by
JOSEPH BELBRUNO
on 5
SUPERVISOR:
SEPTEMBER, 1986
TABLE OF CONTENTS
Page No.
ACKNOWLEDGEMENTS
INTRODUCTION
CHAPTER 1
37
CHAPTER 2
56
84
118
138
BIBLIOGRAPHICAL ESSAY
143
ACKNOWLEDGEMENTS
It was the first time that I had studied political history, but soon I
The
~laws'
this thesis, and even my recent admission as a Ph.D. student to the Faculty of
Economics and Politics at Cambridge University, to the intellectual openness and
excellence of my teachers in the History Department of Melbourne University.
This thesis is dedicated partly to them - I only wish that they can be proud of
it.
3.
scholar whose practical intelligence helped greatly with the research and
..rri ting oi the thesis..
'D.anuscript.
INTRODUCTION
With this statement Aristotle gives us a rare glimpse into the earliest
origins of historical thought.
must sound quaint to modern ears, was quite familiar to Greek authors.
Indeed,
they believed that Historis was the daughter of the blind prophet Teiresias almost as if to lay stress on the relation between present and future and its
dependence on the past.
past to purify the souls of his contemporaries and allow them to act freely in
future.
it is a
"'I
Deal,~
The
Such studies
are all the more defensible when applied to those periods that have been
investigated in great detail and for which there is ample documentation.
1.
2.
and the Case of the New Deal", in Politics and Society, Vol. 10, No. 2
(1980), pp. 155-201.
- 2 -
The New Deal- that is, the period of Franklin D. Roosevelt's presidency
that runs from 1932 to 1940 - has received much attention from historians, and
theories have abounded as to its real significance.
understandable:
Their concern is
improvised and tentative, to the catastrophic economic crisis of the 1930s that
swept away the old capitalist order with its self-regulating market and negative
State.
For the first time in its history, the government of the United States
sought to regulate the capitalist economy, deploying for the purpose a vast
array of administrative agencies that transformed it into a powerful centralized
State.
The problem with nearly all existing accounts of the period is that they
enough.~
or
social progress rather than as outcomes of a new balance of forces in the class
struggle.
The
~lew
capita~: .:;t
reform;
3.
4.
For instance, G. Kolka, Main Currents in American History, New York, Harper,
1976.
5.
- 3 -
history - that see the New Deal as an attempt to develop political institutions
adapted to the needs of an industrial civilization.6
On all sides, the central role of the working class in the dynamic of
capitalist development has been overlooked because historians have studied the
working class in the role assigned to it by capital, as labour-power.
When
capitalists purchase labour-power, they imagine that they are buying just
another commodity or exchange-value, whereas in fact they are buying the source
of exchange-value, the living human activity of workers.
Here is the
If
capital is alienated labour, then the latter must be logically and historically
6.
Latest among these is B.D. Karl's The Uneasy State, Chicago, Uni. of Chicago
Press, 1983.
- 4 -
prior to the former; only from this perspective is it possible to write the
The collapse of the Keynesian economic order in the 1970s has reminded
us of the historical limitations of the mixed economy created forty years
earlier.
affords another justification for a fresh interpretation of the New Deal because
it calls for a reappraisal of the relationship between state and economy.
The
line that connects the wage relation to the State-form may be long, but it is
solid and continuous; tracing it is crucial to the confutation of theories that
separate artificially
~the
~the
economy'.
This
Instrumentalism
this theory tends to treat the state apparatus as a mere 'instrument', an 'empty
7.
Of
more general scope are the two classic works of the Italian School, M.
Tronti~s
Operai e
Capi~ale,
- 5 -
or 'functional' link between the economic base and the political superstructure.
This is where functionalism steps in to stress precisely the existence of such a
link.
labour, they still postulate an economic base from which the political
superstructure is 'relatively autonomous'. 8
eclecticism, with its insistence on the 'pecularity' of U.S. history and the New
Deal, is founded on this historically false distinction.
rationalist trap in which are caught all those who hypostatize 'the State' and
'civil society' or 'the economy' as abstract concepts
deducible~
priori.
Too
Had
they done so, they would have found that the historical tendency o capital is
to subordinate all social relations to the wage relation, to expand the factory
8.
- 6 -
market and its attendant bourgeois civil rights begin to vanish in the thick fog
of state economic regulation.
society~
society~
capital.
The organization of our study reflects both its aims and this historical
logic of capitalist development.
discover why the
~ew
9.
- 7 -
trajectory of capital in the United States seen as the unfolding of the wage
relation from its political origins to the emergence of a new State-form wi
the New Deal.
t: h
the
content of Chapter Three - the heart of our study - where we assess the role
of
the
as
My primary
o i.
into place, I have decided that erudition should be left to those without ideas
-
Nowadays
- 8 -
references are easily within the reach of people who dare but to push the button
of a computer.
to read everything in the text, without endless footnotes to explain what they
have just read.
This is not to say the writer should not try to direct readers
CHAPTER 1
In the final part of the first volume of Capital, after he has uncovered
the "secret' of the birth of capital - "so-called primitive accumulation" - Marx
shows with examples from the modern theory of colonization that capitalists are
necessarily aware of this secret:
directly
To
tr~nsformation
capital.
10 -
The immunity of North America from any previous mode of production serves to
illustrate with poignant clarity the political origins of capitalism and the
historical priority of alienated labour to capital.
without a proletariat. 2
There is no capitalism
to enforce on it the despotism of the factory must come initially from outside
the factory, from society or the State.
~powerless'
State.
As soon as workers
enter the factory, they become part of capital, its real productive power.
At
first, capitalists adopted those labour processes that were used before their
advent with traditional tools and antiquated sources of energy and power.
With
1.
2.
- 11 -
systematic theft of labour-time, the rule of dead over living labour, mediated
by the wage.
Once
they are in a factory, however, workers begin to realize their power as the
producers of social wealth.
re-compose their work socially and to take control over the labour process by
withholding labour-power and renouncing the wage relation.
This process of
in the factory over the labour process by changing the latter so as to increase
the ratio of surplus value to variable capital (wages), also known as the rate
of exploitation.
labour process ensures that its reproduction occupies a smaller portion of the
working day so that the remaining values can be used to accumulate capital.4
This relative extraction of surplus value exploits fully the mediating potential
of the wage.5
3.
4.
5.
- 12 -
In practice, both
small shops or at home, manufacturing was seasonal and rural, and a tiny
proletariat was paid in kind as well as wages.
attempt to increase the rate of exploitation began to meet with the resistance
of craft workers keen to preserve their status and interests.
The traditional
labour process did not allow the intensification of labour necessary for greater
exploitation because the special skills of craft workers gave them control over
the pace and character of production.
the integration of formerly distinct labour processes was made very difficult by
the existence of separate craft unions for each process.
6.
- 13 -
The attempt to wrest control over the labour process from workers by
lowering their living standards and degrading their working conditions led to a
series of industrial upheavals that forced a change on the traditional forms of
production.
strike of 1877, the giant shutdown for the eight-hour day in 1886, and the
redoubtable strikes of the 1890s at Homestead Steel and Pullman,
u.s.
employers
quickened the pace of industrial change to regain control in the factories over
skilled workers.
indirect one, imposed by the pressure of workers' antagonism - was the Great
Depression of the 1890s with the ensuing deflation and high rate of
unemployment.
nineteenth century caused much concern among capitalists for the growing
militancy and autonomy of craft unions.7
were to increase the size of the reserve army of labour, through greater
migration from overseas and from country to city, and to reduce the level of
skill required in the labour process.
rose from 76 to 106 million; a great part of the increase was from immigration,
with a peak of 1,285,000 entries reached in 1907.
rapidly through the development of more efficient machinery and equipment, the
use of higher quality raw materials, and the intensified application of energy,
especially coal and oil.
7.
See, passim, the works by P.S. Foner, History of the Labor Movement in the
u.s.,
- 14 -
Taylorism and Fordism are the best known expressions for the
close ranks around craft unions, leaving thereby a great (and rapidly rising)
number of industrial workers in mass-production industries unorganized for the
simple reason that their jobs did not fit the old artisanal categories.
To be
sure, wherever the AFL swelled its ranks, capital followed and opposed it with
the establishment of various employers' federations, all under the umbrella of
the National Association of Manufacturers.9
only 85,000 new members joined the Federation - a fact that attests to its
inherent inability to organize unskilled industrial workers.
Instead of
restructuring the AFL, member unions were too keen to maintain their jealously
8.
The immigration data are in R. Hofstadter, The Age of Reform, New York,
Vintage, 1955, pp. 176-7.
Braverman, Labor and Monopoly Capitalism, New York, Monthly Review Press,
1974; and the review by T. Elger in Capital and Class, No. 7, Spring 1979,
pp, 58-99.
9.
- 15 -
guarded autonomy despite the fact that it did not allow for industrial unionism.
It is in this sense, however narrow, that one can speak of an entente between
big business and AFL to prevent the formation of industrial unions. 10
Of
When
~society'
the company provided funds for running the union and co-opted
officials in elections.
industrial towns with housing and services provided to workers by the companies
themselves.
workers~
autonomy.
campaigns in the local press to mobilize the local middle class against striking
workers, followed by the formation of civil liberties leagues and the engagement
of strike-breaking detectives or the deputization of local vigilantes.
