Global Turmoil
Capitalist crisis, a socialist alternative
Section One: World Relations
Chapter Nine: The Americas
Latin America, despite the claims of bourgeois commentators to the contrary ("Latin America looks fit enough to fend off crisis", British Financial Times), has been affected by Asia’s crisis, as is the case with all the ‘emerging markets’. It is estimated by the World Bank that this will result in a drop of 1.5% of Latin America’s growth for 1998. Low commodity prices still have a severe effect on most of the countries of Latin America dependent as they are on exports of primary produce.
Venezuela has been severely affected by the drop in oil prices, notwithstanding the ceiling on production that has been introduced by OPEC on oil production in 1998. In 1997, oil generated four-fifths of Venezuela’s exports and represented 72.2% of its gross domestic product. Venezuela’s budget projections are based on the price of $13 a barrel, compared to $8.73 for the ‘basket’ of its ‘crudes’ and an average price, last year, of $11.27. Clearly the country faces a period of austerity which the Venezuelan bourgeoisie fears would boost the electoral prospects of Hugo Chávez, a ‘radical populist’ who led an unsuccessful military coup in 1992 and has been ahead in recent opinion polls.
Mexico and Venezuela stand to lose $920m and $843m respectively for every dollar that the price of oil falls. It will also have a significant spin-off effect in Colombia, Ecuador and many other countries in Latin America. The drop in the price of copper has severely hit the Chilean and Peruvian economies. It is true that many Latin American companies are still making historically high rates of profit, but this cannot last, particularly when the crisis bites in the USA itself. Even Argentina has had to cut back spending plans and severe poverty exists among big sections of the Argentinian masses.
In Brazil, the financial and economic crisis has had serious repercussions. There is intense polarisation in the country. This has exploded in the north-east of Brazil, which contains some of the poorest sections of the Brazilian population. There is widespread hunger. This has triggered a social explosion of the kind that took place at the end of the 1970s and 1980s. Organised groups of the disabled and the hungry have raided supermarkets and distributed food. Convoys of lorries carrying food have been stopped on the highways and food taken from them and given to the hungry. Eighty percent of the movements have been spontaneous but also the landless labourers’ organisation, MST, has organised some of them. At the same time, the government is carrying through a neo-liberal policy, which meets with increased resistance from the masses. Sixty-one of the 62 large universities were on strike in June and the movement involved both teachers and students. The government was forced to pay the salaries of strikers.
The coming election in Brazil is one of the most important for the country and the rest of Latin America. Opinion polls put Lula, the PT’s candidate, level with the candidates of the governing party. The PT has moved to the right and Lula is linking up with the PDT of Brizola for the elections. In fact, Brizola has taken a position to the left of Lula on some issues and has called for the reversal of all privatisations. Big opportunities are opening up for the forces of Marxism in Latin America both in the mass movements and on the left of the PT as well as the PSTU.
If the major countries have been affected by the crisis, it has meant a catastrophe for the already poverty-stricken countries and regions of Latin America. The crisis in Mexico continues with the simmering opposition in Chiapas. Although a rural movement of this character cannot succeed by itself (and the Zapatistas have downplayed their original socialist phraseology), nevertheless, we cannot underestimate the effects that the struggle has had on the formerly conservative native population of Chiapas. The British Guardian reported in January that, "On the ground… there is a new confidence amongst the Indian people. Indian men and women used to walk with heads bowed; now they look you in the eye and discuss world politics. ‘Sometimes you go to bed with a sore head from thinking so much,’ one villager said after a lengthy discussion on the Irish peace process." The state governor of Chiapas and the PRI will undoubtedly move to crush the movement at a certain stage but will find it difficult against the background of an increased radicalisation in the urban areas.
In Colombia, the election of Pastrana, a former newscaster and son of a former conservative president, opens up a new situation. There was a big turnout in the election and Pastrana achieved the greatest number of votes of any candidate in the country’s history. Pastrana has vowed to talk to the guerrillas in an attempt to end a 35-year conflict. Nevertheless, he is clearly seen as a candidate of business and takes power against the background of a catastrophic economic situation with official unemployment of 14.5% of the workforce and more than 20% inflation.
The United States of America
The US is "the anvil upon which the fate of humankind will be forged". It is the world’s major capitalist power. It is the only real military superpower today. It is the economic engine of world capitalism, and the US proletariat will be decisive in the struggle for world socialism.
In terms of consciousness, the US working class lags behind its counterparts in most of the world, particularly the European proletariat. In the past class relations softened in those periods when US capitalism was able ‘to deliver the goods’ in terms of rising living standards at least for the majority of the population.
