Economic Update: Working Class History and the 2020 Election

[S9 E32] Working Class History and the 2020 Election

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This week on Economic Update, Professor Wolff explores the historic parallels of the U.S. working class and politics in the U.S. He begins by exploring how and why the Great Depression of the 30’s married the U.S. working class to FDR's Democratic Party and then explains how that led to both the Democratic and Republican parties becoming pro-capitalist - which has led to both parties presiding over the exponential growth of income and wealth inequalities along with the political power the richest 10% have, and exploit, over the working class in the U.S. today. Professor Wolff goes on to show that because of this, Trump landing in the White House was a result of the working class’ disgust with both parties. Professor Wolff ends with a discussion about the implications of this history for the upcoming 2020 election.

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Transcript has been edited for clarity. 

Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. I’m your host, Richard Wolff, and today’s program takes into account the fact that Americans are beginning to look into the election — the big one for president coming up next year, 2020. Because this election is becoming an issue and will of course become more of an issue as the months roll on, I thought it would be a good time to stop and take a look at the broader historical picture of American politics right up to the present. So I call today’s program “American History and the 2020 Election.”

If you’re interested in this argument that I’m going to be presenting during this program, I should also mention to you that an article-form version was published in the digital magazine, Counterpunch, which you can find online at https://counterpunch.org, dated June 3, 2019.

Of course, when I’m talking about the American working class, I don’t mean to suggest that everybody who’s in that working class, roughly 150 million Americans, our fellow citizens, agree on everything or act in the same way. There are important divisions of the working class: men and women, whites and blacks, skilled and unskilled, more educated and less educated workers. The regional character of the working class in the South is different from that in the West, and so on. But there were things over the last 75 to 100 years that brought all working people together. And by “working people” I mean what the government calls “non-supervisory employees,” the workers who do the work that makes this country function, producing and distributing goods and services. There are roughly 150 million non-supervisory workers employed in the US today, and they are important not only because they make everything go around and produce the goods and services without which we couldn’t live but also because they play a vital role within our current economic system, capitalism. Capitalism is an economic system in which a relatively small minority of people — owners, CEOs, the people at the top of corporations, boards of directors, and so on — have the majority of power, wealth, and income in society, and such a system could not continue to function unless the mass of people, the vast majority, the non-supervisory working class allowed it. Thus, for capitalism to survive, it has always been necessary for those at the top to find allies in the working class, and the history of this relationship is what we’re going to be sketching in what follows.

Our story starts back in the 1930s at the height of the the Great Depression. It starts there because capitalism crashed big time in 1929. Suddenly, in this country, an economy that had been booming along basically since the Civil War crumbled. During this period, America had grown richer faster than even its old parent Britain could do, had grown richer as fast or faster than the only other quickly growing national economy at the time, Germany’s, could do. America was a success story of exploding net wealth — we killed off enough of the Native Americans in this country to allow an immense expansion of the immigrants from Europe across this country. Such wealth created the great names of that time: the Rockefellers, the Carnegies, and all of those people who got called by the name that most others understood applied all too well: “robber barons.” Such people became extremely wealthy, and they celebrated the system that made them so. They also convinced everyone else pretty well that the wealth and the growth in this country were somehow their doing — not the work of the mass of people but the result of the genius of the “captains of industry,” the robber barons themselves.

They did a pretty good job of convincing people of this until, that is, the crash of 1929, when suddenly this great capitalist system with all of these rich Rockefellers and so on at the helm fell apart. Between 1929 and 1933 there was a continuing collapse, and by 1933 the unemployment rate in the United States had reached 25%. That means that one out of four people were without a job. Every family had either a mama or a papa or a cousin or an uncle without work and, therefore, all were affected. Whatever savings people had accumulated were quickly used up, because there was no support for unemployed people. There was no unemployment compensation system then, and thus people had nowhere to turn. The desperation of the times was captured in novels like Of Mice and Men, Grapes of Wrath, or the other great works by Steinbeck, Dreiser, and the other novelists of the time, which you might remember reading as a high school or college student.