When
none of these measures succeeded, there were always the law and the courts,
capably backed by the police and the National Guard.
remedies were the
~yellow-dog
Although
10.
11.
u.s.
1982.
- 16 -
This, in turn,
forces many of them either out of business or into mergers because they cannot
afford the higher expenditures on constant capital and wages.
the very fact of competition that equalizes capitalist profits across the
various branches of production until an average rate of profit is formed.
Capitalists expect to gain from the anticipated capital for production the same
or pro rata the same profit as every other capital of commensurate magnitude,
whatever the branch of production.
12.
In the form of
This curious dealectic and all its implications are explained brilliantly
by K. Marx, op.cit., Appendix to Vol. 1, pp. 949-1060.
- 17 -
It is
at this point that the function of money runs the risk of becoming autonomous
from the sphere of production.
Those
observers who have seen finance capital, in its form of social capital, as a
stabilizing force, as the herald of a new 'organized or monopoly capitalism',
err just as much as those who see in it the anarchy of the market, the selfish
greed of money dealers. 14
can wake capital from its imaginative flight and lead it from its feast in the
stock exchange back to the dreary reality of the factory.
13.
s.
De
Brunhoff, Marx On Money, New York, Urizen, 1976; and L. Berti, Moneta,
Crisi, e Stato Capitalistico, Milano, Feltrinelli, 1978.
14.
1~
Thus the extraction of relative surplus value facilitates the concentration and
centralization of capital - which explains why the new mass production of the
1870s and 1880s in the United States resulted in a great number of mergers and
trusts. 16
Gross national product in 1919 was six times larger than in 1870 ($146 billion
against $23 billion)* representing an average annual rate of growth of 3.75%,
with per capita output tripled.
The new
corporations controlled about 30% of manufacturing output, while the top 300
trusts owned about 37% of all U.S. corporate stocks and bonds; of 72 markets
investigated by Moody in 1904, trusts controlled 60% of the market in 55 cases
15.
16.
See generally J. Moody, The Truth About the Trusts, New York, MPC, 1904.
- 19 -
u.s.
capital that
One was
Of
~high
wages' and,
As it
turned out, these overall needs of U.S. social capital were in contradiction
with the equally crucial need to reduce the wage level of industrial workers.
This task proved impossible while the dollar was pegged on the gold standard,
that is, while the market functioned autonomously, according to its own
laws. 18
17.
All these data are in R.L. Ransom, Coping with Capitalism, Englewood
Cliffs, Prentice-Hall, 1981, pp. 71-2.
18.
For this entire dynamic of events see A. Negri's essay on Keynes in Operai
e Stato, op.cit.
- 20 -
This fact
alone served to mobilize American farmers and white-collar workers whose entire
lives and social status grew ever more dependent on the burgeoning power of
corporate capital.
States from the 1890s, started mainly as a campaign against monopolies, asking
the government to intervene to break them up into more modest units.
Paradoxically, this request seemed to invoke a stronger government bureaucracy,
seen by many Progressives as a symptom of the malaise.
did intervene and in 1898 Congress passed the Sherman Antitrust Act.
But,
although drafted in stern terms, the Act proved very difficult to enforce, given
the weakness of the administration and the
courts~
Indeed, the growth of the trusts had been greatly facilitated by the Supreme
Court in the 1870s and 1880s through the use of the due process clause of the
Fifth and Fourteenth Amendments to protect 'corporate individualism' - that is,
the enforcement of corporate rights as if they belonged to natural persons.
Progressives turned to Theodore Roosevelt's 'New Nationalism' as an enthusiastic
call for the regulation of private enterprise.
Even
the Sherman Act was used by the courts as a legal device to destroy or curb
unions until in 1914 Woodrow Wilson signed the Clayton Act to stop this
judicial abuse.
Whenever the federal government was called to intervene on some aspect of social
and economic life that had become politically troublesome- such as, for
instance, trusts and the railways
- 21 -
was that their powers and budgets were limited, while their regulatory
activities, detached from overall political needs, were too static and rigid to
be effective.
During the First World War the State intervened massively in the
economy.
Wilson was forced to abandon his "New Freedom" program for one of
The relaxation of
trust controls and the suspension of the Sherman Act, as part of the enforced
rationalization imposed by the War Industries Board, gave many firms the chance
to merge into big conglomerates.
triumph of federal intervention over state legislatures gave big business a form
of government commensurate with its industrial needs with respect to the
regulation of the labour force and of inter-capitalist rivalries.
Excess
wary of political control over its affairs to allow the war-time state apparatus
to continue and it mounted a successful campaign to force Congress to dismantle
it.19
19.
On
the U.S. State machinery before the New Deal the literature is very
Government and the American Economy, New York, Norton and Co., 1959.
On
On
- 22 -
In
- 1,593 in 1915 and 4,450 in 1917 with an annual total of about 1.5 million
workers on strike.
controls and the cost of living rose by 30%, more than 4.5 million workers
downed tools in 3,360 strikes - about 20% of the working population in a single
year.
Most epochal of all were the struggles in steel and coal mining.
And it
was here that the craft unionism of the AFL proved most treacherous and impotent
as employers turned one craft union against another, using the skilled workers
as strike-breaking pawns against mass workers who still lacked adequate
industrial organizations.20
industries, U.S. Steel, was lost, the political horizon of industrial unionism
was pushed back many years.
u.s.
capital into one of its deepest recessions, induced partly by its excess
20.
The working
New York,
New York,
- 23 -
During the 1920s, the decade of welfare capitalism, the American economy
witnessed the most impressive growth of its history.
grew from $79 billion in 1923 to $97 billion in 1929.
Wholesale
commodity prices fell by about 5% while average hourly earnings rose 8%.
With
prices remaining steady throughout the decade, wages rising slowly, and greater
production of consumption goods, wage workers saw a good improvement in their
living standards.
The number of
takeovers surged from about 250 to 1,200, confirming the trend of capitalist
centralization in times of rapid accumulation.
23%, from 62 to 76.4 billion dollars and gross capital formation by 22%, from 17
to 20.7 billion dollars.22
company unionism described above were used extensively after the big defeat of
the working class in 1919-21:
intensified as the membership of the AFL dropped from 5 million in 1920 to 3.5
million in 1924 where it remained for the decade.
strike declined steadily from 757,000 in 1923 to 289,000 in 1929, a drop of 62%.
21.
22.
24 -
Although overall
Services and
Despite a 43%
differentials between North and South and between unionized and non-unionized
workers.
the South and 47 cents in the North; wages in unionized sectors averaged one
dollar an hour, but they were only 50 cents in non-unionized sectors.
Some
from $77 billion in 1922 to nearly $160 billion in 1926, plummeted from its 1926
high to $120 billion by the end of 1929 and then to the incredible low of $37
billion in 1932.24
consumption of durable goods by 5% between 1926 and 1929 (between 1920 and 1926
23.
1920s has been told exhaustively by I. Bernstein, The Lean Years, New York,
- 25 -
that started in these years and that culminated in the debacle of October 1929
was due in part to the increasing difficulties of realization that capital was
encountering.
intervals of $500 million per annum between 1923 and 1926, jumped by $2 billion
in 1927 and by a further $2 billion in 1929 to a total of $10 billion; the
prices of industrial stock, which had increased by only 47 points between 1923
and 1927 (60 to 107), suddenly jumped 64 points to 1929 (107 to 171) as more
companies took capital away from productive investments to lucrative sharemarket speculation.
The
The collapse of the stock market in October 1929 signalled the beginning
of a downward spiral of deflation that lasted four years until the biggest
economy on earth lay in a state of prostration.
billion.
Similarly, the physical volume of industrial production fell from 110 in 1929 to
58.
Wholesale prices for non-farm products fell 25 points, from 93.3 to 68.3.
The fall for all commodities, including farm products, was of 30 points, from
95.3 to 65.9.*
disregarded some of the more evident danger signs such as the business slumps in
1924 and 1927 and the elevated number of bank failures.
25.
- 26 -
The non-
After the Crash, the number of bank failures and suspensions soared.
In 1928 there had been 491; but in 1929 the number rose to 642 and in 1930 it
was a staggering 1,345 with many large city banks joining the death list.
nadir was reached in 1931:
billion.
The
When
England abandoned the gold standard in September 1931, the United States lost
$700 million in gold in six weeks. 2 6
even reproducing; the national birth rate, already low at 25.0 per thousand
population in the 1920s, fell to an average of 19.2 for the 1930s.2 7
A month after the Crash, President Hoover summoned some business leaders
to the White House to persuade them to maintain current wage levels so as to
26.
Data on economy and bank crisis are from W. Mitchell, Depression Decade,
New York, Rinehart, 1947, Appendix and pp. 127-8, respectively.
27.
D.A. Shannon, Between the Wars, Boston, Houghton Mifflin, 1979, p. 140.
the effects of the Depression, J. Garraty, Unemployment in History, New
York, Harper, 1978,' Chs. 9 and 10, and Bernstein, op. cit.
