Wednesday, July 22, 2009
Lessons from Hard Times Past
We’re all struggling with how to think -- and what to do -- in the face of the “great recession.” An initial progressive response was to advocate better regulation; then Keynesian economic stimulus; now nationalization; perhaps in the future some kind of socialism.
One theme that has reverberated through periods of “hard times” in the past is the idea of “production for use.” It has appeared in the form of public works job creation; worker run enterprises; self-help mutual aid; and efforts to push the envelope on property rights that preve
nt people from using the resources that are available to meet their needs. Today production for use may find new applications – including working to save the planet from climate destruction.
What are recessions, depressions, and economic “hard times”?
According to conventional economics, markets guide companies and investors to bring together labor and means of production to produce the goods and services that people need. Notwithstanding numerous “market failures,” something like that happens in capitalist economies during normal times.
But in times of economic crisis, recession, and depression, it doesn’t work like that. Instead, people lose their livelihoods, homes, and healthcare and slash their budgets for food and other necessities – even while workers who want to work are unemployed and underemployed and offices, factories, and construction sites lie idle. As a result, people often begin thinking and doing things that they didn’t think and do before.
Since 1900, the US experienced depressions and recessions in 1903, 1907, 1911, 1914, 1921, the whole decade of the 1930s, 1949, 1954, 1957, 1961, 1970, 1982, 1990, and 2002.
We don’t know how severe current “great recession” will be. One thing we know from hard times past, however, is that they are almost always declared over when they have barely begun. Prosperity is always just around the corner. True to form, as early as April, headlines like “Top U.S. officials offered reassurances that the worst of the economic downturn is likely over,” began appearing in media outlets around the country. Maybe so. But what should we do if it is not?
Production for use
A reverberating theme that emerges in hard times is the idea of “production for use,” rather than production only if production is profitable in the market. This requires actions – whether by government or by ordinary community members -- that attempt to meet needs directly, rather than through the failing process of production for the market.
Remarkably, President Obama laid out this precise this idea – rarely heard in public discourse in The United States since the 1930s – in advocating his economic stimulus legislation.
His plan, he said, recognizes:
both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That's why we'll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century.
Such an approach has a long history.
In every major U.S. recession since 1808, unemployed people and allies have organized to demanded job creation through public works at local, state national and even international levels. (Franklin Folsom offers a history of these efforts in his book, “Impatient Armies of the Poor”.) And in an earlier post we described how the international labor movement proposed international public works as a way to overcome the mass unemployment of the Great Depression – and to combat the fascist movements it was engendering. This expressed an intuitive -- and at times explicit -- sense that if there are things that need to be done and people who need work, why shouldn't those people be put to work doing what needs to be done?
New Deal public works programs like the Works Progress Administration (WPA) employed millions and substantially reduced unemployment until Roosevelt cut them back in the face of conservative hostility. The WPA was notable for its emphasis on putting people to work doing things that utilize their existing skills.
In 1973, in the midst of a deep recession, the Carter administration created the Comprehensive Employment and Training Act – CETA. It provided the unemployed, the poor, and high school students full-time jobs for one to two years in public agencies or private not for profit organizations. CETA provided 750,000 jobs at its peak in 1978. It, too, became a bete noire for those who saw it as government interference with the private labor market. But the idea has come back with Obama stimulus plan.
Worker run enterprises
Another feature that often emerges is the combination of production for use with some kind of cooperative self-management. For example, in 1934 the Ohio State Relief Commission used relief funds to support a dozen factories in which unemployed men and women made clothing, furniture, and stoves for the unemployed. The Ohio Plan became a model for programs in several other states and was incorporated in the Federal relief agencies. It became the basis for Upton Sinclair's sensational “end poverty in California " (EPIC ) campaign for governor – and the bete noire of those who feared the U.S.was on the road to red revolution.
The massive deindustrialization of the 1980s led to the emergence of efforts throughout the “rustbelt” to save and create jobs through worker and community ownership. For example, the Ecumenical Coalition to Save the Mahoning Valley conducted a three-year campaign, ultimately defeated, to preserve Youngstown’s steel plants through labor and community ownership. Another such effort, the Naugatuck Valley Project in western Connecticut, helped workers buy and for seven years run a threatened brass mill dubbed Seymour Specialty Wire: An Employee-Owned Company and create an community-worker owned home healthcare cooperative.