The class gulf widened, however, and became more generalised on an all-US scale when economic progress slowed or broke down. Then the class struggle developed with ‘American speed’ and ferocity. The period prior to the First World War showed some of these features in the epic industrial battles at this time, and was expressed politically in the one million votes for the Socialist Party US presidential candidate in 1912, Eugene Debs (this is the equivalent of about five million votes today).
Similar developments took place after the First World War with a colossal radicalisation of the most advanced workers under the influence of the Russian revolution. Following the 1929-33 Wall Street crash, the US workers poured into the new unions, engaged in some of the most inspiring industrial battles, in which the Trotskyists played a key role, for instance, in Minneapolis. Hundreds were killed and wounded in the 1930s and the question of US labour breaking from the Democrats and forming its own party, the Labor Party, was posed.
The knot of history, however, was broken by the Second World War, which saw US capitalism emerge enormously strengthened as the major capitalist power on the globe. Notwithstanding this, a huge strike wave convulsed the US in the post-1945 period, exceeding at one stage even the mighty revolutionary strike wave of the 1930s. However, the colossal development of the productive forces allowed the US ruling class to grant significant concessions to the majority of the US working class.
This did not mean that the accumulated historical contradictions within US society were overcome. Searing racism and the effects of the movement for colonial liberation led to mass movements of the black population in the 1950s and 60s. Also, US imperialism’s role as world policeman built into its foundations the explosive material of world capitalism, as was shown in the Vietnam war, which still exercises a powerful effect on the consciousness of the US’s people.
Reality of the US economic ‘paradigm’.
In the past, the economic largesse of US capitalism has guaranteed it a relative social stability; that is about to come to an end. The seven-year boom of the 1990s has hidden all the underlying weaknesses, which will be dramatically highlighted in the coming recession or slump. The US’s so-called economic ‘paradigm’, of low inflation and unemployment officially at its lowest level for 24 years, has hidden (or more accurately, been ignored by the US’s ruling class’s strategists) the serious economic decline and the continued erosion in the living standards of the working class. In the fourth quarter of 1993, for the first time in nearly a century, the outflow of financial returns paid to foreign investors on the assets they held in the US exceeded all of the profits, dividends and interest payments that US firms and investors collected from their investments abroad. In the following year, 1994, the annual outflow was negative for the first time since 1914. William Greider in his book, One World Ready Or Not, comments: "The outflow of these so-called factor incomes reflected the nation’s true balance sheet in the global economy. They were the net sum of earnings on assets going both ways - the profits and interest payments foreigners got from what they had lent or bought in the United States minus what Americans got from their assets overseas."
As recently as 1980 the US had enjoyed a net surplus in ‘factor incomes’ every year of $35bn or so, equal then to 1.5% of the national income. The income of the US had exceeded the outflows by nearly two to one. This was the product of the massive foreign investments (and exploitation of workers) throughout the world by US imperialism. Now, comments Greider, "It was like a bill for interest due on previous borrowings. The negative flow was certain to continue and increase because it was based on the underlying debts and obligations that had been accumulating for 20 years, primarily from the US’s annual trade deficit with other nations. Cumulatively, since 1980, the US has brought $1.5trillion more than it sold in its merchandise trade with foreign nations. The trade deficit started modestly in 1975, exploded during the 1980s and, despite ebbs and surges, set a dollar volume record of $180bn in 1995."
This enormous gap was filled either by borrowing money from abroad in the form of government bonds and private borrowings, or foreign capitalists came to the US and bought up assets in Los Angeles, New York, etc. This added up to an "epochal shift of wealth, probably unmatched in human history in its size and speed, as the richest nation on earth swiftly redistributed wealth to others".
The British economist, Wynne Godley, has pointed out that the US went from holding a net surplus of foreign assets equal to 30% of its own annual economic output in 1970 to a debtor position by 1994 of -8.5%. And the situation, unless "corrected, is going to get much worse". Each year, the American economy is taking on new balance of payments deficits equal to 2-2.5% of its total economic output. This is covered by capital inflows and borrowing to make up the shortfall. It also means that the US’s foreign debt obligations were growing at a much faster pace than the underlying economy would have to pay for them. Wynne Godley has estimated that the US’s debt position in net foreign assets - now around 9% of GDP - would roughly double in five to six years, reaching 20% of the US GDP by the year 2000. Then, by 2005, it would reach 30% and, five years later, more than 40%. Long before this situation was reached, a seriously deflationary programme would have to be implemented.
