OUR UTOPIAN LEADERS FACE THE ECONOMIC DOWNTURN
American Leaders of Organized Labor have always prided themselves on their hard-headed "realism”, their tough “practicalness”, their pragmatic approach of looking at each problem concretely with no “theories” to block their view. They set up no categorical imperatives, no laws of dialectics, no beliefs in “socialism”, or some other “blue print". They want to “live and let live"; only a “fair day’s pay for a fair day’s work.”
Actually these poses of practicalness and realism of Labor Leaders at best simply cover their ignorance and refusal to face the facts of life and at worst represent downright cynicism and narrow selfishness. This is seen all too clearly when times get rough and business falls down. A new situation faces labor officials then. Their old comforts and privileges are endangered. Their members are getting out of work. They must pretend to do something about it. They must give an impression that they are as radical as the next fellow. Hence the utopian phrases, which, to give the Leaders their due, they really do not mean. Their utopianism, like their “practicalness”, shows itself to be more self-seeking cynicism.
Nevertheless, the demagogic word or phrase that gets mass support can be a social force moving with effect. Hence the necessity to analyze the meaning of the theories and “demands” thrown about so freely by these Labor Leaders at the present time.
Let’s start with the Leader of the heart of the old A.F.L.—Mr. Gray of the Building and Construction Trades Department. The building and Construction Trades Department of the American Federation of Labor customarily meets in convention just before the A.F. of L. itself convenes. The purpose of those earlier conventions was patently designed to see that Building Trades Leaders controlled the later conventions, that satisfactory deals were arranged in advance, proper leaders elected, and everything kept under control of the “old guard". That’s how (George) Meany first came to be elected Secretary of the A. F. of L. while (William) Green was President.
In earlier days it could be taken for granted that the pronouncements of the Building and Construction Trades Department would be the policies followed by the A. F. of L. Alas, for Mr. Gray, this can no longer be taken as true. As one of the results of the last depression and its aftermath, the CIO was formed composed of industrial unions in the biggest industries of America. The attitudes of the Leaders of the CIO had been molded by giant industrial production and not by small independent contractors. Naturally, when the CIO—AFL fusion took place, the old Building and Construction Trades Department no longer remained the heart and spokesmen for the larger organization, whose President, Mr. Meany, now had to stand somewhere in between both sides.
All this, of course, does not prevent Mr. Gray from limping behind events and still trying to control the policies of the AFL-CIO. He does this with a policy statement as to what should be the position of the Building Trades Unions during the coming year of the depression. In essence his strategy is simple: Let us make no further demands for wage increases, but hold on to what we’ve got. Our wages now are the highest in the history of the trade union movement. If we just hold on to our gains we will not be put in the position of being blamed for increasing industrial costs of production which in turn mean increased prices.
To support his position, Mr. Gray brought into the convention the representative of the General Contractors Association who solidly endorsed this policy statement as “reasonable” and "practical". Faced with the mass of trade union delegates before him, how could this employer representative elaborate on the simple fact that if wages rise in periods of prosperity, they must fall in periods of depression? He must have said to himself: well, at least we have labor on the defensive, we have stopped their incessant demands for more and more wages. Next year, if invited, we’ll really tell them the facts of life.
Mr. Gray, we can be sure, is a shrewd and clever old-timer thoroughly representative of the Building Trades “Business Agent” hierarchy. In enunciating the kind of policy he has, he must first have conferred with the leaders of his Department and stated what they themselves thought was the best plan of action. Any criticism we make, therefore, of Mr. Gray’s position is a criticism of the policy of this entire group of leaders. We can hence ask ourselves the legitimate question: What interests are behind the ideas of this group that they can enunciate this entirely impractical and utopian set of proposals? Let us see the matter as they can see it.
The journeymen and craftsmen in the building trades have taken advantage of the years of prosperity to raise their nominal wages to an extraordinary height. Wages of $4.00 and $4.50 an hour with considerable overtime have not been uncommon. They were able to get this kind of pay because of the exceptional need for public and private housing after World War II and the Korean struggle, because of the relative weakness of the building and construction contractors, and because of the great needs of the government in military and other installations here and abroad.
These extraordinary wage levels were reached only with the active aid of the government. The prevailing wages provisions embodied in public contracts and in the Davis-Bacon Act insured that for the immense government projects undertaken after World War II, union rates would become the standard everywhere. The easy terms granted to veterans for home ownership and the other Federal home ownership provisions made it not too difficult for building contractors and real estate men to dispose of houses even at rates extraordinarily high.
For these reasons as well as for the reason that in any serious depression private business factors are greatly reduced while public factors expand, the Building and Construction Trades Department has to play ball with the government. Since the present administration has spoken sternly against wage increases at this time, the “defensive” position of the Building and Construction Trades Department would be bound to find favor in the eyes of the government and this all the more should a “defensive” position by the Building Trades force a similar “defensive" position for the entire labor movement.
This “good boy” position could also be used to counter the fact that the Building Trades Leadership is thoroughly honeycombed with the worst sort of gangsterism and racketeering. It would take away the string from the attacks against the notorious Leaders of the teamsters, the hoisting engineers, the carpenters, and others who are already under heavy fire. With the adoption of the No-Wage Increase Policy (for others) these racketeers and gangsters now show themselves to be “safe” reliable citizens.
For many people a “defensive” position is only a cunning way to take the offensive in reality. This is a classic technique in the use of which the Leaders of the Building Trade are expert. They know very well the general economic rule that in the first downswing of the depression the general level of prices drops first and more drastically than the level of wages, and thus, even with wages falling in an absolute sense, the purchasing power of wages increases at the start of a depression, no matter how hard certain sections of the workers may suffer. If this is the case even with falling wages, one can imagine the “subtile” cunning of Labor Leaders who “merely” ask that wages, the very highest in all history, should remain without changes during this year of depression.
The Leaders of the Building and Construction Trades Department reveal the true offensive character of their position by the fact that they never refer to adhering to escalator clauses in their contracts, namely that wages would rise or fall in direct ration to the so-called cost of living index as issued by the government. If union leaders only wanted to retain their old purchasing power during a depression they would be glad to follow escalation principles since relatively high standards had already been won. This, however, they carefully avoid for they know that their demand for retention of the present level of money wages during a depression is in reality a demand for a far greater share of the social product than ever before but placed in a more "innocent” guise.
