Roads Not Taken or Roads Foreclosed?
When Donald Trump announced a plan to introduce tariffs on steel and aluminum in early March 2018, he was flanked by the Vice President, the Secretaries of Treasury and Commerce, the Director of the National Trade Council, and Scott Sauritch. Sauritch stood out among that group, and not only because he was the one without a title. He is a worker at the U.S. Steel Irvin Works plant in West Mifflin, PA, just southeast of Pittsburgh, and the president of the United Steelworkers (USW) Local 2227.1
To be clear, Sauritch is no Trumper. A few days before the 2016 election, his local hosted a rally at which Joe Biden spoke, and during the campaign they sent members into the field to knock on doors for Clinton.2 But Sauritch is a union man, and as he put it to NPR’s Mary Louise Kelly, when the USW leadership instructed him to “gather up the troops” and head to the White House, he didn’t hesitate.3 The USW, which has seen steep membership declines since the 1970s, was quick to endorse Trump’s policy. In a statement issued soon after the announcement, the union asserted that the “tariffs announced by President Donald Trump are good for working people because they punish the predatory practices of countries that use lax trade rules.”4 AFL-CIO President Richard Trumka added that the measure represented “a great first step toward addressing trade cheating.”5
As their statements indicate, organized labor’s stance on the tariffs stems from a particular interpretation of the problems facing industrial workers: global overcapacity has resulted in foreign—read, Chinese—dumping in the U.S., and protectionist measures are needed to stop this unfair competition. The analysis isn’t great. In response to a backlash from just about every trading partner, the Trump administration quickly exempted most major steel suppliers from the policy. Moreover, the last time the U.S. government erected import barriers on metals, under Bush in 2002, the effort barely moved the needle, and they backtracked a little over a year later.6
Commentators on the left have noted the short-sightedness of labor’s position—deals with the devil rarely pay off, and when they do the dividends don’t last. Writing in The Nation, Doug Henwood argued that the tariffs “will do little if anything to help the steel industry,” and, what’s more, they could well “add a fresh dose of bellicosity to a world already overdosing on it.” The heterodox economist Robert Blecker observed that, insofar as they yield any returns, it isn’t the workers who stand to benefit: “to the extent that steel prices do rise, it will increase profit margins for US-based steel companies—and those companies will be under no obligation to raise their workers’ wages or invest in expanded domestic steel facilities.” In any case, Trump’s strategy arrived about a third of a century too late. The same amount of steel is produced in the U.S. today as in the mid-1980s, but with less than half the level of employment. Automation, which has resulted in enormous increases in labor productivity, is a key factor here, though none of its gains have trickled down to the workers. As Henwood has put it, “steel workers aren’t doing well, but the industry is doing OK.”7
The point is, crude protectionism like that offered by selective tariffs isn’t going to address the plight that deindustrialization has wrought. A comprehensive overhaul of trade policy would involve addressing the structural conditions that disadvantage US-based producers. This includes, for starters, the overvaluation of the dollar that hampers exporters and invites imports as well as the unfettered mobility of capital that enables corporations to invest in markets with labor and environmental standards that pale in comparison to those which prevail at home.8 But even with a more sustainable balance-of-payments, there is no returning to the heyday of American industrial might—and given the ecological limits of the carbon economy, such a return wouldn’t be desirable even if it were possible. The only solution to the crisis of underemployment, as the progressive critics of the tariffs have noted, is robust public investment in the sectors of the future, like care and education, human services and green infrastructure. And such a program can only be realized through national economic planning along with measures to ensure a just transition for those displaced by whatever is to come.
But planning and public investment aren’t new ideas, even if they sound fresh after decades during which neoliberal market logic has exercised hegemony over the mainstream political imagination. Beginning during the New Deal and continuing into the postwar years, forces on the labor-left pressed for controls over corporate power to set prices, reap profits, and determine the direction and objectives of investment. At particular moments, it looked like they might succeed in establishing a new common sense on the role of the state in the economy. For a short time, this even involved serious consideration of what it would take to build an independent party of the working-class. Cold war hysteria and the immediate organizational and political imperatives it brought about soon swept this experience into the dustbin of history, but it’s worth reflecting on the vision certain key actors held and the obstacles they encountered. The challenges our predecessors faced during the most opportune moment of the twentieth century could well prove instructive for thinking through what we’re up against today.
