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:
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.
Officially unemployed 6,200,000 Persons not in workforce who want a job 4,568,000 Forced parttime workers 3,665,000 Total unemployed 14,433,000 Official unemployment rate -- 4% True unemployment rate 11+%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.
They want us to buy into the electoral swindle – the phony myth that the people decide their own political fate. Of course all this is just a capitalist propaganda ploy -- the last thing that capitalism could tolerate is for everyday working people to make any of the decisions about how society is run. The campaign hoopla is all part of how the ruling class manipulates society for its own political and economic ends, how it obscures the real power relationships in society, how it assures the desired outcome, and makes sure that the correct ruling team is in power. Despite the horse race metaphor that the media is so fond of, the election campaign more resembles a World Wrestling Federation wrestling match – where all the action is scripted in advance.
For much of the past decade in the vast majority of the western industrial powers, the bourgeoisie has relied upon a strategy of the left in power. This strategy was first dpower. This strategy was first developed by the bourgeoisie in the U.S. in 1992, with the realignment of the Democratic Party towards the center-right and the election of Bill Clinton, and was then emulated in Britain with a similar revamping of the Laborites under Tony Blair (the Bill Clinton of Great Britain), and subsequently adopted throughout the major European capitalist nations. This strategic division of labor, which places the left in power, and the right in opposition, has been successful for the bourgeoisie on both the imperialist and domestic levels, in that it has permitted the bourgeoisies of the respective countries to unleash military interventions overseas under the guise of humanitarianism without engendering serious opposition, which would have been unimagineable for the right, and has allowed it to continue to implement austerity measures without provoking serious resistance. As the Resolution on the International Situation adopted by the ICC’s International Bureau last spring puts it,
"Bringing the left of the bourgeoisie into government has proved to be the ideal means of making the most of the proletarian disarray. No longer speaking the language of struggle as it did in opposition in the eighties, the left parties in government are well-equipped to give a snt are well-equipped to give a softer edge to the attacks on working class living standards. They are better able to obscure the militarist barbarism with a humanitarian rhetoric. And they are more suited to correcting the failures of neo-liberal economic policies." (Point 10)
At home the left has successfully managed the deepening of the economic crisis, and while it unleashes attacks which are just as vicious and far-reaching as the right’s, it does so in a manner and style clouded in democratic and reformist rhetoric. The left’s austerity attacks are disguised as "reforms," not as cutbacks. Everywhere this strategy is successful. In Germany the left government is positioned to remain in power for at least the next three years, until the expiration of its elected term. At the level of the class struggle, the balance of forces favors the bourgeoisie, as the combativeness which exists in some sectors of the working class is completely heterogenous and confronts serious obstacles in developing.
The German trade unions function in open solidarity with the regime; the oppositional role is played by the right. In France, there are strikes and protests in various sectors, but these struggles are very atomized. Though a simulre very atomized. Though a simultaneity of struggles exists, this phenomenon poses no particular problem for the French bourgeoisie, and the unions and the leftists are not required to play a strong oppositional role. In Britain, the story is much the same. There are signs of class combativeness but a serious difficulty for struggles to develop and the left government has the situation in hand. In Italy, the same situation prevails. Despite being the most heavily politicized in Europe, the Italian working class has launched no major struggles since the left government came to power.
Here in the U.S., there have been rising levels of combativeness, including particularly the Detroit teachers struggle last autumn, the transit struggle in New York in November-December, and more recently the Boeing strike on the West Coast, but these struggles experienced difficulty in developing and remained largely isolated. Despite an oppositional posturing on international trade issues by some unions, as illustrated by their participation in the anti-WTO and anti-World Bank protests in the past few months, the unions remain staunch allies of the Clinton administration, and were early supporters of the Gore candidacy. Thus, the Clinton-Gore team has successfully pursued a right-wing economic and social agenda, including the reinforal agenda, including the reinforcement of the state’s repressive apparatus (adding 100,000 cops to the nation’s police forces, increasing the death penalty, making the severest inroads on civil liberties) and dismantling the welfare state put in place by the Roosevelt administration’s New Deal program 65 years ago, without hardly a murmur of resistance.
As in other countries, the bourgeoisie can be expected to continue to play the left in power card at the political level in the period to come. Unlike 1992, imperialist policy disputes will have little impact on the 2000 election campaign. In 1992, the dominant factions of the bourgeoisie were dissatisfied with President Bush’s failures to take offensive action in the Balkans and to consolidate American imperialism’s successes in the 1991 Gulf War. Today the dominant factions of the bourgeoisie are in agreement on imperialist policy. This in no way implies that serious divergences within the ruling class on imperialist policy regarding the Far East have ceased to exist. The disagreements that have marked the internal disputes within the ruling class over China are very real and continue to exist, as certain elements on the right, but also including some in the Democratic party, contend that China is too potentially unstable and unreliable toially unstable and unreliable to serve as America’s central partner in Asia, preferring instead to play a Japanese card in the region.
These disagreements were the underlying factor involved in the scandals and campaigns against Clinton, including the impeachment attempt in 1999. However, the faction opposing Clinton’s China policy was badly routed in their abortive attempt to drive Clinton from office and are in no position to impact the presidential election – most were excluded from any role in the Republic Party convention, for example. However, this does not mean that disagreements on China policy have disappeared, or that this issue will not be revisited in the future. Meanwhile, John McCain, the only major candidate in the presidential primaries to represent the anti-China faction, was badly defeated and driven from the race. In the Democratic primary contests, the Bradley candidacy was more designed to counter a lagging interest in and rekindled enthusiasm for the electoral circus (fewer than 50% of Americans bother to vote) than it was to pose a serious challenge to a Gore candidacy. Indeed bourgeois commentators observed that Bradley didn’t seem to want to win!
Both the Republican candidate, George W. Bush, and Vice President Al Gore adhVice President Al Gore adhere to the foreign policy currently in place, and are truly mirror images of each other on domestic policy. Bush’s "compassionate conservatism" emulates Gore’s attempts to firmly occupy the center ground, and even if Bush were to win the White House through some political mistake, there would be political continuity with the Clinton presidency. However, Gore’s left credentials, exemplified by his reputation as an environmentalist and his strong support from the unions, most strongly corresponds with the successful left in power strategy.
Bush's move towards the center following his wrap up of the nomination in the primaries, alienates the base of the Christian right wing of the party and seems designed to undermine the Bush's chances to win in the election. The electoral circus will surely heighten the drama with strident discourse on such secondary non-issues for the bourgeoisie as abortion and gun control, which are designed to stir up passionate debate on issues that pose no challenge to capitalism but provide a safety valve for political steam, and an orchestrated close race, designed to beat the drums for the "every vote counts" electoral mystification. In a now familiar pattern, a probable Pat Buchanan candidacy on the Reform Party ticket, will siphReform Party ticket, will siphon off religious right support from Bush and help assure the continuance of the left in power.
In the end, whether Gore wins, or whether Bush pulls off an accidental upset, the working class will continue to bear the brunt of the economic crisis. No matter who wins, despite the propaganda campaign about "unprecedented economic boom" the global economic crisis will continue unabated. At home, the working class’s real wages will continue to decline, job security will continue to be eroded, social and company benefits will be scaled back. Abroad, American imperialism will continue to exercise its military might in a never-ending effort to assert its super power hegemony in a world in which international discipline has broken down with the collapse of the two-bloc Cold War confrontation.
The election offers nothing for the working class but the opportunity to be suckered into believing that we do not live in a capitalist class dictatorship. For the working class the only way to assert its interests is not at the ballot box, but the class struggle, a struggle that will one day lead to a revolutionary confrontation with capitalism, and pose the possibility of creating a genuine human community in which capitalist exploitationin which capitalist exploitation is banished from human experience. – JG 9/6/00
De Leon’s opposition to reformism, a central element in his ideological perspective, superficially resembles the position defended today by the ICC and the rest of the Communist Left. However, De Leon’s views, originally formulated as early as the 1890s, were based on a total confusion on the operation of capitalist economy and were actually incorrect for the period in which he lived. Here it is important to differentiate clearly between reformism and reforms. As we pointed out in Internationalism, #21, "Reformism has always meant the theory and practice of a peaceful transition to socialism, whose hallmarks have been a commitment to parliamentarism, legalism, and pacificism. This theory and practice of reformism…has always been antithetical to the interests of the working class and has represented the invasion of bourgeois ideology into the ranks of the proletariat." On the other hand the struggle for reforms – for durable improvements in the conditions of the working class, i.e., the end of child labor, the eight hour day, etc – "in the ascendant phase of capitalism when it was pse of capitalism when it was possible for the working class to win durable reforms from the bourgeoisie…occurred on the class terrain of the proletariat and was a manifestation of the fundamental antagonism between capital and the wage-working class." Thus in the late 19th and early 20th centuries, the struggle for reforms was correctly supported by Marxist revolutionaries. De Leon on the other hand did not support that struggle. Instead he denounced the struggle for reforms as synonymous with the counter-revolutionary practice of reformism.
