Chapter 3 -- Hi Tech, Low Pay

The Ups and Downs of the Capitalist Economy

How cyclical crises affect trade unions

It should be recognized that trade unions are a limited form of organization. This does not mean that they are limited to only taking up purely economic tasks arising from the conditions at work. In recent years the unions have taken on more and more political activities.

But the unions are limited in a different way, in that there is only so much that can be done within the limits or the framework of the capitalist relationship between workers and bosses. Thus the economic cycle of capitalist development is often decisive in determining what workers can achieve through a union or what they may have to concede. The cycle of capitalist development dictates the objective conditions in which the unions operate and in turn puts an obligation upon them, the workers and their leaders, to develop both tactics and strategic plans to combat this problem.

As long as the relationship of exploiter and exploited is retained within the framework of the capitalist system, the unions necessarily remain hemmed in and at the mercy of the capitalist cycle of development.

One of the most pervasive myths regarding the standard of living of the workers is that it has gradually improved over the years. It is true that much has been gained by the workers. But the ravages of a capitalist crisis have often hurled them back.

Everyone knows that the great capitalist crisis of the 1930s created havoc with the workers' standard of living. This happens with nearly every significant capitalist depression. It is only in periods of a capitalist upswing, or what is known as prosperity, that the workers are able to recover what was previously lost and perhaps gain more as a result of new opportunities for struggle.

The capitalists attempt to take advantage of every capitalist crisis to carry out both indirect and frontal attacks against the working class as soon as they get the opportunity. "The origin of the crisis of the cities," we wrote in the middle of 1975, "lies therefore in the general crisis of capitalism in this country. The capitalists are trying to overcome their crisis by a general assault on the mass of the [municipal] workers, striking at the weakest link first--healthcare, social services, education, fire and sanitation."1

We noted at that time, however, that "a broad frontal attack on the organized working class, especially in basic industries, is at the present time not possible though it is precisely what the ruling class has in mind." (Emphasis in original.)

The frontal attack did come several years later and began with the demand for concessions from the organized working class, especially in the basic industries. Cutbacks and plant layoffs became the order of the day. The assault was one of the most venomous in the history of the U.S. working class. It not only struck the basic industries, mining and metal, it struck all manufacturing. The bourgeois state gave it added impetus with the breaking of the PATCO union of air traffic controllers. This concerted assault has tended to lower the wages of the higher-paid, thus leveling the standard of living of the workers as a whole. It has also destroyed the jobs of millions.

During the 1970s the employers, unable to carry out a frontal attack on the workers, had to resort to more indirect means by fueling the fires of inflation. But the deflationary process that began in the 1980s necessitated a frontal attack.

As can be seen, the capital-labor relationship puts the working class in a vise-like condition with respect to the employers. As long as they accept that relationship, the workers are in the subordinate position and their opportunities are limited by the very nature of the trade union organization, whose fundamental purpose is merely to bargain over the wages and conditions of employment (the price of exploitation).

Members of a revolutionary working class party, as we'll go into more fully in Chapter 8, differ from mere trade unionists in that their goal is the abolition of the relationship of exploitation. But there is still another fundamental difference that is closely connected with this. They regard the antagonistic relationship between the employers and the workers as an irreconcilable one. This dictates an entirely different attitude in labor relations, negotiations and even grievance proceedings.

Militant workers almost always instinctively understand this irreconcilable character of their relationship to the bosses. As a Wall Street Journal article on the 1985 Wheeling-Pittsburgh Steel strike observed, when the workers were speaking about labor relations they referred to "a struggle between us and them." It is a clear-cut example of how the objective relationship of exploitation sinks into the consciousness of the workers as a struggle between "us and them."

Capitalist recessions have lengthened

The problem facing the trade union movement is how to effectuate strategy during times of chronic depression, of protracted capitalist overproduction which gives the employers the upper hand, at least on a narrow economic front.

