The crisis & the prospects for resistance: an outline

By Fred Goldstein

Depression. The present crisis is the worst since the Great Depression. But it is not only the worst crisis since the Depression. It has the same fundamental elements as the Depression.

The system will not recover. It is similar not just because of the rising unemployment; not just because so many trillions of dollars have been spent to keep the capitalist system from collapsing; not only because of the great speculative bubble that burst; and not only because of the widespread suffering of the workers and the communities.

It is similar to the Depression, which lasted 10 years and ended only with a world war, because the capitalist system is not going to have a genuine economic recovery—that is, a capitalist expansion of such magnitude that it could overcome the deepening crisis of widespread mass unemployment.

The capitalist economy in the U.S. only recovered from the Depression by massive government spending on war preparation and war itself. Without that spending there would have been no markets and no demand for the products of U.S. industry. The Depression would only have deepened. Capitalism was suffering from a crisis of overproduction which had reached the point of no recovery.

The means of recovery are exhausted. After World War II the U.S. capitalist economy kept itself going by war: the Korean War, the Vietnam War, and the spending for a vast military buildup against the Soviet Union and China during the Cold War, including Reagan’s $2-trillion anti-Soviet military spending program.

It also kept itself going by pouring money into the banks and corporations at crucial moments of crisis. The capitalist government bailed out Chrysler; it bailed out the savings and loan associations in the 1980s; it bailed out Wall Street after the 1987 crash—the Long Term Capital hedge fund in 1999. It poured money into the housing market and Wall Street during the downturn of 2000-2001.

Capital has kept its profits up and fueled its expansion by ruthlessly lowering wages through technological restructuring, union-busting, and fostering a worldwide wage competition to drive wages down.

Imperialism itself is a sign of crisis in the capitalist system. It means that the system cannot go forward within the framework of the nation state by “normal” economic means. It must go abroad to plunder and loot peoples in Asia, Africa, Latin America and the Middle East to seek superprofits.

Right now the Pentagon is bogged down in Afghanistan and Pakistan; it still has well over 100,000 troops in Iraq. The military budget is $700 billion for the coming year—enough money to rebuild decaying cities and put workers back to work. But Washington has not been able to conquer territory and pay for its war of aggression with profits from abroad. The attempt to expand the empire has become a drain on the system and is aggravating the crisis at home.

All of these means have already been pushed to the limit. Trillions in bailout money have not been able to revive the economy and stop the layoffs. The military is now overbuilt; what remains is high-tech and cannot mobilize millions of workers in war production. Wages have been going down for 30 years and the working class is being pauperized. The historical sources of revival are exhausted.

Workers are being told the lie that things will get better. The working class in the United States has lived through 10 post-WWII recessions. After each one the system revived and expanded; employment eventually returned for the vast majority of the workers.

The Obama administration, various media outlets and economic so-called “experts” are continually hammering away at this idea. They tell the workers that it takes time for the economy to recover and employment lags behind, so just hang on.

In the meantime, Congress keeps extending unemployment insurance benefits and food stamp assistance in order to keep the workers passive and to forestall a resistance movement.

This hope that they must endure long enough for things to get better is shaping the overall psychology of the workers at the moment. But this is temporary because the crisis is only beginning to play out. It must be emphasized over and over again that the crisis is in its early stages. There are many seeds of future shocks to come.

Era of “jobless recovery.” Workers are facing a jobless recovery with no end in sight. A jobless recovery is where production and profits begin to revive but unemployment remains the same or gets worse. This trend in the U.S. capitalist economy began in 1991 and has been getting more and more severe.

During all the crises in the post-WWII period, jobs returned when production began to rise. After the 1991 downturn, however, jobs were lost or none were added for over 12 months after the capitalist recovery. It took 18 months to get to pre-recession job levels.

After the 2000-2001 crash of the technology bubble, 594,000 jobs were lost in the first 27 months of the downturn; it took four years for employment to return to pre-recession levels.