Mr. Gray is no “socialist” but a firm supporter of the present capitalist system. He is not even idealist enough to believe in the efficacy of the “built-in” government stabilizers to prevent depressions, so often hawked by the “friend of labor” “crusader,” Senator Paul Douglas. Mr. Gray knows very well that capitalism must have its ups and downs, its booms and depressions; that during depressions prices and wages must fall or capitalism must perish. In fact, he makes this point a part of his argument by stating that when markets are falling this is no time to keep prices high by keeping wages high. Just as though during a depression he could keep prices high or keep wages high!
This is the essential utopianism of the Grays and their kind. They actually imply that by their puny threats they can stop the gigantic economic forces that are unleashed during a depression. It is clear that if they had the power to keep wages high when all prices were low, they would have the power to raise all wages to the level where capitalism would entirely collapse. So Mr. Gray, with his utopian statements, ends up by considering himself the savior of our society. He "could”, you see, keep wages up and even raise them, but unlike Mr. Meany and Mr. Reuther, he does not think he should do so. He is a “good” fellow, you see, and ought to get real support from all employers.
Let us state some fundamental economic truths right here. First, if all wages in the building trades were to rise, or, what amounts to the same thing, be maintained at boom levels during depression times, prices of building and construction work in general would NOT rise (since there is no way of meeting a greatly lowered effective demand in that manner), but building trades profits would drastically fall. There would be a great flight of capital way from the building trades to some other economic function. This, in turn, would leave a much smaller building and construction trades industry with only the very largest and most efficient firms in operation, reducing employment to the utmost and determined to carry on the most energetic struggle to lower the wages in the building and construction trades to normal proportions. The largest and most efficient firms might agree to Gray’s plan in order to destroy their weaker competitors. Indeed, they may have even egged him on to his position.
But let us suppose that much building and construction work is urgently needed for defense and other purposes right now by the government and that the government must use the general contractors or pay equivalent wages itself. In this case, all that would occur is that every other industry, including giant aggregations of capital far more powerful than the “general contractors association”, and the people generally would be taxed to pay for relatively higher prices, wages, and profits that prevail anywhere else. There would then be a great flow of capital to this peculiar profit making and wage raising industry, especially in a depression, so that an entirely disproportionate economic force would be pushed into such work to the relative detriment of all. This last consideration, of course, would never bother the Leaders in the Building Trades because they have long built their special power on the deliberate separation of their crafts at the expense of all others.
Mr. Gray, however, is making a bid for a very important group in industry and believe that even a very temporary holding of the wage line with government support and subsidy would help him greatly in this effort. This important group is the “inside” mechanics in industry. This brings him in direct conflict with the industrial union group of the CIO. Let us briefly discuss this point.
The great increase and ever quickening tempo in the productive capacity of our country is a result of the fact that a relatively greater share of capital must be placed in the means of production, such as buildings, fixtures, equipment, machinery, tools, auxiliary and other materials, etc. This has led to an accelerated increase in the number of “inside” mechanics who are now not in the building and construction trades unions but in the industrial unions with the other workmen. An ever more important group, these “newer” mechanics are engaged in industrial construction, maintenance and repair. They are bound, however, directly to the general wage structures and differentials prevailing in industry rather than to the especially high rates prevailing in the “outside” building and construction trades.
As can be realized, industrial employers are directly concerned. If they granted outside craftsmen rates to their inside mechanics, other factors remaining the same, either their rate of profit would be lowered or they would have to take out from the other sections of labor the higher share paid to the mechanics. Since the industrial unions contain in the majority articulate and militant groups who were not inside mechanics, to increase the share of the latter at the expense of the main part of the workers was not practical. Nor could they lower their share of the profit or pay the mechanics a disproportionate rate without getting into serious difficulties on every side.
Where the matter is decisive, large industrial employers prefer to have their own construction and maintenance mechanics in the industrial union of their own branch of operation rather than under the influence of the outside Building and Construction Trades Department of the A.F. of L., unless by such a separation they could hinder the growth or reduce the wage levels of their particular industrial union. The Taft-Hartley Law is the result of such a compromise. The outside general contractors, of course, have opposite interests and thus the struggle between the Building and Construction Trades Department and the industrial union group of the CIO reflects also the struggle of their respective employers as well. It is one of the reasons why the Building Trades Unions and the general contractors can work so closely together on many matters.
If the general contractors, cooperating closely with the Building and Construction Trades Department, can secure government aid in placing the outside craftsmen on government projects - if only for a while at present rates of pay—while, on the other hand, the industrialists are forced to lay off large numbers of inside mechanics and cut the take-home pay of the remaining group, this would be a great victory for the coalition. A larger share of work and income will accrue to the outside contractors and greater power and income will fall to outside craft union leaders, all at the expense of the industrial group.
The utopian ideas of the Building and Construction Trades Department Leaders, therefore, that they can maintain craft union wages at a boom level in times of depression is only a mask to cover clever conniving and craftiness. They themselves do not believe their naive sounding statements. But after all, maybe we are taking Mr. Gray too seriously. Since the General Contractors Association goes along with him he will not be called on to endorse strikes to enforce his position and after all he spoke only for the present year of 1958.
The policy statement of Gray compelled the appearance at the Building and Construction Trades Convention of Mr. Meany, President of the general organization of labor in this country, the AFL-CIO. If the General Contractor Association employer group supported Gray, Mr. Meany, speaking for the leadership of all organized labor, had to repudiate him. Standing midway between the CIO and the Building and Construction Trades Department, Meany, himself a product of that Department, nevertheless could not hold his job without implying that the "defensive” position of Gray had greatly hurt the cause of labor in general.
If Gray appeared practical, Mr. Meany appeared righteous. If Gray was a special pleader, Mr. Meany was a “statesman”, taking an over-all and national position. If Gray was the savior of this group, Meany was the “catholic”, that is “universal” savior. In Meany the Jesuit caucus inside the A.F. of L. leadership and the aggressive attitudes of the CIO could find a common meeting point.