Capitalist recessions in the United States a century ago, such as the "panics" in 1873 and 1893, were relatively short by comparison with the current ones. It was generally assumed at that time that the workers' movement, especially in Europe, was capable of resuming its upward swing politically and would soon make up what it could not win economically during periods of capitalist recession.

On the whole, capitalist recessions were not as chronic and protracted in the last quarter of the 19th century as they are now. The illusion of capitalist stability and the resulting revisionism of Marxism toward the end of the 19th century came about as the result of this.

But the period following the Second World War has been punctuated by longer-lasting recessions. No one can accurately estimate how long the earlier periods of relative capitalist stability would have lasted had the imperialists not created two world wars and innumerable counter-revolutionary interventions.

All of these retarded the capitalist crises, at least temporarily. There is no question that the crises might have resulted in the overturn of class relations in at least some of the capitalist countries, had it not been for the intervention of war.

All of this is very important in relation to strike strategy, which has a lot to do with the duration of the capitalist economic crisis. If the capitalist crisis were to last only a month or two months, the workers would be in a more advantageous position.

Marx says that the most favorable time for the workers is a period of rapid capitalist accumulation. That aspect of Marxism every trade union bureaucrat will agree with.

So the problem arises, what can be done during periods of capitalist recession when the workers are on the defensive? How should they react if the recession turns out to be protracted and the employers can seemingly hold out for a long time?

The 1979-82 capitalist recession, which is certainly not over for the manufacturing industries, has also been accompanied by political reaction, by the most reactionary intervention of the capitalist state against all workers. The Reagan administration has generated reaction in all fields of social life. But separate and apart from the Reagan administration, the capitalist recession has had a universal effect. "Socialist" governments in Spain, France and Greece have been forced by the capitalist crisis to carry out almost the same austerity measures that the Reagans and Thatchers have imposed on the workers.

So it is not really the form of the capitalist state which determines how the rulers respond to the capitalist crisis. The capitalist system engenders both social-democratic and outright reactionary forms in the administration of the capitalist state. It continually throws up a variety of political formations, few if any of which address themselves to the fundamental ills of the capitalist system or promote a revolutionary perspective.

The lengthened character of the capitalist recessions imposes on the working class in general and the trade unions in particular the necessity to develop a defensive strategy. The working class as a whole can, after a period of time, transform this into an offensive. There is no way this can be done, however, without attempts to break out from the accepted bourgeois conception of the capital-labor relationship. Otherwise the workers are kept in a kind of stranglehold which they cannot get out of by economic means alone and which leads to a continuing stream of concessions to the employers.

Campaigns for prenotification

One such defensive strategy was first raised around 1956 in the upstate New York area. Those were not years of capitalist recession, but nevertheless the Ford Motor Co. closed its stamping plant, organized by the UAW, and Wickwire Steel, a plant owned by Colorado Iron and Fuel, also closed down around that time.

Earlier, of course, there had been a tendency for plants in the North to flee to the South, where not only was labor cheaper but the climate was viciously anti-union. Many states in the South were still governed by so-called right-to-work laws. But when plants did relocate, it was generally with about the same kind of equipment and technology as in the North.

It was in 1956 that militants in the Buffalo area for the first time in U.S. labor history introduced the idea of prenotification, designed to stop plant closings. Since then, prenotification has become widely publicized, even though the trade unions have been slow to avail themselves of this weapon in the struggle. Many local and state bills have been introduced which in one way or another contain prenotification provisions to halt the spread of plant closings. Few if any, however, have really been implemented into law.

Prenotification usually means that before a plant can close, it is required by law to give the workers a notice of one or two years, depending upon how strong a legislative campaign the union and progressive movement have conducted. The tactic is to have hearings on the legislation. This halts the plant closings pending the hearings, which of course take place over an extended period. Penalties against the company designed to protect the workers and the community are assessed on the basis of public hearings.