There are two factors underlying De Leon’s confusion on this question: 1) a failure to understand adequately that all economic modes of production go through phases of ascendance and decadence in their historic development, and in particular the significance of this fact for capitalism; 2) an adherence to a variant of "the iron law of wages,"(1) which essentially held that under capitalism workers’ wages always fell and that the struggle for wage increases and for reforms was pointless. .
When Did Capitalism Enter Its Epoch of Decay?
The understanding that all modes of production throughout history pass through phases history pass through phases of ascendance and decadence in the course of their historic development, defended by the Communist Left, has its basis in the work of Karl Marx. Even the Socialist Labor Party’s Arnold Petersen was forced to acknowledge in his 1947 introduction to a reprint of De Leon’s "Reform or Revolution," that "social systems are born, grow and mature and eventually decay," and that before a social system reaches its period of decay, reforms are possible. But once decadence sets in, the era of reforms is over, and only a revolutionary transformation of society is on the agenda.
For revolutionaries it is essential to theoretically understand when capitalism reaches the limits of its historic development, ceases to be progressive in the historic sense, and instead becomes a fetter on the further development of the productive forces, and thereby puts proletarian revolution on the agenda. Such an understanding has profound implications for the intervention of revolutionaries in the class struggle. Marx and Engels at first underestimated the expansive potential of capitalism, and thought that proletarian revolution was on the agenda in 1848. History was to demonstrate otherwise, and Marx and Engel’s later writings and revolutionary activities were based on a clearactivities were based on a clear recognition of this fact.
For De Leon the onset of capitalist decay must have come very early. As early as the 1890s, De Leon argued that "at the present stage of civilization there is possible no reform worth speaking of…" and that "every reform granted by capitalism is a congealed measure of reaction." But on what basis did De Leon believe that capitalism had reached the limits of its historic development and changed so fundamentally and irrevocably? Certainly such a qualitative change in the fundamental character of the capitalist system and the conditions of class struggle would have announced itself and offered itself for theoretical elaboration by revolutionaries. It is difficult to imagine that such an historic development would have occurred secretly and unnoticed. The fact is that De Leonism offers no answer to this question, no theoretical explanation for its conclusions. In the 1890s, De Leon was wrong when he opposed reforms, right when he opposed reformism, and wrong for confusing the two. Reforms were still possible at the turn of the century. Capitalism was in its last phase of expansion, still expanding into Africa. The capitalist system had not yet completed its historic mission – the creation of a world market. The struggle for a shorter wo The struggle for a shorter working day, for an end to child labor were not struggles that were "congealed reaction."
On the contrary, they were class struggles for durable gains for the working class, that provided a preparation for future revolutionary struggles, and also served as a goad to capitalism to continue its further development. In the ascendant phase of capitalism, the struggle for reforms was not separate from the revolutionary struggle. Ironically, despite his avowed opposition to reformism, because of his confusions on the nature of bourgeois democracy, and the political tasks of the proletariat, De Leon argued from parliamentarism, legalism and pacifism in the political arena, which made his practice identical to the reformism he so thoroughly despised. We will address these political shortcomings in a future article in this series.
While De Leonism was oblivious to the theoretical tasks of understanding when the qualitative change in the nature of capitalism had arrived, the rest of the revolutionary Marxist movement was clear that the outbreak of World War I, a fullscale inter-imperialist war, plunging humanity into an unprecedented global butchery, was the historic watershed, marking the end of capitalism’s period of historic expansion, and the beginning of the era of war or revolution. The understanding that a new situation existed, that posed directly the question of proletarian revolution as the means to rescue humanity from a descent into barbarism led to splits in all the socialist parties in the major countries of world capitalism, between the right which collaborated with the respective bourgeoisies in mobilizing the working class for the bloodbath, and the left which advocated a proletarian solution to the social impasse.
It was the change in historic period that led to the workers’ revolution in Russia as the first act in the world revolution, to the founding of the Third International to regroup the left revolutionaries and to help spread the world revolution, and to the founding of the Communist Parties. There was debate within the movement as to what were the fundamental causes of the onset of capitalist decadence, polarizing eventually on two theoretical explanations, and indeed this theoretical explanation is still debated within the Communist Left today. (2) But however hotly this issued is debated, there is underlying agreement that the nature of capitalism changed in the run up to World War I. Though De Leonism often found itself siding with the left in the Second International, it was cSecond International, it was content to wait for the end of World War I so it could resume its old political practices without regard to the changed historic conditions.
De Leon’s Confusions on the Theory of Wages
De Leon’s belief in a variant of "the iron law of wages" meant that he essentially saw no purpose to the class struggle on the immediate level. As one of his adherents once put it, De Leon believed that "regardless of how strong and militant the working class is, its collective action under capitalism cannot prevent its conditions from becoming worse. (Goodstein, New Socialist). In "Socialist Reconstruction of Society," De Leon developed his contention that the workers’ share of the products produced in society is declining. This was certainly accurate but did not necessarily mean that the standard of living of the working class was declining. According to De Leon, from 1870 to 1900, the standard of living of the workers had "gone from bad to worse." What De Leon confounded was the difference between the relative and the absolute impoverization of the working class. Absolute impoverization means a fall in the workers’ standard of living, while relative impoverization occurs even while the worketion occurs even while the workers’ standard of living may actually rise.
For Marx, here was no law that real wages must always sink. Quite the contrary. While the lower limit of wages was fixed by the physiological minimum necessary to reproduce the workers’ labor power, the upper limit was ultimately set by factors such as the rate and mass of profit, the rate of accumulation and the conditions for the realization of surplus value prevailing in a given period of capitalist development. Between this lower and upper limit (the latter receding as capitalism went from its phase of ascendance to its phase of decadence), the actual level of wages at any given moment is determined, in large part, by the degree of class combativeness and the level of class struggle. In developing this point, Marx wrote:
"although we can fix the minimum of wages, we cannot fix their maximum. We can only say that, the limits of the working day being given, the maximum of profit corresponds to the physical minimum of wages; and that wages being given, the maximum of profit corresponds to such a prolongation of the working day as is compatible with the physical forces of the laborers…The fixation on its actual degree is only settled by the cont is only settled by the continuous struggle between capital and labor, the capitalist constantly tending to reduce wages to their physical minimum, and to extend the working day to its physical maximum, while the worker constantly presses in the opposite direction. The matter resolves itself into a question of the respective power of the combatants"(Wages, Price and Profit).
Contrary to De Leon’s view that real wages must always sink, regardless of the class struggle, Marx held that the class struggle was a vital determinant in settling the actual level of wages.
That Marx distinguished between absolute and relative impoverization is illustrated by the following passage:
"By virtue of the increased productivity of labor, the same amount of the average daily necessaries might sink from 3 to 2 shillings, or only 4 hours out of the working day instead of 6 be wanted to produce an equivalent for the value of the daily necessaries. The working man would now be able to buy with 2 shillings as many necessaries as he did with 3 shillings. Indeed the value of labor would have sunk, but that diminished value would command the same amount of commld command the same amount of commodities as before…although the laborer’s absolute standard of life would have remained the same, his relative wages and therewith his relative social position as compared to that of the capitalist would have been lowered" (Wages, Price and Profit).