On
- 27 -
the
in
spring of 1930 under the weight of fixed capital depreciation and plum.me t i.ng
commodity prices.
u.s.
cut its workers' wages by 10-15%; most of the other industrial giants
suit.
Steel
followed
General Electric, Gerald Swope, and the U.S. Chamber of Commerce, envisaged a
form of "industrial self-government" whereby corporations in an industry
were to
divide the market among themselves, refrain from undercutting one another- s
prices, and maintain wage levels.
rationalization of the economy.
from
By the
same
token, he rejected many proposals to expand the powers and functions of f e.deral
government.
~.
La
The
found
that POUR officials did not know the total of relief needed in the country,
Congress cut its funds.
28.
and
R.
28 -
a most ignominious manner, charging the helpless veterans with cavalry and
infantry equipped with bayonets.
He sponsored the
The RFC's partiality to business and its virtual unconcern for the
urban poor and farmers caused resentment and widespread suspicion of corruption
that was substantiated in a few cases.
received less loan funds than some banks, a fact that enraged progressive
Congressmen.
Perhaps the only joy that progressives derived from Hoover's presidency
was his consent to the Norris-La Guardia Anti-Injunction Act of March 1932,
restricting the power of federal courts to issue labor injunctions.
This
effectively put an end to the 'yellow dog' contract and augured well for the
reform of industry.
- 29 -
Law, given that the latter postulates the ability of supply to meet increased
demand.
economy, as is shown by his sympathy for public works, the RFC, failure to
oppose the Norris-La Guardia
rationalization.
In this
The State was merely another element in the economy, one that
'indicative~
inspire business confidence; but it was also one that had clear limits beyond
which it could not legitimately go.
As he wrote in 1933:
29.
We agree here with M. Bleaney, The Rise and Fall of Keynesian Economics,
London, Macmillan, 1985, pp. 32-7 and H. Stein, The Fiscal Revolution in
America, Chicago,
C~icago
u.s.,
1969, Ch. 1.
- 30 -
Hence,
Hoover~s
the end of 1931 was intended to balance the budget against the fall in
government revenue. He feared that failure to do so would exacerbate the heavy
outflow of gold that occurred once Britain went off the gold standard in
September 1931, and that thereafter
irreparably.
busines~
the currency so as to avoid financial loss and bank failures because the
political institutions of the time did not allow his Administration to undertake
a new form of economic policy. Even the Norris-La Guardia Act, for example, was
a futile exercise in this sense because it lacked the administrative machinery
to implement its clauses.
change this situation - and we are about to see the social agencies and the
political institutions that effected the change.
in the Age of Marshall - a time when a growing awareness of the new needs of
capitalist society had not found yet appropriate capitalist institutions.3 1
Of the many explanations that have been advanced to account for the
Great Depression, perhaps the most widely accepted is underconsumption,
30.
31.
For the mixture of humanism and laissez-faire in the Marshallian era see
J.M. Keynes' essay on Marshall in his Essays in Biography; also Tronti,
op.cit., pp. 269-74.
- 31 -
according to which economic crises occur whenever capitalists force wages too
low for workers to consume the commodities on sale.
A somewhat different
The problem with the first explanation is that it flies directly into
the face of the logic of capital:
The consumption
the physical amount of fixed capital per worker increases does not mean that its
value must increase - for it may well decrease and, indeed, this is precisely
the task of fixed capital in the sector of capital goods production.
dismiss thus the
'overaccumulation~
thesis.
We may
'too much accumulation' means; there will be always new areas of investment so
long as there is living labour to exploit.
There can
be little doubt, however, that labour-power was plentiful and cheap throughout
32.
Generally on the
Marxist theory of crises, E.O. Wright, Class, Crisis and the State, London,
Verso, 1979, Ch. 3.
- 32 -
the 1920s.
We have seen
that the working class had been disembodied politically by capital in the 1920s
and that the use of fixed capital to transform the labour process helped it
achieve this goal.
that the devaluation of fixed capital occurs through the employment of new
machinery, that is, through investment in new fixed capital.
But when, as in
1929, the working class is absent from the workplace, devaluation can take place
only through deflation.
in the capital goods industries dropped while the crisis spread to consumption
good industries.
33 -
The wave of financial speculation that preceded the collapse of 1929 was
the clearest sign of the crisis of realization that forced capitalists to
withdraw money capital from investments and seek better returns in the stock
market.
fails~
The inevitable
financial collapse comes when the growing pile of paper money fails to find real
productive equivalents in terms of command over labour-power and other
commodities.
bigger ones resume their investments on new fixed capital, paying relatively
higher wages for higher productivity.
take place only where the working class is sufficiently strong to impose a
certain wage level throughout individual branches of industry and the entire
economy because the relatively high wage level cannot be afforded by smaller
capitalists whose fixed capital is devalued quickly.
instead, the working class had been driven out of the factory in the 1920s and
capital found it impossible now to start a new cycle of accumulation.
resulted in further deflation as prices and wages collapsed.
Deflation
The breakdown of
price and wage structures endangered also the function of money as the measure
of value, as the embodiment of capitalist command in society.
For there is no
The decline
vi~lent
- 34 -
repay loans while their fixed capital was devalued ran to the State for help
against parasitical financiers.
We saw earlier that in the New Era fixed capital ceased to play its
mediating role between surplus value and variable capital.
But
we have not discovered yet the reasons why what seemed to be a normal recession
turned into a micidial crisis both for capitalism and for society as a whole.
The growing extraction of surplus value requires ever increasing sums of fixed
capital relative to variable capital.
the physical mass of fixed capital increases, its value need not increase; on
the contrary, the purpose of higher expenditure on fixed capital is to raise the
rate of exploitation and thereby to lower the cost of fixed capital itself.)
But the attempt by capital to transform the labour process into a process of
valourization means that the expenditure on fixed capital must come slowly to
encompass even areas of social reproduction like communication, transport,
education, and health, as well as the production of means of production.
Investments in fixed capital have the double function of absorbing idle capital
and of liberating large amounts of surplus value for capitalists.
As Marx put
it, it is possible to stave off crises by transforming "a great part of capital
into fixed capital that does not serve as agency of direct production" because
''such undertakings, in which the ratio of constant capital to variable is so
enormous, do not necessarily enter into the equalization of the general rate of
profit".
which we alluded above because the astronomic rise in the organic composition of
capital causes a 'jump'in the structure of capital:
1~
35 -
however, that investments in fixed capital have very slow turnovers; hence,
capitalists are forced "to shift the burden ... on to the shoulders of the
State".
The State is needed also because "the greater the scale on which fixed
p~oduction
process
able to plan the development of capitalism, not in any rational sense, but in a
politically decisive manner.
Depression; nor is it possible to imagine how it could have existed without the
capitalist experience of such a redoubtable crisis.
provides us with clear evidence that by the 1930s a society of capital had come
into existence, one in which the extraction of relative surplus value as the
specifically capitalist mode of accumulation had engulfed the basic reproductive
functions of society by transforming them into fixed capital and subordinated
most social relations to its own expanded reproduction.
33.
- 36 -
p~litically
at the
accumulation with a higher rate of exploitation, that is, with a new politicoeconomic asset between workers and capital.
A certain
this
was the momentous political task that the Roosevelt Administration inherited in
1933.
35.
APPENDIX
This is
the thought of a Weber or a Keynes is much more valuable than the scattered
pragmatic journalism of people like Walter Lippmann or Thorstein Veblen.
It
should be borne also in mind that Weber, Keynes and Schumpeter all visited the
United States and embodied their experiences there in their theoretical
frameworks.
1936, it was to Europe and its theoreticians that the American administrators
turned:
they even
travel!~d
- 38 -
administrative secrets.
peculiar to that country and especially to the fact that it had become already
society of capital.
~free'
The
owners of the tools, and consequently they were free to alienate or sell their
labour-power to any employer.
English Civil War assumed the alienation of labour and the existence of a legal
subject.
social contract by means of which each individual bourgeois could have its
rights validated as a citizen.
the consistent Hobbes had advocated the total alienation of the individual self
to the sovereign who would ensure social peace.
witnessed the growth of political stability after the Restoration, could propose
the creation of a representative State with the purely negative function of
protecting .. life, liberty and estate".
- 39 -
The expansion
Indeed, opinion could be 'public' also in the sense that it did not
promote any private or sectional interests but merely aided the protection of
private interests generally by assuring them of the impartiality of the State.
Hence, the self-understanding of the English and American Revolutions was based
precisely on the postulate of a good state of nature, pre-social and prepolitical, giving rise to a civil society embodying natural rights and operating
according to the laws of the market which the state was to protect against
external interference.
But the
- 40 -
it
Whereas
rights~
hence, the
~ven
public opinion from a classist tool for the rationalization of power (the public
sphere of property owners) into the very embodiment of Reason.