It cannot be stressed too strongly that the unions have to link up with the rest of the community, which has a great stake in this. For a company to move out and close a plant inflicts incalculable damage on a community as well as on the workers.

In almost all communities the corporations are given subsidies in the form of tax breaks for locating there. Small homeowners and others, by comparison, seldom get any tax relief. Therefore penalties must be assessed in the event these companies want to pull out. This is a deterrent to plant closings.

Of course, political pressure has to be applied at all levels of government, and in this respect the union also has to mobilize the masses politically in order to sustain the struggle and see that irreparable damage is not inflicted upon the communities.

Wherever possible, injunctive relief should also be sought in the form of temporary restraining orders. In other words, the judicial process should be utilized, notwithstanding the fact that the judges are generally more reactionary than the legislators. But publicity around this type of case is a form of pressure and can mobilize the workers for more direct action. Just as farmers have learned to stop farm foreclosures, in some cases with overwhelming might, this has to be done on an industrial basis.

Also state and federal legislators should be urged to introduce legislation declaring a moratorium on plant closings and where possible unions should collaborate with the legislators in framing the legislation. All this would be immensely educational and at the same time enhance trade union activity.

There are now whole groupings of enlightened environmental groups which could also lend their support. They have come to realize the value of having an alliance between the working class and all progressives concerned about the damage that is inflicted upon the environment and society as a whole by the reckless pursuit of super-profits by the capitalist class.

Pentagon plant closings

It is often assumed that plant closings happen only in the civilian sector of the economy. It is further assumed that with the growth of the military budget and the consequent expansion of the Pentagon's operations, plant closings should not be a problem. However, this is not so.

There are now 37,000 industrial firms serving the Pentagon as prime contractors, and three times as many subcontractors, according to Seymour Melman.2 This means that at least 100,000 industrial units operate to serve the Pentagon in one capacity or another.

When the Pentagon decides to close out an operation, it of course is not motivated by the same considerations as a civilian production unit or plant. The latter is fundamentally concerned with maximizing its profit. That's the basis for its existence in the first place.

It is altogether different with the Pentagon. They don't have to be concerned with profit or loss. The endless stream of appropriations grows ever larger as each new Congress gives the Pentagon a virtual carte blanche on how to dispose of billions of dollars. Occasionally the mere whim of the military bureaucracy can decide when and if to close down a plant or relocate it.

The Pentagon has historically chosen to locate its business in areas away from a labor force which would be susceptible to union organization. Many times it forces the closure of plants out of purely racist considerations, always claiming a military rationale and using national security gobbledygook to cover itself. Most often, it prefers locating in rural or suburban areas away from the centers of contagious labor militancy that characterize the metropolitan areas of the country.

There is also the matter of obsolescence, which often leads to layoffs and plant closings. It ranks high in the Pentagon as a means of producing sophisticated or exotic new technologies. But often these can be rapidly discredited, especially when one considers the sheer number and variety of weapons the Pentagon is involved in producing.

It is well known how when legislators fail to vote for the Pentagon's appropriation requests, the military threatens to close military bases in their area. This practice is even more common when it comes to closing military production units.

Should there be a sudden shift in weapons development, the closing of defense plants could become a far more serious development than it is now. The vast bulk of the subcontractors in particular are smaller units and mostly unorganized. However, they can be just as susceptible to and just as much in need of union organization as those in the civilian sector.

In this connection, it should be borne in mind that in the first years after the Second World War, as well as after the Korean and Viet Nam wars, there were several public campaigns by progressive organizations to convert military production to civilian use. Of all the international unions in the country, the International Association of Machinists (IAM) was the only one to present a plan and attempt to publicize it in order to educate the public on the need for conversion of military production to public use.

Since then, no other union has so far broached the subject, notwithstanding the staggering unemployment and the growth of the military.


1. Marcy, Sam, "Capitalist Economic Stagnation and the Revolutionary Perspective," Workers World, Aug. 8, 1975.

2. Melman, op. cit., p. 252.

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