Economic Conditions and Hollow Victories

Among the very few things to look forward to on Labor Day is Jack Rasmus’s annual report on the state of US labor. Rasmus, an accomplished political-economist, riffs on the famous Frederick Engels book with Labor Day 2024: The Condition of the American Working Class Today. It may come as a surprise to some, but academically-trained economists are among the most intellectually shallow and ideologically tainted practitioners of the social sciences. Some are so in awe of their own academic specialty that they paint all economic trends through specialist lenses. Still others are so tied to their political biases that they cannot resist slanting their conclusions to reinforce their loyalties to one of the two political parties that we are currently allowed.

Rasmus is the rare university-educated purveyor who knows where to look, looks critically, and clearly synthesizes the data to draw broad and useful conclusions for working people. For a philosophically-trained skeptic and self-styled Historical Materialist, I have grown to trust Rasmus’s digest of the meaning of arcane, jargon-filled, often-misleading government reports.

Of course, we have had earlier times when similar data were available. For over three decades, Labor Research Associates-- a group of Communist and left researchers-- published a comprehensive Labor Factbook every two years that addressed “labor trends,” the “social and labor conditions” of the period, “people’s health,” the “trade unions,” “civil liberties and rights,” “political affairs,” and “Canadian labor developments.” This comprehensive book armed working people who cared to advance the cause of workers with a cache of ammunition in the class war. We don’t have Labor Factbook, but we are lucky to have Jack Rasmus’s report.

What does his report tell us?

● Despite $10 trillion in stimulus since the pandemic, the US economy has only produced an anemic recovery: GDP of 1.9% (2022), 2.5% (2023), and 2.2% (2024, to date).

● And the US worker fared even worse: “...with regard to wages, the American worker has not benefited at all from the $10 billion-plus fiscal-monetary stimulus. Real Weekly Earnings are flat to contracting. And take-home pay’s even less.”

● The great US job creation machine that US politicians celebrate is not performing so well: “It is important to also note that the vast majority of the net new jobs created have been part-time, temp, gig and contractor jobs. In the past 12 months, full-time jobs in the labor force [have] fallen by 458,000, while part-time jobs have risen by 514,000.” 

Typical of an election year, official reports grab headlines, exaggerating job gains, only to be corrected later: “The jobs reports over the past year are revealing as well. They continually reported monthly job gains of around 240,000. But the Labor Department just did its annual revisions and found that for the period March 2023 thru March 2024 it over-estimated no fewer than 818,000 jobs!” [The September 6 employment report downgraded June and July’s job growth by a further 86,000 jobs!]

“The Wall St. Journal further reported that up to a million workers have left the labor force due to disability from Covid and long Covid-related illnesses. Neither of those statistics [is] factored into the government’s unemployment rate figures.”

● For working-class citizens, debt has been a paradoxical life-saver, supplementing slack wage growth. But it continues to grow at a dangerous pace and with increasingly unsustainable interest rates: “The last quarter century of poor-wage increases has been offset to a degree by the availability of cheap credit with which to make consumer purchases in lieu of wage gains and decently paying jobs. Actually, that trend goes back even further to the early 1980s at least.”

“Household US debt is at a record level. Mortgage debt is about $13 trillion. Total household debt is more than $18 trillion, of which credit-card debt is now about $1 trillion, auto debt $1.5 trillion, student debt $1.7 trillion (or more if private loans are counted), medical debt about $.2 trillion, and the rest installment-type debt of various [kinds].

American households carry probably the highest load of any advanced economy, estimated at 54% of median family-household disposable income. And that’s rising.

Debt and interest payments have implications for workers’ actual disposable income and purchasing power. For one thing, interest is not considered in the CPI or PCE inflation indexes and thus their adjustment to real wages. As just one example: median family-mortgage costs since 2020 have risen 114%. However, again, that’s not included in the price indexes. Home prices have risen 47% and rents have followed. But workers pay a mortgage to the bank, not an amortized monthly payment to the house builder.

One should perhaps think of workers’ household debt as business claims on future wages not yet paid. Debt payments continue into the future for purchases made in the present, and thus subtract from future wages paid.”

Since Rasmus penned his report, the Census Bureau released its report on household incomes. While there was an uptick in 2023, median household income adjusted for inflation remains below the levels of 2018, explaining why poll respondents (and voters) are feeling insecure about the economy. In fact, household incomes have only increased around 15% over the last twenty-three years-- hardly a reason for a victory lap by the last four administrations… or the capitalist system!

