture.

The bourgeoisie demonstrated that it had the upper hand through its clever use of the division of labor between the right and left in the union, to derail workers’ combativeness, stymie the strike movement, and leave workers confused and in disarray. The fact that in order to assist this division of labor within the union to be successful the bourgeoisie was forced to grant the transit workers a wage increase larger than the prevailing level in recent years, has been used to foster the illusion that a militant left base unionist movement "pays," and has served as an impetus to base unionist insurgencies in other municipal unions.

The provocative actions of the Giuliani administration in New York City in no way contradict the overall policy of the left in power to seek avoidance of open class struggle, but rather reflects the different approach taken by the right in power on the local level in New York at the City and State governmental levels. Such provocative actions have not been characteristic of the Clinton government on the national level.

With all its difficulties, the transit struggle was clearly part of the arduous process of a return to class struggle, in which the paramount task at the present moment is the rediscovery of class identity by the working class, a recognition its nature as a class for itself, and development of the self-confidence as a class that will enable workers to begin to reclaim the acquisitions of past experience. Revolutionaries must intervene in this process to expose the bourgeoisie's efforts to stymie the struggle and bolster the base unionists.

JG

The U.S. government continues to boast about its "unprecedented, longest running economic expansion in history." And it is true that the anticipated bursting of the "bubble economy," which we had anticipated was just around the corner has not occurred, and this despite the fact that the elements for open rececession seemed to be in place in 1998 following the collapse of the Asian tigers. State capitalism has demonstrated the resiliency to postpone its economic day of reckoning. On the one hand, much of this economic wonder is based on deception – the manipulation of economic data to paint an artificially rosey picture – and on policies designed to foist off the worst aspects of the global economic crisis on the peripheral countries of world capitalism. On the other hand, the degree to which there is economic growth in the U.S., or, more accurately, the absence of open recession, it hardly makes a difference from an historic perspective. The global economic crisis of world capitalism, a crisis of chronic overproduction, continues to deepen inexorably, regardless of the vicissitudes of the trade vicissitudes of the traditional business cycle that the bourgeoisie focuses on in its propaganda.

As early as the mid-80’s, the ICC pointed to the existence of hidden recession, and "vampire recovery," which despite the lack of an open recession, defined by the bourgeoisie as two consecutive quarters of negative economic growth rates, continues to weaken the global economy at the historic level. In this sense, the appearance of economic prosperity in the short run, only aggravates the inherent contradictions of capitalism in the throes of an historic crisis for the long run. In any case, even using the bourgeoisie’s own statistics, we can see that despite the "recovery," the economic picture is hardly rosey. The recovery, such as it is, is confined only to a few sectors, and is based primarily on an explosive expansion of credit and a tremendous increase in the trade deficit, which is running at a record setting $29 billion per month (an annualized rate of $348 billion). This is important to note because, though state capitalism still has the capacity to maneuver, its maneuvers tend to accumulate more powder in the keg, which will make the explosion that much worse in the longer term.

Masking the Real Level of the Crisis

We have previously demonstrated on numerous occasions how the bourgeoisie has deftly managed to redefine how its much vaunted economic statistical measures are calculated and altered economic benchmarks, so as to paint a falsely optimistic economic picture. These manipulations include:

• recalculating the unemployment rate to include only those workers without a job who actually applied for work within the previous month and to discount discouraged workers who have no job and have given up looking for employment;
• to include members of the armed forces as part of the workforce to dilute the unemployment rate,
• to count as "employed" anyone working 10-hours per week (defined as a job) and hence to ignore the level of "underemployment" in the economy;
• to overstate the level of employment in the economy by counting every parttime job of 10 hours or more as a job – thus workers scrambling to make a living with three parttime jobs , count as three separate jobs;
• changing the benchmark for inflation. In 1971, Pres. Nixon imposed wage and price controls because an inflation rate of 4.4% wasse an inflation rate of 4.4% was considered intolerable. Today 4% inflation is considered "natural inflation." If the problem won’t go away, just declare it is no longer a problem.
• changing the benchmark for unemployment.In the early 1970’s, an unemployment rate of greater than 6% was considered crisis level and automatically triggered extended unemployment benefits; in 1978, the Humphrey-Hawkins bill set 4% unemployment as the national target of acceptable unemployment. Today 6% is defined as natural unemployment in the economy, and an unemployment level of 4.5% is considered a "labor shortage." Again, if you can’t solve the problem, it is easier for the bourgeoisie to turn reality on its head.
• recalculating the formula for determining the official unemployment rate in 1994 and again in 1997. Allegedly this was done to make the measure more "accurate," but of course it was due to these statistical shell games that the bourgeoisie has been able to claim the lowest unemployment rates in 30 years. Even though the footnote to the unemployment statistics in the World Almanac notes that the changes in rate calculation are so great that unemployment figures from 1994 to the present are not directpresent are not directly comparable to earlier periods, the Bureau of Labor Statistics itself grinds out press releases making direct comparisons anyhow.