In that collapse, the mass of the American working class finally saw through the pretenses of capitalism. They saw that capitalism could deliver not the goods but the really bads, and the American working class drew a conclusion. The conclusion was that the political party that represented capitalism the most, the party supporting both capitalism and the wealth of the rich capitalists, that is, the Republicans, were the people who were not working men and women’s friends.

Working people turned and placed their hopes in new directions. Some of them decided to go with the Democratic Party: at least it wasn’t the Republicans, and at least the Democrats showed some sympathy for workers’ situation. Many workers decided to do something much more dramatic. They joined labor unions in a way that Americans had never done before. Indeed, the greatest wave of labor organization in the history of the United States took place in the depths of the Depression of the 1930s. Millions of Americans who had never been in a union before, whose parents had never had to do with unions before, decided that the best way to get through the hard times of the terrible Depression was to unify with other workers and work together to make something happen. Those who were even more upset by what was happening to them and by the economic system they thought they could rely on joined either the two main Socialist parties of the period or the Communist Party. These parties became very important in American history at that time, and indeed a powerful coalition formed from them, an alliance between the Communist Party, the Socialist parties, and the labor organizers under the heading of the CIO, the Congress of Industrial Organizations. 

Members of this coalition went to the then newly elected president of the United States, Franklin Roosevelt, a Democrat brought in out of frustration with the Republicans, the latter of whom had been boasting most loudly of the great achievements of capitalism. The members of this labor coalition went to that new president, and they said, “We put you in office. You’re here to help us through this terrible Depression. If you do, we will celebrate you, and if you don’t, we will vote you out.” The Communists, the Socialists, and the other organizers of unions together represented tens of millions of people. The president, Mr. Roosevelt, got the message. He went back to the rich people he came from, the big leaders of business like himself, and he said, “I just had a meeting with the Communists, Socialists, and the unionists, and they basically read me the riot act. I had better help those people, the mass of Americans, through this Depression, or I’m out of here. And gentlemen,” he said looking at them — there were very few ladies present in that room — “I advise you to go with me in this effort because if you don’t, these people are very angry. They’re already talking — particularly those Socialists and Communists — about a revolution here, you know, like the one they had in Russia just a few years ago, back in 1917” (which wasn’t that long ago when you're talking in the early 1930s).

So he finished this conversation, Mr. Roosevelt did, and he said to the rich people with him, “The government has no money. With millions of people unemployed and businesses falling apart, nobody’s taxes are being paid. The only way to help these people is to get money, and the only people who have money are you, you corporate leaders, you wealthy millionaires. So you’ve got to give me the money so I can take care of the mass of people, and I urge you to do it because if you don’t, there’s a good chance those people will remove whatever money you have, and you won’t be in a position to give anybody anything anymore.”

Half of those business tycoons gathered bought Mr. Roosevelt’s argument, and they agreed to his proposition. Mr. Roosevelt then went and did something unprecedented in the US, and what he did was to take money from the rich, taxing them very highly and borrowing what he didn’t tax from them, basically telling them that they had no other choice. He used this money first to create the Social Security system, which suddenly offered a safety net for all American families. It was as if Mr. Roosevelt had said, “You’re elderly, you’re 65 years of age and older, so I’m gonna give you a check, a government Social Security check every month for the rest of your lives.” Second, Mr. Roosevelt created an unemployment compensation system for the first time. If you lost your job through no fault of your own, the government would give you a check every week for a year or two to help you through until you found new employment. Third, he instituted a minimum wage. We never had that before in America, just like we never had a Social Security system before or unemployment compensation. Suddenly, if you had a job, you couldn’t be paid below a certain amount because it was indignant for you and indignant for society to treat people this way — what an idea! Finally, with his massive government hiring program, it was as if Roosevelt told the American people, “If the private capitalists of this country can’t or won’t hire millions of Americans who only ask for a job, then I will, as president.” And he did this. He hired roughly 15 million people between 1934 and 1941.

