Gil Scott-Heron again:
“What has happened is that, in the last 20 years, America has changed from a producer to a consumer; and all consumers know that when the producer names the tune, the consumer has got to dance. The way it is.
“We used to be a producer–very inflexible at that–and now we are consumers and finding it difficult to understand: Natural resources and minerals will change your world.” –Gil Scott-Heron, “B Movie,” ca. 1981.
http://www.youtube.com/watch?v=56ipWM3DWe4&feature=related
I’m using Gil Scott-Heron’s words to anchor this piece because I always saw him as the voice of the voiceless, the underclass, the black workers and those who couldn’t get a job. And when the 1980s decade began, black workers and poor people in general were the canaries in the coal mine for what was going to befall the rest of the working class and what we called “the middle class” in those days.
Ronald Reagan became a larger-than-life figure for a lot of voters in this country who saw him as someone who could deal with the threat of the Soviet Union, with the Iranian revolution, take on the labor unions, stop inflation, cut taxes, curtail welfare spending, and usher in new prosperity, even if only for a quarter of the US population.
The election of Reagan caused some splits in the US labor movement, where in many cases, labor unions of the more conservative bent such as Teamsters and some of the construction trades actually endorsed Reagan. In order to grasp why some labor unions in the USA have tended toward the conservative side of the spectrum, you might go back a ways in history and consult writers of the real left, starting with Frederick Engels’ 1892 book The Condition of the Working Class in England. Engels, and later V.I. Lenin in Russia, spoke of an “aristocracy of labor” who more and more tended to side with the capitalists, even while occasionally getting into conflict with these capitalists.
It all had to do with the use of the super-profit that could be derived from the laboring people in the colonies (later, neocolonies), who worked at the very bottom of the wage-labor pyramid. With such extraordinary profit in hand, the theory goes, capital can sort of “bribe” the highest-paid sectors of its home labor force in the home country (England or the USA) to take its side in political matters. The most important of these political matters was the continued oppression and exploitation of foreign nations’ work forces. With the highest standard of living in the world somewhat assured, the higher tiers in the US labor movement (as well as professional workers and those not in unions) could usually be counted on to support wars of foreign intervention.
Domestically, the form that this kind of “super-profit” extraction and division of the labor force into an “aristocracy” and a highly-exploited general workforce took was in the division of white workers against African-American and Latino workers. Within the US labor market, the deep south and the southwest provided a source of such super-profit for capital for decades. The deep south also became a kind of foundry for the civil rights movement, a general uprising of southern black working people against the intolerable treatment that persisted since the first slaves arrived.
All this is to suggest some explanation for why Mr. Reagan, no friend of the working class, could nonetheless have gotten a lot of votes, and support, from the working class. White workers understood him to be out to slash spending on social welfare, seen as disproportionately supporting poor black working families. They thought his administration would lower their taxes and bring new prosperity. They thought this administration would stand tough against the communist threat arising from Latin America, the Caribbean, and Afghanistan.
So, a sector of labor was willing to throw their votes to Reagan, then watch for the next eight years as the producing, industrial sector of America’s economy was hollowed out and shipped overseas. They watched as de-regulation was introduced in a number of sectors of the economy, especially the financial sector, and where a large bubble would build up in the stock market, along with the savings and loan industry and other key sectors that would later come crashing down, starting in October, 1987.
Left economists often point out how big capital uses recessions to “rationalize production,” that is, to down-size manufacturing, introduce new automation techniques, shed less-profitable factories or entire divisions, and especially since the Carter years, these downturns have served as opportunities to move work abroad. The recession that began shortly after Reagan took office was a deep one, and left US organized labor in a greatly weakened condition.
The Reagan Recession introduced America to a new wave of homelessness among poor workers that had not been seen since the Great Depression era. In 1984-1985, I had been living and organizing in Philadelphia at a time when there were some 40,000-50,000 homeless working poor people living out on the streets, in full public view. This was the time when Bruce Springsteen was organizing benefit gigs for homeless groups, and when the issue of homelessness became a major issue in many large cities in the USA.
This recession began to raise the question both for capital and for labor: how far can you cut the standard of living of your domestic working class before their ability to be a consumer class is badly damaged and begins to feed into the growing recession? It is one thing to gain super-profits by opening hundreds of new factories in the maquiladora region of Mexico (just across the US border). It is another thing if this impoverishes so many US workers in the domestic market that they can no longer afford to drive retail sales onward and upward.
This tension between falling standard of living in the USA and the need for constant growth in the US gross domestic product was only temporarily resolved in the boom period of the Clinton-Gore years. It would come back to haunt the USA with the start of another recession just at the beginning of the GW Bush administration, and would take on an entrenched, scary scope with the recession that began in December, 2007. It turns out, you can’t just turn a nation of producers into one of consumers, if the consumers have not got the income to drive a healthy consumer economy. This is the pickle in which America finds itself today.
What of Reagan’s role as the liberator of those behind the “Iron Curtain” of the Soviet Bloc? “Mr. Gorbachev: tear down this wall” and look, a few years later, the wall came down. I don’t think Reagan liberated those people through his tough rhetoric and huge military spending. But Reagan certainly landed on the scene at the opportune time, when the Soviet Union had been struggling under 40-year history of maintaining an unsustainable bloc of countries hostile to the Russian homeland, trying to match the USA in war spending, and finally, making the historically fatal error of trying to invade and occupy Afghanistan. I think you can argue that as hollowed-out as the USA was becoming, the Soviet Union was even more hollowed-out in terms of its ability to sustain itself as a going concern.
The legacy of the collapse of the Soviet Union is still playing out today in many ways, in the Persian Gulf, in Afghanistan, Iran, as well as Latin America and Africa. With the disappearance of socialism as an economic system for most of the globe, the way was clear for global capitalism to take over, and take over it did, rapidly. In a way, this rapid takeover prepared the way for future economic crises to take on the sort of apocalyptic scale that our current global economic meltdown is taking.
Next: Part VI: Clinton/Gore, Bush, and Obama: Laying the Groundwork for Collapse.
Readings
Max Elbaum and Robert Seltzer, Theory of the Labour Aristocracy, Resistance Books, 1984. E-book available here.
Bill Fletcher, Jr. and Fernando Gapasin, Solidarity Divided: The Crisis in Organized Labor and a New Path toward Social Justice, University of California Press, Berkeley, 2008.
Steven F. Hayward, The Age of Reagan: The Conservative Counterrevolution 1980-1989, Crown Forum, 2009.
V.I. Lenin, Imperialism: The Highest Stage of Capitalism, International Books, 1969.
Michael Round, Grounded: Reagan and the PATCO Crash, Routledge, 1999.
James B. Stewart, Den of Thieves, Touchstone Books, 1992.