The economy’s problems have undoubtedly been compounded by the majority of the US bourgeois falling prey to the same disease as their British counterparts. The maintenance of a manufacturing base is now perceived as not important; ‘services’ are the new engine of capitalism. Such ideas have contributed to the calamitous de-industrialisation of British capitalism. The Clinton administration has also embraced the false notion that the US service sector - banking, insurance, etc - which is producing a growing surplus in global trade, would eventually offset the nation’s deteriorating position in manufactured goods. Service exports were in surplus and growing, but they were no replacement for the production of real goods. The service sector would have to quadruple its annual trade volume immediately in order to reverse the trade deficit in real goods. Greider comments: "This was not just unlikely, it was impossible." A symptom of the de-industrialisation of US capitalism is that the employment agency, Manpower, is now the biggest employer of labour. There are also one million lawyers!
The problems with the US economy are undoubtedly compounded by the fact that it is the ‘buyer of last resort’ for world capitalism. The US absorbed "a generous share of the [world’s] excess production every year". In 1980 the US absorbed 27% of world vehicle exports, more than 41% in 1989 and then fell back to 23% by 1993. Germany, by contrast, absorbed only 8% and Japan, of course, a trivial share. The US took 15% of world exports in office and telecommunications equipment in 1980 and 23% in 1993. It absorbed 10% of all steel exports, 18% of heavy machinery, 9% of chemicals. One bourgeois economist wailed: "You got excess capacity and you can’t sell it any place? Sell it to the Americans. We’re also the market that props up development. If you’re China or Indonesia, Thailand or Korea, you achieve rapid economic growth by supplying the Americans. You run a trade surplus with the US and that’s how you can earn the capital to finance the rapid growth."
Notwithstanding Clinton and US imperialism’s enthusiasm for globalisation and its attendant policies of deregulation, the serious underlying economic position of US capitalism and, at a certain stage, growing unemployment, will lead to a clamour for measures to limit the import of foreign goods. Measures to extend ‘free trade’ have rebounded on the US.
Unemployment and job insecurity
NAFTA, originally proposed by the Republicans and continued by Clinton, put the US, Canada and Mexico in a ‘common market’. Clinton claimed that this would create 200,000 good new jobs for US workers by boosting US exports to the Mexican economy. However, two years later, Mexico was gripped by an economic depression. It was also used by US and foreign multinationals as a convenient low-wage export platform into the rich US market. The US deficit with Mexico soared and contributed to the growing US trade debt. Instead of benefiting the US, NAFTA’s effect was an estimated negative job loss of 200,000.
This seems to be contradicted by the drop in unemployment. But highly-paid jobs in manufacturing were being replaced by low-paid jobs (with many workers compelled to do two or three jobs). Many of these jobs were part time and ‘contingent’, that is, not permanent or secure. US workers who lost their jobs in the recessionary years of 1990-92, suffered a 23% drop in wages, on average, when they found full-time work again. 80% of male workers in the US have seen their wages stagnate or decline. The pay of workers on the median wage in the US has shrunk in real terms by 1% a year, every year from 1989-94. Indeed, over a longer period there has been a stagnation and decline of the real wages of US workers, for something like 20 years. Even Clinton has been compelled to admit, "Most people are still working harder for lower pay than they were making the day I was sworn in as President."
This goes together with insecurity. The number of managers, let alone workers, who feel confident about their job security has plummeted from 79% to 55% from 1982 to today. At the same time, there has been a fabulous piling up of wealth by the rich, Al Gore, in the 1994 presidential elections, stated that the richest 1% owned as much as the lowest 90%. Profitability has increased to "levels last seen in the 1960s". (British Financial Times)
At around 20%, the return on capital earned by companies in the S&P 500 index is well ahead of other industrialised countries where profits have also risen in this boom, but by an average of 10-15%. Now, however, profits have begun to slow down as the cycle begins to come to an end. On the other hand, it is now claimed that the wages of US workers have begun to improve, with a 2.6% annual rise since 1996. This is because of ‘tight labour markets’, low unemployment, low inflation, and an increase in the minimum wage. It is not uncommon that in the very last stages of an economic upswing, the working class manages to capture a greater share of the wealth it creates. However, the Economic Policy Institute in Washington, which produced this report (The State of Working America 1997-98), admits that: "American families are working harder to stay in the same place and have seen little of the gains in the overall economy."
It also reports: "Amidst positive overall growth, significant economic disparities persist as trends in wages, income and inequality in the 1990s continue to follow patterns set in the 1980s."
Most workers, the report says, have grown less secure, and the jobs created are less likely to offer health and pension benefits. Moreover, "Middle class wealth (the value of tangible assets such as houses and cars, plus financial assets, minus debt) has also fallen."