The American working class could not believe what they had accomplished through the alliance of the Communists, the Socialists, and the unions. They had pressured a president to tax the rich and the corporations in order to provide a vast program of help and support to working men and women, the working class. And the working class made a commitment: this is our guy, Mr. Roosevelt. And so they turned to his party, the Democratic Party, and said, “This is the party of the working class, and we’re gonna support you.” How powerful was this support of the working class? Well, let’s see: Mr. Roosevelt was president four times. He was reelected three times, that is, by overwhelming support of the American working class. The working class became the Democratic Party, and the Democratic Party became it.

It’s an extraordinary story, and it’s when the politics of this country were shaped in a profound way. The role of the Democratic Party and of Roosevelt was simple. Capitalism as a system, if left in the hands of private enterprises, capitalists, and big corporations, can and will blow itself up and produce catastrophes like the Great Depression. The only way to manage that, to prevent such catastrophes from happening over and over again, is to bring the government in through a massive intervention of an ongoing sort, like Social Security, unemployment compensation, minimum wage legislation, and federal jobs, when the private sector can’t provide a living wage to everybody who needs and wants one. What a commitment! And who’s to pay for it? Big business and the rich.

That set the tone for what the Democratic Party did, but it also set the tone for what the business community would do next. Confronted by a massive defeat, they had to pay. They had to pay taxes like they had never paid before to fund a program of helping the mass of people. They had been made out to be the problems of our society, the “robber barons,” who cared only for profits and not for the well-being of the American people. Capitalism had given itself a black eye, and the Democratic Party pointed at it and said, “Never again!” The business community was horrified. Would they have to pay high taxes forever in this system? Would they not be on top of it? Would they be held responsible forever? “No!” they said, and the rest of this story relates how American politics were changed after Mr. Roosevelt was gone.

We’ve come to the end of the first half of this program, so having teased you a bit, before I take you to the next step, bringing the story up to our current president, I want to remind you: please follow us on YouTube. On YouTube, simply search for “Democracy at Work” to find this program and follow it. Supporting us that way is an enormous encouragement in a very practical sense for us. Please also make use of our websites: https://rdwolff.com and https://democracyatwork.info. Finally, there’s always a special thanks due to our Patreon community, whose support and encouragement is crucial to every program we produce. Stay with us, and we will be right back!


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Welcome back, friends, to the second half of today’s Economic Update. We had taken our story of the American working class’s history through the Great Depression and even to the end of World War 2. That was the crucial time because the Depression was now over. The working class had embraced the Democratic Party of Franklin Roosevelt, and vice versa. The war had put Americans back to work — half of the unemployed took on a uniform, and the other half went to work producing the uniforms, guns, ships, and all the rest.

So 1945 marks the crucial end of the Depression, the return of people to jobs, and the death of Mr. Roosevelt, and that was the opportunity for action, that is, for the Republican Party to lead the way in pushing back against all that had been accomplished in the 1930s, undoing what had been done: that thing called the New Deal. Now the agenda was to undo the New Deal, and the way the Republican Party and the business community, working very closely together, did that was to destroy the New Deal coalition, that combination of Communists and Socialists, on the one hand, and unions, on the other. The working class’s leadership congealed in those groups: Communists, Socialists, and labor unions had to be destroyed so that the Republicans could then find allies within the working class to pull over to their side. That way the Republican Party wouldn’t face a largely united working class, as it had in the devastatingly successful run of the Democrats under four presidencies of Mr. Roosevelt.

So here’s how Republicans did this. First, they went after the Communists by claiming that they were not leaders of the working class but rather evil agents of a foreign power. That way they justified getting rid of them, and the minute they finished that, they did the same to the Socialists and said that they were the same as the Communists — they just spelled things in a different way. They taught Americans to be very frightened of all of that, very hostile, and Russia became the great enemy. This was step one: break the working class coalition.

Step two: hobble the labor movement. This especially took place with the passing of the Taft-Hartley Act of 1946, a law that stipulated that anything that a trade union won at a workplace had to be given to everybody who worked there, whether or not they were members of the union, whether or not they had gone out on strike when the union called them to do that, and whether or not they paid dues to the union. This gave everybody an incentive to be a free rider, that is, to get the benefits of labor struggles without being part of the union movement. That marked the beginning of the downhill run of the labor movement, which was eviscerated in this way.