The repeal of
the Corn Laws and the extension of free trade to the markets of the world,
together with the introduction of the gold standard that sanctioned the existing
global division of labour, finally enthroned the ideology of bourgeois public
opinion as the supreme social power.
of classist ideas that directs the overall operation of a political system, this
was the only period in the history of capital when a bourgeois ideology can be
said to have existed.
- 41 -
The
For
the State, the embodiment of rational power, was to preserve the autonomy of the
market by ensuring the adequate electoral representation of the various
interests in society so that no particular interest arose to disrupt the
economic equilibrium.
and balances':
two great liberal philosophers, J.S. Mill and Alexis de Tocqueville, limited the
sphere of State activities to the negative enforcement of private rights and
civil liberties in the light of public opinion; the other, expounded by G.W.F.
Hegel, duly recognized the misery of civil society, the antagonism of bourgeois
interests, and sought to reconcile (Versohnen) them at the level of, and
through, the State.
between State and civil society because they did not confront the antagonism of
private interests; but the mere fact that they dealt with the problem showed
that even bourgeois thought perceived a central dysfunction in the liberal
regime.
'
- 42 -
Socially, the
accumulated~
At the level of civil society, the reproduction of the market, its selfregulation, was inconsistent with the autonomy of the producers.
Economically,
the expansion of the market and the increased production of social wealth had
paradoxically brought about the immiseration of a whole social class and the
obvious squandering of material resources.
Politically,
the endogenous growth of powerful economic interests within the market and of
classist political organizations within civil society had elicited the political
intervention of the State and engendered the need for a bureaucratic apparatus
to regulate social conflict.
As we saw in the previous chapter, the Great Depression was the first
catastrophic symptom of the existence of a society
I*
- 43 -
u.s.
Starting in
the second half of the ninetheenth century, European parliaments and States
began to adjust to the growing political needs of the capitalist economy with a
flurry of legislative activity.
These can be seen as attempts to liberate the state machinery from the
shackles of liberalism with its defunct institutions and allow it to intervene
in the capitalist market mechanism to ensure the reproduction of society.
One
awareness of the tasks of the new State-form and of how it should fulfil them.
Not until the great international explosion of working-class revolutions in
1919-20 did the most brilliant bourgeois theoreticians reflect on the immediate
needs of capitalism.
Weber~
- 44 -
goal of saving capitalism from its imminent diremption; but each of them dealt
with a different aspect of this goal - Weber with how the new State-form could
master politically the antagonism of the working class and make it the motor of
its growth, Keynes with how the crisis could be avoided through state control
over the monetary medium, and Schumpeter with the possiblity of a capitalist use
of the crisis and the trade cycle.
For Weber, the real ruler in the modern State was bureaucracy, the
public power of the administration to ensure the reproduction of society in its
vital functions:
the
The 'progress'
The fate of Zivilisation, then, is the "disenchantment" of the world that comes
with the "separation" of the worker from the object of work.
It is the enforced
alienation of the Arbeit (labour) that has transformed human reality into a
wholly reified, calculable, cybernetic "iron cage".
- 45 -
workers who clamour for the socialization of the means of production are
oblivious of this destiny:
The shattering of
No!
Rather it would
But Weber was never fooled by the apparent objectivity of purposive rationality
or by its embodiment in the bureaucratic machinery; "an inanimate machine is
mind objectified",3 its technical operation is the product of political
decisions.
2.
Cited in K. Lowith, Max Weber and Karl Marx, London, Allen & Unwin, 1982,
p. 53.
3.
Ibid. , p. 1402.
4.
Ibid., p. 1404.
- 46 -
The outbreak of World War I, with its grave domestic crisis, had
These factors
combined had led to the "negative politics" of the Reichstag in both external
and internal affairs - such was the execrable "will to impotence" (Wille
Ohnmacht) of the German political class.
crisis awaiting Germany at the end of the War, Weber threw the entire weight of
his analytical acumen on devising a new form of the State to counter the rising
level of working-class composition and struggle.
proletarian avalanche, against the blind fury of the masses", a powerful asset
of the State would be essential; democracy would have to be transformed.
It is
In Germany
5.
Ibid., p. 1460.
- 47 -
Capital must
use the Arbeit of the labour force as the motor of its own development.
To
~social
It is the antagonistic cohesion of the working class that forces capital out of
its archaic form of private capital into the new one of organized capital:
capital must present itself now as social capital, and the State as a
Sozialstaat.
The
law will intervene decisively to regulate and command vital social processes,
and the intervention will be guided by political, not bureaucratic, dictates.
There will be parliamentary control of the bureaucracy; but above all, there
will be parliamentary selection of leaders, who will be accountable to
Parliament through the party structure.
Beruf (calling) of the leaders.
of the executive, the new parliamentary structure will pro-duce the leitender
Geist (the charismatic leader).
6.
Ibid., p. 1391.
- 48 -
separation of powers.
All Marxist
theoreticians of the time were agreed that the contradictions of capitalism, its
'exploitation', lay not in the act of production mediated by the wage relation,
but in the distribution of commodities.
Hilferding's attack on
Bohm-Bawerk~s
critique of Marx, aimed at proving that the latter had not failed to
transfo~
7.
- 49 -
Lenin~s
Lukacs,
capitalism operates a split between subject and object that becomes evident in
the act of cognition, in the antinomies of burgeois thought; it encourages
contemplative attitude.9
this process.
Lukacs~ philosophy,
8.
In P. Sweezy (ed.), Karl Marx and the Close of His System, London, Merlin,
10.
Ibid., p. 103.
- 50 -
transfo~ation
of the
labour~,
by monopolies, all meant to counter the tendential fall of the rate of profit.
But the new indusrial methods of Taylorism and Fordism would not eliminate the
old antagonism:
~tame gorilla~
is a phrase,
11.
R. Luxemburg, Rosa Luxemburg Speaks, New York, Pathfinder, 1970, pp. 153-
218.
12.
13.
Ibid., p. 467.
- 51 needs that could be left in the hands of private capital but has to be
controlled by the State.
Failure to take such action "would weigh on labour in a much more crushing
manner".
ubiquitous Arbeit of this period, and the sole fault of finance capital is to be
unconnected to the "productive organism".
It was left to Keynes to spell out the precise terms of state economic
policy for the new exigencies of capitalism in crisis.
If 'money is the link between the present and the future', the crisis had shown
that the political autonomy of this link, on which depended the self-regulation
14.
Ibid., P 472.
15.
- 52 -
'profitability~)
had shown that money wages had a certain 'stickiness', even when real living
standards were preserved.
The link between present and future, the political role of money, had
a simple matter of monetary flows because it concerns the antagonism of the wage
relation evinced by falling profits and
~sticky'
wages.
There is no
This outcome
16.
- 53 -
capitalist class time to settle accounts with its own national working class
instead of keeping to the structures of gold.
the State to fix investments and eliminate the influence of parasitic rentiers
could effective demand be raised to maintain equilibrium with full employment.
The crucial category was to be '"national economic growth", and not "profit".
Hence, the State appeared in a novel guise as the expression of a capitalist
will to power, or better, will to survive.
The Weberian shift from worth to purpose was not limited to the social
sciences but extended to science overall and to technology.
For once,
therefore, science and technology had lost their epistemological neutrality and
become aspects of social practice.
also rational; but its ultimate status of social practice requires a sujective
motor to it that, for Weber, is the calling (Beruf) of charisma.
If the State
must be run like a factory, the charismatic leader must become a captain of
industry.
mas~ive
- 54 -
employment had failed to understand the specific nature of the cycle, concealing
the political uses of economic crises.
Most
Cycles are
Cycles are no longer thought to be accidental 'conjunctures' that may or may not
occur; rather, they are structural elements essential to the reproduction of the
capitalist system, the system of "creative destruction".
The massive
17.
- 55 -
confusion;
There is a
bureaucratic asset of the old society to make a leap to a new dynamic system, to
more powerful forms of political command for the promotion of capitalist
production.
Nevertheless, the
CHAPTER 2
Prologue:
Two
state with capable institutions could ensure an adequate response to the gravity
of the crisis.
For this was not just anoher cyclical slump; here the very future of
capitalism was in danger.
It is probable that
Roosevelt~s
"Our last
Hence the need for political control of private enterprise had grown greater
than ever:
1.
Roosevelt~s
- 57 -
It became
In every
The
The elections of
the previous year had seen him victorious by seven million votes over Hoover,
reversing the latter's victory by six million over Smith in 1928.
The gigantic
swing was due to the massiv~ working-class vote that allowed Roosevelt to
- )8 -
~A
needed them to run the many governmental agencies, boards and authorities that
were to be erected in the next few years to measure and control the performance
of the economy.
Many waited breathlessly to see if the crisis would transform the United
States into another Russia or Germany and Franklin D. Roosevelt into another
Huey P. Long.
We must act,
Senate: 59 Dem. and 36 Rep.; H. of R.: 313 Dem. and 117 Rep.
2.
See J.M. Allswang, The New Deal and American Politics, New York, Wiley,
1978, Ch. 3.
- 59 -
demand and need for undelayed action may call for temporary
departure from that normal balance of public procedure.