The high and lofty position of Mr. Meany can be summed up as follows: The depression at hand is not the fault of labor which must not be made to suffer for what it is not responsible. Labor remembered the last depression of the 1930s with its food lines, relief rolls, make-work projects, etc. , and was not going to tolerate a repetition of the situation. The underlying cause of the depression is the fact that there exists too much goods unconsumed. If the purchasing power of the workers is increased generally the surplus would disappear and be better distributed. Capital can then open up the process of production again and keep on producing. The more the share of the workers increases the greater the prosperity of the nation. Therefore, this is the very time for labor to ask for a general increase in wages and not to limit itself to the defensive.
So the AFL-CIO is no longer an organization limited to a “Fair Days Pay for a Fair Days Work." It is not even an organization pledged to maintain the highest boom wages in time of depression and apparently scorns such matters as escalator clauses in contracts tied to the cost of living. It now has acquired a messianic mission to end depressions forever and this is to be done precisely by asking whopping increases in pay as soon as markets decline and industry begins to lag! if Christ was a carpenter surely his disciple savior on earth could be a plumber!
Compared to Gray, Mr. Meany poses as a real “leftist". Gray wants to hold the line for a special group. Meany wants general offensive for all labor. To the new Meany, if the crisis endures and goes deeper it is the fault of the capitalists. (The Jesuit caucus goes along with this because in the United States the capitalists, in the main, are Protestants and this line of attack is one of their roads to power. Later the Jesuits will be re-enforced by an Opus Dei)
Gray works hand in glove with the General Contractors Association. Meany now wants the surplus commodities taken from all employers and consumed by all labor. The A.F. of L. apparently changes its policy from one of class peace to class war in the name of labor and humanity. But it is all done with the tongue.
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Mr. Meany is a hard-headed plumber. He knows how to wipe a joint. He fought his way through the ranks of the vermin who head the local unions and the new York State Federation of Labor to become top banana in the A.F. of L. Practical cunning and machine politicking did the trick. Now he is in a job which is too big for him. Situations call for actions which must be theoretically explained.
But now does meany get theory? It is hard enough for him to speak English well, what time or inclination does he have for great and serious study? He has a “staff” consisting of “research" workers; he has a group of “socialistic” trade union officials, Dubinsky, Potovsky, Rose, and their “theoretician” Jay Lovestone (Jacob Liebstein) and such; he has a Jesuit caucus and catholic labor fraction; He has the pressure of former Soviet visitors such as Reuther and his “staff". So he gets his “theory” in patches, by pressures, so to speak. Essentially he remains a bureaucrat who wiped a joint. He is out of his element outside the building trades; he is out of his element as a theoretician. But what shall we say of the labor “theoreticians” who advise him?
For over a hundred and fifty years advanced industrial countries have witnessed the development of capitalism. In all this time capitalism has proceeded in a jerky fashion of cyclical prosperity and depression. Indeed, it is a necessity, and vital necessity, for capitalism to do so. Because developed capitalism can not exist without a world market in which a social division of labor is created not in the control of any individual or group of individuals, because capitalism cannot exist without profit that is repeatedly thrown back into production on a greater and more efficient scale each time, and because these profits cannot be realized without a battle and test in the world of the market place as to which commodity is more efficient and appropriate and which is not.
The essential basic feature of the capitalist mode of production is profit; the driving motivation of capitalist society must be the relentless pursuit of an ever greater rate and mass of profit. The foundation of our America rests on this fact. This profit is the surplus over and above what the costs of production are, the costs of the means of production and the cost of labor power. This profit is placed in the hands of the capitalist. Part of it is spent for his revenue and enjoyment; another part is divided among different groups of society or is paid in taxes. But an essential part of the profit must be reinvested in the productive process itself on an ever increasing scale. Capital must be accumulated or it will die.
The drive to increase or maintain the rate and mass of profit or prevent their decline means that every effort must be made to reduce the costs of production, the costs of the means of production and the cost of labor power. To do this science, engineering, technology and techniques are developed as much and as speedily as possible so that mankind can produce the goods for the needs and wants of society with the least cost possible.
Every capitalist, therefore, must throw into the market all he possibly can over and above the amount he took out of the market. This surplus must grow in ever increasing and rapid amounts. If the markets do not expand accordingly, and they do not, there must come a time when the surplus cannot be marketed and a depression occurs with consequent unemployment and suffering.
The depression, however, tends to have this historic result. The less efficient methods of production are wiped out, the more efficient prevail; and when the depression ends, there is production on a far more efficient and better scale than ever. Competition and depression have forcibly destroyed what had been allowed economically to remain too long. Depressions result in intensification of both the suffering of the people and economic progress. The capitalist is no more to blame for this situation than the laborer. Both are products of the same mode of production.
In all this long cyclical history of capitalism some noble people have arisen in the past who have tried to see whether depressions could be prevented and yet capitalism saved. Nevertheless depressions are still with us and grow ever more intense and enduring. A far greater number of noble people, especially from the ranks of the sufferers, have clamored for some relief. Perhaps the depressions could be made more gradual and not so severe, made shorter and not so prolonged, have less fearsome effects. Perhaps the suffering could be alleviated. Certainly it seems an anomaly to have bread lines and relief rolls in the midst of great piles of useful commodities lying ready to be consumed or to be produced. Indeed, advanced capitalist countries have done something along this line if only to prevent riots and revolutions from the suffering victims.
Now let us suppose that in the course of the coming depression, when the warehouses and magazines are stuffed with all sorts of goods and commodities which can not be sold, the government is induced to open the warehouses to the hungry and to distribute the stuff stored there to the needy so that they would have the same standard of living as during normal times. The government could either buy all the stuff and distribute it or take it by force without payment, either directly or by taxation or other means. For our purpose here it would make no difference what methods are used.
We shall first suppose that the government physically takes the goods without payment and distributes them. First of all, not all the goods stored are means of consumption that can be used by the masses. A great deal would be in machinery equipment, means of production, raw materials such as copper, cotton, yarn, etc. These could not simply be distributed because they represent commodity capital destined for the industrial process and are of no use unless the factories can be reopened as well.
So, unless we were to forcibly reopen the factories all this stuff would have to remain in the warehouses and deteriorate as well.All the means of consumption stored as surplus, however, can be taken and distributed. Fine, for those who need the stuff. But, hold! The wares were not all made with the same efficiency. Let us take three specimens of the same item each made in a different factory under different methods. Let us say the average cost was $10 for the item, but one had actually cost $5 and another $15. They were all waiting in the warehouse to be sold. Thanks to the depression, that testing period of the efficiency of all items, the $15 item would have proved too costly and would not sell; the $10 item also could not sell. Only the $5 item could sell and thus only the efficient method of production in this factory would have continued to exist and prevail. If, however, the market is taken away and the goods are removed from the warehouse and distributed free to the population there is no testing of efficiency at all! All three forms are consumed and then if the factories continue to produce them, all three methods of production will continue to be used. Thus with the end of the competition of the market place, the development of technique, technology, engineering, and science disappears.