These groups developed a strategy based on networks designed to give early warning of threatened plant closings, coordinated efforts to save threatened plants, employee buyouts, new cooperative enterprises, and other locally-initiated economic development. Fifteen of these organizations came together in 1988 to form the Federation for Industrial Retention and Renewal.
Self-help mutual aid
In the early years of the Great Depression of the 1930s, the unemployed in many cities tried to create a counter-economy. A Seattle Unemployed Citizens’ League, for example, established 22 locals throughout the city, each with its own commissary at which donated food and firewood were exchanged for the services of barbers, seamstresses, carpenters, and doctors.
By the end of 1932 there were 330 such self-help mutual aid organizations in 37 states with membership over 300,000. (For an account of this movement see Strike! by Jeremy Brecher who is one of the authors of this post.)
Unfortunately, commissaries needed food and carpenters required wood: when the materials that could be begged, borrowed, or stolen petered out, so did self-help mutual aid.
Much more sophisticated versions of such mutual aid self-help are being developed today. Much of it is occurring through bartering websites – Craiglist.org reports that traffic is up 100 percent in a year on its bartering boards. About a dozen communities have now established local currencies. The BerkShares currency in western Massachusetts can be used in 370 local businesses. These alternative systems of exchange all help bring resources together to do something useful that isn’t happening in the mainstream economy.
Transgressing property rights
When things get desperate, people often find they have to ignore established property relations.
In the early 1930s, unemployed organizations used direct action to halt evictions. Journalist Charles Walker described how a local branch of the Unemployed Council in Chicago responded when it received word that a neighbor was to be evicted.
The sheriff arrives and in the face of protest does his work. The MacNamara’s bed, bureau stove, and children are transported to the street. Then the Council acts. With great gusto the bed, bureau, stove and children are put back in the house. Then the neighbors proceed tro the local relief bureau, where a Council spokesman displays the children, presents the facts, and demands that the Relief Commission pay the rent or find another flat for the MacNamaras. . . . If the Commission is adamant, he leaves and reappears at general headquarters with a hundred Council members instead of fifty. Usually the Commission digs up the $6 a month rent or the landlord throws up his hands, and Mrs. MacNamara’s children have a roof over their heads.
Such direct action halted many evictions and forced the authorities in Chicago and other cities to halt them entirely.
During the 1980s, the Association of Community Organizations for Reform Now – ACORN) developed a movement in which squatters occupied and set out to renovate thousands of abandoned city-owned buildings in New York, Philadelphia, Detroit, and other cities.
In 2009, Acorn has started a new campaign called Home Defenders to use civil disobedience to support families who refuse orders to vacate their homes. According to the New York Times, in cities like Orlando, Boston, Houston, Baltimore, Oakland, and Tucson,
Acorn organizers have been creating networks to alert a homeowner’s neighbors when an eviction has been scheduled or deputies are on the way. Some volunteers will summon friends and relatives to converge at the home, while others will be in charge of notifying news media. Organizers are also recruiting lawyers willing to defend for no fee those who are arrested.
This March 12, as real estate investors waited to bid foreclosed properties at the Alameda County Courthouse, dozens of “home defenders” carried signs saying Stop Evictions Now! and Save Our Home. Among them were Fernanda Cardenas and her husband Armando Ramos, whose home in East Oakland was up for auction. In the face of the protest, the auction of their home was temporarily postpned.
In addition, in a growing number of cities across the country, activists are moving homeless families into empty foreclosed homes.
Perhaps the most dramatic example of action pushing the limits of property relations was the wave of “sitdown strikes” – factory occupations --of 1936-37. The sitdown had developed as a vehicle to exert rank-and file labor power in the rubber plants in Akron. But when, in the midst of a union organizing campaign, General Motors started removing production equipment from its plants in Flint, auto workers began a massive occupation. They organized an orderly daily life, guarded the plant, and even spread the occupation to adjoining plants. Tens of thousands of workers mobilized outside to protect the plants from attack. After more than a month, GM agreed to recognize the union. Seeing what the sitdown could accomplish, 400,000 workers occupied their workplaces during 1937.
During the recession of 1974, workers seized the Rheingold breweries in New York City when management decided to close them down. The occupation led to political intervention which successfully kept the company, a local icon, in business.