The present jobless recovery is a continuation of this trend on a much more drastic level. The economy was reported to have grown at an annual rate of 3.5 percent in the 3rd quarter of 2009. But during these three months of economic upturn, 726,000 jobs have been lost! These figures do not count the rise of millions of discouraged workers or workers forced to work part time.

Labor productivity, low wages and the crisis. Nothing shows the crisis of capitalism more than the fact that profitability and increased production are taking place on the basis of cutting jobs. In addition, those workers still employed are being pressured to work harder, faster and produce more. Wages are being cut as the bosses squeeze out every last minute of labor.

For three decades ruthless technological innovation has all been directed against the workers. Capitalism has made workers more and more productive. With technology it has transferred the skill of workers to machines and software. The bosses have always tried to reduce the skills of workers and pay them less. Going to school to get a skill will not really benefit the masses, since the capitalists are destroying skilled jobs.

The bosses have used the crisis to step up productivity. Their plans are to reduce hiring if there is a recovery. This shows how impossible it will be, under the profit system, to rehire the tens of millions of workers now unemployed and underemployed.

U.S. capitalism has followed the inevitable logic of the profit system to its end. Capital must try to reduce labor and wages relentlessly. This is the other side of the pursuit of profit. But capital must also expand or die. Thus, in destroying wages, it must destroy its market, while at the same time expanding its capacity to produce. This process has now reached the point where it is leading to a total breakdown of society—and is posing a threat to the existence of the working class and the entire planet.

The working class is unaware of this long-term trend in capitalism and of the magnitude of the crisis right now. But they will become aware as the crisis deepens and spreads and does not go away. It is only a matter of time before they begin to fight back as a class.

Signs of motion among workers, students and activists. While the working class and the labor movement in general are still in retreat after decades of attack followed by economic crisis, there are growing pockets of resistance, both inside and outside the labor movement.

The low point of the labor movement in the present crisis came during the bankruptcy proceedings for General Motors and Chrysler. The leadership of the most powerful industrial union in the U.S., the United Auto Workers, agreed to humiliating and onerous concessions without a struggle while the companies planned to close more than 20 plants and lay off thousands of workers.

But at that very moment, in December 2008, the Republic Windows and Doors Workers, Local 1110 of United Electrical Workers in Chicago, changed the atmosphere by seizing their plant. They held it for six days and forced Bank of America to grant all their demands for severance pay, holiday pay and benefits. This largely Black and Latino/a group of 250 workers, largely immigrants, electrified the labor movement and became a focus of class solidarity across the country.

While the UE workers were still holding their plant, 5,000 Smithfield workers forced the largest hog-processing plant in the world to recognize the United Food and Commercial Workers in the anti-union state of North Carolina, after more than 15 years of struggle. The victory, one of the biggest in the South in recent years, was achieved by welding together Black, Latino/a, Native American and Asian unity in a struggle that included a large number of immigrant workers.

In the period since then there have been numerous strikes and struggles. A recent nine-week strike by Teamsters at SK Tools in Chicago ended in victory. A strike by Philadelphia transit workers won a victory. Stella D’Oro workers in the Bronx, N.Y., won a valiant year-long strike against concessions, but then the company was sold and the plant closed.

There have been many struggles, but they are carried on in isolation. There has been no attempt by the labor leadership to give major support to any particular struggle or to generate a coordinated fightback.

There are student-worker support networks growing up around the country. The anti-sweatshop movement just had a victory against Russell Athletic, forcing the company to rehire fired workers in Honduras and recognize their union.

Cutbacks in public and private colleges affect students and workers and are leading to student-worker alliances to fight back. Important battles against cutbacks are taking place in California—Los Angeles, Berkeley and other places—involving sit-ins and mass action.

The movement for genuine health care reform is spreading and the labor movement has taken it up, but only symbolically and by lobbying. A mass mobilization for health care is badly needed.

Collectives and independent radical groupings among students and off campus are springing up around the country and moving on a variety of issues—the war, the environment, poverty, cutbacks in social services and so on.

A growing movement against the wave of foreclosures and evictions is developing in Detroit, Minneapolis, Chicago and other cities.