Significantly, it also points out the main reason for current income trends is a continuing wage deterioration among middle and low wage earners and white collar and some college educated workers. The growing discontent of US workers is not yet fully reflected in strike statistics.
Trade union strength
The crude figures on strikes and union membership show that US labour, under the leadership of predominantly right-wing trade union leaders (and tied to the coat-tails of the Democratic Party), has stagnated and, in some senses, has declined. The Wall Street Journal jeeringly declared early in 1998: "Union membership continues to drop in the US."
In the past, a boom or growth in production generally meant an increase in union membership. In the 1950s and 60s, when union membership peaked, growth in the economy created jobs and with it union membership. However, this was largely because of the growth of jobs in already unionised shops. In the seven years of one of the US’s ‘greatest economic expansions’, according to the Wall Street Journal, union membership "continues to fall, both in absolute numbers and as a percentage of the workforce". The AFL-CIO, the trade union federation of US workers, points out that its affiliated unions recruited 400,000 workers in 1997 but this was still not enough to produce a net gain. In the same year, an estimated 2.8 million jobs were created in the US and yet the number of workers represented by unions fell by 159,000 to about 16.1 million. The unions’ share of the workforce has dropped to 14.1% last year from 14.5% in 1996.
The labour leaders say membership numbers are not as bleak as capitalist spokesmen point out. Many of the AFL-CIO’s biggest unions have reported significant recruitment in the last year. The Teamsters, with 1.4 million members, claim they recruited more than 30,000 workers, while the Service Employees International Union, with 1.1 million members, picked up 58,000 workers. The drop in union membership is exaggerated, they claim, because many of the new workers recruited in 1997 have not yet shown up in the US Labor Department’s data. In general, workers are not counted as union members until they have a contract and are paying dues.
This stagnation or decline is in the teeth of significant attempts to increase union membership. John Sweeney, President of the AFL-CIO, pointed out on Labor Day to the increased resources thrown by the unions into recruitment drives. Of the nation’s 580 Central Labor Councils, 56 now have programmes that have trained 792 organisers. The Steelworkers’ Union has tripled its organising budget, the Carpenters’ Union is devoting half of its resources to new campaigns.
There are a number of factors that account for the present position of US unions, which similarly affect the union movements in other advanced industrial countries. The decline of manufacturing and heavy industry, where union density is at its greatest, is one reason. Another, and more important one, is the shift to the right, to a more openly bourgeois position (acceptance of the market, etc) of the union leaders. This acts to undermine and sometimes cancel out attempts at union organisation, even where they are successful at first. Militant methods and leaders have, in general, been the most successful. Those who are politically opposed to the capitalist system are the best union organisers. The swing of the trade union leaders to a pro-capitalist position carries with it the ideas of class compromise, ‘partnership’, and a reliance on so-called pro-labour laws and the bourgeois parties, which enact them rather than on militant class struggle and fighting policies.
In the past in the US, the ideas of ‘business unionism’ held sway in the summits of the trade union movement. Such ideas, however, clash with the new realities of the world of work in the US and the crisis facing the trade unions. What point is there in workers joining unions unless these new recruits see a palpable benefit in increased wages and changed conditions? Experience has shown that a union leadership, which is tied to class collaboration and is completely out of touch with the wages and conditions of those they purport to represent, is incapable of mobilising effective action against the employers. Therefore, new recruits in this period have tended to drop away as the right-wing trade union leaders show they are incapable of standing up to the bosses’ offensives.
This is particularly the case in the US where the class struggle (more than in Britain for instance) has always contained an element of civil war when industrial battles take place. Nowhere is the resistance to the unions more brutal, open and unbridled as in the US. 32% of US companies contesting recognition go on to sack union activists, in violation of the law, and then pay the penalties (which they view as a kind of anti-union licence) for violating the law. The US National Labor Relations Board charged corporations with committing ‘unfair labour practices’ in no fewer than 12,000 cases last year.
The case of a female worker in Landers Plastics gives a little glimpse of the lengths to which the vicious US bosses will go to prevent union organisation. She signed up a majority of her co-workers into the United Steelworkers Union and petitioned for a recognition election. The terrible conditions in the plant had generated enthusiasm for a union. 77% of Landers workers had been injured on the job, including six with fingers amputated in unguarded machinery. She was then slandered by the bosses for ‘sexual harassment’ of two male bosses! She allegedly "pulled down the trousers of the two… and made disparaging remarks about their penises". After a long battle, the female worker was reinstated into the Landers Plastics plant. The government had fined Landers for 63 ‘egregious’ safety violations and charged the company with 71 unfair practices. But Landers continues to put off a recognition vote. Disconsolately, this brave union activist declared: "How can I win when women come to me crying, scared for their jobs. Of the 200 workers who signed up for the union over two years only 15 remain."
