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An Unemployment Story: Capitalism Won’t Solve Economic Crisis It Created
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- 06 June 2013 60 hits
Economic crises are deadly for workers. But for capitalists, crises are opportunities to attack the working class. As Treasury Secretary Andrew Mellon declared at the onset of the Great Depression, “During depressions, assets return to their rightful owners.” By “rightful owners,” he meant the capitalist ruling class. (Mellon himself was a financier who amassed a personal fortune of more than $300 million.) The system’s internal contradictions create periodic busts that weed out weaker capitalists and enable the surviving bosses to increase their profits by rolling back workers’ gains.
The current Great Recession is no exception. The capitalist class has used it to wage a relentless class war, complete with massive unemployment and givebacks from workers still hanging on to their jobs. This brutal cycle can be ended only when workers fight back — not just against pay cuts, but to destroy capitalism itself.
A Worker Faces the Crisis
In 2008, when Michael was laid off from his construction job, he was just one of millions of workers who found themselves jobless due to the latest capitalist crisis. What he didn’t know was how deeply this crisis would cut. In his home Washington State, there were now 350,000 workers collecting monthly unemployment checks. In Seattle, where Michael worked, there were three unemployed workers for every job opening.
After spending nearly two years on unemployment, applying for hundreds of jobs, Michael finally found work in a factory. Though the job was similar to his old one, he was forced to take a 30 percent cut in pay; his wages fell from $16.75 to $12 an hour. He was not alone. The average worker coming off unemployment during this crisis took a 17.5% pay cut, with the deepest cuts concentrated among the lowest-paid workers.
Where did all these lost wages go? They were pocketed by the capitalists. In 2010, 93 percent of all income gains in the economy went to the top 1 percent of the population — what economist Joseph Stiglitz called “the largest redistribution of wealth in such a short period of time in history.” In fact, this class thievery merely accelerated a trend of the last four decades. In 2000, U.S. workers received 64 percent of national income; by 2012, their share dropped to 58 percent. In short, the capitalist class has grown even wealthier at the expense of the working class.
Class War by Design
The civil rights and anti-Vietnam War movements of the ‘60s and early ‘70s fought militantly to empower the working class. Rejecting the ballot box, workers, students, and soldiers took to the streets to demand justice. Mass urban rebellions helped to crush the capitalists’ ability to wage genocide in Vietnam. As a result, wages and benefits between 1966 and 1972 rose at a record 6.8 percent per year. In 1966, official unemployment hit an all-time low of 3.8 percent. In 1969, the average duration of unemployment fell to a record low of 7-8 weeks.
This period was a nightmare for the capitalist class, squeezed between rising inter-imperialist rivalries abroad and revitalized working-class movements at home. In 1971, in a secret memo to the U.S. Chamber of Commerce, future Supreme Court Justice Lewis Powell warned that the Left was “waging ideological warfare against the free enterprise system” and that “almost half of college students favored socialization of basic U.S. industries.” He stated that capitalists needed to stop their policy of “appeasement” of the working class: “The time has come — indeed, it is long overdue — for the wisdom, ingenuity, and resources of American business to be marshaled against those who would destroy it.”
In a 1976 report by the Rockefeller-organized Trilateral Commission, ruling-class stooge Samuel Huntington echoed Powell’s concerns. He stated that the U.S. suffered from an “excess of democracy” and that “people no longer felt the same obligation to obey those whom they had previously considered superior to themselves in age, rank, status, expertise, character, or talents.” Two years later, another Trilateral Commission member, William Simon, warned that the U.S. is “careening with frightening speed toward collectivism.”
The rulers’ solution was to launch a massive attack on workers. In the early 1980s, as head of the Federal Reserve, Paul Volcker jacked up the prime interest rate to induce a recession. This caused unemployment to skyrocket amid a relentless attack on labor unions, spearheaded by Ronald Reagan’s firing of 11,000 air traffic controllers in 1981. In 1982, at the height of the Volcker recession, 60 percent of unions agreed to pay freezes or cuts.
Hand in hand with their economic attack, the capitalists launched a political assault on workers. They packed their think tanks and universities with intellectuals dedicated to neo-liberalism, a reactionary ideology that stressed total reliance on the market and the elimination of social programs run by the government. Think tanks and foundations, Simon stated, must “serve explicitly as intellectual refuges for the non-egalitarian scholars and writers” — those who would exalt the deeds of capitalists while relentlessly attacking workers.