Of course, it would be quite a job to get any of the factories to reopen if the goods were not paid for, since it would be only from the sales of the commodities stored away that the reproductive process could start all over again. Certainly the factory owners would have to be paid. But how? By taxation? Then who would be taxed, the factory owners whose goods still remain in the warehouses unsold, whose products can not be consumed and who are now discriminated against because the factory owners of the means of consumption are being paid and they are not? The industries still producing so that their cost would mount still higher?
Or should the government print paper money which would then immediately fall in value and rampant inflation make all money utterly valueless with a complete bankruptcy of the State?
And in the meantime what would happen to our relative international position? If all our surplus were consumed and if our techniques were slowed down or destroyed, how long could we stay in foreign competition? And in what way would we be able to resist the real and rapid advances made by the Soviet Union? What would happen to the country’s military strength which vitally depends on our most rapid development of efficient methods of production?
It can thus readily be seen that the opening of the warehouses to the hungry and the forcible reopening of the factories to the unemployed can only be the result of revolutionary action to destroy capitalism and can not at all be made to fit into the framework of the capitalist mode of production. Only a fool or a Communist could support such a proposition.
Now our Mr. Meany, if anything, is not a Communist. God and Pope forbid! Besides, he does not want in the slightest to open the warehouses to the hungry and the factories to the unemployed. The fact is, he is not directly concerned with the unemployed except as they affect his dues paying organizations. He is concerned primarily with the wages of the employed. It is wages that he wants raised in time of depression, reduced markets, and falling prices. That’s all! A very reasonable and practical man, indeed. Fit to talk business with any business man.
Now let us suppose for a moment that Mr. Meany, in control of all the unions, could enforce the demand for higher wages, even in ordinary times, for the entire working population. Here most people would say that this would mean a general rise in prices, since the price of labor power is part of the cost of production and with the rise in costs there would be a rise in prices. This, however, is NOT correct. A general rise in wages, not as a result of temporary factors such as demand for labor or for commodities being greater than supply, but as a permanent factor of redistribution of the total national product, could only lead to a decrease in the rate and mass of profit. The workers share would increase, the capitalists share would decrease. The capitalist, together with those directly depending upon him in society generally, might have to pull in his belt and reduce his revenue expenditures. Luxury industries catering to the wealthy would decline and industries producing commodities necessary or available to the workers would increase. Capital would shift away from one direction and more toward another. And, it might be argued by Meany, that this is all to the good. There has been a “fairer” and “better” distribution of wealth.
But, and this is the most important and vital matter, the reduction of the rate and mass of profit is impossible for capitalism to tolerate because it also means the reduction of the rate and mass of capital reinvestment and capital accumulation. It would mean that the rate of progress of our capitalist civilization would slow down. The workers might have a better life for the moment, but our relative competitive and international position, especially vis-a-vis the Soviet Union, would take a drastic fall. Not the capitalists, but labor, would be in complete control of the situation, and “creeping socialism” would have been installed with Savior Meany in the saddle.
Now how much of an increase should the workers receive, assuming that they can get such a permanent general increase in the share of the total product? Meany is “reasonable”, he says, he does not want much; he only wants the total surplus product! And if he can take any considerable increase, would he not have the power to take all? History shows repeatedly that where one has the social power to do what he thinks he “ought” to do, he generally does what he “ought not” to do. Ethics is not very efficacious in either politics or economics. Let us do what we must do, instead.
It might be that Meany’s advisors (as well as Gray’s) were unduly affected by the fact that a number of powerful unions had made long-term contracts which contained “built-in” wage increases added each year, including the present year when the economic downturn is upon us. How simple to say, if we can make long-term contracts for additional increases regardless of the economic conjuncture, why can’t we extend these contracts indefinitely? But it is one thing to make a pledge during periods of prosperity, it is another thing to try to collect during times of depression!
At any rate, one can readily see that such a demand on the part of labor for a permanent general increase in the total product is fundamentally a revolutionary demand that must destroy capitalism at once. It can only be enforced by a revolutionary working class, which, if it were truly revolutionary, would not undertake to act in such a silly fashion but would move outright and forthright for the physical possession and ownership of the factories themselves. Here, again, with Meany, as with Gray, the offensive is merely with the tongue.
It is clear that before organized labor could get a considerably higher share of the total national product it would have a real struggle on its hands. The owners of industry, faced with a great and serious loss of the ability to reinvest their capital in more efficient and better methods of production must use every means in their power to end such an intolerable situation. They would have to throw out labor as much as possible and to the most extraordinary degree replace living labor with the dead labor of better means of production. Technological unemployment would grow with leaps and bounds. But, as we have said, Meany is not really concerned with the unemployment, but with the wages of the employed that go to make up his dues.
Furthermore, the government, knowing that such action on the part of labor would destroy the international power of the United States, would have to step in immediately to put down any physical action labor might take to enforce such a demand as that of Meany. The government could also move through the power of taxation, greatly increasing the income tax on labor to take away the extra share and then by subsidy and subvention, by reduction of the tax on capital and by a multitude of other means, place back in industry and in the hands of the capitalists what the workers would have taken away. Thus the struggle would have to move to the higher plane of politics. Labor would have to form its Labor Party and the Class struggle would open into a new an decisive stage.
If such would be the results were labor by fiat to try to enforce a permanent higher wage than economic conditions called for during ordinary times, can one possibly imagine what should the labor unions try to get higher money wages in times when all prices are falling and when markets are becoming narrower? Coming from a sincere person such a fantastic utopian proposition would be pathetic; coming from Meany, it is ridiculous. Meany himself does not at all believe in it. He utters these phrases with the same sort of anachronistic cunning as Gray uttered his own formulas. Let us look into this calculated cunning a little bit.