At the end of 2008, 240 workers at the Republic Window and Door factory in Chicago were told they would lose their jobs in three days, without the advance notice legally required by the WARN act, and not even get the money they were owed. After intense discussions with their union, the United Electrical Workers (UE), they decided that at the end of their final work day they would not leave the plant. Their sitdown received instant media coverage and huge public support. The governor of Illinois came to the plant to show support. Even President-elect Obama weighed in:
When it comes to the situation here in Chicago with the workers who are asking for their benefits and payments they have earned, I think they are absolutely right . . . what’s happening to them is reflective of what’s happening across this economy.
By the sixth day of the occupation, the company and its chief creditor, the Bank of America (which had just received a major Federal subsidy), agreed to a $1.75 million settlement that provided workers pay owned under the WARN Act and the union contract. The plant has been purchased by the California-based Serious Materials, which has promised the union it will call back workers over the next few months.
Very often such actions challenge existing property rights – but often rights that have some degree of ambiguity. In the early days of the sitdown strikes, it wasn't clear that theoccupations were illegal since the companies were in violation of the newly-passed Wagner Act. The same was true of the recent Republic Window and Door occupation in Chicago, where the employer was in violation of the WARN act. Due to the securitization and tranching of so much of capital over recent years, there is reason to think the entire American property system is somewhat up for grabs. So there should be a lot of opportunity to utilize such ambiguities, most obviously in housing, but also in the rest of the economy as well.
Today’s “Great Recession”
Each period of hard times is unique, both in the character of the economic downturn and in the changing character of national and global society. Today’s “great recession” is differentiated from previous downturns by globalization and the massive financialization of the U.S. Deindustrialization has transformed the majority of the American workforce from blue-collar to white-collar. Outsourcing has divided that workforce into “core” employees with job security and benefits and a “ring” of contingent workers with neither.
Unions have shrunk and the social safety net has been dismantled – less than half of those without work and who are actively seeking a new job were receiving unemployment compensation in early 2009. Meanwhile, new means of communication – think smart phones and web 2 – are making new ways of organizing possible. And behind it all, the crisis of human-induced climate change threatens to disrupt all social life and cause economic dislocation greater than the Great Depression and World War I and II combined.
The fundamental problem underlying today’s “great recession,” however, is the same as in past periods of hard times – Obama’s paradox that “there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done.”
The pursuit of profit through the market does not lead to production of what people need. The solution can be summed up in the phrase “production for use.”
The range of unmet needs – nationally and globally – is enormous. All -- education, healthcare, food security, infrastructure, childcare – can be spheres for putting people to work doing the work we need to have done.
These all represent what economists call “market failures.” And according to the British government’s Stern report, the greatest market failure of all history is the destruction of the planet by greenhouse gasses. While current “cap and trade” programs attempt to create a market solution to this problem by creating a market to buy and sell pollution permits, we cannot wait for the market to fix the market.
Instead, we need to create a rapidly growing “green” sector in which production is for use – specifically, for climate protection -- not just for profit. We must reconstruct society on a low carbon basis regardless of whether or not it is profitable to do so.
It is often pointed out that it took mobilization for World War II to end the Depression. Today we need, in William James’ magnificent phrase, a “moral equivalent to war.”
We don’t expect an army to make a profit. It has other responsibilities and other means of support. During World War II, for example, public policy mandated the production that was necessary: tanks and airplanes. At the same time public policy forbade much production that was unnecessary; as a popular song about wartime mobilization put it, “put those plans for pleasure cars away.” Today’s equivalent would be mandated reductions every year in carbon-emitting production and consumption combined with employment of all available people and resources for green transformation.
Obama’s stimulus package actually provides a first step in the right direction:
To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can't be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.
Like previous forms of production for use, this plan is a bete noir for those who think “production for use” is a crime against capitalism. They are already mobilizing against, tea bag by tea bag.
But there is another lesson from hard times past:
Economic adversity creates an intense social dynamic in which people become less and less willing to wait for “pie in the sky.” That is why they demand jobs, take over and run their enterprises, pursue self-help mutual aid, and transgress the established boundaries of private property.
The unemployed movement of the 1930s used the slogan: “Don’t starve – fight.”
Who knows what the result will be if we combine that with the slogan, “Don’t let the planet burn – let us get to work.”