Soon enough, the dramatic reversal of U.S. class struggle was apparent. In 1993, the Wall Street Journal reported that industry had “excelled in holding down the cost of labor. Hourly pay in the U.S. was lower than in most other [industrial nations],” to the point where “gaps have narrowed” between the U.S. and “emerging nations” like Mexico and Taiwan. The Journal lauded this trend as “a welcome development of transcendent importance.”
In Congressional testimony in 1997, Federal Reserve Chairman Alan Greenspan explained that resurgent capitalist profits were the result of “atypical restraint on compensation increases” and “mainly the consequence of greater worker insecurity.” In 1991, as he pointed out, 25 percent of workers feared being laid off. By 1996, that number rose to 46 percent. In explaining how Ford “tamed the monster,” namely the United Auto Workers, the Wall Street Journal gleefully reported how “massive layoffs” and “outsourcing” had forced “increased cooperation” among workers now willing to work harder for less.
Worker Misery is No Accident
Michael is part of a growing trend. Between 1972 and 2011, as worker productivity increased by 80 percent, wages have gone up only 4 percent. More recently, workers have actually lost ground to the price inflation on necessities. Since 2000, food prices have risen 25.2 percent, health insurance premiums 131 percent, and the price of gas 286 percent. With public transit allowed to deteriorate under neo-liberalism, Michael and millions of others spend an increasing proportion of their paychecks on gas as “extreme commuters,” traveling 40 miles or more to their jobs.
Yet Michael is not the hardest hit in this economic crisis. The bosses have used racism in their effort to make even more profit and also to divide the working class. They’ve created categories of super-exploited workers. As racist anti-immigrant hysteria is stoked by the media and politicians, the bosses have taken greater liberties in exploiting Latino workers through overwork and stolen wages. Black workers are still “last hired, first fired.” A recent study found that a black male with a college degree had as great a chance of being called back for an interview as a white male with a felony conviction.
The Only Solution is Revolution
More than anything, what Michael and other workers across the world need is class consciousness. The capitalist class is organized in its attack on the working class; workers must be organized in their counterattack. They must organize under the only political banner that has consistently fought for the rights and dignity of the working class: communism. There is a reason why the capitalists’ lackeys label those who opposed slavery, racist segregation, apartheid, sexism, child labor, and imperialist war as communists. It is because communists fight for workers. Communism is the political movement of the working class.
El Salvador — PL’ers met to discuss May Day activities. We discussed the planning and outcome of each activity:
First, one comrade went to Honduras to coordinate the event there and arrange the distribution of 2,000 flyers at the May Day march by six CHALLENGE readers.
Following that, in the capital city of El Salvador, San Salvador, 15 comrades, members and friends of PLP, distributed 5,000 flyers. These comrades come from various nearby communities.
In total, 45 people distributed flyers at the May Day event in San Salvador. We’d also like to highlight the number of flyers that were sent to a university in Guatemala, through the efforts of a PLP sympathizer. Further, we printed one thousand more flyers than the number planned at a pre-May Day meeting.
In summary, we’re certain this event was a success and a step forward for PLP, and therefore for the working class, and the peasants from the villages, who were pleased. All the PLP members in San Salvador are very proud and we’re ready to continue the struggle organizing workers, women, peasants, teachers, soldiers, and students.
Youth who participated were able to realize that the only way to change the capitalist system is organizing to build our base and contribute to consolidating and strengthening communism internationally to destroy the forces of imperialism.
Long Live May Day! Long Live the Workers of the World! Long Live PLP!
ISTANBUL, June 5 — The working class is rising in Turkey, involving 3,000,000 across 60 cities. Mass demonstrations with as many as 250,000 people have occurred on a daily basis since May 29, centered in Istanbul’s Taksim Square, a place where workers traditionally voice their grievances and show their strength. They are outraged at the Islamist government of Prime Minster Erdogan. On June 4, 240,000 government workers in the Confederation of Public Sector Trade Unions walked out as part of a general strike. They are protesting the arrest and trial of 72 members on phony terrorism charges. They are also striking against the current wave of police repression of massive anti-government protests that started last Friday.
On May Day, the trade unions staged their annual march, with tens of thousands of workers carrying red flags despite warnings not to enter Taksim Square. Workers responded to police attacks by hurling rocks, paving stones and bottles, and destroying police vehicles.