Another employer took revenge on a New Orleans pipe fitter after he spoke up for union in his shipyard. They made him sit for weeks in a tiny rowing boat in the Mississippi River and instructed him to fish out logs. When he refused, Avondale, a major defence contractor, sacked him and 20 other union supporters. After four years of litigation, the Labor Board ordered that they all be reinstated. Meanwhile, the union’s drive for a contract had withered and died.
A whole industry of ‘management/labour relations’ lawyers in consulting firms are hired by the bosses in massive ‘union-busting’ drives. They charge upwards of $1m to defeat union recognition elections. One union organiser told the correspondent of The Observer in Britain: "It’s surprising we win any elections at all." In fact, the unions have lost 60% of recognition elections in the last seven years. This is despite the fact that the unions only request elections if they have a solid majority of a shop’s workforce on record in favour of unionisation. The unions lose because in the months between the government’s scheduling of an election and a vote, massive intimidation takes place of workers.
One study found that 62% of US industrial companies threaten to move or shut operations when faced with union votes. Such threats are illegal, but a violation "simply affords another opportunity for law firm consultants to delay the election while the Labor Board investigates". As The Observer comments: "This is a cautionary tale," for the unions in Britain who, under New Labour’s ‘Fairness in the Workplace’ proposals should have union recognition election laws similar to the US on the statute books soon.
The trade union leaders in Britain hope this legal structure alone will "help them recover from the devastation of the Thatcher years". But as The Observer continues: "US-style recognition elections are a leaky lifeboat."
Recent bitter disputes
Notwithstanding the huge obstacles in their path, the working class will move into struggle. The unions in the US will be filled out as the mass of the working class, propelled by events, will flood into them and, in the process, begin to transform them. It is true that for the first time in 100 years union membership has dropped below 10% of workers in the private sector. Also, there were only 29 major strikes in the US last year, the lowest ever. In the three decades before Reagan came to power, the unions called an average of 303 major walk-outs each year. Nevertheless, the bitter battles that have taken place in US industry in the last period are a harbinger of the convulsive movements of the US workers to come. The bitterly fought 1997 Teamsters’ strike resulted in a partial victory for the workers. However, UPS remain unreconciled to the outcome of the strike and are attempting to take back some of the concessions forced on them last year. A Teamsters spokesman has pointed out: "UPS is still very, very bitter about the strike, and very, very angry at the Teamsters."
By deliberately misinterpreting the contract agreed at the end of the strike on the volume of work, the company is trying to nullify the job creation agreement. No full-time union jobs have been created since the strike and the company has been reducing its workforce. UPS have 16,000 fewer part-time and full-time workers than a year ago and several thousand drivers have been officially laid off. The company is undoubtedly engaged in speed-ups, pressurising drivers to work more forced overtime and to work through their lunch hours.
Similarly bitter battles have developed in 1998 between bosses and unions in General Motors, in Bell Telephone, where 73,000 workers went on strike in August 1998, taxi drivers in New York, and in many other companies. The GM strike was one of the most significant. This is the biggest car company in the world, and with more than 200,000 workers on strike, production of a quarter of a million vehicles was lost and GM’s profits were reduced by $1.2bn.
The cause of the strike lies in the cutthroat competition between the giants of the auto industry, not just in the US but on a world scale. There is massive overcapacity, which, it is estimated, will be the equivalent of the total auto production in North America by the year 2000. Every car company in the world is involved in ruthless ‘cost cutting’, that is, wage cuts, speed-ups, etc. GM, which has massively reduced its labour force in the US, has still not been as ruthless in this respect as many of its competitors. It is an open secret that it needs to ‘shed’ at least 40,000 hourly workers. Little wonder then, as one union representative declared in the British Financial Times: "At the core, it is a feeling of insecurity, a fear of the future and a deep distrust of General Motors."
In competition with "hi-tech, non-unionised Japan" (The British Independent), US car manufacturers have savagely cut ‘inefficient’ plants, especially in unionised centres like Flint, and have sought to open new ones with non-militant labour forces. GM has moved much of its labour-intensive activities to Mexico, which has reinforced the suspicions of the union, the United Automobile Workers (UAW) that GM wants to move out of the rust belt altogether. Over the last 30 years, GM’s market share has dropped from 50% to 30% which, through confrontation with the unions and ‘labour costs’ savings, it hopes to put into reverse. The strike ended after two months with a stand off but with the ground prepared for further battles. A Flint union activist stated: "GM is claiming communication with the union has been re-established. I can tell you… that is BS [bullshit]. We don’t trust each other as far as we can spit."