That Marx recognized that while the workers’ share of the social product may sink in relation to that of the capitalists, the standard of living of the workers can remain the same, or even rise, is illustrated by the following passage:
"Real wages may stay the same, they may even rise, and yet relative wages may fall. Le us suppose, for example, that all means of subsistence had gone down in price by 2/3 while wages per day have only fallen by 1/3, that is to say, for example, from 3 marks to 2 marks. Although the worker can command a greater amount of commodities with these 2 marks than he previously could with 3 marks, his wages will have gone down in relation to the profit of the capitalist…The share of capital relative to labor has risen. The division of social wealth between capital and labor has become still more unequal…and Real wages express the price of labor in relation to the price of other commodities; relative wages, on the other hand, express the share of direct labor in the new value it has created in relation to the share which falls to accumulated labor, to capital" (Wage, Labor and Capital).
Thus, De Leon’s view that the real wages of workers, in contrast to their relative wages, must continually sink regardless of the class struggle in capitalist society, was refuted by Marx decades before De Leon even joined the socialist movement. De Leon persisted in this misunderstanding despite the fact that he translated into English the very works in which Marx argued his analyses.
De Leon’s view that the workers’ standard of living during the ascendant phase of capitalism had continually "gone from bad to worse" was refuted by the reality of workers’ struggles. In the ascendant phase of capitalism, there was a tendency towards absolute impoverization of the working class during the period of primitive accumulation. But in the period of capitalist expansion in the 19th century, there was a tendency towards a rise in real wages, simultaneous with a decline in relative wages, and thus relative impoverization. It was during this period that it was pduring this period that it was possible to wrest durable reforms from the bourgeoisie in the course of the class struggle.Thus, for example in Volume I of Capital, Marx pointed out that real wages fell in Britain between 1799-1815, the final stage of the primitive accumulation of capital. But if we look at Britain and France during the period of the most rapid capitalist expansion, it is clear that far from continually sinking, as De Leon mistakenly believed, real wages actually rose:
Real Wages in France and Britain 1830-1910
(1900=base 100)
Date France Britain 1830 54 45 1840 e="Arial">1840 57 50 1850 59.5 50 1860 63 55 1870 69 60 1875 70 18801880 74.5 70 1885 72 1890 89.5 84 1895 93 1900 100 100 1905 104.5 1910 106These figures taken from Fritz Sternberg’s Der Imperialismus, 1926
The Link Between the Daily Defensive Struggle and the Revolutionary Struggle
It is in the decadent phase of capitalism that "the general tendency of capitalistic production…to sink the average standard of wages" (Marx, Wages, Price and Profit) prevails precisely because the accumulation process itself has come up against the insurmountable barrier of a saturated world market, and the cyclical crises of capitalist ascendance have been replaced by a permanent crisis.
Even if De Leon hadn’t totally misunderstood Marx on the questilly misunderstood Marx on the question of wages, the political conclusions he reached on the futility of the day to day struggle of the proletariat would have been wrong. Even if durable reforms had not been possible during capitalist ascendance and real wages continually fell as De Leon mistakenly believed, the daily struggle of the workers to defend themselves against the attacks of capital would have been no less necessary at that time than it is today, when durable reforms are in fact impossible to attain(3). This defensive struggle of the working class was contemptuously spurned by De Leon who could not understand the link between the daily struggle of the proletariat and the revolutionary struggle to overthrow capitalism. In the Warning of the Gracchi (1902) De Leon expressed this contempt with these words:
"The characteristic weakness of the proletariat renders it prone to lures…short of the abolition of wage slavery, all ‘improvements’ either accrue to capitalism are or the merest moonshine."
Marx, on the contrary insisted that the defensive struggle was one of the most important conditions for the proletariat to be able to wage a revolutionary struggle against the capitalist state, when after the capitalist state, when after pointing to the objective tendencies which would, if unopposed , continually lower the standard of living, he wrote:
"Such being the tendency of things in this system, is this saying that the working class ought to renounce their resistance against the encroachments of capital, and abandon their attempts at making the best of the occasional chances for their temporary improvement? If they did, they would be degraded to one level mass of broken wretches beyond salvation…
"By cowardly giving way in their everyday conflict with capital, they would certainly disqualify themselves for the initiating of any larger movement" (Wages, Price and Profit).
The necessary link between the economic and political struggles of the working class, between the immediate, defensive struggles and the historic struggle for communism is basic to revolutionary Marxism, but was rejected by De Leon. Particularly in decadence, the polarization of the class struggle, the tendency for economic struggles to become transformed into political struggles, and thus the generalization of the daily struggle, is at the heart of the revolutionary strugglheart of the revolutionary struggle. De Leonism’s failure to grasp Marxism’s theory of the laws of motion of the capitalist economy, and its political implications for the class struggle, have condemned it to dire consequences on the political terrain, as we shall see in future articles in this series. – JG
Notes
1) The iron law of wages was a term coined by Ferdinand LaSalle and decisively refuted by Marx.
2) A full discussion of capitalist decadence is beyond the scope of the current article. Readers are referred to the ICC’s pamphlet, "The Decadence of Capitalism" and a series of articles defending the theory of decadence in the International Review 48, 49, 54, 55, 56, 58, 60.
3) Of course today the working class’s defensive struggles must take different forms than in the epoch of ascendant capitalism, because of the integration of the trade unions into the state apparatus and the impossibility of permanent mass organs of working class struggle because of the emergence of state capitalism. See the ICC pamphlet "Unions Against the Working Class" for a full discussion of the union question.
In Discussion Bulletin #103, the group called New Democracy, contrary to its usual habit of ignoring political criticism, has done us the honor of responding to our denunciation of their bourgeois character and counter-revolutionary politics. In its reply ND, behind a renewed attack on Marxism, has tried hard to defend its supposed revolutionary intentions, but perhaps unknowingly what it really has done is to corroborate our charge that they are a bourgeois organization. By ND’s own account its two founding members are ex-militants of a now defunct maoist leftist organization, the Progressive Labor Party, who split from this organization to form another "Party" and later on ND. These individuals, whatever their intentions, instead of breaking with their political past in counter-revolutionary Stalinism, have simply moved from the defense of leftist bourgeois ideology to the forefront of the bourgeois attacks on Marxism, with the addition of a sort of democratic bourgeois rubbish developed by their guru David Stratman, the main ideologue of ND.
New Democracy distortions of Marxism
For former maoists, the ND crowd are quite unsophisticated in their distortion of Marxism. In their writings one can find all kind of nonsense, like the one which af nonsense, like the one which affirms that "for Marx whatever increases economic production is good; whatever fetters it is bad" or the one that says that "Marxism turned into a method of increasing productivity," and similar other trash. However, ND actually contributes very little that is original to the slanders that the bourgeois ideologues have often heaped against Marxism. Thus ND’s main line of attack is to make Marxism responsible for the bloody state capitalist regimes of the former Soviet Union and its satellites of Eastern Europe, China, Cuba and so on. For ND, as for the rest of the bourgeoisie, the regimes of these countries were/are "Marxist dictatorships" because the dominant class there and all over the world says so.
And, if revolutionaries, armed with the tools of Marxism, show that in those countries there has never existed anything but capitalist production relationships, while their dominant class regimes pretend to cover their brutal exploitation of the working class with the most trivial "marxist" phraseology, then according to ND revolutionaries "miss the point entirely." But ND is not satisfied with simply repeating its bourgeois mentors –that would show their true capitalist colors too obviously. While the latter denounce Marxism to oe latter denounce Marxism to obliterate any idea of working class revolution, ND swears that it does so to put "revolution in the agenda." In their own words: "we don’t criticize Marxism to attack the idea of revolution; we criticize it to put the idea of revolution back in the public agenda in a way that can inspire millions of people to build the revolutionary movement and make it succeed where the old movements failed."
This may sound like a commendable intention, but… the road to hell is paved with good intentions. As Marx used to say
"as in private life one distinguishes between what a man thinks and says of himself and what he really is and does, still more in historical struggles must one distinguish the phrases and fancies of the parties from their real organism and their real interests, their conceptions of themselves from their reality" (The Eighteenth Brumaire of Louis Bonaparte, emphasis ours).
And the reality of ND, its real function, its raison-d’etre, as shown by its whole activity is to contribute to the mystification of the working class through the spreading of lies against Marxism. It is on this basis that we have denothis basis that we have denounced ND as a bourgeois group, regardless of how their members may earn a living; whether they are workers or petty bourgeois, or police agents, or whatever, is not an important issue. The central issue is what is the nature of the political positions and activity of the organization.