As we have said, Mr. meany is a ripened product of the Building and Construction Trades Department and of the A.F. of L. As part of the building trades, Meany has experienced the many times the outside craft union officials, as representatives of the older aristocracy of labor, undertook actions that were detrimental to the A.F. of L. as a whole, and so he understands the special pleading policy of a Gray very well. Further, as the leader of the A.F. of L., he himself is responsible for the many times the A. F. of L. officials, as representatives of the skilled workers, undertook actions that were detrimental to the workers as a whole. The history of both organizations reeks with the repeated betrayals by their leaders of the over-all interests of the workers. This history Meany would continue.
Skilled workers, although greatly affected by a deep depression, are not as heavily hit as the unskilled. Skilled construction workers get a proportionately better share of jobs with the government. In factories the proportion of skilled workers laid off is often less than that of he unskilled. Even when factories are entirely closed down, maintenance and repair men are needed if only to prevent rapid and progressive deterioration of the instruments and means of production. Skilled workers can weather the storm better and if only they can work part time they can manage to get along. Because they are affected, however, they can afford to take a more aggressive position than during prosperity, so that Meany, as their borrowed representative, must talk more aggressively than Gray and speak of labor’s “offensive” prospects and not merely of "defense".
But Meany’s “offensive” is really a very limited one. It is true, now that the organized labor movement has grown to a size of more than 15 million members, including the CIO industrial unions, Meany can speak for more than just the skilled workers, but he can and does limit himself to the interests of those employed. As we have seen, his increased wage policy for the employed during a depression could only increase the ranks of the unemployed in a drastic and rapid manner as industry frantically would strive to meet lower prices by reduced costs. This is no concern of Meany. It is the employed who will pay dues and not the unemployed.
All this is only a continuation of the traditional policy of the A. F. of L. and Meany here is only following in the footsteps of Gompers and Green, his predecessors. Gompers was opposed to any State insurance for old age or for unemployment and this policy was carried on by Green and the A.F. of L. during the depression days of the 1930s. Only after the tide of opinion for unemployment compensation had become overwhelming and Congress had begun to act did the A.F. of L. reluctantly change its position. If, when the relief rolls became large in the 1930s, the Communist Party began to holler “We Want Work”, the A.F. of L. insisted on its policy of “No Work unless trade union rates were paid.”
During periods of depression the unemployed masses tend to become radicalized. They think of staging demonstrations, marches to Washington, street actions of all sorts. They tend to become dangerous elements ready for subversive propaganda. The employed workers, on the other hand, tend to avoid such actions in proportion as their work is steady and remains well paid. Mr. Meany knows very well that during a depression the strength of the old trade union organizations melts away in proportion as the workers are no longer in the productive process. He also knows that these trade union organizations can be the very strongest bulwark against any radical or revolutionary action. He wants to throw the trade unions against such action, if he can, but he wants to be well paid for it, and his demands for general increases for the employed union members is the form of his social blackmail.
Not that Meany really thinks he can get wage increases. But he is a good bargainer at union contract negotiations. He knows the trick of asking twice as much as you can get in order to stop the other fellow from cutting you down even further than you were before. Meany would be well satisfied to have maintained during the depression the present wage where skilled workers can average around $2.75 an hour. His goal is, then, really the same as that of Gray, but his demagogy is greater because he must dress up his aims in universal phraseology that would appeal to all. With him the phrase is a trick to get the unemployed to support the employed, not the employed to support the unemployed. It is also a trick for him to hold on to his job.
In times of depression when labor representatives meet management around the conference table on new contract negotiations, they will have to meet the question of wage cuts. Whether these wage cuts will be accepted and to what extent will depend on the given relation of forces in each case. There will be strikes and lockouts as demonstrations of such strength before the issue is finally resolved. This is a traditional trade union situation. What Meany here does is to give this struggle an “idealistic” formula to make himself a hero of striking workers, a formula, however, which could prove disastrous if translated into actual strike strategy.
To Mr. Meany, apparently, it would be a grand thing to see employed skilled workers coming out of the factories during the depression with a money wage of $150 a week and a real purchasing power of $300 a week, stuffing themselves in a neighborhood filled with unemployment,with unemployment compensation funds exhausted and relief rolls greatly enlarged. How typical Meany! How typical A.F. of L.! This is how Meany has moved to the “left” under the pressure of the CIO group in the new fused organization.
If Meany remains typical A.F. of L., Mr. Reuther gives us the typical utopian cunning of the CIO leader. Within the AFL-CIO hierarchy Mr. Reuther stands at the opposite pole to Gray whose Building and Construction Trades Department he has fought practically all his mature life. If the fusion of AFL and CIO has pushed Meany slightly to the “left”, however, this same fusion has pushed Reuther considerably more to the “right". Reuther is still the “radical” but is now the pal of Meany.
Mr. Reuther bitterly felt the effects of the last great depression. He grew mature in that depression. He rose to power on the back of that depression. He knows the attitudes of the unemployed and the power of the unskilled worker. He has a “socialist” background and was much impressed with atheistic Russia. He is familiar with technological revolutions and drastic social change. It is precisely in such moiling times that he hopes to become the real Leader of Labor, if not the President of the United States, and realize at least a part of his unlimited ambition.
The CIO organization was founded and tempered in the course of large-scale struggles against big modern industry of which the automobile concerns were typical examples. By this time in American history the unskilled had become organizable and had organized themselves in large numbers within the industrial unions. The struggles were sharp and disillusioning. The CIO labor leaders had to meet an aggressive and unscrupulous set of managerial representatives who stood for no particular Christian ideals but who used every trick they knew to win.
In modern large-scale industry, old-fashioned philanthropic owners who like to imagine themselves the patriarchal heads of large families give way to cynical career managerial professionals who would like to take the cream for management, if they could, and give the skim milk both to the owners of stock and to the working force. Their character is reflected in the shabby brassy automobile advertising, in the heavily applied useless chrome adornments of their cars, in the shoddy methods of the automobile dealer and his “financial” deals. Their “industrial relations” practices, at the start, was most classically exemplified by the Vice-President of Industrial Relations of the Form Company, the notorious Mr. Bennett.
Labor leaders, in such an environment, are naturally conditioned by it. And Reuthers is no exception. He has absolutely no respect for this managerial group who have lost all prestige. He is as aggressive, ambitious, and power hungry as they. He exposes them whenever he can as rapacious fellows who like to bleed labor and the general public. He thinks the modern Labor Leader is as smart as the Manager, has as good an education, knows as much about organization and technology of industry as the Manager, and that should the Manager fail, the Labor Leader could well step in to lead the way. Just as the Manager considers Labor as his pawns, so Reuther considers the members of his union.