Labour and Capital battles
The ground has been prepared for an almighty collision between the arrogant US ruling class, bloated by its victories over labour under Reagan, by the fabulous profits piled up in the 1990s, and an increasingly angry US working class. John Sweeney, President of the AFL-CIO, on Labor Day gave vent to the pent-up frustration which is threatening to burst out when he denounced the "cruel, winner-take-all economy", and bitterly condemned the employers for manipulating the labour laws to discourage union organisation.
One of the keys to any fight back of the unions is a concerted drive, particularly in the private sector in which union density has decreased to less than 10% last year from about 27% in the early 1950s. In the public sector, union membership is still growing. It is workers in the ‘contingent’ sector, some with ‘permanent’ jobs but in reality very insecure, as well as those in part-time working, who can become a major centre for union organisation.A pointer to future developments is the successful drive by the Canadian Auto Workers Union (CAW) in unionising a McDonald’s outlet in Canada.
It is possible that an economic collapse in the US could further undermine union strength. But the accumulated anger of the last 20 years, at low wages and deteriorating conditions, is also a guarantee that huge defensive battles are likely once the bosses attempt to lay-off workers. An actual overall growth in union strength, however, will probably have to wait a further upturn in the US economy after the coming slump. But as in other countries, a politicisation, a greater class awareness, will inevitably develop from the changed situation that will result from this.
Perspectives in the unions are organically connected to the character of the union leadership, which is dominated overwhelmingly by the right-wing. In the Teamsters union, the election of Carey represented a shift towards the left within that union and the trade union movement as a whole. That, however, has now been thrown into reverse by the removal of Carey and his expulsion from the union by the legal intervention of government-appointed US Federal officials. He was found guilty and stripped of his post and barred from the union because of the alleged embezzlement, by his campaign organiser, of union money that was used in his election battle for the presidency with Hoffa. Carey partly contributed to his own downfall because he opted not to fight, as did the former rank-and-file Teamsters, the TDU (Teamsters for a Democratic Union). Hoffa will now probably win the run-off for the vacant presidency. Although Hoffa may demagogically put forward some radical demands, especially in the election campaign, he is the candidate of the right who wishes to return the Teamsters back to the dark days of the past.
Similar battles between the right and incipient left exist throughout the US trade union movement. Sweeney is really on the right of the unions but is more sensitive to the pressures from below than the Kirkland wing of the AFL-CIO.
The right was looking to strengthen its position with a proposed merger between the National Educational Association (NEA) - which is presently outside the AFL-CIO - and the American Federation of Teachers (AFT). In general, Marxists stand for the greatest possible amalgamation and combination of workers in the trade unions. But when it leads to the strengthening of the bureaucratic grip of the right-wing trade union officialdom, then there are occasions when proposals for mergers must be opposed. The NEA is already the largest union in the US with 2.3 million members, and would add 900,000 members to its strength if it merged with the AFT. The combined union would account for 20% of the membership of the AFL-CIO, and would have been used by the most conservative elements within the AFL to mount an offensive against the current leadership.
However, considerable opposition exists in the NEA to the merger terms which would have ended secret balloting and strengthened the national leadership. This would have undermined the rank-and-file’s right to take decisions in committees and assemblies at the base of the union. Moreover, the NEA has opposed merit pay and teacher testing, although in the past it has declared that it is more of a ‘professional organisation’ than a union. At the same time, it is not affiliated to the AFL-CIO and certainly its members would be repelled from joining a body which is linked to the Clinton regime, which has pursued policies in education of a narrow and reactionary character, which are now being borrowed by Blair in Britain. The opposition prevailed and the merger was rejected at a special union conference in July.
Perspectives for the Labor Party
The looming economic slump in the US will lead to a period of unprecedented ferment and turmoil within the trade unions and the broad labour movement in the US. This will lead, at a certain stage, to the search by workers for independent political representation, a new mass workers’ party, in the US.
The present Labor Party could be an anticipation of how things will develop in the future. It is a small, embryonic formation with a union base. The individual membership is 15,000 and one million are affiliated through the unions. Ten small unions and hundreds of local labour bodies have recently joined the Labor Party. At the Labor Party Convention in November, it is expected that the non-electoral stance of the Labor Party will be ended. This will be a step forward with the possibility of the Labor Party in the future standing in elections. However, in the short term, this is unlikely, as the trade union leadership is not yet ready to break decisively with the Democrats.