Marxism and New Democracy’s "revolutionary" ideas
According to ND, the "fundamental problem" with Marx is his view "of people and class struggle." Marx, the say, "thought working class people and capitalists are both motivated by the same thing –self interest. Marx understands the conflict between these classes as a conflict between the self interest of people who exploit others versus the self interest of people who are exploited." Next, ND begs to disagree with this "fundamental problem" and declares its ‘alternative": "working people object to exploitation not out of self interest but because they think it is wrong for anybody to be exploited." Thus for ND "class struggle is a struggle over what values should shape society, not a tug of war over competing self-interest." This is why the upcoming revolution will be the result of evolution will be the result of the victory of a an already existing "working class culture based on the values of solidarity, equality and democracy …against the capitalist values of inequality, competition and top down control." ND’s arguments are so contorted that one finds it difficult to choose where to begin to respond.
For a start let’s clarify marxism’s view "of people and class struggle," which, if it means anything, is marxism’s materialist conception of history. The whole view of world history up to the beginning of XIX century was based on the conception that the ultimate causes of the historical changes of society were to be found in the changing ideas —what ND calls "values"— of human beings, and, that of all the changes, political changes are the most important, and are dominant in world history. It was only after the French revolution that bourgeois historians began to recognize that the since at least the Middle Ages the developing force in European history was the struggle of the developing bourgeoisie against the feudal aristocracy for social and political domination. Marx, for his part, proved that the whole of previous history is a history of class struggles, a struggle for the social and political domination of social classes cr domination of social classes created by the material conditions in which society at a given point produces and exchange its means of subsistence
In the preface to A Contribution to the Critique of Political Economy, Marx gives an integral formulation of this conception in the very well known passage, which despite its length, we will quote in its entirety as it succinctly presents the essence of the Marxist view:
"In the social production which men carry on they enter into definite relations that are indispensable and independent of their will; these relations of production correspond to a definite stage of development of their material forces of production. The sum total of these relations of production constitutes the economic structure of society — the real foundations on which rises a legal and political superstructure, and to which correspond definite forms of social consciousness.
The mode of production in material life determines the social, political and intellectual life processes in general. It is not the consciousness of men that determines their being but, on the contrary, their social being determines their consciousness. At a certain stage of their development, the materiof their development, the material forces of production in society come in conflict with the existing relations of production, or — what is but a legal expression of the same thing — with the property relations within which they had been at work before.
From forms of development of the forces of production these relations turn into their fetters. Then begins an epoch of social revolution. With the change of the economic foundation the entire immense superstructure is more or less rapidly transformed. In considering such transformations the distinction should always be made between the material transformation of the economic conditions of production which can be determined with precision of natural science and the legal, political, religious, aesthetic or philosophic — in short, ideological forms in which men become conscious of this conflict and fight it out…In broad outlines, we can designate Asiatic, ancient, feudal and modern bourgeois forms of production as progressive epochs in the economic formation of society.
The bourgeois relations of production are the last antagonistic form of the social process of production — antagonistic not in the sense of individual antagonism but of one arising from the social conditions ofng from the social conditions of life of individual; at the same time the productive forces developing in the womb of bourgeois society create the material condition for the solution of that antagonism…"
This materialist conception of Marx, together with his discovery of surplus value –the demonstration of how within present society under the existing capitalist mode of production, the exploitation of the worker by the capitalist takes place — was and is of supreme importance for the working class communist movement. It allowed the working class for the first time to understand the reason for the historical division of society into classes, into exploiters and exploited, rulers and ruled, oppressors and oppressed, and put in firm theoretical ground its movement for its own emancipation, which contains the uprooting of the economic conditions in which the existence of classes and class rule is based.
For Marx, the working class revolution was based on the fact capitalist relations of production would become too narrow, a "fetter" for the progressive development of society, and reaching that point would sink humanity in an ever-growing barbarism — a projection that the history of most of last century so brilliantly confirmed. Certainly this revolution, or the class struggle which leads to it, have nothing to do with "what values should shape society and who should rule it" (ND). In making its revolution the working class, as Marx said when analyzing the uprising of Parisian workers during the days of the "Commune", "have not ideals to realize…" in the sense of the ready-made utopias –or ND’s "values based on love and equality and solidarity" — set to be introduced by decree. Foreshadowing ND over a hundred years ago Marx would write:
"In the full consciousness of their historic mission, and with heroic resolve to act up to it, the working class can afford to smile at the coarse invective of the gentlemen’s gentlemen with pen and inkhorn, and at the didactic patronage of well-wishing bourgeois-doctrinaires, pouring forth their ignorant platitudes and sectarian crotchets in the oracular tone of scientific infallibility." (The Civil War in France).
We cannot conclude without saying a few words about ND’s "critique" of the "Communist Manifest," which they pompously pronounced previously, but also maintain in their recent text inmaintain in their recent text in Discussion Bulletin. In its response to our denunciation of its politics in Discussion Bulletin, ND states that the Communist Manifesto’s "dominant theme" is "whatever increases economic production is good; whatever fetters it is bad" and, full of sentimental indignation, protests about Marx speaking of "capitalists as a positive force in its early years.".
The first affirmation is nothing but a stupid slander of Marx and Engels, and as regards the second, we claim its absolute validity. In describing the historical development of capitalism in The Communist Manifesto, Marx and Engels recognized the revolutionary role played by the bourgeoisie –as the bearer of large scale industry and the world market — in contrast to feudal aristocracy which struggled to keep their social position and the obsolete relations of production of feudalism. This is an historical fact –that ND likes it or not matters little — just as it is that that today bourgeois rule has become together with the relations of production that it represents not only a hindrance for the development of society, but a menace for its very existence. Furthemore that the bourgeoisie has become "unfit to rule" has absolutely no to rule" has absolutely nothing to do with changes in the ideology of the bourgeoisie or in ND words "with any change in capitalist values." In fact over two hundred years after the bourgeois French Revolution, bourgeois ideologues continue to hold fast to its historical ideological motto: "Liberte, Egalite, Fraternite" —spiced today with the catch word "democracy."
That this motto coincides almost word for word with the ND "model of social change and revolution" based on the "values of equality, solidarity and democracy," should surprise no one; it proves, if it were still necessary, the bourgeois character of this group and how misplaced are its militants when they say: "we don’t trace our thinking to any particular individuals from the past." Despite their claims of being new thinkers, so reactionary are the politics of ND, that their analysis of ideas or values as the motor force of history dates back to the 18th century, and their revolutionary watchwords are a throwback to the French Revolution at the end of that century.
Eduardo Smith.
As we pointed out in Part I of this series, Daniel De Leon unquestionably played a pivotal role in introducing Marxism to American revolutionaries, and exerted considerable influence early in this century not only over members of the Socialist Labor Party (SLP), but also the left of the Socialist Party (SP) and the early Communist Party, as well. Unfortunately this influence wasn’t always beneficial. In Part II, we focused on De Leon’s mistaken adherence to Lassallean economic conceptions (see Internationalism 114), which rendered De Leon incapable of comprehending the relationship between the immediate struggle and the historic goals of proletarian struggle. This failure had profound implications for De Leon and his followers in terms of their political intervention in the class struggle.
Rejection of revolutionary work within the mass organizations of the working class
De Leon contended that strikes could be successful only in the early stages of capitalism. In his view the development of machinery and the existence of a reserve army of the unemployed had undercut the ability of workers to wage successful strikes. Following the failure of the Buffalo Switchmen’s strike in 1892, De Leon wrote, "Once more it has been shown that no strike couldshown that no strike could succeed in industries that reached a high degree of capitalistic concentration" (People, August 28, 1892). This view, consistent with De Leon’s Lassalleanism, was completely at odds with the Marxist understanding of the workings of capitalist economy and the class struggle. As Marx insisted,
"The historical or social element, entering into the value of labor, may be expanded or contracted, or altogether extinguished so that nothing remains but the physical limit…the value of labor itself is not a fixed but a variable magnitude, even supposing the values of all other commodities to remain constant…The fixation of its actual degree is only settled by the continuous struggle between capital and labor" (Value, Price and Profit).