*****
We begin our treatment of the New Deal with an analysis of its monetary
and fiscal policies not merely because they form an essential part of all
economic policy, but also because they illustrate best the logic of state
,,,
II'
~idealism'
control over the monetary medium to ensure that it gave a truer indication of
real capital formation and accumulation.
both as the quickest channel for state intervention in the economy and as the
most powerful form of state authority over society.
much:
Roosevelt understood as
- 60 -
In other words,
In theory, coral
The President's obvious exaggeration was clearly intended to impress in the mind
of listeners the necessity of prompt political action to resolve the crisis.
Only political authority over the monetary medium could extend the capitalist
present into an otherwise uncertain future.
By the time Roosevelt took charge of the Presidency on 4 March 1933, the
financial system of the United States was on the verge of total collapse:
an
Hence,
in the first days of March, the financial system of the greatest capitalist
economy was paralyzed. 4
Trading with the Enemy Act, Roosevelt declared a national bank holiday and the
3.
4.
See H.W. Arndt, The Economic Lessons of the Nineteen Thirties, London,
Oxford U.P., 1944.
\)
- 61 -
After calling
holiday and the lending by the Federal Reserve to member banks without
limitation on the character of the security accepted.
those banks whose solvency and liquidity could be guaranteed. by the government
were re-opened.
without restrictions; a month later the number had risen to 90%; withdrawals had
lj
stopped and $1.25 billion in currency had flowed into banks by the end of
March. 5
,,
By 1933 many debts that had been contracted three or four years earlier
had become unbearably onerous because of the rapid decline in price 1evels. 6
A succesGful economic policy presupposed the re-establishment of the old price
level through reflation which, in turn, required the suspension of the gold
standard at home and the strict supervision of gold exchanges.
Banking Act achieved all this and went further in outlawing
The Emergency
~gold
clauses' in
Adjustment Act (the Thomas Amendment), signed on 12 May, Congress authorized the
5.
6.
- 62 -
issue~
An investment fund of
$2 billion was to be set up with the funds obtained from the devaluation.
Moreove~,
mournfully:
powers, Roosevelt wanted a managed money economy and not some reckless
;greenbackism'.
balanced budget.
7.
- 63 -
Administration and Congress that the budget deficit could not be incurred with
the dollar so overvalued on the gold standard without a serious outflow of gold
that might lower prices still further and spread financial panic.
Although the
United States could withstand the gold outflow easily in terms of gold reserves
(which had been growing fantastically during the twenties), a drain of gold
would have lowered domestic prices and threatened the fragile economic recovery.
Since March, the dollar had fallen spectacularly in exchange markets, driving
domestic commodity prices up and creating new purchasing power.
Tied to this
reflation was the added protection enjoyed by U.S. industry through the SmootHawley tariffs of 1932 and those introduced by the Agricultural Adjustment
Administration and the National Recovery Administration.
by the time the Conference was held, the dollar would fall so much that the
foreign delegations might be forced to agree on international action to raise
price levels in exchange for monetary stabilization and lower tariffs.
The
Axis powers; he himself linked the fates of the London Economic Conference and
the Geneva Disarmament Conference on 16 May, a day before Hitler launched his
foreign policy in the Reichstag.
shoulder the cost of reflation, Roosevelt warned his delegates not to enter into
any monetary or tariff agreement that might jeopardize domestic recovery.
8.
- 64 -
According to Roosevelt, the mere return of the dollar to the gold standard
showed "a singular lack of proportion and a failure to remember the larger
purposes for which the Economic Conference was called".
e tis hes of so- called international bankers.
That objective
means more to the good of other nations than a fixed ratio for
a month or two in terms of the pound or franc.9
9.
- 65 -
national~sm
on 30 January, gave Roosevelt power to fix the new price of gold, which became
$35 per ounce, up 69.33% from its old official level of $20.67.
The decision to
buy gold, announced by Roosevelt in October, was dictated by the new slump of
the economy and prices in mid-summer.
effectiveness of these measures; but there can be no doubt that the fantastic
increase of U.S. gold .reserves from $4 billion in 1933 to nearly $14 billion in
1937 must have created a lot of liquidity, as is attested by the large excess
reserves of banks and the low interest rates.
These initial measures opened the road to inflation, they made possible
''the liberation of fiscal policy" that allowed the State to mortgage the future
through the credit system in order to preserve the present. 11
Now the
The revolutionary fiscal and monetary measures it took until 1937 must
10.
11.
- 66 -
capital during the crisis had provoked an abysmal deflation and caused serious
distortions in the distribution of productive assets.
A huge program of
I'll
I'
reducing interest rates was not sufficient because, in the absence of government
aid, debt re-adjustment could only hurt creditors and increase the financial
chaos. 1 2
stock in financial institutions (mainly banks), loans to urban homes, and loans
to farmers.
This
financing technique was meant to increase government control over banks in view
of the creation of deposit insurance.
A huge
12.
- 67 -
recipients of aid were home mortgages ($2,903 million) and farm mortgages
($2,867 million); these loans were intended to finance private debts and to
increase directly the purchasing power of urban workers and farmers.
Very
The encouraging results of executive action in March did not mark the
end
of
the emergency.
founded in 1932 by Hoover, was enlarged in resources and scope to feed funds to
banks by subscribing to preferred stock or other equity claims against them; the
Federal Farm Mortgage Corporation helped farmers in trouble; the Home Owners'
Loan Corporation re-financed home mortgages.
The necessary price that finance capitalists had to pay for their rescue
came in the shape of the two Banking Acts, 1933 and 1935, the two Securities
Acts, 1933 and 1934, and the Public Utility Holding Company Act, 1935.14
13.
14.
A full account is
i~J.Seligman,
- 68 -
These statutes sprang out of the investigations held by the Senate Committee on
Banking and Currency, starting in September 1931 under the direction of Senatar
Carter Glass, into the causes of the depression and the role of the Federal
Reserve System.
Pecora, special attorney for the committee, subjected top bankers like
J.P. Morgan and Charles M. Mitchell to a thorough grilling.
A series of grave
intensified public outrage against Wall Street until it reached fever pitch on
the eve of Roosevelt's Inauguration.
action.
,tt
The Banking Act of 1933, approved on 16 June, separated the savings and
commercial business of banks, prohibiting their joint pursuit and requiring
Federal Reserve banks to keep themselves informed on the credit extensions of
their member banks.
innovation in the Act was the Federal Deposit Insurance Corporation which, under
its permanent scheme, was to insure deposits 100% up to $10,000, 75% between
$10,000 and $50,000, and 50% beyond $50,000.
while state banks had to become members within two years to be insured.
The
capital stock of the FDIC was subscribed by the Treasury, by Federal Reserve
banks, and by participating banks.
banks, which would be liquidated, while new stockholders were found or else the
business of the failed bank would be turned to a larger bank willing to take it.
With the FDIC, bank failures became a thing of the past.
- 69 -
increased the authority of the Federal Reserve Board and extended the Federal
Reserve System. No reserve bank could negotiate with
consent and participation of the FRB.
~he
on demand deposits and the FRB could set the interest rate on time deposits.
The FRB was empowered to remove officers of member banks who offended against
regulations or sound banking practice.
was introduced in February 1935, big bankers and other finance capitalists
finally rallied their forces against its proposals.
under the guidance of none other than FRB chairperson Marriner S. Eccles, easily
went through the House, it was stopped in the Senate until it was signed,
heavily curtailed, on 23 August.
'credit~
or 'legal
tender' that had to be placed under the tight control of a central bank
responsible to the State.
given the FRB authority to impose margin requirements for loans on securities
(again, a measure apt to strengthen banks against stock exchanges).
The Banking
Act of 1935 clarified and extended the role of the Federal Reserve System.
The
old FRB was replaced by a Board of Governors with seven governors appointed by
the President with the advice and consent of the Senate.
presid~nts
The Federal
70 -
the old
scheme of the 1933 Act was dropped for a $5,000 insurance limit on any one
account - a concession to the larger banks whose higher deposits were not
equally protected, occasioning a loss of business to smaller banks.
independence of the
~Fed~
The
available for purchase only in the open market and not directly from the
Treasury.
private banks by fixing their maximum interest rates to the level paid on
savings by the member bank nearest to a post office.
original proposals contained in the bill for one central bank, for a monetary
authority, for a policy declaration, and for new qualifications for board
members, were all dropped.15
Virtually the same fate awaited the Securities Act, 1933, and the
Securities Exchange Act, 1934. 1 6
Schedule A
Securities issuers could expect to wait twenty days for the FTC to study the
15.
16.
- 71 -
But the Act was a far cry from the original bill.
interstate.
buildings and loan associations, and securities issuances for less than
$100,000.
weakness and uncertainty of Congress, certainly not to any pressure from Wall
Street, which was still recovering from the shock of the Pecora hearings.
The
mildness of the 1933 Act, however, gave Wall Street time to catch its breath and
to prepare against future attacks.
One of the aspects of finance capital with which the new Administration
had not dealt yet was the regulation of the securities industry and of the stock
exchanges.