In early April 1946, A. Philip Randolph convened a “Conference of American Progressives” intended to take up the idea of forming an independent workers’ party.9 The head of the Brotherhood of Sleeping Car Porters and the nation’s most prominent black trade unionist had assembled an impressive group. The one hundred people in attendance were all, as Liberal Party of New York executive director Ben Davidson noted in a report on the meeting, “influential in organizations.” A third came from organized labor, both AFL and CIO, with the UAW sending the biggest delegation; another third were from independent political organizations like the Socialist Party and the Minnesota Farm-Labor Party; and farmer organizations and cooperatives along with what Davidson called “Racial & Religious” groups accounted for the rest. In addition to Randolph, conference sponsors included the pragmatist philosopher John Dewey; H.L. Mitchell of Southern Tenant Farmers’ Union fame; Samuel Wolchok, President of the Retail, Wholesale, and Department Store Union; James Patton, President of the CIO-backed National Farmers Union; and Simon Martin, head of the Michigan Farm Cooperative Union.10
After some debate over the exact purpose of the meeting, the conference delegates established what they called the National Educational Committee for a New Party (NECNP).11 The acronym was clunky, but it had to be. Few attendees were ready to commit to a full break from the Democrats, and Randolph had to reiterate both during and after the event that it was not the founding convention of a new party. As Randolph put it in a letter to an associate, the idea behind the NECNP was instead
to act as a clearing house and coordinating center for new party ideas and forces; to stimulate and establish contacts with unions, farm groups, cooperatives and other organizations and key persons; to encourage local and regional conferences; to establish a monthly paper; to issue and distribute pamphlets and leaflets; to issue statements on current events from time to time in accord with our objectives; and [on the whole] to survey the conditions in the country concerning the prospects for the development of a new party.12
The goals were grand and modest at the same time.
To direct the effort, the Chicago group appointed steering committee of some fifty members which set as its first task the selection of a chairperson. In the interest of appealing to both AFL and CIO unions, they agreed to avoid a partisan decision and to pick what Davidson called “an outstanding liberal.” To the surprise of no one, that outstanding liberal was Randolph. They also appointed a seven-member subcommittee charged with hiring an executive director, establishing a headquarters, and managing finances. Together, those in attendance were prepared to raise $25,000—about $325,000 in 2018 dollars—to carry the organization through a second conference planned for December 1946, after the midterm elections that year. That would allow for a temporary budget of close to $50,000 a month today – enough for the staff, space, and supplies needed to get the organization going.13
In advance of that planned follow-up meeting, the NECNP published a “Declaration of Principles” in the Antioch Review.14 Drafted by Lewis Corey, Clay Fountain, one of Walter Reuther’s senior advisors in the UAW, and others, it began by calling the New Deal “a spent force in the Democratic party.” It was no longer any match for “the bi-partisan Congressional coalition of reactionary Democrats and Republicans” whose “savage opposition” made achievement of an ambitious postwar vision next to impossible. The American people therefore “need a new people’s movement with a policy of basic economic reconstruction for economic security, human welfare and freedom.”15
The policy of basic economic reconstruction that the declaration proposed was ambitious indeed. It called for public ownership of key industries including the financial sector; national economic planning by tripartite industrial councils; a full employment economy with fair employment practices; a comprehensive public housing program; robust funding for public education from kindergarten through the university; and social security, including healthcare, from the cradle to the grave.16
The Declaration also called for a “farm security” program that would emancipate tenant farmers and sharecroppers from the control of large landowners and encourage the establishment of co-operatives in which agricultural labor would have a stake. It proposed developing a system of national agricultural planning that by integrating new public enterprises modeled on the TVA, soil conservation and improvement programs, and regulation of processors and implement producers would result in “greater and more varied food production” and “provide the rural population with larger economic and cultural opportunity.” The goal was to address the failure of the New Deal to incorporate rural America, and in so doing to create a farm-labor coalition akin to that consolidated by the Canadian Cooperative Commonwealth Federation (predecessor to the New Democratic Party).17
Finally, the Declaration demanded an end to restrictions on civil and human rights at home—“Our race relations, especially our treatment of Negroes, are the ugliest aspect of American civilization”—and an end to imperialism and militarism abroad.18
In short, the NECNP Declaration of Principles presented a program for making social democracy in the United States. It is an extraordinary document, one that reflects the extent to which an anti-capitalist (though not communist) left sought to shape the character of postwar liberalism. And, it should be noted, Randolph and company didn’t consider these objectives pie in the sky—there was a real sense of urgency. The alternative to their vision, the Declaration drafters concluded, was to get steamrolled by the “driving force of reaction” in the postwar world: a “capitalist monopoly” which used its power to push wages down and prices up, sapping the economy of purchasing power and creating the conditions for another slump.19
The Antioch Review followed the Declaration with a symposium that drew contributions from figures ranging from Arthur Schlesinger Jr. to CIO PAC Director Jack Kroll to the Socialist Party leader Norman Thomas.20 But that symposium was one of the last traces of the NECNP. The meeting planned for December 1946 never occurred, and by some time in 1948 the organization had ceased to exist. Hardly anyone remembers it.