The failure to see that workers could struggle to improve their living standard – to increase wages and wrest durable reforms during the period of capitalist ascendancy had catastrophic consequences for De Leonism’s intervention in the class struggle, leading directly to a rejection of revolutionary work within the mass organizations of the proletariat during that period. For De Leon unions made sense only if they advocated the destruction of capitalism, and ignored tn of capitalism, and ignored the immediate struggle. In the early 1890s, De Leon had had illusions about the possibility of revolutionary socialists gaining control of the American Federation of Labor and the Knights of Labor, but after several years of "boring from within," De Leon became completely disenchanted with the mass unions. In 1894, De Leon enunciated his hallmark positions on revolutionary trade unionism and revolution at the ballot box, in an article about the failed Pullman strike:
"The union of the workers that expects to be successful must recognize 1) the impossibility of obtaining a decent living while capitalism exists, the certainty of worse and worse conditions, the necessity of the abolition of the wage and capitalist system, and their substitution by the Socialist or Cooperative Commonwealth, whereby the instruments of production shall be made the property of the whole people…and 2) the necessity of conquering the public powers at the ballot box by the vote of the working class, cast independently."
Frustrated by the failure to capture control of the unions, De Leon denounced them as useless and dead, and called upon socialists to withdraw and adopt a dual unionist policy. In 1895 the SLP established the Soc1895 the SLP established the Socialist Trade and Labor Alliance (ST&LA), which an SLP resolution written by De Leon hailed "as a giant stride toward throwing off the yoke of wage slavery." In 1900 the SLP formally dropped support for immediate demands in workers struggles, and in 1902 in "The Warning of the Gracchi," De Leon wrote,
"The characteristic weakness of the proletariat renders it prone to lures…The essence of this revolution – the overthrow of wage slavery, cannot be too forcefully held up. Nor can the point be too forcefully kept in evidence that short of the abolition of wage slavery, all ‘improvements’ either accrue to capitalism or are the merest moonshine."
This rejection of the possibility of fighting for immediate demands, of winning gains or durable reforms, was absolutely dead wrong in the period of capitalist ascendance, in which De Leon lived, a period when capitalism was still an historically progressive mode of production, still expanding, and favoring a development of the productive forces, and therefore making durable reforms a real possibility. But it would be wrong even if advocated today in the period of capitalist decadence, when the system is no longer hie, when the system is no longer historically progressive, but rather has become a fetter on the further development of the productive forces and therefore incapable of granting reforms, because it grossly fails to recognize the link between the immediate struggle of the proletariat and the historic struggle to overthrow capitalism (see Internationalism 114 for a fuller explanation of capitalist ascendance and decadence). Even if reforms are impossible under decadent capitalism, the immediate struggle of the proletariat to defend its interests against capitalist attacks poses the possibility of transforming struggles that begin even as simple economic disputes into a political confrontation with state capitalism, which holds the seeds of the revolutionary struggle.
De Leon’s confusion on revolutionary work within the mass organizations of the proletariat was at odds with the repeated interventions in the American socialist movement by Engels, who urged participation in the existing unions, which,
"whatever their shortcomings and little absurdities, whatever their platform and their constitution…are…the only national bond that holds them (American workers) together, that makes their strength felt to themselves not less than to their enemies: less than to their enemies: (Marx & Engels, Letters to Americans, 1848-1895, The Labor Movement in the United States, p. 289).
Engels also called upon socialists to form
"a core of people who understand the movement and its aims"
within the unions, and warned that if socialists
"stand aloof, they will dwindle down into a dogmatic sect and be brushed aside as people who do not understand their own principles" (Letter for Frederick Sorge, Nov. 29, 1886).
Proving Engels prescience, the SLP withdrew from the mass unions, retreated into its ST&LA front group, which shrank from 15,000 workers to 1,500 in the decade of its existence, and cut itself off from the masses of the working class.
De Leon’s foolhardy withdrawal from the mass organs of the proletariat triggered considerable opposition from within party ranks, which led to a wave of splits and expulsions, after which the SLP was reduced to a small isolated group, losing half its membership, including long time and leading members of the organizatiog members of the organization. In 1900, one significant group split to regroup with Eugene Debs and others to form the Socialist Party, which quickly developed into a mass socialist party during the first two decades of the 20th century. The splits and expulsions had reached such epidemic proportions that in 1902, Lucien Sanial and Hugo Vogt, high ranking party leaders who had sponsored De Leon for membership in the SLP in 1890, issued an appeal for an end to "the inquisition in the SLP," and then shortly left the party themselves. Rudolf Katz, an SLPer who left the party at the time of De Leon’s death in 1914, reported that so many comrades had left the organization in such a short period of time
"that De Leon remarked that he had to look at himself in the mirror at least once a day to find out whether he had not gone with the others" (quoted in Reeve, The Life and Times of Daniel De Leon).
Confusions on the development of class consciousness
Mesmerized by bourgeois democracy, a serious political confusion that will be addressed in the ion that will be addressed in the next installment of this series, De Leon sorely misunderstood how class consciousness develops in the course of class struggle. For him consciousness was measured by means of the political thermometer of elections, and developed pedagogically, one worker at a time, as a voter at the ballot box, not as a collective phenomenon among workers at the point of production in the class struggle.
True, De Leon said he found
"the attitude of workingmen engaged in a bona fide strike…an inspiring one. It is an earnest that slavery will not prevail. The slave alone who will not rise against his master, who will meekly bend his back to the lash…that slave alone is hopeless. But the slave, who…persists despite failures and poverty, in rebelling, there is always hope for" (What Means This Strike?).
But his view of class struggle is erroneous. It sees struggling workers as noble savages, blindly rebelling. However, workers are not the slaves of the ancient world, who could only engage in blind rebellion, a noble act against injustice. In slave society, the slaves did not hold the future of the world in their hands. They were not the key to a society without exploitaey to a society without exploitation and oppression. De Leon may have found the attitude of struggling workers "inspiring" but he did not understand that this struggle was the key to the transformation of society. In the same text, "What Means This Strike?" he developed his views with these words,
"Look at the recent miners’ strike; the men were shot down and the strike was lost; this happened in the very midst of a political campaign and these miners, who could at any election capture the government, or at least, by polling a big vote against capitalism announce their advance towards freedom, are seen to turn right around and vote back into power the very class that just trampled them."
What a mass of confusion. First there is the bourgeois conception of the workers gaining control of the capitalist state, a position abandoned by Marx on the basis of the experience of the Paris Commune in 1871. And then, instead of pointing out the necessity for workers to organize and defend themselves, to arm themselves against the state and the pinkertons, to recognize the necessity for class war, De Leon called upon the workers to forsake the class struggle for the terrain of parliamentarism. What De Leon did not understand is t De Leon did not understand is that consciousness is a collective phenomenon. It cannot be measured by what an individual, atomized "citizen" does in a polling booth; it must be judged by what workers do together as a collectivity in confrontation with the bosses and their state. There is a concrete reason why every union bureaucrat knows that if he really wants a sellout contract rammed through, he has to hold a mail ballot ratification vote, where the workers alone in their living rooms will cast their ballots, rather than risk a mass meeting of the workers, where they can influence each other and react collectively to the issues before them.
In the period in which De Leon and the SLP were involved in the IWW, De Leon opposed what he disparagingly called the "bummery" who wanted to engage in direct action against the employers and the state. After the 1908 split between the anarchists and the SLPers in the IWW, the De Leonist controlled splinter-IWW organized one important strike, among silk workers in Paterson, New Jersey, in 1912, which gives a glimpse of De Leon’s conception of class struggle. This silk strike of 1912 is not to be confused with the famous struggle of 1913, led by the "bummery" IWW, which made working class history. No, the 1912 strike was doomed by the De rike was doomed by the De Leonist leadership which insisted upon legality and decorum in the course of the struggle. According to a contemporary newspaper report, "’Peaceful means’ is the slogan," meaning that workers could use only peaceful, legalistic forms of struggle under the SLP leadership.
"All forms of disorder and even peaceful picketing are barred. The strike-leaders notified the strikers that if any of them took the law into their hands the union would not help them out of trouble with the police" (St Paul Daily News, March 31, 1912, cited in Foner, History of the Labor Movement in he United States, Vol. 4).