Since then, the government announced plans to erect a shopping mall, bulldozing hundreds of trees that form a park in the Square. This plan further enraged the masses. Huge protests began as hundreds blocked the bulldozers. The government responded with water cannons, tear gas and police batons, wounding over 1,000. Police have shot gas cannisters at people’s heads, killing one and blinding 12.
Protests have spread to the capital city of Ankara, Izmir, and the port of Bodrum on the Mediterranean Sea. The protesters are demanding the resignation of the Erdogan government.
Over the past six years Turkey has experienced rapid economic growth, but the working class has seen little benefit. As a result, the unions led a strike wave this past year. The Erdogan government responded by arresting hundreds of trade union leaders and rank-and-file militants, charging them with serious felonies in order to smash the power of the unions.
Turkey has been crucial to U.S. imperialism’s influence in Iraq, its aim to undermine the Assad regime in Syria, and U.S. conflict with Iran. Instability in Turkey could weaken U.S. influence in the region and strengthen Russian and Chinese imperialist influence.
The parallel to Egypt is quite evident. Like Egypt, there is a succession struggle between the rival political parties, neither of which has the worker’s interests at heart. By trying to change the constitution, Erdogan is attempting to pave the way for him to circumvent the term limits on being Prime Minister by becoming President. So, the crackdown on the sit-ins in front of bulldozers and its subsequent uprising, are now being co-opted by opposition political parties.
For courageous workers in Turkey, the essential lesson from this struggle is that a mass communist party is necessary to up the ante to a fight for workers’ power and an egalitarian communist society. PLP embraces this struggle against tyranny and looks to aid the working class in building that international party in Turkey. We ask all workers to organize rallies at Turkish embassies, consulates and Turkish Air Lines protesting the fascist Erdogan regime.
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The Cultural Revolution: A Model for Communist Society
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- 06 June 2013 86 hits
As communists, we are often asked how a communist society would function under the leadership of the Progressive Labor Party. One way to envision a communist society is by studying historical examples, such as the Great Proletarian Cultural Revolution (CR) that occurred in China between 1966 and 1976. An excellent source of first-hand knowledge and documented facts is Dongping Han’s book, “The Unknown Cultural Revolution: Life and Change in a Chinese Village.”
The book is largely based on research done for Han’s PhD thesis. He traveled from the U.S. to his native village in China to interview villagers who lived there during the CR, and to examine records of crop production and village expenditures. As part of his thesis, he wanted to provide evidence that the educational and political reforms that took place during the CR greatly improved the lives of the average villager.
However, by 1969 Mao retreated from the CR and had the Red Guards dismantled or placed under army control. Many of the educational and political reforms that the CR initiated were reversed. Consequently, the children of many rural villagers were, and continue to be, denied an education because the schools are no longer free. With the abolishment of communal farming (and thus eliminating the societal security it created) many farmers are forced to work well beyond retirement age.
The CR empowered villagers because, for the first time, they were encouraged to criticize their leaders. Students were encouraged to criticize their teachers and principals; women were encouraged to work and get educated. Corrupt village officials were denounced and forced to reform or be removed from office. Big character posters, newspapers, and mass organizations flourished during the CR.
Before the CR, there were only two high schools in Jimo county (where the author grew up); as a result of the CR the number increased to eighty-four. The high schools were all constructed and financed by communes. Before the Cultural Revolution, a standardized test determined who would be admitted to college. In 1966, the national entrance exams were suspended, and all students had to work in rural areas or a factory for at least two years before going to college. “Students had to prove themselves as good farmers or workers before going to college.”
On communes, team leaders were no longer appointed, but chosen. Production plans were decided on by meetings of mass leaders of various mass organizations. These meetings involved as many as ten thousand, from county leaders to production team leaders. The democratic nature of the CR resulted in significant increases in yields of corn and wheat, as well as mechanization of farming techniques.
Han concludes that “economic development in the countryside was facilitated by political and cultural changes brought about by the CR.” Among the changes was a cultural shift that allowed villagers to challenge party leaders, advance a collective work ethic, including leadership participation in manual labor and democratic decision-making. These changes also resulted in giving rural children an opportunity for an education and development of skills that helped rural economic development.
Even though capitalism was restored in China and the USSR, the Great Proletarian Cultural Revolution serves as an example of what we in PLP are fighting for under a communist society.
Crowds of anti-capitalist protesters on June 1 blocked streets leading to the European Central Bank in Germany's to protest its role in pushing for austerity cutbacks as a way to fight the continent's debt crisis.