Why didn’t the NECNP go anywhere? The short answer is that in the years immediately following the war capital mounted a counteroffensive intended to stymie exactly what Randolph and his collaborators had in mind. In the spring of 1946, while the Chicago group was gathered, congressional conservatives were waging an aggressive campaign against the regulatory features of the wartime state. Their top target was the Office of Price Administration (OPA), the agency that regulated prices and wages and succeeded at keeping inflation at a minimum for the duration of the war. Maintenance of the OPA was one of labor’s key objectives coming out of the war, in large part because everyone understood inflation control to be a precondition for any serious full employment legislation. Employers knew this too, and by swiftly moving to dismantle the OPA after the war they created the conditions—galloping inflation in 1946—within which they could kill the dream of full employment and also pave the way for a GOP coup in November. Republicans gained eleven seats in the Senate and fifty-five in the House, giving them together with Jim Crow Democrats the supermajority needed to pass the Taft-Hartley Act over Truman’s veto.21
Industrial workers weren’t the only victims of capital’s postwar offensive. Thanks to the bargaining power that Jim Crow Democrats wielded over the Roosevelt administration, farm workers had been excluded from just about everything—the National Labor Relations Act, the Social Security Act, the Fair Labor Standards Act. And the farm policies that did affect them did so negatively. The New Deal answer to the violent Depression-era deflation in crop prices was to subsidize those big growers who cut back on production—less supply means higher prices, the logic went. This had two principal consequences: a reduced need for farm labor, which would only intensify with agricultural mechanization, and rising food prices for hard-pressed consumers.
In 1948, James Patton, head of the CIO-backed National Farmers’ Union, and Charles Brannan, Secretary of Agriculture under Truman, sought to overhaul this system—they proposed guaranteeing basic incomes to small farm producers in exchange for their cooperation in a national agricultural plan intended to maximize and diversify food output. Big growers and their Jim Crow Democratic and GOP allies waged a two-year war to kill the idea, and after 1950 agricultural policy reform never again gained traction.22
The postwar labor-left suffered a third setback in the realm of financial policy: the 1951 Federal Reserve-Treasury Accord. This defeat occurred outside of public sight and without much comment, but it was no less consequential than the previous two. From early in Roosevelt’s first term, the leaders of the central bank had agreed to subordinate their authority to that of the Treasury Department. In practice, this meant allowing the federal government to borrow for cheap so as to enable significant deficit spending. In theory, this meant that the Federal Reserve could have gone on to function as a central bank for social democracy, eliminating the cost of capital as a constraint on the making of a robust welfare state. The Fed complied through the war, but with the outbreak of inflation in the latter-half of the 1940s its directors mounted a stealth campaign to win central bank independence. Their success in 1951 did not just cost advocates of greater government spending control over an important financing mechanism. It also unleashed a powerful adversary that could use the whip of interest rate hikes as a means of disciplining those forces it considered unruly.23
Review of these three defeats should underscore the overwhelming opposition facing any effort like the NECNP. Together with the McCarthyist witch hunts just around the corner, this experience forced those on the labor-left to reconsider the way forward.24 It has therefore been easy for scholars to miss the ways in which figures like those involved with the NECNP continued to press for at least parts of what the Declaration outlined in 1946. The resultant narrative runs something like this: organized labor struck a Faustian bargain with the larger industrial employers, securing strong wages and benefits for its members and accepting macroeconomic, Keynesian demand management as a substitute for substantive economic intervention and planning. A few decades of sustained economic growth and the affluence it created then served to sap the trade union movement of its earlier militancy, even as the majority of the working-class—including most women and workers of color—derived few benefits from this Golden Age. When the crisis of stagflation arrived in the 1970s, labor and its liberal allies were in no position to rise to the occasion.25
Judith Stein was one of the few historians to seriously grapple with and problematize this story. In Running Steel, Running America: Race, Economic Policy, and the Decline of American Liberalism, she reconstructed in meticulous detail how an industry that once appeared fundamental to the functioning of the economy could fall so hard. In short, steel was never so strong as it seemed. In 1949, 1953, 1957, and yet again in 1961, recessions pounded the industry, leading to significant reductions in capacity utilization and layoffs. Only defense production kept it afloat—as Stein pithily observed, “It was Ho Chi Minh, not Keynes, who brought [unemployment] down to 4 percent” in the 1960s.26 The problem of overcapacity that industry leaders today bemoan also haunted them in the mid-twentieth century, and the trade imbalances they now blame for their woes go back to U.S. State Department decisions to cultivate foreign industries—with the hopes of staving off the Communist threat—from the Marshall Plan onward. Throughout, the USW and its supporters in Congress pursued industrial and labor market policies that would prevent deindustrialization, the specter of which was well visible by the late-1950s. But against a corporate bloc opposed to any encroachment on its right to manage and with enough fractions of the U.S. state more committed to industrialization abroad than its opposite at home, things like liberalized depreciation allowances stood in for substantive industrial planning.