It is precisely in those struggles that De Leon could appreciate only as the noble, blind rebellion of hapless slaves, that class consciousness develops. It is precisely these struggles, especially in decadent capitalism, that can lead quickly to a direct confrontation with the capitalist state, and hold the seeds of decisive class confrontations. Revolutionaries must intervene in these struggles to help generalize the lessons of past struggles, pointing out the need to organize independently of and against the unions, and the necessity for the violent overthrow of the capitalist state. Revolutionaries must not follow the example of De Leon, intervening in these struggles to tell the workers to abandon the class struggle for the ballot box in capitalist elections. In the next installment we will address De Leonism’s total confusion on the question of bourgeois democracy.
– JG
If there were no conjunctural factors pressuring the bourgeoisie to abandon the left in power strategy, neither was there any necessity to resort to an alternation in power to revitalize the democratic mystification. The left has been in power for only eight years, and the Republicans have controlled congress and a majority of state governorships, so there was no monopolizing of political powerolizing of political power for an overly long period of time to put in question the democratic mystification. After all, the right had held power for 12 years under Reagan/Bush, and was removed from office not to revitalize democracy, but rather because of imperialist preoccupations, following Bush’s indecisiveness to intervene in the Balkans and consequent squandering of American imperialist capital built up by the Gulf War in 1991..
Consequently, a Gore victory seemed most sensible for the bourgeoisie. As we noted in Internationalism 114, at the same time, to protect themselves against an "accident" the bourgeoisie installed the younger Bush as the candidate of the Republicans on the right. Despite all the campaign rhetoric, and despite their different party affiliations, both Gore and and Bush adhere to the same, identical faction of the bourgeoisie, with no significant divergences on imperialist policy, and essentially identical positions on all significant domestic policy questions. Whoever won, the bourgeoisie was assured that basically the same orientation on domestic and international policy would be pursued.
The campaign was manipulated to generate interest and enthusiasm in the election, to present it as "close" in order to bolsterlose" in order to bolster participation by largely apathetic electorate, to rejuvenate the electoral mystification. The propaganda stressed over and over that the campaign was too close to call, that every vote would count, etc. etc. The polls portrayed Gore as trailing even until the very eve of the election, prodding working class and liberal voters to come out to the poll to prevent the triumph of the right.
So, what happened?
In large measure the strategy prevailed. Despite being portrayed as trailing in all but one of the national polls by three to five points, Gore won the popular vote, achieving 49% of the vote, a greater percentage than the vastly more popular Clinton received in 1992 or 1996. In fac, Gore received more actual votes than Reagan did in his landslide victories over Carter and Mondale, respectively in 1980 and 1984. The political accident that threw the electoral circus into turmoil was due to two factors 1) the loose cannon actions of the Green Party candidate, Ralph Nader, and 2) the fact that for the first time since 1888, indeed for the first time in epoch of capitalist decadence, the results in the popular vote were contradicted by the results in the anachronistic Electoral College, which appeared to give the election victory to the candidate who came in second place.
The Nader Factor
Unlike the Perot campaigns of ’92 and ’96, which were designed to siphon off votes from the Republicans, and facilitate the victory of the left in those elections, the Nader candidacy was not designed to impact the current election. The script called for the Green Party to develop a political presence so that it might 1) prepare play a crucial role in the future as a means to control radicalized workers and petty bourgeois elements, as the crisis deepens and work class discontent becomes more pronounced, In this sense the Nader campaign was designed as a electoral reference point for the Seattle-type anti-globalism movement, as well as traditional environmentalists and "progressives." The immediate goal was to post 5% in the popular vote, which would qualify the Greens for federal campaign funds in the future. However, Nader made a deal with the established environmental groups and the Democratic Party that he would not seek to impact the result of the election, and promised not campaign in states where it might effect the outcome. For whatever reason – some of his critics in the left of the Democratic party and the environmental movement charge egomanial movement charge egomania – Nader reneged on this agreement and concentrated his campaign in key battleground states that were crucial to a Gore victory but were also most receptive to Nader’s "progressive message" attacking big business, . Realizing that Nader was poised to threaten the Gore victory, about two weeks before the election the environmentalists and the left of the Democratic party began an all-out campaign against Nader for reneging on the deal, urging him to withdraw from the election, and calling upon his supporters not to "waste" their votes and help elect Bush. The New York Times joined this campaign, denouncing Nader for "electoral mischief," and tv journalists joined the chorus as well. This campaign was in sharp contrast to the situation with Perot, who never received such criticism and was never asked to withdraw in ’92 and ’96 – precisely because his campaign was designed to effect the election results in the Clinton races..
Even though the bourgeoisie was successful in scaring off more than fifty percent of the people who were supposedly intending to vote for Nader, and achieved a Gore victory in the popular vote, the Green party candidate managed to screw up the electoral college vote on the state level in at least three states: New Hn at least three states: New Hampshire, Oregon and the all important Florida, with its 25 electoral votes. For example, in Florida, where Bush had a 1700 vote popular vote margin on election day (before the first recount which brought him down to 330), Nader got 96,000 votes. While undoubtedly a good number of the voters who cast ballots for Nader were people who were so alienated from the mainstream parties that probably wouldn’t have participated in the election had Nader not been a candidate, if only 3 percent of the 96,000 had voted for Gore, Bush would have been easily defeated on election day.
The anachronistic electoral college
The unforeseen accident that produced a situation in which the electoral vote did not match the popular vote was caused by Nader’s reneging on the deal, and aggravated by the electoral college, an anachronistic, anti-democratic -- even by bourgeois standards – historical relic created in 1787 as a check against "popular passions." In today’s conditions this institution is weighted disproportionately in favor of rural, small population states, and it was these states that Bush won heavily.
The bourgeoisie’s strategy provided protection against arovided protection against an accidental defeat at the polls, but not for a contradictory and indecisive result at the polls. For the American bourgeoisie, no matter how much they pay homage to the wisdom of the Founding Fathers and the constitution they created over 200 years ago, an election in which the guy who lost the election is declared the winner is a tremendous political embarrassment and liability. All the rhetoric about the "will of the people" and "the people decide" rings empty. Despite the fact that the dominant faction of the bourgeoisie could certainly live with either Gore or Bush as president with no problem, each of the candidates, and their entourages, genuinely want to be president, and this has led to never ending political soap opera since election day. All the bickering, posturing and rancor by the two candidates camps is in complete contrast to the normal unifying, mutual support and coming together that normally marks the conclusion an American electoral circuses.
The goal of the current recount, and the legal challenges by the Gore staff is designed not simply to satisfy Gore’s personal ambitions, which are real, but also to produce an election result in Florida so that the final Electoral College results will coincide with the popular vote, though the final outcom vote, though the final outcome is still in doubt. The ruling class is trying to put the best "spin" possible on the current situation, stressing how this election proves that every vote counts, and that the melodrama we are witnessing is a simply a stupendous civics lesson for the American public. But in reality both sides expose the pettiness and corruption of the highly touted American electoral political system, in which each side is shamelessly trying to cheat and manipulate the vote counts in their won favor. Senior "statesmen" in both parties, including former presidents Carter and Ford, are already pushing for a resolution that will somehow salvage the authority and legitimacy of the presidency and American democracy following the settlement of the current stalemate. And indeed the current squabbling in no way threatens the stability of American society – whatever jitters there are on Wall Street have been there for over a year and are not caused by the inconclusive election, the working class is not engaged in open struggle, and the imperialist strategy of American imperialism is not in question. In this sense the so-called "sharp political division" in the American electorate couldn’t come at a better time for the bourgeoisie, even if it is unplanned. While not having the left in power might create certain prob power might create certain problems for the ruling class in terms of justifying overseas military interventions or in potentially provoking oppositional actions by the unions and the Jesse Jackson/Ted Kennedy wing of the Democrats, the situation will not be insurmountable. Once the election is decided the bourgeoisie will try to foster a reconciliation, and a strongly divided Congress and White House will somehow find the statesmanlike wherewithal to rise above partisan divisiveness to continue to attack the standard of living of the working class, and begin to repair the tarnished image of the democratic mystification. --
JG11/18/00
Now that the dust has settled from November's electoral mess, it's business as usual for the American ruling class. The incoming Bush administration will largely continue the same basic policies as the Clinton administration, particularly in regard to American imperialist interests. Already the bourgeoisie is pushing with great success an ideological campaign to cast the recent electoral embarrassment in the most positive light.