The
securities exchange to register with the FTC, which could approve or reject its
rules and regulations;
These provisions reflected the New Dealers' belief that "the two real
causes of trouble in the stock market are speculation with borrowed money ...
and lack of adequate
pub~~city'',
- 72 -
independence of the FRB from Wall Street that would permit it to settle margins
adequately - thence, the reliance on the FTC.
the 'financial
community~
This meant
effectively that money changers could not be investors and vice versa!
One can
easily imagine how these proposals pronged the money changers into action:
Congressmen were incessantly lobbied, newspapers were approached and often
bribed to oppose the bill, state legislatures were called in support, people
were employed to write thousands of letters and telegrams to all those involved
with the bill, a slur campaign was started against the proponents of the bill
and Roosevelt himself.
persistent lobby that any of us have ever known in Washington", the bill was
defeated in Congress.
4 May, 1934.
vested a new Securities and Exchange Commission, rather than the FTC, with power
to approve their rules.
of the bill against the New Dealers' wishes because they feared the power of the
FTC.
Despite its fortuitous origins, however, the SEC turned out in practice to
be a very useful and thorough watchdog of the money market, mainly because of
its expert and courageous membership.
members appointed by the President and was to have jurisdiction over both the
Securities Act, 1933, and the Securities Exchange Act of 1934.
itself was a big disappointment if one excepts the creation of the SEC itself.
Still, there was reason for some optimism; as Pecora put it to Roosevelt,
"It will be a good or bad law depending upon the men who administer it." 17
In hindsight, it was a good law.
17.
Ibid., p. 100.
- 73 -
companies.
controversy instigated by the companies against its passage, the Public Utility
Holding Company Act of 1935 granted the Securities and Exchange Commission more
sweeping powers than most regulatory agencies and had extraordinary breadth in
that it applied to all electric and gas companies.
the 'death sentence' provisions, directed the Commission to order the physical
integration and corporate simplification of public utility systems and gave it
control over all aspects of company finance and management.
An
~anti
pyramiding' clause prohibited operating companies from having above them more
than two tiers of holding companies.
operation of the Act through legal action in the courts; it was March 1938
before the Supreme Court approved the constitutionality of the Act with regard
to registration, and it waited until 1946 before upholding the other provisions.
Nevertheless, the fear of imminent state intervention forced many companies to
put their houses in order.
18.
- 74 -
regulatory role with regard to private companies especially with regard to high
rates, low utilization, and limited availability of electricity.
threat of public competition served to reduce rates.
The mere
Meanwhile, the fiscal policies of the New Deal were coming under
increasing attack from business.20
In fact, as
the reform of industrial relations and the regulation of the labour force
proceeded, business grew more alarmed at the ominous fresh militancy of workers.
Soon, the collective wrath of the various employers' organizations, from the
Chamber of Commerce and National Association of Manufacturers, both representing
small business, to the Business Advisory Council, representing the big
corporations, was aimed at the destruction of the New Deal reform program:
the
Social Security legislation, the renewal of NRA, the holding company bill, the
19.
20.
- 75 -
Wagner labor relations bill, the thirty-hour bill, Title II of the Banking Act,
the government's taking over the role of trade associations, the broadening
o~
powers of the AAA, the improvement of the Securities Act - all these were
sturdily opposed and combatted by business with greater vehemence as the
elections of 1936 approached.
The New Deal saw the development of a full-scale welfare state through a
spate of legislation and of executive action providing for the regulation of the
labour force with relief payments and public works.
expenditure was twofold:
Civilian Conservation Corps (CCC) with $300 million to provide work camps for
many thousand youths from families on relief.
Relief Act (FERA) made available $500 million for grants-in-aid to states.
The
following month, the Public Works Administration (PWA) was set up under Part II
of the National Recovery Act and endowed with $3.3 billion to stimulate direct
and indirect employment.
21.
Cf. B. Rauch ... s famous thesis on "the Second New Deal" of 1935 in The
History of the New Deal 1933-8, New York, Capricorn, 1963,
for what follows.
~,
Ch. 5,
- 76 -
pla~e
Consequently,
to finance the program through the winter. The CWA employed over four million
workers at its peak, but soon it ran out of funds and was suspended in April
1934.
to provide relief for one and a half million 'unemployables' and 'useful work'
for three and a half million 'employables'.
throughout the Depression, paying normal hourly rates for lesser hours.
Obviously, the purpose was to preserve .the 'availability' of the unemployed for
work and to inure them to the work ethic. 22
The Social Security Act of 1935 is one of the most important pieces of
legislation in the entire New Deal
22.
becau~e
For a Marxist analysis of New Deal welfare policies seeS. De Brunhoff, The
State, Capital and Economic Policy, London, Pluto Press, 1978, Ch. 2, and
F. Fox Piven and R.A. Cloward, Regulating the Poor, New York, Vintage,
1971, Ch. 3.
- 77 -
Its
from the arbitrariness of charity and relief, the real purposes of the Act were
political and financial.
assistance, was provided already in 28 states just prior to its passage, but the
various programs were either inoperative or inadequate.
Townsend founded a movement to pay $200 once off to all people over 60, the
extraordinary success of the Townsend Plan stung Roosevelt into action.
As
finally enacted, the SSA provided for federal co-operation in state plans for
public assistance to the aged, the blind and dependent children, extending also
to various health and welfare services.
aged.
'I~"
old age insurance that was to begin annuity payments in 1942; benefits were tied
to contributions and protection was made a matter of right.
Initially,
employers and employees alike paid taxes of 1% on all wages under $3,000 a year.
The Act included also a system of compensation for temporary unemployment based
on contributions.
in 1936,
receipts from contributions totalled $391 million and expenditures $95 million;
in 1937, receipts were $1.5 billion and expenditures only $142 million.
It did
not take long for the social security scheme set up by the 1935 Act to be
supplemented by private pension schemes established by insurance companies.
The
capitalist liking for these funds is explained by the fact that they are current
23.
Apart from Rauch and Fox Piven and Cloward, seeM. Fainsod et al.,
op.cit., pp. 774-89 ..
~j
''I
- 78 -
expenditures for firms that have all the attributes of an ideal form of savings
for long-term financial investments.
Of
course, the very fact that these pension schemes are 'private' serves to
perpetuate a certain proletarian insecurity when insurance companies go
bankrupt. 24
Roosevelt's veto:
The first, the Revenue Act of 1935, raised the top tax rate
on individual incomes from 50% to 75%, it set higher tax rates on large
corporations together with a federal tax on inheritances on top of the existing
federal tax on estates, and it made some other changes.
to be collected was estimated at around $250 million, which suggests that the
measure was not intended chiefly as a revenue-raising tax.
1936 proposed to eliminate the then existing tax on corporate profits and impose
only a tax on profits not distributed to shareholders at a rate to be
commensurate with the proportion of undistributed profits.
of taxing distributed profits twice, the new tax was to encourage the payment of
big firms that could finance themselves over those that had to resort to the
capital markets.
stock exchanges; but the Wealth Tax of 1936 must be seen mainly as an attempt to
reduce the budget deficit.
24.
Cf. Aglietta, op.cit., pp. 231-5 and De Brunhoff, op.cit., pp. 16-9.
25.
- 79 -
Nearly all of the economic measures that we have reviewed above were
grounded on underconsumptionist reasoning.
welfare reforms were adopted after the collapse of the NRA under the weight of
bourgeois pressure between 1934 and 1935.
Roosevelt had to consolidate popular forces behind the New Deal against the
evident inability and unwillingness of business to settle its own affairs and
achieve industrial recovery.
In particular, the
rich~
movement that had gathered behind the Louisiana Governor and Senator Huey P.
Long, for it is estimated that at one time the
nicknamed) could count on six million votes.
~Kingfish'
was to neutralize the popular ferment behind the Townsend Plan; and the relief
program (the WPA) effectively halted the rapid advance of left-wing groups of
unemployed and dozed the spreading popularity of Father Coughlin, the 'radio
priest'.
first, because the followers of Long, Father Coughlin, and Townsend joined
forces to form the Union Party and, second, because they were defeated
26.
The political aims behind Roosevelt's reforms are discussed in Fox Piven
and Cloward,
op.cit~,
pp. 84-94.
- 80 -
much to reporters:
I want to equalize
After the great triumph of Roosevelt and the New Deal in the elections
of 1936, the WPA rolls were reduced almost immediately, and they continued to
decline thereafter except for a brief spell with the recession of 1938.
Also in
1938, Congress acceded to the request of business to abrogate the wealth taxes
of 1935, overriding the President's objections.
over and the economy began to recover in 1937 and then again late the following
year, Roosevelt and Congress lost their sympathy for programs of direct relief
and welfare that tended to emancipate workers from the wage relation. 28
The fact that these programs had to be enacted and implemented against
strenuous opposition from business says a lot about their political importance
to the Roosevelt Administration.
with alarm when the President voted nearly $4.8 billion for the WPA in 1935
while the budget deficit was already $3.5 billion.
27.
28.
Yet businessmen
- 81 -
against projects like the public utilities bill, the banking bill, the
continuation of NRA, and the Social Security program.