This, then, is the essence of Reuther’s “radicalism". Gray and Meany are concerned only with wages and the consumption of the workers. They are shoemakers, so to speak, who wish to stick to their last; not so Reuther. His is concerned with managerial problems of efficiency, production and productivity. Gray and Meany want to use the unions as conservative support to the government and to employers, blackmailing them in the process. Reuther wants to use the masses so that the Reuthers can become the Managers over industry. Here is the Stalinist Russian model that Reuther can admire at home. But the AFL-CIO fusion has amply shown that Reuther, Meany, and Gray are yet brothers under their skin and use utopian theories only as a cover for their ends.
What ties Ruether and the other leaders of the CIO industrial unions to the Grays and Meanys of the AFL is the basic fact that their power comes only from the employed section of the workers in their particular industries, and that among this employed section there is an ever growing important group of skilled mechanics and technicians. Furthermore, although there is a very rapid individual turnover in such industries as the automobile, yet those industries, representative of the greatest aggregation of concentrated and centralized capital, can pay relatively high wages in proportion as their monopoly practices stifle competition.
At the beginning, with its dramatic strikes and demonstrations, the CIO contained large numbers of radicalized unskilled workers in its membership who threatened to dominate the policies of such unions as the auto workers. This group could become the victims of the demagogy of the Stalinist Party and be used as vital force for Stalinist policy. Under such circumstances it would be very unwise to separate the more conservative skilled mechanics and technicians from their ranks and hand them over to an outside organization of the A.F. of L. which had not the slightest skill in fighting the Stalinists, especially when to turn them over to the AFL meant the management would have to pay higher craftsmen rates. It would be far better, indeed absolutely necessary, to develop the skilled mechanics as the leaders of the new unions so as to render these industrial unions rally safe. Hence the victory of Reuther and the group of leaders who came to dominate the CIO. Better a Reuther than a Martin who might be dominated eventually by the Stalinists. Reuther, indeed, is a product of the policies of the management whose guts he pretends to hate. “Radicalism” is still a far ways off from revolutionism.
A mutually satisfactory compromise between management and Reuther could very easily be worked out. First, management would resist the skilled workers going over to the A.F. of L. and would consent to their becoming part of the CIO on condition that these skilled elements dominated the new unions and diluted any anti-capitalist feeling the unskilled workers might have. Second, the unskilled workers could join the industrial unions but they would have to be controlled not only by the new union leaders but by the institution of the check-off which would make the ordinary member helpless actively to protest the actions of these leaders by refusal to pay dues. Third, the new unions must not resist the terrific technological changes constantly being introduced in the modern industries, since this would especially mainly affect the unskilled workers and would leave intact the relatively stable force, the better paid skilled worker and technician. As can be seen, the CIO was no I.W.W. and Reuther no Big Bill Haywood.
The ravaging effect of technological unemployment, which with the greater application of the principles of automation, affected not only the poorer unskilled workers but entire plants with their “older” layers of skilled workers as well, could not but result in howls of anguish from the members of he CIO unions represented by Reuther. Reuther was too close to management and to an understanding of the necessity of constant productive improvement to protest the introduction of those new technological practices. He could, however, make some gestures of protest against their effects. The result: the utopian panacea of the Guaranteed Annual Wage, a plan so blatantly utopian that even Meany could not endorse it (especially after the Building and Construction Trades Department showed its active hostility to it) although the AFL- CIO fusion was then in the making and Meany needed Reuther badly.
Insofar as the Guaranteed Annual Wage panacea resulted in merely the establishment of supplementary unemployment benefits of one sort or another, the matter does not concern us since all that happened was the setting aside by the employer of a fund for regular employees who had worked for a certain time to be paid in stated amounts periodically for a limited duration during lay-off or unemployment periods. The amount of the fund was calculated and deducted from what would have been a general wage increase granted to all the employees at once. Instead of a certain general wage increase given then and there, there was a forced saving fund in the guise of possible deferred payments to be made later.
Any ordinary trade union leader might have demanded these additional fringe benefits in the normal course of labor contract negotiations. Reuther is different, however. Like the automobile industry itself he must fanfare extensively each new relatively insignificant addition of flashy chrome plating as a new “revolutionary” achievement. In this case the mountain labored and produced a mouse.What was the “theory” enunciated by Reuther supporting the Guaranteed Annual Wage panacea? That is what is of interest to us now. We can briefly summarize the “principles” as follows: The employee has a vested interest in his job. He should not be thrown out of his job because of technological improvements (the question of depressions was secondary to that of technological unemployment in 1955). If his job is no longer necessary he should be paid full wages just the same. This would put great pressure on employers not to discharge or lay-off any workers.
To Reuther, the automobile industry was a good place to inaugurate this new plan since it was guilty of monopoly practices and sold its commodities far above their values, far above what they would have to sell them were competition free in this field. Part of this excess profit made by the automobile companies should be shared with the automobile workers.
With Reuther the Guaranteed Annual Wage fantasy was connected with his demands that the greater the productivity of the automobile industry, the more the worker should be paid. In his contract negotiations he had already won wage increases based on average increased productivity due to technological improvements. Such contracts bound him not to fight against these improvements and this is what was important to Management.
But under capitalism the worker can not possibly have a vested right to his job. The whole progress of our society consists in the production of commodities with less and less labor. Technological improvement are introduced precisely because the means of production can be workers with less labor. If now the displaced worker were to be paid anyway, either the improvements would not be introduced or the improvements would have to correspond with an enormously increased market so that the same number of employees could be used, other factors remaining the same. Since the market could not permanently expand at the same rate as technology advance, especially since the prices would tend to remain higher because of the Guaranteed Annual Wage, the ultimate result would be a slowing down of the rate of progress and the advent of general stagnation.