It is not possible to determine exactly how the Labor Party will develop. Certainly the conditions are being created in the US, particularly in the event of a serious economic crisis, for the evolution of independent workers’ political representation. Even Jesse Jackson, currently an adviser to Clinton, has summed up the differences between the Republicans and the Democrats: "What we have got now in the United States is one party, two names. We’ve got Republicans and Republicans Lite." (The British Guardian, 3 June,1995)
Immigrant communities and ethnic minorities
The US section of the CWI has undertaken serious work within the LP over the past period, actively participating in the building of local chapters. Comrades on the West Coast have also undertaken important work amongst immigrant workers and communities.
The importance of this work amongst ‘minorities’ cannot be overestimated. Big changes in the ethnic composition of the US are underway. The rise in the young Latino population has now outstripped that of young Afro-Americans. Fifteen percent of the under-18 age group are Latino, a slightly greater proportion than Afro-Americans. By the year 2020, the Latino share is expected to rise to 22% with Afro-Americans at 16%. The US Census Bureau has calculated that in 2005, Latinos will displace Afro-Americans as the US’s largest ethnic minority; by 2050 they will account for a quarter of the population. Shortly after 2050, non-Latino whites will become a North American minority for the first time since the early colonisations by Europeans. The Latino population of the US has nearly doubled since 1980 from 14.6 million to 29.1 million.
The importance of acquiring a base amongst the Afro-American population, particularly the Afro-American working class, is vital. More than at any other time in the post-war period, the Afro-American population now lacks organisation and a voice. The NAACP, which rose to half million members in the 1950s and 60s, articulated the demands of the Afro-American population for the ending of racial segregation in the south and the continued oppression of Afro-Americans in the north. Even those radical organisations from the 1960s and 70s no longer exist and the Afro-American establishment has imposed their own ‘leadership’ on the Afro-American population.
Anything that threatens the status quo is stamped on, as the recent Million Youth March, in Harlem, demonstrated. Sections of the Afro-American middle class and bourgeois leaders moved heaven and earth to undermine this movement. Farrakhan’s Muslims can never attract more than a small minority of the Afro-American population. And yet the brutal murder of James Byrd in east Texas by ex-prisoners with links to the ‘Aryan Nation of the Ku Klux Klan’ hark back to the Jim Crow murders of the 1950s. This, in turn, led to the mobilisation of Afro-American groups, such as the Black Panthers, which are a pale echo of the movements of the past.
Racial discrimination and conflict between the different ethnic and national groups in the US is woven into the very historical and social fabric of US capitalism and will remain so long as that system exists. Periods of heightened struggle by Afro-Americans are inevitable at certain stages. The same is now true of the growing Latino population, which suffers discrimination in language, jobs and conditions.
These movements, however, tend to take a separatist or ‘nationalist’ form in periods of stagnation in the class struggle, or of quiescence within the official labour movement because of the grip of the right-wing leaders. Change towards more open class conflict, tends to merge the struggles of the different ‘nationalities’ in the US with those of the working class as a whole.
This does not, of course, mean that the class struggle or the basic idea of class unity can simply resolve hostilities and divisions, inherited from the past, between groups of workers from different racial backgrounds. Class unity, solidarity, is absolutely necessary but must be complemented with a programme and action which takes account of the special needs of the different sections of the US proletariat. In this respect, the work which comrades on the West Coast have undertaken amongst the immigrant population is an important beginning.
Economic disaster looming
The US, as the citadel of world capitalism, will be profoundly affected by the coming slump. We have separate material dealing with economic perspectives in the short and medium term, so we will just make a few comments about how this crisis is affecting the consciousness of the US working class.
Even before the ‘music stops’, when the US boom runs completely out of steam, the signs of decay are obvious. In California, for instance, the ‘Golden State’, and a past model for the rest of the US, all the symptoms of the ‘British disease’ are manifested. This was at one stage, the "tenth industrial nation in the world", but now suffers from economic stagnation, growing joblessness: some areas have become disaster zones, and there is a net drop in population. There is also the collapse of the infrastructure.
On the East Coast, on the other hand, the city of New York appears, under the right-wing Republican, Mayor Giuliani, to be economically buoyed up. This, however, is largely the spin-off effect of the wealth generated by Wall Street’s spiral upwards. It will shortly come crashing down and with it the superficial wealth that has inflated support for Giuliani as well. It should be remembered that one-third of the 35 million population who are officially poor have experienced ‘severe poverty’, even during a so-called boom,.