Stein continued with this theme in her next study, Pivotal Decade: How the U.S. Traded Factories for Finance in the Seventies. Entering the last third of the twentieth century, the cracks in the manufacturing core were in plain sight. Yet after having opposed state intervention in the economy for so long, the capitalist class was not about to relent just when the novel crisis of stagflation presented the opportunity to shut the door for good. Instead, successive waves of deregulation followed by a brutal dose of austerity from the Federal Reserve at the end of the decade plunged the industrial sector into a crisis from which it would not recover and which paved the way for the Reagan Revolution.27 But while many analysts of this history, myself included, might say that the rest is history, Stein would have objected. At the end of her life she was at work on a study of economic policymaking in the 1980s and 1990s that would have further complicated the story, making the argument that Clinton bears as much responsibility as Reagan for the current catastrophe. Collective understanding of the political economy of our times would be richer had she been able to complete it.
The history Judith Stein excavated is indispensable for making sense of why, in 2018, USW leaders find themselves in the awkward position of endorsing a Trump tariff policy that probably won’t do much for steelworkers. Their options are limited. After a few postwar decades during which achievement of a real industrial policy proved difficult, realization of as much became impossible during the neoliberal era. The union is, after all, accountable to its members, and it’s hard to blame the leadership for grasping at the opportunity to get something. Stein would have been the first to say that understanding this is not the same as justifying their decision to make an alliance with Trump.
Indeed, the current USW predicament illuminates the contradiction facing labor and the left today. In this climate, no union, let alone one representing a membership in an industry in crisis, is in a position to lead a political insurgency around an ambitious economic vision. Yet at the same time, no political insurgency is possible without a revitalized labor movement. To develop a path forward, we might do well to think about the current moment as analogous to that which prevailed in the 1920s—before a mass labor movement that could wage a serious fight for social democracy was on the scene. To be sure, there are limitations to drawing such parallels—for one, there is today no Soviet Union casting a shadow over much of the world. Still, then, as now, the structure of the global economy was changing rapidly and leaving many people in the dust as it did. And then, as now, it seemed as likely as not that a violent and mean-spirited populist right would be the one to capitalize on the situation.
The task before the interwar U.S. labor-left was to think strategically about how to organize what were then the industries of the future—the mass production sectors that were transforming how society was organized—and to devote the energy required to achieve that goal. As they did that, building organizations that attempted to meet the needs of the overwhelming majority of people who are expected to work for a living and who do not spend their time thinking about how to change the world, they gained the capacity to mount formidable political struggles. This did not happen quickly, but neither did it take an eternity—by the mid-1940s they were in a position to think much bigger.
The industries of tomorrow now look different, which for the sake of the planet is probably a good thing. But alas, the challenge confronting us is back to what it was almost a century ago: how to persuade people consumed with just getting by that the best way forward is to come together in collective action, in particular at the workplace. This is of course easier said than done. But if we’re unable to achieve this basic level of organization—around the things with which most people spend most of their waking hours preoccupied—then we’re kidding ourselves to think that we can initiate any larger social transformation. Until we make progress on that front, we shouldn’t be surprised to see workers and their organizations looking for different alternatives, whether they be tariffs or something worse.