A labor-led march against the American Bankers Association in Chicago broke into the convention. Many local movements exist but so far are fragmented. However, the basis is being laid for a national movement.

These developments and many more that are bubbling under the surface represent the earliest stirrings of the resistance. It is sure to grow in response to the economic crisis, the war and occupation in Iraq, Afghanistan and Pakistan, the political attacks on the people and other reactionary measures.

The struggle for jobs. The overriding issue at present is the struggle for jobs and will continue to be. The Bail Out the People Movement held a Jobs March in Pittsburgh at the time of the G-20 in September to bring the political demand for jobs to the heads of the rich imperialist countries. Shortly thereafter many local unions participated in a labor-led jobs march in Boston.

The Jobs March in Pittsburgh was successful because it got the support and participation of the Black community, as well as the endorsement of the United Steel Workers and the United Electrical Workers. It took a concrete step forward in building the kind of labor/community alliance that is key to future success in the struggle against the crisis.

The Obama administration, under pressure to do something about the jobs crisis, has done nothing but point to the stimulus package, which has done little to stem the tide of 8 million jobs lost since December 2007. The administration is now calling a jobs summit.

For the first time, almost two years into the crisis, the AFL-CIO leadership has finally put a national jobs program on the agenda. It is a legislative program aimed at diverting money into extended workers’ assistance, unemployment insurance, creating jobs by building infrastructure, rebuilding destroyed communities, aiding small business, and so forth.

It is a step forward that the labor leadership has tried to address the crisis on a national level. The program reaches out on behalf of the unemployed. Unemployment is a great danger to the labor movement. It was put forward by AFL-CIO leader Richard Trumka and supported by NAACP President Benjamin Jealous; National Council of La Raza President Janet Murguia; Leadership Conference on Civil Rights President Wade Henderson; and Deepak Bhargava, executive director of the Center for Community Change. President Larry Mishel of the Economic Policy Institute moderated the conversation, which Jealous called the beginning of a national human rights movement for economic opportunity.

The program should give an impetus to the movement for jobs. But it stops short in many ways, including and especially the failure to promote the absolute need to mobilize the millions inside and outside the labor movement, employed and unemployed, and bring them into the streets and to Washington, D.C., and other cities to confront the establishment and demand jobs.

The movement from below must take up this challenge and promote a jobs march. And it must take up this challenge from an internationalist point of view. The Bail Out the People Movement has called for a jobs march in Washington, D.C., on April 10, the 75th anniversary of Franklin Roosevelt’s Works Progress Administration. A West Coast group of trade unionists has called for building Solidarity Day III in Washington, D.C., in the spring. The ground is being laid for the coalescence of forces to launch a wide-scale struggle for jobs and income.

International solidarity and unity is the key to victory. The transnational corporations in the U.S. have used their technology to break up their production processes and spread them across the globe to wherever they can find the lowest wages and the highest rate of exploitation.

They have used this process to set workers all over the world against each other and create a worldwide wage competition in a race to the bottom. As the economic crisis deepens they will try to turn workers in the U.S. against each other—in particular targeting undocumented workers. They will try to divide the working class here from workers abroad by scapegoating workers in the low-wage, formerly colonial countries who are superexploited by the bosses.

This is the same tactic of divide and conquer that they use when they scapegoat undocumented workers and immigrants in general; or when they promote racism to divide white workers from the oppressed workers.

The only way to overcome wage competition and divisive racism and chauvinism is by establishing class consciousness and class solidarity at home and abroad. There must be no borders in the workers’ struggle. Under the new regime of low-wage capitalism, Black, Latino/a, Asian, Native, Middle Eastern and Pacific Islander workers, women and men, straight, gay, lesbian, bi and trans, documented and undocumented are going to play a vanguard role in the class struggle. White workers and all workers must fight against capitalist schemes to divide them from one another.

An injury to one is an injury to all!

Goldstein is author of “Low-Wage Capitalism,” a Marxist analysis of the effect of globalization on the working class. He is also a contributing editor of Workers World newspaper.

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