● Rasmus brings a necessary sobriety to the discussion of the state of the organized trade union movement in the US. While there are many exciting developments, the goal of building a formidable force to advance the interests of working people remains far off: “Since 2020 union membership has declined. There were 10.8% of the labor force in unions in 2020. There are 10.0% at end of 2023, which is about half of what it was in the early 1980s. Unions have not participated in the recovery since Covid, in other words, at least in terms of membership. Still only 6% or 7.4 million workers of the private-sector labor force is unionized, even when polls and surveys in the past four years show a rise from 48% to 70% today in the non-organized who want a union.”

“Recently the Teamsters union under new leadership made significant gains in restoring union contract language, especially in terms of limits on temp work and two-tier wage and benefit structures. The Auto workers made some gains as well. But most of the private-sector unionization has languished. And over the past year it has not changed much.

About half of all Union members today are in public-sector unions. It has been difficult for Capital and corporations to offshore jobs, displace workers with technology, destroy traditional defined-benefit pension plans, or otherwise weaken or get rid of workers’ unions. The same might be said for Transport workers, whose employment is also not easily offshored but is subject to displacement by technology nonetheless. But overall, union membership has clearly continued to stagnate over the past year, as it has since 2020.”

Rasmus’s candid conclusion: “The foregoing accumulation of data and statistics on wages, jobs, debt and unionization in America this Labor Day 2024 contradicts much of the hype, happy talk, and selective cherry picking of data by mainstream media and economists. That hype is picked up and peddled by politicians and pollsters alike.”

*****

And speaking of politicians…

A recent Jacobin piece stands as a sterling example of torturing facts and logic to build the case that Democratic Party politicians got the “stop the genocide” message at the Party’s national convention. Waleed Shahid writes that “the Uncommitted movement didn’t win every immediate demand…” in his article Why the Uncommitted Movement Was a Success at the DNC. The Uncommitted Movement didn’t win any demand-- immediate or otherwise-- at the DNC! 

It takes some skill and determination to recast a near totally effective effort to stifle the voice of pro-peace and pro-justice participants and protesters into “not just a fleeting victory — it is the beginning of a strategic shift in how the Democratic Party grapples with its own contradictions.” Sad to say, it takes a twisted perception to see “victory” and “a strategic shift” while convention-goers derisively and dismissively stroll past demonstrators reciting the names of civilians murdered by the Israeli military.

Shahid attempts the impossible in likening the 2024 Democratic Convention to the 1964 Convention, when brave civil rights activists shamed the Democratic Party before television cameras and journalists into negotiating with the Mississippi Freedom Democratic Party (See this sharp comparative account in Black Agenda Report). There was neither shame nor negotiations in 2024.

Like Democratic operatives before him, Shahid scolds those expecting more from Democrats to-- in the future-- “out-organize” the Neanderthals controlling the party. In other words, force them to do the right thing!

When one finds a credible political party to support, it should not be one that must be coerced to support justice.

*****

It is a commonplace on the soft left to advocate a broad coalition or united front to address the rise of right-wing populism in Europe and North America. Building on the ineffectiveness of the long-ruling centrist parties, the French RN, Germany’s AfD, the US’s Trump, and a host of other populist movements have mounted significant electoral campaigns. The knee-jerk left reaction is to advocate a broad popular front of all the oppositional parties or movements, a tactic modeled crudely and inappropriately on the Communist International’s anti-fascist tactic. 

Most recently, the French left conceded to an electoral “popular front” with the ruling president, Emmanuel Macron’s party and other parties in opposition to Marine Le Pen’s RN. To the surprise of many, the left won the most votes and should have-- by tradition-- organized a new government. But President Macron “betrayed” popular-front values and appointed a center-right career politician, hostile to the left, as prime minister. To add insult to injury, Macron consulted with Le Pen for approval of his appointment.

Consequently, despite commanding the largest vote, the popular front is in a less favorable position and the right is in a more favorable position than before the electoral “victory” (see, for example, David Broder’s Jacobin article for more). 

This move by Macron should sober those who glibly call for a popular front as the answer to every alarm, every hyperbole regarding the populist right. 