We can get a more accurate picture of real unemployment in America today by taking a deeper look at the bourgeoisie's own statistics. For example, the official unemployment level is 6,200,000. The bourgeoisie keeps this number artificially low by not counting people who haven't looked for a job in the past month. According to the government, "persons not in the work force who want a job" number 4,568,000. In addition there are 3,665,000 who are forced to work parttime because they can't find fulltime employment. If we add these categories together, true unemployment in America stands at 14,433,000 or slightly more than 11%.

True Unemployment in the U.S.

Source: Bureau of Labor Statistics, Monthly Labor Review, January, 2000

Falling Wages and benefits means a decline in Workers’ standard of living

Despite the bourgeoisie’s hype about unprecedented boom, wages for male workers in 1999 were actually 1.8% lower than in 1989 after adjustment for inflation. A study by the bourgeois Fiscal Policy inflation. A study by the bourgeois Fiscal Policy Institute on the situation in New York state, found that workers’ real incomes declined by 8% since the late 1980s. For the poorest 40% of New York families, real income fell between 13 and 15%. In New York City, average real income declined by nearly 20%. At the same time, the typical working class family in New York has had to put in 256 more hours of work per year (equivalent to more than six additional full-time weeks) than it did in 1989 for the dubious privilege of earning 20% less.

An examination of the deterioriation of key fringe benefits paid to workers over the past 20 years gives an even more accurate picture of the falling real wages (the previously mentioned statistics only account for inflation) and show a serious decline in the standard of living during the period of the "unprecedented boom" over the past eight years. For example, in 1980, 99% of workers employed by medium and large companies in the U.S. received paid holidays. By 1997 that percentage had dropped to 89%. In 1980, 100% received paid vacations, by 1997 that figure had dropped to 95%. (Imagine having a fulltime job with no vacations!)

In 1980, 62% received paid sick leave; by 1997 56%. The deterioration is much more drastic in terms of insurance and retirement coverage.surance and retirement coverage. In 1980, 97% of those employed in medium and large companies participated in medical care plans at work; by 1997 only 76%. In 1980, only 26% were required to pay an employee contribution to medical plans for self coverage, and 46% for family coverage. By 1997, 69% were required to pay for self coverage and 80% for family coverage. The average monthly amount that workers had to contribute for self coverage increased by 350% since 1984, from $11.93 per month to $39.14, and from $35.93 for family coverage to $130.07 per month in 1997.

In 1982, medical coverage after retirement was available for 64%, but 1997 this figure had decline to only 33%. In 1980, 84% of the workers at medium and large companies were assured defined retirement pension benefits, by 1997 only 50%. The Clinton administration’s so-called "reform" of social security has increased the age of eligibility for old age pensions from 65 to 66. If one considers that the average life expectancy of American males is 73.4 years, then this amounts to better than 12% reduction in social security benefits. It is indeed a strange economic boom in which the condition of the working class continues to decline steadily.

Stock Market Reflects Economy’s Ill Health

Likewise, the gyrations on the stock markets belies the propaganda of capitalist prosperity. The stock markets have zigged and zagged for a good year and a half, but since the beginning of the years everything is down. With the NASDAQ index losing nearly 30% of its value in between March 13 and April 14, as highly touted technology stocks plummeted precipitously, even bourgeois commentators have tired of using the dismissive "correction" cliché to hide the seriousness of the situation. In the first place the soaring stock markets were never a reflection of economic health, and the difficulties of the market in the period of state capitalism no longer carry the same economic impact as they did in the previous period. We have had an horrific global economic crisis for more than three decades without the harbinger of a panic on Wall Street.

Under the sway of the global economic crisis of overproduction in the past thirty years, we have seen the spectacular elimination of entire sectors of the economy, the spreading of industrial desertification, the amputation from the world economy of whole regions of the planet, and the collapse, one after the other, of the economic "models," variously termed "dragons" and "tigers," of capitaluot;tigers," of capitalist growth. In addition, the collapse of stalinism in eastern europe has not translated into a utopia of solvent, new markets capable of absorbing capitalism’s overproduction. The spectacular diversion of capital from the spheres of production into the stock market is a consequence of the crisis of overproduction. As the ever shrinking market proves incapable of facilitating the realization of surplus value, capital is pushed towards all kinds of speculative schemes, creating a virtual casino economy. In the context of this orgy of speculation, the stock market has more and more resembled a huge pyramid scheme, where fortunes are made, at least on paper – literally out of thin air – and lost equally easily in the blink of an eye. Investor’s earnings bear no relation to the economic performance or value of the company, i.e., its performance, but rather are gained from the inflated stock prices paid by new investors who buy their stocks.

The price/earnings ratio for internet companies often runs at astronomical levels ranging between 100 and 200! The precipitous drop in internet stocks demonstrates yet again that while the bourgeoisie can cheat the law of value for a while, it cannot do so forever. The speculation on the stock market in high value stocks that had no relation to ththat had no relation to the profitability of the companies involved was just one way of cheating the law of value. Many of these wonder companies are will soon go under, demonstrating the fictitious nature of the "new economy" so highly promoted in bourgeois propaganda. The degree to which workers have been drawn into these get-rich quick schemes or are counting on pension funds linked to the stock market performance, the current stock market volatility will contribute to increasing pressure on workers’ standards of living.

From the working class’s perspective, the economic situation continues to worsen, whether there is boom or recession in the short term, because of the continued worsening of capitalism’s global economic crisis.