Furthermore, whatever technological improvements in production are made in the automobile industry are NOT the result of the automobile workers. Auto workers may produce more in this case, but all they do is operate different machinery or use different methods. Let us suppose, for example, that the automobile industry puts in a lot of new machinery invented in the workshops of machinery plants so that automobile articles can be produced much more rapidly by means of this new machinery with the same amount of labor force. The credit, if anything, should go the the machinery industry that produced the machines, and if any workers were to get wage increases on this account, it might be the machinery workers, not the automobile workers who simply use the new machinery with the same amount of labor as before. Is it not utterly ridiculous for workers who may have to press a button on a new machine to produce items far more rapidly than before with less expenditure of effort to claim that only “they” are responsible for the greater productivity and that only “they” should get wage increases in proportion as the items are produced more rapidly?
As a “socialist” Reuther should have been the first to understand that all new inventions and improvements are basically the end result of a complicated social process in which an infinitely large number of thinkers and doers have played a part. Indeed, socialists have long criticized patent rights giving individual inventors monopoly rights precisely from that angle. But at least the inventor has played a certain role for which society can well be grateful and generous. How does this possibly concern Reuther who as an inventor, can only invent excuses why he should tax the application of any invention or improvement in the automobile industry?
The fact is, furthermore, under a capitalist system, it is not Labor that is responsible for the introduction of new machinery into the productive process, but precisely Capital. It is the profit in the hands of the capitalists, reinvested back in industry that is the driving force of all our industrial progress. It is management that must decide what to do with the funds placed at its disposal in the light of market conditions and current costs. If labor takes over this function, it must take over the management of the production process itself. Of course, this is just what Reuther is not averse to, so long as it is not Labor but the Labor Leader who is in the saddle.
That the automobile industry presumptively could agree in its labor contracts to wage increases based on increased “productivity” is simply the result of the fact that the automobile industry does engage in monopoly practices and that, at the expense of all other industries and the general public, it can keep wages and prices higher to a certain extent than what they would be otherwise. All that the automobile contractors simply did was to grant a limited wage increase each year and labelled it “on account of increase productivity". Any label could have been given. It is simply a case of the automobile industry taking a disproportionate share of the total wealth for for itself at the expense of all others and granting relatively higher wages to its workers. What the others lose, the automobile industry gains. Such a situation could never become the prevailing one for all industry.
So, behind the chrome plated junk of the Guaranteed Annual Wage lies the same sort of special pleading that characterizes automobile advertising generally. In his guaranteed Annual Wage plan Reuther did not speak for all labor, but only for automobile labor, or labor in monopolistic industries. He did not speak for the unemployed, but only for the employed in the particular industry where “his” workers can pay their dues and assessments and give him the opportunity to strut the stage.
The principle of the worker having a vested interest in his job could only have the most destructive effect on the progress of our country under our present mode of production. Management could not possibly think of hiring new workers, for example, under such a plan since it would have to keep them for at least a year. All new enterprises or expansions of the old would have to function entirely by means of improved machinery and new investment in means of production. When each new “vested” worker died or had to retire, his place would be taken by new machinery. The masses of youth and unemployed entering the labor market would find themselves locked out of the productive process.
Capitalists would also be hindered in taking advantage of seasonal or exceptional opportunities since they could not enlarge their labor force except under severe penalties. On the one hand, if temporary and seasonal work were excepted from the plan, soon these exceptions would become the rule.
In any event, the Reuther unions, entrenched in the factories, would earn the legitimate hatred of all the unemployed barred forever. Each time the unemployed demanded a share of the work, the "vested interests” of the entrenched worker would be mortally endangered.
But if Reuther really meant business about the Guaranteed Annual Wage to deter unemployment even for his own members, the present moment when a serious depression is upon us, is precisely the time when he should all the more insist on its adoption. Now considerable numbers of workers are being laid off in all industry, and especially in the automobile industry. Nevertheless, it is just at this moment that he has dropped the Guaranteed Annual wage panacea for unemployment. Now he has a new panacea. Exactly at the time of the depression, when prices are falling and markets constricted and profits more difficult to make than ever, at this very time he comes out for—no less—profit sharing!
Meany and Gray are far more orthodox than Reuther. They want to improve purchasing power of the workers by maintaining or even raising wage levels during times of depression. They are not concerned with profits as such, knowing that the stress on profits is utterly pointless under present circumstances. Not so Reuther. He is a “new type” labor leader. He wants control over the industries and wants a direct hand in all management procedures, especially in the distribution of any profit made.
This great concern of Reuther over “profits” makes him a great hero in the eyes of unthinking socialists and radicals since he dares even to raise an issue others are afraid to talk about. They fail to recognize Reuther’s demagogy for what it is—unbounded. And an excuse for him to raise a $50 million “strike fund” entrenching his power still further.
In order to show that he is no “communist” (which is true, although he has much in common with Stalinists), Mr. Reuther does not want to take all profit away. His proposal is simply that the workers should get a share in all profits made by the automobile industry over and above 10% net profit after taxes. The amount of profit over 10% net after taxes would be divided three ways: one quarter to labor, one quarter to the public in reduced prices, and the other half for management and/or the owners.
As a practical matter, many industrialists could well afford to agree to Reuther’s peculiar profit-sharing plan during a depression. First of all, it will be an exceptional case where capital will make 10% net profit after taxes during a depression, especially with the right taxes now current. Second, unless there would be complete control by the union over all purchasing and sales and over all productive and administrative costs, including salaries of management, it would be a simple matter to see that profits over 10% did not exist. Rather than split the profits with the workers, capital would have to reinvest into industry the means of production that would only exacerbate the very causes leading to the depression.
But what Reuther is really aiming at is control over industry, not workers control which could only come through revolutionary action, but bureaucratic Labor Leader control. His talk about reduced process is the merest demagogy since he knows that in a depression prices will fall any way and even more than the amount calculated in one quarter of the balance after 10% net profit after taxes have been deducted. If anything his efforts would keep prices from falling.
As for his talk about management taking 50% of the remainder over 10% net after taxes, does he really believe that he will regulate the salaries of management or decide for them whether they should get an increase, or a wage cut, and how much? If he could enforce this, he would really be in the driver’s seat. And of course his plan of control must also include control and inspection of the books and records of the Company so that he can supervise their actions! In exchange for this power, Reuther would be glad to give up anything material for the workers of this union, since he must know that his plan of profit-sharing would give them nothing anyway.