Roosevelt met the Business Advisory Council, which consisted of some of the
leading
u.s.
welfare program and the extension of the NRA, although it opposed other pending
legislation.
The tax program of 1935 and 1936, more than any other measure, won the
enmity of business toward the New Deal.
of business to the New Deal in 1935 and especially in 1936 - an opposition that
grew more strident as recovery progressed - was one of the major reasons behind
Roosevelt's decision to balance the budget for fiscal 1937.
At this point in
time, therefore, just before the recession of 1937, both the Administration and
business championed the balanced budget and sound finance as an implicit
good. 30
29.
30.
- 82 -
The historical
evidence suggests instead that the promoter of the Economy Act of 1933 and the
vetoer of the bonus bill in 1936 was a firm believer in 'sound finance'.3l
Roosevelt did believe in a balanced budget and saw most of the New Deal programs
as a 'stop-gap' until industrial recovery was achieved.
to this belief:
first, that the budget would be balanced once full recovery was
made; second, that the Administration should expect to balance the budget
Nsoon"; third, that both expenditures and deficit should decline as recovery
progressed.
Indeed, while the GNP was below its level in 1929, the federal
federal expenditures dropped to $7.4 billion and the annual deficit to $358
million from a peak of $3.6 billion the previous year.
spending sharply for fear of inflation, the government was collecting $2 billion
in taxes to balance its budget.
33% and durable goods production by 50%; national income fell 13% and payrolls
35%; manufacturing employment lost 23%.32
The dramatic downturn convinced Roosevelt that the spending program had
to be resumed:33
31.
32.
For these data and for what follows, see K.D. Roose, The Economics of
Recession and Revival, New York, Anchor, 1969, Ch. 15
33.
- 83 -
upon the future national income had to be invoked as a basis for deficit
borrowing to provide purchasing power that would keep the economy going.
"Spending for its own sake", oblivious of budget deficits, was born.
expenditure for fiscal 1938 returned to $8.6 billion.
The
round, Roosevelt agreed to spend $1.5 billion for public works and housing as an
"indirect" means of stimulating consumption by intervening "directly" in
production, reversing thus his old preference for direct relief.
It must be
stressed, however, that Roosevelt took these decisions neither on his own nor
willingly; at all times he was persuaded and guided by a growing body of
economic opinion ranging from academics to his closest advisers to a radical
Congress in an election year.
budget plans.
Utw,
''tl
. d
l.lj
i>fil
private investment.
~~:
...
extraction and distribution of surplus value, but there were few disagreements
about the new inflationary regime, there were no frantic cries of alarm about
the possibility of inflation arising from deficit spending or dire warnings
about the collapse of government credit.
suited capitalists.
climate of bourgeois opinion and capitalist strategy from the frenzied fiscal
and monetary conservatism of the 1920s.
discover the reasons for the final success of the inflationary regime in the New
Deal.
CHAPTER 3
Roosevelt had proved that the workings of the capitalist system were not at all
automatic, but that they depended on a certain level of political control over
the 'metabolism' of the economy.
measures, Roosevelt was convinced that full recovery could not be achieved
without setting in motion the industrial machinery of the country, without
restoring its profitability.
As we have seen, the first alternative was not open to the democratic
Roosevelt; but the second was necessary and was undertaken by legislation.
The
pace with increases in productivity; lack of purchasing power had caused profits
and investments to fall; the ensuing overproduction had led to cut-throat
competition destructive to profits.
these problems.
The question was what would be the solution and how would it be
implemented.
Three major responses which had been taking shape in the early years of
the Depression, competed for support in 1933: 1
1.
Perhaps the best summary of these is in E.W. Hawley, The New Deal and the
Problem of Monopoly,'"Princeton, P.U.P., 1966, Ch. 2.
- 85 -
small business, argued that monopolies had squeezed the economy with their high
profits and that they should be curbed to achieve recovery; the 'planners',
backed by big business, claimed that overproduction was the evil and that its
remedy lay in abolishing the anti-trust laws and allowing industrial selfregulation and trade associations to weed out destructive competition and to
encourage national economic planning; a strand of left-wing 'planners' insisted,
however, that the planning should be undertaken by the state, not by industry
itself.
to the problem of industrial recovery would have to side with either the antitrusters or the planners.
given that both sides were set on planning, he had little choice in
the matter. Still, dissensions were bound to arise over two crucial points in
the legislation:
very problematic; all that business required was that any government regulatory
agency gave industry the chance to work out its own codes and that it ensured
their enforcement.
should be given a say in the codes through the banning of company unionism,
revocation of anti-strike laws like injunctions and 'yellow-dog' contracts,
legalization of the closed shop, and collective bargaining.
Regardless, the
It is
important to note that initially the Administration did not promote what became
Section 7 of the NIRA.
- 86 -
In its final form, the NIRA contained three titles whose combined effect
was to extend the peacetime governmental powers of control over industrial
organization beyond anything the country had known in its history.
Under
Title I, the President was empowered to form agencies such as the NRA, to
administer the Title, and to authorize equitable and representative codes that
did not promote monopolies.
codes, except that they should comply with Section 7 on labour standards.
Ill
and representative codes that did not promote monopolistic practices to which he
could add or delete segments or impose entirely new codes.
This section
outlawed yellow dog contracts and guaranteed the right of employees to organize
and bargain collectively through representatives of their own choosing.
Section 4a allowed the President to enter into voluntary agreements to
accomplish the purposes of the law; Section 4b contained the controversial
2.
See B. Bellush, The Failure of the NRA, New York, Norton, 1975, Ch. 1, and
I. Bernstein, The New Deal Collective Bargaining Policy, Berkeley,
University of California Press, 1950, esp. pp. 29-31.
I if
- 87 -
licensing provision that granted the President a power of life or death over
business enterprises, attacked by many as an unprecedented extension of
presidential power.
Section 10 authorized the Chief Executive to remake any code at any time during
the life of the law.
Works Administration which was to spend $3.3 billion either' directly or through
the Reconstruction Finance Corporation.
Therefore, he
placed the mercurial and energetic General Johnson, who had already directed the
War Industries Board during World War I, at the head of the NRA and the
finically cautious Harry Ickes at the helm of the PWA.
had no consistent strategy of
~pump
There
can be little doubt that the appointment of Ickes as helmsman of the PWA greatly
weakened the economic effectiveness of the NIRA.
decided that if the economy was to be revived that had to be achieved through a
thorough reform of its industrial structure; the other measures were to serve
simply as means of political control while the Depression lasted.
The
During the
1920s it had suffered from overcapacity with all its attendant evils, pricecutting, low profits, inhumane working conditions, and very low wages.
was drawn up to fix prices in the industry and reduce competition.
3.
The code
Johnson's
in Schlesinger Jnr., The Coming of the New Deal, Boston, Houghton Mifflin,
1959.
- 88 -
Bo~rd.
code of fair competition on 9 July 1933, few could see that it would be used by
the leaders of the textile industry to circumvent the guarantees in Section 7a
and to adopt a restrictionist policy of reduced production (e.g. production
machinery was not to operate for more than two shifts of a forty-hour work week)
that was to have deleterious consequences for employment and wages.
Yet, even
by that late date, no other major industry had proposed a code by which it would
be bound.
~blanket code~
under which participating industries would pledge support for NRA standards
concerning minimum wages and hours, and other labour rights.
After obtaining
~four
Parade held in New York, the largest in the history of that city.
The General
succeeded in forcing most of the biggest industries to sign codes outside the
blanket agreement within a month.
the 'blanket code' because of the obvious advantages of the former, including
price-fixing and regulation of production
'J
- 89 -
suasi~n,
however pressing, because of the risk that the NIRA might be challenged in the
Courts for unconstitutionality. 4
reviewed its impact on the economy and on the public interest before submitting
it to the President for signing.
code-making process were the deputy administrators who were drawn from the ranks
of business; like Johnson, they were unwilling to oppose business and seconded
most of its wishes.
none.
Outside the code-making process lay three Advisory Boards that were
The Industrial
Labor Board was limited by the general weakness of trade unions and by its much
inferior technical resources and research skills to those enjoyed by the
Industrial Board.
behest.
4.
Johnson~s
The inevitable
- 90 -
result was that the codes were written by the technicians from business and
industry loaned temporarily to the government.
Some of the
provisions in the codes set minimum prices either directly, through outright
price-fixing, or indirectly, by prohibiting sales below cost determined with
uniform cost-accounting techniques.
A third set
was demonstrated by some detailed price data collected by the Mail Order
Association.
Within six months of the start of the NRA, while farm prices
remained at little more than half their 1926 level, prices quoted for products
under open-price provisions were 11.2% higher than in 1926 and 21% higher than
in 1929.
Farmers and low-wage workers were the first to suffer and to complain.
S.
- 91 -
Finally, some
Nowhere was the business bias of the NRA more evident than in the
administration of Section 7a.6
appoint labour representatives to some of the boards until December 1933, and
even after that their contribution was all but insignificant.
Instead of
facilitating the role of labour to force the economic recovery in line with the
underconsumptionist philosophy behind Title I of the NIRA, the NRA codes
strengthened the hand of business against workers.
with the automobile industry code, which set the trend for all future codes.