Because of this gross misapplication of the united-front tactic, I can enjoy an I-told-you-so-moment. I wrote in late June: “The interesting question would be whether Macron’s party would return the favor and support this effort in a second round against RN. I doubt they would. Bourgeois ‘solidarity’ only goes so far.” Where the left selflessly threw its support behind Macron’s party where it needed to win, Macron through his deal with Le Pen, threw the left under the bus! 

Hollow victories, indeed.

Greg Godels

zzsblogml@gmail.com

What History Teaches…

The years of reaction (1907–10). Tsarism was victorious. All the revolutionary and opposition parties were smashed. Depression, demoralisation, splits, discord, defection, and pornography took the place of politics. There was an ever greater drift towards philosophical idealism; mysticism became the garb of counter-revolutionary sentiments. At the same time, however, it was this great defeat that taught the revolutionary parties and the revolutionary class a real and very useful lesson, a lesson in historical dialectics, a lesson in an understanding of the political struggle, and in the art and science of waging that struggle. It is at moments of need that one learns who one’s friends are. Defeated armies learn their lesson. V I Lenin, “Left-wing” Communism, an Infantile Disorder

What does history tell us about where we are today, well into the first half of the twenty-first century? 

It surely tells us that capitalism remains the greatest obstacle to solving the manifold injustices, irrationalities, and existential threats that face humanity. History also teaches us that the false answers of nationalism, racialism, and social exclusion remain leading obstacles to overcoming capitalism and the class divide at the center of capitalist social relations. Division-- the separation of potential allies in the struggle against capitalism-- remains a deep infection immobilizing those seeking social justice for all, a lesson the advocates of both casually chosen and deeply personal identities seem to have missed. 

We are even further removed from defeating capitalism when we construct unlimited identity barriers to unity, when who we are as an individual comes before who we are as a class. 

History’s lessons are easily lost to hasty generalizations and wishful thinking. The “victory” of the US over the Soviet Union in 1991 was thought to usher in the end of history and, in the mind of celebrated intellectual, Francis Fukuyama, the global ascension of US values and US rule over the global order. Within a decade, this conclusion met determined resistance on many fronts, as the US attempted to enforce its dominance, only to be challenged on all counts by independent rising powers, insurgencies, and defiant forces in Asia, the Middle East, and South America. The two-decade long war in Afghanistan is but one dramatic example of that stubborn resistance to US power.

Unfortunately, popular resistance in the capitalist powers of Europe and North America took a different turn after 1991. A “third way” center left, buoyed by the setback to Communism, abandoned class politics for “a rising tide lifts all boats” economic policy, as well as cultural politics, the chosen field of battle favored by the political right. This “respectable” left-- respectable to power and wealth-- paid an electoral price over the following decades with the erosion of working-class votes. Today, the Euroamerican center left, along with its center-right counterpart, struggle weakly to dominate politics, as they have since World War II.

The multifaceted crises of capitalism-- unemployment, slack economic growth, inflation, recession, political illegitimacy, inequality, eviscerated social services, rotting infrastructure, and environmental degradation-- have all struck at one time or another since capitalism’s “triumph” in 1991. The lowering of mass expectations and the rising of mass deprivation have presented the radical left with the objective opportunity for change only imagined in earlier generations. 

But the radical left was not ready for the challenge, convinced after 1991 that socialism, as we came to know it, was either impossible or too far off in the distant future to be our project. The self-annihilation and mutation of Europe’s two largest Communist Parties only added to the pessimism. It was a time not unlike the years after the failed 1905 Russian revolution, as described by Lenin: 

Tsarism [capitalism] was victorious. All the revolutionary and opposition parties were smashed. Depression, demoralisation, splits, discord, defection, and pornography took the place of politics. There was an ever greater drift towards philosophical idealism; mysticism became the garb of counter-revolutionary sentiments. At the same time, however, it was this great defeat that taught the revolutionary parties and the revolutionary class a real and very useful lesson, a lesson in historical dialectics, a lesson in an understanding of the political struggle, and in the art and science of waging that struggle.

Except the radical left largely drew no useful lessons from the 1991 setback, beyond the abandonment of the socialist project. When jobs migrated in huge numbers to low wage countries, the left blamed “globalization” -- a process commonly and frequently encountered in the capitalist accumulation process. It is far easier, but far less effective to fight a phase --- a phase soon to be transcended by a resurgent economic nationalism-- for society’s ills than to attack its parent: capitalism. It is as though people believed that they could actually turn back the clock to some imagined, more benign era of capitalism.

