Last week's elections in Wisconsin and in San Diego and San Jose, California, brought victories for capitalists' over workers' priorities. Majorities of voters endorsed politicians' plans to ease state and city budget difficulties by cutting public employees' jobs, wages, pensions and rights to bargain collectively with employers over those crucial dimensions of their lives. Private-sector workers reacted to five years of economic crisis with little help from their government by voting against benefits won in collective bargaining by public-sector workers. Conservative and pro-business ads had persuaded them that their taxes paid for public workers' better benefits and salaries. Majorities of private-sector workers believed voting to cut those benefits and break public employee unions would relieve their present and future tax burdens.
Why did this happen, and what strategic lessons can we learn from answering that question? To understand last week's election results, we need to consider the 1930s Great Depression when the opposite happened. Then, unions grew faster than at any time before or since. Instead of losing legal protections, workers gained them more than ever before or since. When the Depression's unemployment reached 25 percent, workers gained all sorts of benefits, more than at any time before or since. Establishing Social Security helped those over 65. Creating the federal unemployment compensation system helped tens of millions of unemployed. And federal jobs provided income and dignity to over 12 million Americans between 1934 and 1941. Huge majorities of voters re-elected Franklin D. Roosevelt, the president who delivered these huge gains for workers, four consecutive times.
Why did capitalism's collapse in the 1930s affect workers so differently from what is happening in the current crisis? Back then, workers' interests were advanced by a powerful alliance coordinating two sets of organizations active in two different segments of society. One ally, the Congress of Industrial Organizations (CIO), built strong industrial unions to confront employers on the job about work, power and income there. The CIO achieved the greatest union organizing drive in US history; there had been nothing like that before, nor has there been anything like it since then. The other ally, the socialist and communist parties, worked largely in residential communities and social and cultural movements, as well as in politics – throughout the public spaces of society. The CIO demanded a better deal for people at work within capitalism. The socialists and communists demanded and fought for basic social change to an alternative system that would do better than capitalism for most people.
The alliance was close. CIO unions got their allies' help in many organizing drives and struggles with employers. The socialists and communists got an audience and base in the unions. The labor-socialist-communist alliance informed, mobilized and organized Americans so successfully that Roosevelt had to provide massive, expensive help to average Americans despite the economic crunch of the Great Depression. What is more, Roosevelt had to pay for that help in large part by taxing corporations and the rich far more than they were taxed before.
The lesson that American history teaches is thus not the need for just any alliances or cooperation between unions and the community. We have had them in various forms for many decades, and while some gains were made, those alliances could not prevent unions and the left from declining steadily and severely. The key lesson is this: What makes all the difference is a very particular alliance, one between unions and an explicitly anti-capitalist social and political movement.
Here's why that particular alliance was so successful then and why its absence is so costly now. Unions succeed more in workplace bargaining when employers must worry that refusing to compromise might strengthen anti-capitalist movements. Unions are less vulnerable to criticism as narrowly caring only for their own members when they are continuously and clearly allied with organizations struggling for a better society for everyone. Socialists and communists built the community contacts and consciousness that undermined and defeated pro-business arguments against the CIO union drives and against the programs Roosevelt developed. Working together, the two allies strengthened and legitimated each other. The absence of that alliance now enables the results of the June 5 elections, just as its absence in recent decades facilitated right-wing shifts. In contrast, the presence of such an alliance in Europe (although weaker now than it once was) explains why so many countries there have shifted far less to the right.
Skeptics might argue that however successful the union/socialist-communist alliance was in the 1930s, it proved vulnerable to destruction thereafter. Yet the explanation for the long, post-1930s decline of unions and the left reinforces our basic argument here. That is because the 1930s marked not only the peak of the union/anti-capitalist alliance. As we can briefly show, it also marked the breakup of that alliance.
As Roosevelt confronted a fast-deteriorating capitalist collapse and the fast-rising power of the CIO-socialist-communist alliance, he fashioned a political New Deal. He would take from corporations and the rich the tax increases and loans to pay for Social Security, unemployment compensation and the federal jobs program. In return, he would get the CIO-socialist-communist alliance to celebrate him as the savior of the country and the Democrats as the people's party. Most important, he would get the alliance to drop, or at least downplay, the critique of capitalism and the activities for a change of system.
In winning the needed support for his deal, Roosevelt split the capitalists and the rich (half agreed, while the other half hated the deal, and him), thereby weakening the Republican Party that represented them best. That party took the next 50 years to recover its pre-Depression power. The deal also split the union/socialist-communist alliance. Most of its members agreed to celebrate the state-interventionist social welfare capitalism Roosevelt installed in the 1930s. Some approvingly called it socialism (enraged right-wingers called it socialism, too). Except for a few radicals, the union/socialist-communist alliance downplayed serious anti-capitalist activity in favor of enthusiastic support for the New Deal as a "progressive" development of US capitalism.
In the loss of a vibrant socialist and communist movement devoted to system change, the capitalists, the rich and the Republicans who had never accepted Roosevelt's deal saw a weakness they could exploit. They proceeded to undermine support for the New Deal by: one, demonizing the socialists and communists with McCarthy-type attacks on them as disloyal; two, attacking unions as guilty by association with the socialists and communists; and three, thereby further splitting the alliance to weaken its political power. For unions and progressives to reduce government persecution (for violating the 1947 Taft-Hartley Act) and avoid public vilification, they had to end any links to their former socialist and communist allies.
The capitalists-rich-Republicans alliance succeeded as the union/socialist-communist alliance split and both factions commenced a half-century decline.
Unions were increasingly isolated from the kind of mass radical support that served workers' interests so well in the depths of the Depression. Last week's June 5 elections are only the latest signs and results of that isolation.
American history teaches how to achieve the best results for workers' interests on the job, in the community and socially. It requires building a robust alliance between labor unions and movements or political parties (or both) seriously committed to an anti-capitalist agenda for social change. The historic significance of the Occupy Wall Street movement lies in its taking a big first step toward rebuilding such an alliance.
Richard D. Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst where he taught economics from 1973 to 2008. He is currently a Visiting Professor in the Graduate Program in International Affairs of the New School University, New York City. He also teaches classes regularly at the Brecht Forum in Manhattan. Earlier he taught economics at Yale University (1967-1969) and at the City College of the City University of New York (1969-1973). In 1994, he was a Visiting Professor of Economics at the University of Paris (France), I (Sorbonne).