The inconclusive result in the November election was clearly an unplanned accident for the bourgeoisie. Nothing in the current situation either on the level of the economic crisis, inter-imperialist tensions, or the class struggle, required the bourgeoisie to abandon the strategy of the left in power that had worked so effectively for the past eight years. As pointed out in Internationalism 115, "this strategy permitted the ruling class to use the Clinton administration to maintain a continuous implementation of austerity and the dismantling of the New Deal welfare state, and to intervene frequently and effectively on the military level around the world under the ideological cover of 'humanitarianism,' and to maintain the disorientation of the working class. At the same time the ruling class was able to revamp and strengthen the union apparatus in order to confront future working class struggles." Thus, the best interests of the bourgeoisie would have been served by a Gore victory as a continuation of the left in power strategy. The inability for the ruling class of the world's greatest imperialist power to control the electoral outcome was a great embarrassment, one which European powers did not hesitate to ridicule. This failure was largely attributable to the confluence of two factors: the actions of Green Party candidate Ralph Nader, who reneged on a deal with the Democrats not to pursue his campaign in states that might affect the outcome of the election, and the anachronistic Electoral College, which is weighted heavily in favor of sparsely populated rural states, that voted for Bush. The fact that Gore won the popular vote by 500,000 votes, but was not the winner of the election severely undercut the democratic myth that the "people decide," that the government is a reflection of the "will of the people."
Following the election night impasse, this accident was exacerbated by a tendency for the political situation to spin out of control, as political ambition, and not the best interests of the ruling class became dominant. With 9,000 senior and middle level appointments at stake, the political and legal wrangling was quite unsightly for the bourgeoisie, incidentally exposing for the moment the hypocritical qualities of bourgeois electoral democracy. Robert Reich, former Secretary of Labor in the Clinton administration openly lamented this losing sight of the national interest in an op-ed piece in the New York Times, in which he complained about "the career politicians, congressional aides, party activists and the staffs of partisan think tanks and Washington-based interest groups that have gone ballistic." Reich moaned, "None of them expected an outcome so hair-splittingly close. There was no script for anything like this," and complained that this led to a "naked quest for power in the absence of clear rules" for settling the election (New York Times Dec. 4, 2000).
A popular e-mail parody of the election began circulating throughout internet asking what the media would say if in an African nation, there was a controversial election in which the winning candidate was the son of a previous president, who had previously served as director of the state security forces (CIA), and where the victory was determined by a disputed counting of the ballots in a province governed by a brother of the presidential candidate. Even the Supreme Court, which normally benefits from a mythic ideological portrayal as an exalted, "non-political" branch of government guaranteeing the rule of law in American society, permitted itself to be drawn into the highly charged partisan maneuvering. The Court ruled 5-4 along narrow political lines to stop the recount in Florida and award the election to Bush, a decision tainted by the vested interest of two of the conservative judges in the outcome of the election: Scalia, whose son was a Bush campaign official, and Thomas, whose wife was working as a personnel recruiter for the Bush transition team.
As embarrassing as this political loss of control was for the bourgeoisie, the American ruling class was not powerless to protect itself. First, as we pointed out in Internationalism 115, the dominant faction of the ruling class had preventatively protected against serious damage in the event of such an accident by making sure that both major party candidates, Al Gore and George W. Bush, represented the outlook of the same ruling class faction, and that no matter who won essentially the same policies would be implemented. Thus, both Gore, and Bush, a champion of "compassionate conservativism," advocated identical positions on imperialist issues, and very similar positions on domestic policies. In this sense, while there was definitely a loss of political control for the bourgeoisie, it occurred within very proscribed limits and posed no particular threat to political stability. This was not a clash of two rival political factions for control of the capitalist state, but rather a bickering between two members of the same faction.
This enabled the bourgeois media, despite the ridicule emanating from Europe, whose leaders bragged that such a mess could never happen in their parliamentary democracies, to unleash an ideological campaign that emphasized the strength and maturity of American democracy. The ridicule that portrayed the U.S. as little better than a banana republic was refuted by the argument that the electoral stalemate did not lead to violence, that the rule of law would prevail, and ultimately that the system worked. This campaign to salvage the democratic myth, of course, was bolstered by Gore's concession speech after the Supreme Court ruling, which was hailed, even by conservative commentators, as one of the greatest speeches in American political history.
The emerging Bush cabinet demonstrates the effectiveness of the bourgeoisie's policy of minimizing the dangers of an electoral accident. Bush's political inexperience and alleged "lightweight" intellectual capacities, are fully compensated for from the very beginning by the role of the new vice president, Dick Cheney, who served under the elder Bush as Secretary of Defense during the Gulf War in 1991, and coordinated the transition team and played a key role in cabinet member selection. So prominent a role has Cheney played that the Economist, and even some American journalists, have quipped that the US is switching to a more European style government, with a largely ceremonial president, and the vice president serving essentially as prime minister (Economist Dec. 23, 2000, and Tom Brokaw, NBC News Jan. 20, 2001).
Bush's cabinet selection clearly demonstrates that his administration does not personify the Republican Party's right, but occupies essentially the same ground as the Clinton-Gore administration. Cabinet members for the most important posts, those dealing with imperialist and economic policy, come from the Republican Party mainstream, what the Economist (Jan. 6, 2001) called the traditional Republican "east coast establishment," not the right of Ronald Reagan. The imperialist policy team members have all served in previous administrations: Secretary of State Colin Powell who previously served as Chief of Staff of the U.S. military and National Security Advisor in the elder Bush's administration; and Defense Secretary Donald Rumsfeld, who previously held the same post in the Ford administration. Treasury secretary designee Paul O'Neill also served in the Ford regime, as Budget director, and more recently as CEO of Alcoa Aluminum Corporation. As further evidence that his administration is not representative of the Republican right, Bush has gone out of his way to outdo Clinton in making his cabinet the most ethnically diverse in American history. This demonstrates clearly that Bush is not representing the far right of the party, but rather the center of the Republicans. Bush has thrown a bone to the far right by making several controversial appointments to less important posts, especially John Ashcroft as Attorney General, who will serve as a lightning rod for liberal and left opposition, especially on abortion - a social issue that the bourgeoisie purposefully and skillfully exploits to stir up emotions and divert attention from fundamental class questions. In fact, some news commentators have pointed out that the liberal Democrats want Ashcroft in office so they will have someone to attack.
The one error made in cabinet appointments made by the Bush transition team was the initial nomination of Linda Chavez as Secretary of Labor. She was forced to withdraw not, as the media would have us believe, because she had lied to the Republican vetting team and FBI investigators about employing an illegal immigrant as a housekeeper in the early '90s, which was surely just the pretext, but rather because she was too far right for the post. The Labor Department has a key role to play for the government in regard to the class struggle, through its regulation and control of the unions and laws regulating wages and employment. The bourgeoisie still needs to continue its efforts to revitalize the unions, and because of Chavez's opposition to unions, and minimum wage laws, her leadership at Labor would have jeopardized the continued strengthening of the unions, undercut the cozy relationship between the unions and the government of the Clinton years, and risked provoking premature confrontations with them. A more centrist nominee, like Elaine Chao, who was named within 48 hours of Chavez's withdrawal, will assure a more peaceful relationship with the capitalist unions in the immediate future.
The election is over, and after embarrassing itself and momentarily losing control of the political situation, the American bourgeoisie has already recovered, and is repairing whatever damage may have been done. Even if the election outcome appears to contradict the principle that the majority wins, the American population is being serenaded with a lullaby about the rule of law and the legitimacy of the new president. As soon as possible the Bush administration will get down to business, continuing to make the working class bear the brunt of the economic crisis and embarking on military missions to defend America's threatened hegemony in the world arena.
JG.
During the 1990's the bourgeois media portrayed the US economy as an oasis of unlimited prosperity. Today this talk of a never-ending, booming economy is heard no more. The days of the "longest running economic recovery in US history" - as they used to call it - seem now to be gone. The debate now among bourgeois economists is not about the likelihood of a recession, but rather about how bad it will be, whether there will be a hard landing or a soft one. There are even some so-called pessimistic economists who say that there is already a recession, particularly in the manufacturing sector, the central industry of the economy.