Others in the diluted socialist movement designated the enemy as another phase of capitalism: “neoliberalism” -- a set of ruling class policies designed to escape the 1970s collapse of the post-war Keynes/demand-side paradigm. 

During that lost decade, Stagflation and aggressive foreign competition brought the class-collaboration model into disrepute, with the monopoly corporations turning viciously on their counterpart, the class-collaborationist labor leadership; decades of capitalist offensive followed, with a rout of working people’s liberal and “progressive” former allies; many past gains were reversed. 

After 1991 and with far too many having abandoned the socialist project, the broad left chose not to attack the cancer of capitalism, instead, choosing to try to dull the painful symptom of neoliberalism. 

The drift to “philosophical idealism” described by Lenin was everywhere in the wake of the fall of the Soviet Union. Academics diminished Lenin’s theory of imperialism, with wild fantasies of the decline of the nation-state (a fantasy embarrassed by the aggressive global reach of the US empire-- the preeminent, most powerful nation-state of all time). Other thinkers saw transnational capitalist corporations overshadowing and superseding the nation-state, as though the nation-state was not intimately fused with monopoly capital. This drift from Lenin’s historical-materialist analysis reached its ludicrous peak with the infamous tract of Hardt and Negri, Empire, positing that history was now grounded in a mysterious, totalizing force that they called “Empire,” an obscure, ineffable entity rivaling Hegel’s Absolute. 

Some on the international left saw a possible socialist revival in the righteous rejection of US domination by social movements in Latin America, the so-called “pink” revolution. Elections brought to power several promising charismatic leaders who openly and strongly defied the long-imposed dictates of US imperialism. Most notably, Hugo Chavez mocked and scorned US government arrogance, establishing an independent foreign policy and embarking upon a generous and humane welfare state based on Venezuela's then-ample resource revenue. 

Other leaders in Central and South America were inspired to join this anti-US imperialist, social democratic front, with the goal of Bolivarian independence from neo-colonialism (a sovereignty project) their most common feature. Because of “socialist” rhetoric, many on the left elevated these multi-class, reformist movements to the status of “twenty-first-century socialism”. In fairness, some leaders truly aspired and envisioned socialism, though they lacked a program, a revolutionary party, and the necessary understanding. 

Twenty-first-century socialism, without an existential confrontation with capitalism, has proven to be an elusive goal, especially with a US-supported domestic bourgeoisie still holding vast economic power. The social democratic dream of taming, while partnering with capitalism has nowhere sustained the support of the working classes. With a hostile behemoth on its doorstep, it is not succeeding in Latin America, either.

The latest notion distracting the left from socialism is the doctrine that global multipolarity --removing the unipolar US from the pinnacle of the imperialist heap-- will somehow produce a more just world and even move us closer to socialism. While capitalists in many countries would welcome leveling the economic playing field and freeing markets for others to exploit, a multipolar world offers no obvious benefit to working people. Without question, the iron grip that US capitalists have had on international economic institutions and the promiscuous use of US sanctions and tariffs has incensed US rivals and weakened US hegemony. But their success in blunting US power holds little consequence for exploited workers in Asia, Central and South America or Africa, who continue to be exploited. 

Like the period after the 1905 Russian revolution described by Lenin, the period after the exit of the Soviet Union has been difficult for the international left. After dalliances with bizarre, “novel,” and foolish answers to what many perceive as the failure of socialism, the left has offered a beleaguered working class few victories. In the last thirty-three years, theorists have contrived new enemies: neoliberal capitalism, disaster capitalism, racial capitalism, crony capitalism, hyper-capitalism, coronavirus capitalism, unipolar capitalism and a host of other hyphenated capitalisms. What all of these theories share is a fatal hesitation to call out the capitalist system itself. They all share a faith in a reformed, managed capitalism that --shorn of its deviations-- will somehow serve all classes. 

After thirty-three years, this experiment in rescuing capitalism from itself should be discarded. It is time for the left to draw “a real and very useful lesson, a lesson in historical dialectics, a lesson in an understanding of the political struggle, and in the art and science of waging that struggle,” in Lenin’s words. If defeating capitalism is our goal, it requires tried and tested forms of political organization: a revolutionary political organization. It requires a bold, independent party embodying both democracy and centrism-- a Leninist party-- with a clear program based on enlisting working people to the greatest project of the twenty-first century: winning and constructing socialism. That is what history teaches.

Greg Godels

zzsblogml@gmail.com