A foreboding of what lies in store is reflected in the comparisons, which are more and more drawn, between the present situation and the period prior to 1929. Marx’s diagnosis of capitalism has been invoked in this period. Even recent advocates of the ‘new paradigm’, such as a certain Ed Yardeni, quoted in a British Guardian supplement in July, admits that there is a crisis of overproduction, caused, in his view, because, "capitalism has an arch enemy in corruption. In corruption the rich get richer and the corrupt don’t distribute the income sufficiently so that the workers can buy what they make. I think that’s one of the basic problems in Asia." Leaving aside the waffle about ‘corruption’ this is, in the words of another Guardian writer, a justification of Marx, who "warned of a crisis of overproduction."
Other economic commentators have weighed in, warning that the situation if anything is worse than in 1929: "At the time of the great crash, very few Americans were actively involved in the market. It was considered the sort of thing that racy, and rather corrupt, city slackers did. A lot of Americans, if they didn’t actually cheer the crash, felt a certain grim satisfaction." (Ron Chernow, a historian of finance). The effects of the depression had a lasting effect both psychologically and also economically. The US market, "did not return to its 1929 peak until 1954, 25 years later."
In the speculative bubble which has gripped the US in the 1990s, an estimated 100 million Americans now own shares. Most, of course, own just a handful of shares, but the tendency has been to invest, either directly or indirectly through ‘mutuals’, what in the past went into savings. Therefore, a drop in the stock market will have a decisive effect on household incomes and, therefore, on consumption.
In Britain, 27% of the population are ‘shareholders’, up from 8% in the early 1980s. Many of these ‘shareholders’ only own one or two shares from the Thatcher privatisations of the 1980s. A drop of 25% in the stock market will have a considerable effect, and a 50% fall, which is possible, will have a decisive effect on household incomes for a big section of the US population.
Lewinsky affair
It is against this background that the crisis arising from Clinton’s sexual affairs must be viewed. This is another expression of the political crisis affecting the world bourgeoisie, this time in its most important centre. It points out the contradictions in the US constitutional and electoral system, and the vicious infighting between the major bourgeois parties of the Republicans and Democrats. This infighting is reminiscent of the mutual slaughter of the British feudal aristocracy in the War of the Roses, in the Middle Ages. The Republicans, in a nauseating and hypocritical moral crusade led by the Speaker of the House, Gingrich, have attempted to whip up the ‘moral majority’. The Democrats have hit back with similar charges of sexual infidelity against leading Republicans which prompted the British newspaper, The Observer, to write that this was preparing the ground for "laying bare Washington’s sex life [which] will make Caligula’s Rome look tame". The Democrats have countered with charges against the Republicans of ‘sexual McCarthyism’.
The Lewinsky affair was the trigger for demands of impeachment but not the initial reason for the ferocity of the Republicans’ anti-Clinton drive. The investigation against Clinton began on the Whitewater issue. The special prosecutor, Starr, stumbled by accident onto the Lewinsky affair. The Republicans, having lost the last two presidential elections, are fearful that Gore, as Clinton’s anointed successor, would be elected in the year 2000, thereby establishing a third victory and a virtual Democratic dynasty for the foreseeable future. They, therefore, sought to use their majority of 21 seats in the 435-member House of Representatives and the 10-seat majority in the 100-member Senate. They wish to shatter the base of the Democrats with a campaign of denigration. They hope in the November elections that their grip on both chambers will be reinforced, thereby repeating the control similarly exercised by the Democrats between 1954 and 1980.
The aim is to so discredit Clinton and his regime that he is not so much a ‘lame duck’ as a ‘dead duck’ for his last two years in office. It cannot be ruled out that the Republicans will proceed with impeachment proceedings, but the situation is very uncertain. Their repugnant moralising has already rebounded on them with increased support for Clinton in the polls. The November mid-term elections will have a profound effect upon which way the Republicans will go. But, even if they increase their support, it may serve them better to leave the damaged Clinton in power rather than see Gore in office in the two years up to the next presidential campaign.
The vicious political infighting between the ‘political class’ of the US has served to further discredit the presidency and the Congress - vital institutions of the bourgeoisie. The growing disenchantment with fraudulent and meaningless elections is shown by the fact that less than 50% voted in the last presidential elections. Clinton’s real crime, the real impeachable offence, is that he has acted as the front man of US big business to the detriment of the working class and poor. He has balanced the budget and Wall Street has boomed. But, as one political observer in Britain commented: "Those are achievements that will be toasted by bankers but not by the children of the ghetto he emoted so effectively about."
The economic, social and political situation in the US is preparing the ground for the emergence of the working class, one of the most important detachments of the world working class. A measure of the success of our ideas will be how, in the mighty maelstrom of events in the US, the CWI and its US section builds a powerful pole of attraction for the best workers and youth who will be moving into struggle.