Third, businesses decided they could make more money by going out of the country. They began that hemorrhaging of jobs out of the country to cheap labor somewhere else, which the unions couldn’t fight because they were fighting desperately to survive the onslaught of the government’s attack on them.

All of this worked. The long and the short of it is that this worked. The New Deal coalition was broken up.

Part of this effort also involved forcing women back into the house, women, that is, who had been pulled into the labor force during World War 2 when the men went off to fight. Women like Rosie the Riveter had become workers everywhere in America. Now, after the war, the Republicans led the charge: women must go back in the household. A woman, they claimed, wasn’t a hero if she was doing the work that the men used to do and doing her part for the war effort. No, no, she became a person who ought to be at home, who ought to be taking care of children. The whole Women’s Liberation movement was born out of the attempt to push women back to a subordinate household role that was not valued, and yet they were told that they had to do this.

Simultaneously, black people, who had begun to emerge from the Jim Crow segregation of the past into the modern American working class alongside white people, were pushed back and made subordinate in various ways. White workers were told that they really were different from black workers — the opposite of what the message of the 1930s had been in many cases. The idea now among Republicans and their allies was to build up the divisions within the working class to break them apart, to stop them from being unified around the idea that capitalism was their problem and that the Democratic Party would be the party that would save them from what capitalists would otherwise be prepared to do to them again.

This strategy worked in large part. The working class, the labor movement, fell apart. Women and men started playing the old roles again and not the new ones they had taken on during the war. Segregation and race hostilities were revved up again where they had not survived so well before. And so the working class fractured, and the Republicans were able to make real gains, to be the champion of white against black, as well as the champion of the male worker on the job against women. You can see the situation that gave birth to modern identity politics in this onslaught of the New Deal.

What did the Democratic Party do? Did it go to its roots and say, “No, we’re gonna be the united working-class”? No, it didn’t know how to fight this battle. The Democrats, too, were hobbled. They didn’t rely on their left wing because it was tarred with the brush of “Communism” and “Socialism.” So they fell for that kind of splitting of the labor coalition, and they themselves helped split it further. Indeed, a new generation of Democrats led by people like Bill Clinton emerged, who said, “Okay, if we can’t hold on to the working class, maybe we can gain power for the party by appealing to the capitalists. The party not of Franklin Roosevelt but the party of the other side — the Republicans — split the working class and hurt us. We’ll split the capitalist class and pull over a bunch of them to support us.”

And what you have in recent decades is the result: two political parties, both of whom are begging for money from the rich, the powerful, and the capitalists, and each of them with a hand on part of the working class — the Republicans more and more appealing exclusively to white, male workers, and the Democrats more and more to female, non-white minorities. This is the modern picture of party affiliation among the working class that we’re used to. But both parties are unwilling and unable to challenge capitalism, because both depend on the same funders. They depend on the same support from the same small part of society. The Democrats thus could not maintain their oppositional position that they had developed in the 1930s. 

And the man who comes to power and puts it all together — Ronald Reagan — he takes the crucial step to finish this job of decimating the labor coalition. He begins his presidency by throwing the air-traffic controllers out of their jobs, showing that he is gonna crunch down on what remains of the labor movement and that he is gonna celebrate globalization. Of course he will help American companies that want to go abroad! Of course he will help American companies that want to use this new invention of the computer to get rid of millions of jobs, throwing people into the chaos of unemployment and hunting for a new job! The power of the business community was rebuilt as it was before the Great Depression, and the American working class split. Mr. Reagan gets enough of particularly white male workers to pull away from the Democratic Party to get power.

Mr. Clinton, who comes afterwards — he has given up. He supports the same capitalists, he supports globalization, he supports all of it. His only claim to the mass of the working class is: “Look, you should vote for me, not those like Mr. Reagan, because I’ll soften these developments. I mean, I’ll do the same stuff that he did, but I won’t do it so harshly. I won’t do it so quickly. Yeah, you’ll lose your job to a computer, but I’ll give you some help along the way so it won’t be as bad as those Republicans will let it be.” The Democrats become Republican Light, and that’s not a winning strategy, not at all. Because the white working class — the men, and particularly the white men, who increasingly supported mostly the Republicans — helped the Republican Party win. The Republicans appealed to them.