If we examine this new plan of Reuther’s we see that it has nothing at all to do with the unemployed or with the depression except to use this period of discontent for his purposes of bureaucratic labor official control. Apparently, here, as in his previous panacea of Guaranteed Annual Wage, Reuther is not concerned with the millions of new workers thrown on the market seeking work and not being able to find it. His Guaranteed Annual Wage, as we have seen, would greatly hinder new employees from being hired even in times of prosperity. But now even those working could not be safe from discharge.
Suppose, under the profit-sharing plan, for example, a 10% net profit could be obtained only by lowering costs by the introduction of new machinery and the removal of surplus labor from the productive process? Would Reuther want the excess profit over 10%, or would he want the Guaranteed Annual Wage? Surely he could not have both. Apparently, if Reuther did manage to get control of the automobile industry he would see to it that the 10% net profit was maintained in the name of the labor industry he would see to it that the 10% net profit was maintained in the name of the labor movement, even if he had to see that monopoly prices were even raised and he would defend his position by pointing out that only in this way could labor increase its income and the country saved from depression.
Within the automobile union Reuther’s demagogic utterances find most response not in the rank-and-file ordinary laborer, but among the skilled workers who must be retained even when production is reduced, and especially among the bureaucrats of the union who aspire to take over managerial functions. Reuther’s union machine is built on precisely these elements. Now that he has consolidated his own position and has moved into the A.F. of L., it is natural for him to break with the Stalinist elements in the union whose support he needed when he was fighting the A.F. of L.
These Stalinist elements have their own utopian slogans and have developed their own fraction and groupings in opposition to Reuther. If Gray can be said to occupy the position of the “right”, and Meany the “right center”, with Reuther the “left center”, this Stalinist opposition claims to be "left". They have their own “remedy” for the depression. In anticipation of the time when they will again raise their old slogan for the unemployed “We Want Work”, they wish to make room for the unemployed by their new slogan for the employed “The 30 hour Week (at 40 hours pay)". We place the 40 hours pay in parenthesis because we know from experience that they will later be glad to give up this part if they can get the 30 hour week at less than the current hourly wage.
It was during the last great depression that these same elements, under the direction of their Russian bureaucratic masters, staged demonstrations hollering “We Want Work". They didn’t say very much then about the pay, at least at the start. It was only when the A.F. of L. took the position “No Work without Trade Union Wages”, that they added to “We Want Work” (in parenthesis, you might say) the clause “…at union wages.”
American Stalinists have no independent life of their own. They take now, as they took during the last depression, their slogans from the Stalinist bureaucratic managers over labor and industry in Russia. If these Russian nationalist Stalinists have contempt even for their own workers, one can imagine the contempt they have for the workers of other countries, particularly the American. All the workers are good for, in Russia, is to work. And Stalin provided plenty of work for all, including forced labor camps and death for striking, or for quitting work without permission, or for travelling without a passport, etc. If this was good enough for Russian Stalinists it was good enough for American Stalinists.
The cunning Stalinists were outsmarted, however, during the last depression. Hitler, in Germany, gave the unemployed all the work they wanted both in forced labor and in the army. The Stalinists in Germany collapsed. And in America all sorts or work projects were undertaken by the government, some of which amounted to boondoggling, but a considerable number of which were necessary to the development of capitalist economy and growth. The Stalinists were then pushed into these projects to look more ridiculous than ever in the eyes of history. They were the laughing stock of the trade union movement. The American Stalinists, under Khruschev will be no different today, when, as we anticipate, again they will raise their slogan: “We Want Work (at union wages).”
But if the Stalinists holler “We Want Work” when they are unemployed, while they are still employed they demand less work, that is: “We Want the 30 Hour Week (at 40 Hours Current Pay).” Since they are opposed to the profit system, the Stalinists can not go along with Reuther’s "share the profits in a depression” farce. They want to appear as “sound” trade unionists stressing orthodox demands like Meany and Gray, but instead of wages, to stress hours of work. If they can get the mass of unemployed into the factories and unions, even at reduced pay, they hope to drive the Reuthers out of the union and take over power themselves.
Within certain limits it is very possible during a depression to share the work among the productive labor force and instead of having a 40 hour work week to have a 30 hour part-time work week. Especially is this the case in certain older type of craft unions where a certain brotherhood has developed and all feel they ought to share alike. In the automobile industry, however, this would mean a greater weight thrown in the scale for the unskilled and a better chance for him to dominate the skilled. The Stalinists rely on this.
But the Stalinists know very well that they can no more realize the 30 hour week in a depression with 40 hours prosperity pay, than Meany can realize his increased prosperity pay scales in times of depression. In fact, Meany’s plan is more “radical” for under Meany’s plan the worker would be getting not 40 hours pay but enough pay to consume the entire surplus product now glutting the market. At any rate, the Soviet managers would welcome either plan for America since it would so utterly destroy American capitalism as to make the surrender of the country to them absolutely inevitable. It should not come as a surprise to see the Stalinist faction within the A.F. of L. support the Meany proposal in some cases and try to move it from mere phrases into Reuther type action.
For the Stalinists, like the Reuthers, are men of action. Both want power over labor. Both want to control the destiny of the country. Both use their particular utopian slogans with tongue in cheek. Both want political activity to spring up and to use the masses in radical fashion in line with that political activity. They are not like the Grays and Meanys who would not lift a finger to carry out their own phrases. The Grays and Meanys, as “realists” profess to have no “principles” but have them; the Reuthers and Stalinists, on the other hand, profess to have “principles” but are unprincipled.
The future is not with the Grays and Meanys, but only the past. Rather it is the dangerous demagogues whose phony phrases can get mass support who must be watched. The workers, of course, even in a depression, will engage in all sorts of struggles to prevent wage-cuts from going too far or to take advantage of specially favorable circumstances. To such workers in struggle it is not the Grays and Meanys who will become their worst enemies but the demagogues who take leadership over these struggles with crack-pot phrases that can only lead them to disaster.
It is interesting to see how Reuther fights his Stalinist “left wing” proposals for strike action for the 30 hour week (at 40 hours present pay). He declares himself opposed to the reduction of work hours at this time because of the threat of the Russian Sputniks and the dire need of the United States to work as hard as possible on nuclear weapons and war materials to meet and defeat the Russian menace.
Here is a very popular and patriotic formula: End the depression by increasing military work. War with Russia will do the trick, but war with lessened profits. Truly, is not Reuther fit to run for President of the United States?
And, in the meantime, the depression hangs more and more heavily over us.
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