Certainly there is not much to brag about in the present US economic situation. The official figures themselves can't hide an increasing deterioration of the economic indicators that the dominant class uses to measure the health of its system. For instance there is a virtual collapse of economic growth, from about 7% annual rate in the last half of 1999 to a 1.8% annual rate in the last six months of 2000. In the fourth quarter of last year, the rate slowed to a meager 1.4 percent, the lowest since the second quarter of 1995. So far for 2001, Federal Reserve chairman Alan Greenspan estimates that economic growth has declined to near zero. For its part, Wall Street, the 1990's miracle machine that produced riches out of thin air is lately looking quite humble. The same "analysts" that peddled the virtues of the stock market before are now referring to last year's plunge in technology and Internet stocks as "a bubble that burst." It is quite symbolic that the big losers of this explosion are the infamous "dot-coms," the Internet companies that were supposed to epitomize the bright future of the "new economy," that according to the fashionable mumbo jumbo of the bourgeoisie characterizes today's capitalism. For the last year these companies, many of which were an aberration, never turning out profit, have been going belly up one after the other, making the myth of a healthy American economy collapse like a house of cards.
The reality is that - as we have often insisted in the pages of Internationalism - the US "booming economy" has been from start to finish a sick organism, bred by an explosion of private debt, growing commercial deficits and a tremendous wave of speculation on the stock market, which helped sustain growth and created a façade of general prosperity.
As bad as the situation of the US economy is, the dominant class is still not calling it a recession. According to its definition, a recession will only start after two consecutive quarters of negative economic growth. The truth of the matter is that official recession, or not, the working class is already suffering - like always, bearing the brunt of the economic troubles of the bourgeoisie. On the job front it is a blood bath. January's layoffs -142,208- are the highest in 8 years, rising 6.4 percent over December's 133,713 job cuts. And these jobs lost are not MacDonald's or busboy jobs, but positions in sectors where, on average, workers can make a living salary. For instance in January the auto sector layoffs reached 34,959, while the telecoms, E-commerce and computer companies accounted for 44,851, about 32% of the total.
At the command of the state, the economic witch doctors of the bourgeoisie are hurriedly trying to breathe some life into the ailing economy. The Federal Reserve is busy playing its monetary games, dropping another ½ percent of its benchmark short-term interest rate at the end of January, on top of the half percent already cut at a few weeks before. The engineering of a reduction of a full percentage point in less than a month by the Federal Reserve under Alan Greenspan, who one bourgeois commentator put it, "never before…. moved this fast to rescue the economy from a slide," bears testimony to the worrisome situation. For his part, the new president, George W. Bush, is pushing for a tax cut, which will supposedly be central in jump-starting the moribund economy.
However, the bourgeoisie doesn't seem to be very optimistic about the immediate impact of either its monetary or fiscal policy in preventing the downward economic slide. The bourgeois analysts themselves are recognizing that the lowering of interest rates are at best encouraging people to play the stock market again, while the big banks, overburdened already by bad debts, are for the moment unwilling to open wide a flow of money that very likely will never be paid back. The irony of the situation is that in order to bring back some semblance of prosperity, the bourgeoisie has had to resort to a mechanism that the Federal Reserve had already found unsustainable and was trying to curtail when it started raising interest rates at the end of the 90's. Thus, faced with the present convulsions and the perspective that things will get worse rather than better, the bourgeoisie again resorts to a policy that will foster renewed speculation. Nor is there much enthusiasm for tax cuts among the bourgeoisie either. Some are arguing that it needs to be retroactive to have any impact in the slowing economy. Probably the real reason of this lack of enthusiasm is the fact that they know that, given the present economic troubles, the projected budget surpluses for years to come - the basis for the proposed tax cuts - may now never materialize at all. Of course the working class doesn't have much to be enthusiastic about in this tax cuts - the average 8 dollars more in their weekly paycheck they would get is nothing to cheer up about.
Nonetheless, despite the fact that the dominant class is more or less openly acknowledging that something has gone wrong with its economy and that things will only get worse, it is still promoting its mystifying way of looking at the world, only telling half truths. It wants us to believe that its present troubles are nothing but a normal phase in capitalism's economic cycle, after which a new period of prosperity will follow, and everything will continue as before. Nothing could be farther from reality. What present bourgeois economists call recessions are not the classical economic crises suffered by capitalism during the 19th century. Then, each cyclical decline of the economy was followed, through the expansion of the world market, by a new expansion of production reaching higher levels than the previous period. Today this way out is not possible. The world market been saturated since the beginning of the 20th century, opening up the historical crisis of capitalism. The youthful periodical crises of the bourgeois system of production have been transformed into a chronic economic crisis of a historically decadent system, which has nothing to offered humanity by cycles of crisis, wars, and reconstruction.
Since the end of the 1960's, following the "economic boom" of the period of reconstruction after the devastation brought about by the barbarism of WW II, capitalism as a whole has been confronted by an ever deepening worldwide open economic crisis, to which the bourgeoisie can only offer artificial solutions. Particularly the lack of solvent markets, in which it would be possible to realize the surplus value produced, has led the bourgeoisie to the creation of fictitious markets through the permanent abuse of credit. Thus for the last three decades, each "recovery," following a so called "recession' has been made possible only by an increasing growth in public and private debt. The result is that each one of the phases of convulsions has meant a more violent fall into the abyss, while each moment of recovery softens the fall. Nevertheless, both are situated in a dynamic of progressive collapse.
In this context the present troubles of the US economy are nothing but a moment in the general economic crisis that the whole system of capitalism has been confronted with for the last three decades. The years of "unprecedented" recovery after the world recession of the early 90's, which we often heard about, was mainly reduced to the US, bearing witness to the depth of the world crisis of capitalism. The second largest economy of the world, Japan, has not been able to come out of recession, while the countries of Western Europe - the other centers of capitalism - at best have shown only very anemic rates of growth over the past decade.
At the end of the 90's the US bourgeoisie was able to avoid the cataclysm of the system threatened by the collapse of the economies of South East Asia in 1997-98 thanks only to a historically unprecedented speculative bubble. Investments in the stock market were turned into the only profitable investment. Families and businesses in the US were pulled into the aberrant mechanism of taking out debt in order to speculate on the stock market and using the stocks acquired as pledges in order to frantically buy goods and services. The "wealth effect," or, more accurately, the dilution of wealth produced by this speculative bubble, has been in fact the real motor behind the famous "unprecedented" longest recovery of the US economy.
As we said above, the bourgeoisie itself had already recognized even before the present troubles of the economy became apparent, that it could not go on forever sustaining growth through the speculative mechanism and was trying to prick the speculative bubble and "cool" down the economy. This attempt to engineer a soft landing of the economy, judging by the sudden change in monetary polices by the Federal Reserve at the beginning of this year, has not been totally successful.
Paralysis of growth, massive layoffs, credit crunch, rising inflation are all indicators of the beginning of a new convulsion of the US economy which will without doubt have a tremendous effect on a world capitalism already very much weakened by thirty years of open economic crisis.
During the 90's, while the bourgeoisie was celebrating the wonders of the "booming economy," workers experienced salary freezes, worsening working conditions, the dismantling of the welfare state - in short, an all out austerity attack, sugar-coated with the promise that they eventually would get their piece of the pie. Yet the only thing that workers saw rising was their debts and the hours that they have to work to keep up with the deterioration of the purchasing power of their salary being eaten up by chronic inflation. Now they are told that the good times are off for a while. Now they will be asked to continue tightening their belts and bear the austerity made necessary by the bad phase of "business cycle." More than ever the working class needs to give its own solution to the crisis of capitalism: fight on its own terrain against the attacks of the system, overthrow capitalism and all its bourgeoisie institutions.
Eduardo Smith.
Links
[1] https://en.internationalism.org/tag/5/50/united-states
[2] https://en.internationalism.org/tag/3/19/union-question
[3] https://en.internationalism.org/tag/recent-and-ongoing/class-struggle
[4] https://en.internationalism.org/tag/4/30/economics
[5] https://en.internationalism.org/tag/4/32/decomposition
[6] https://en.internationalism.org/tag/general-and-theoretical-questions/economic-crisis
[7] https://en.internationalism.org/tag/17/253/us-elections
[8] https://en.internationalism.org/tag/political-currents-and-reference/de-leonism
[9] https://en.internationalism.org/tag/3/13/marxism-theory-revolution
[10] https://en.internationalism.org/tag/political-currents-and-reference/leftism