But the white working class was getting frustrated, as were women, blacks, and others across all this period. Whether it’s Reagan or it’s Clinton, whether it’s the old Republicans or the Democrats, the underlying reality is that both of those parties are letting capitalism do what it does: replace people with machines, move jobs abroad, build up the profits of the few, and neglect the conditions of the mass of people. And people get angry. It takes a while, even decades, but across the 1980s and 1990s and the first decade of this century, all of these processes are at work until finally the working class is angry enough to say, “We don’t care whether it’s the Reagan Republicans or the Clinton Democrats! This is all the same! We want something different!”

There is a memory, an echo, a historical trace of what the working class remembers, even if it was their parents who told them about something different back in the 1930s. And they want something different. For a while in recent presidential campaigns you began to see this, as each candidate for President said to the audience at the beginning of the campaign, “I’m not like every other politician!”

You might have thought to yourself, “Oh, I wonder why they’re saying that they’re something new and different?” Because that’s what people wanted to hear! And then along comes a character, a narcissist, a baby, a boaster, a bully, Mr. Trump, and he says, “I’m different from all the Republicans!” He looks it and acts it, and he speaks it. So he defeats all of the old Republicans inside that party, and then he defeats the other side associated with Clinton in the other party, and he becomes the president. Because the working class was so angry at what had been done to them in the rollback of the New Deal by Republicans and Democrats alike, with the only difference being the Democrats did things a little slower. They were so angry they wanted somebody different, and since the only offer of something really different was Mr. Trump, well, they surprised everybody by raising their collective middle finger. They voted for him, really hoping that he’d make a change now — maybe. What’s to lose? as Mr. Trump himself said.

So here we have it. We have the working class, which has been crucial at every step of the way in this history — in coming forward, in retreating, in allowing the destruction of its institutions that had formerly protected it. You know, in Europe none of this kind of thing happened in the same way. Why? Because the working class did not suffer the kind of crushing that happened here. They held on to their Socialist parties, they held on to their Communist parties, and they held on to their unions, which is why you couldn’t do in Italy or France or Germany or Scandinavia what the capitalists could do here after the war. This is why these countries have universal health insurance and subsidized colleges and all the things that Americans vaguely dream of, which they have and they will not let go of.

So the American working class is at a kind of cross roads, isn’t it? What’s it gonna do now? Is it gonna realize the unity of white and black workers, of men and women, and on and on? Is it gonna pull that all together? And why should it? Because this tactic won large concessions the last time in the 1930s, concessions that have been lost since then. No way is Mr. Trump gonna bring you any of that back. He’s one of them, even if he acts the bully and acts the crazy. He’s one of them. He’s part of the rollback of the New Deal.

Regarding the Democratic Party in 2020: we’ll have to face all of this even more so if Democrats go for someone like Mr. Biden. With him, the Democrats are saying to the American working class, “We’ve learned nothing from this history. We’re gonna give you more of what you’ve shown us you will reject, first when you voted for Reagan, and again when you voted for Trump.” Are Democrats going to choose another one of those losers, or are they gonna go in a direction of unity — unity of the working class across all these divisions — by choosing someone more like Mr. Sanders or others in the primary. It doesn’t have to be Mr. Sanders, and it doesn’t even have to be any of the declared people right now. It has to be a person representing something new and different in terms of the recent history but something old that we’ve learned from in terms of what the Democratic Party was in the 1930s. What it was, it can be again, but the question is when, and how, and who will make that happen. And this election coming up in 2020 is a first step in figuring out whether the Democratic Party can rise to this present situation. If it can’t, perhaps new and different parties will have to emerge that do learn the lesson of the history of the American working class and its relationship to politics, and therefore, can make a difference and surprise everybody from the left the way that Mr. Trump’s victory surprised everyone from the right.

I hope you found this interesting as a way to think about the election coming up. That’s what this program was designed to help you to do. Thank you very much for your attention, and I look forward to speaking with you again next week.

Transcript by Steven T Payne

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