Profiting from the AFL's weakness in the industry, the auto employers obtained
Johnson's and Richberg's approval of a 'merit clause' to select and retain
employees as a proper construction" of Section 7a.
in the code affected few workers, while the variations in maximum hours allowed
in it gave employers flexibility to handle the labour force.
Labor Advisory Board warned of disaster in industrial relation did Johnson, and
6.
Bellush, Ch. 4,
proy~des
- 92 -
then Roosevelt, announce that future codes would not contain 'interpretations'
of Section 7a.
w~n
became the chief disruptive force: - disagreements over NRA policy within
business circles themselves. 7
The
dissensions that had arisen from the start between 'planners' and 'antitrusters'
betrayed their different stance on behalf of big and small business,
respectively.
Once the initial clamour of the Blue Eagle drive was over, the
labour, and consumer groups, various business groups, especially small business,
unleashed a campaign of opposition to the anti-competitive, corporatist features
of the NRA.
became clear, many small businesses denounced the NRA as a form of 'bureaucratic
socialism' prone to 'labor domination' and political economic intervention in
favour of 'monopolistic combinations' that threatened to put small business out
of action.
big business, after the initial panic caused by the price slump of July 1933,
began to view the NRA as a dangerous precedent in government regulation of
business on the European corporatist model.
7.
- 93 -
inabil~ty
~he
Supreme Court torpedoed the NIRA for unconstitutionality in May 1935, the NRA
became a welter of divisions, dissent, and confusion, with constant squabbling
and changes of personnel.
would proceed with some of the more beneficial aspects of the program.
One of the more beneficial aspects of the NRA had arisen as a result of
the strike wave in the summer of 1933 which involved at one stage 300,000
workers.8
Boards that a tripartite National Labor Board (NLB) be created to stem the tide
of strikes that threatened recovery, Roosevelt
el~cted
labour and three from business), with New York's Senator Wagner as public
representative.
the vagueness of the decree establishing it, Wagner and the other
representatives took the tasks of the Board very seriously.
put to the test in a recognition dispute involving the hosiery mills in Reading,
Pennsylvania.
8.
Formula~
which
The 'causal' connection is undeniable, cf. C.L. Tomlins, The State and the
Unions, New York, Cambridge U.P., 1985, P 109, and PP 109-19 for a concise
narration and appraisal of events that follow.
- 94 -
parties to hold elections where workers would vote by secret ballot for
representatives and those chosen by a majority would bargain collectively with
the employers on wages, hours, and conditions of work.
agree, the NLB would make a final adjudication.
employers with the directions of the NLB and the conclusion of the dispute
marked a major victory for the Board and for the '"Reading Formula".
In October
and November, the Board continued to score a number of brilliant successes; but,
given the constraints to which we have referred above, this situation could not
be expected to last for long.
show to the wide world, including industrial workers, just how dependent the
whole NRA experiment was on the self-interested support of business.
Once
again, after the initial panic of economic collapse in July had vanished,
u.s.
Two
NLB, the latter was forced to request the NRA to withdraw the Blue Eagle; but it
was clear that the NRA could not take that action if it did not wish to cause a
general business strike against the entire program.
disputes in its first three months, its success rate had fallen to 28 out of 86
cases from December 1933.
through Executive Order No. 6580 failed when Johnson and Richberg 'interpreted'
this Order in support of proportional representation.
were in open war.
on the borizon betweenworkers and capital, while both sides were losing faith
in the recovery program.
- 95 -
organized plants in Detroit warned General Motors and Hudson that they would
strike unless recognition was granted, union activists reinstated and a 20% wage
increase granted.
announced a settlement that hurt both the union and the NLB.
The settlement
provided for a tripartite Automobile Labor Board (ALB), with one labour, one
industry, and one neutral representative, separate from the NLB but still within
the NRA.
The ALB could hear and adjudicate charges of discrimination, but the
auto industry was awarded the all-important victory over the interpretation of
Section 7a.
Thus, the President himself had contradicted the NLB and supported
proportional representation.
Instead,
they allowed the auto industry to become the spearhead of a capitalist attack on
the working class, helped by the President and the NRA.
9.
10.
- 96 -
The bill
The
President's action was dictated by the fact that business was united as one
against the bill and he was unwilling to confront it.
Massive social
upheavals shook the country when workers in Toledo and Minneapolis struck. 11
It was evident that 1934 would witness a strike explosion of a scale and
significance comparable to that of 1919-20.
while the AFL regretted the missed opportunity of the Wagner-Cannery bill.
11.
12.
Tomlins, op.cit.,
'pp.
127-32.
In
- 97 -
~industrial
self-government' of
the NRA by the scale, bitterness, and violence of working-class struggle early
in 1934.
Johnston and Richberg, the top administrators of the NRA, were aware
that the massive wave of strikes menaced the existence of their Administration,
once it became clear that it could not negotiate the codeswithout the
concurrence of workers.
and Richberg, to a lesser extent, should clash with workers over the next few
months.l3
13.
158
~~~
'
(,...[
ll
;t~l1I
~~
u
111
'
'
.:
'~~I
1111~~~~
- 98 -
par~y
Instead of the
improved on its
A declaration
Ill
'I
Worse,
to outlaw such unfair labour practices as company unionism and interference with
collective bargaining; it set up a National Labor Relations Board with power to
enforce its own decisions and sanctioned the majority principle in workers'
elections for union representation.
the bill after a year or more of industrial strife and with the failure of NRA
all but evident was the backing of the President.
followed his NRA advisors in rejecting the bill, probably because he held out
some hopes for business support.
14.
40, and J.A. Gross, The Making of the National Labor Relations Board,
Albany, State Uni '~Of New York Press, 1974.
- 99 -
finally broke with Roosevelt denouncing. both the Wagner bill and the New Deal as
a whole at the same time as the Business Advisory Council, representing big
business, expressed its overall support of the Administration.l5
Fortified by
the backing of the BAG and seeing the obvious unwillingness and perhaps even the
inability of business - demonstrated in the NRA experiment - to reform the
industrial production of the country, Roosevelt was compelled to turn elsewhere
for political support; the American working class was the obvious alternative.
Responding to Wagner's entreaties not to oppose his bill which had been passed
already in the Senate, the President finally yielded, needled by the thought
that he might be losing his initiative in Congress over the legislative program
of the New Deal now that the bill looked like passing easily in the House.
On
24 May he decided to endorse the Wagner bill, three days before the Supreme
Court delivered its decision in the Schechter Case declaring the NIRA
unconstitutional.
5
July.
The Wagner Act was enacted consciously to replace the NIRA and became
quickly the keystone of the New Deal.
The
15.
16.
A copy of the
text~is
- 100 -
application and validity of the Act in the light of U.S. common law.
The third
Sections 4
and 5 set forth the organization of the agency, while Section 6 granted it
authority to issue rules and regulations.
oq~anization
choosing were copied precisely from the NIRA and set out in Section 7.
Various
Throughout the legislative history of the Wagner bill, the AFL had
backed its reforms almost implicitly.
17.
In fact, the AFL had hoped that the bill would empower the NLRB
."
Cf. Tomlins, op.cit., pp. 140-5.
- 101 -
merely with the function to ensure that basic trade union rights were observed
by employers while the actual task of organizing workers went to the Federation.
As it turned out, however, the bill went much further than this in assigning to
the NLRB the authority to oversee the conduct of elections, to decide on the
"appropriate units" of voting workers in various branches of industry, and to
scrutinize the conduct or internal organization of the new unions.
The presence
of these provisions in the bill and their eventual inclusion in the Act is quite
understandable within the overall functional aims of the New Deal.
If the
were given power to integrate the new unions in the rejuvenated motor of
capitalist industry aimed at regulating the various phases of accumulation.l8
The timing of the Wagner Act - which, as we have seen, virtually was imposed on
Congress by the strike eruption of 1934 - was a further source of worry to the
AFL.
For, in 1935, the Federation was facing a growing internal challenge from
18.
19.
See
w.
1960, Ch. 1.
- 102 -
AFL consisted of the United Mine Workers, the Amalgamated Clothing Workers, and
the Industrial Ladies' Garments Workers' Union, led by John L. Lewis,
Hillman, and David Dubinsky, respectively.
Stephen~
unions, went to the AFL convention of 1935 held in October in Atlantic City with
the intention to convince the Federation to carry out a massive organizing
campaign among industrial workers.
it came to the vote, the industrial unions could not summon more than 38% - good
but not sufficient.
leaders met with seven others in the Washington headquarters of the UMW to found
the Committee for Industrial Organization.
Once
again, the usual perspective that sees the CIO as the founder of industrial
unionism must be reversed:
were responsible for the success of the CIO and the enforcement of the Wagner
Act, both of which had to be imposed on
u.s.
To
The Wagner bill had been passed and the NLRB was a reality.
But could
it enforce its decisions on its own against the combined might of U.S. capital?
In the light of historical experience with the NRA, the answer had to be
negative.
1936, a powerful wave of strikes arose that led to the unionization of the great
majority of industrial workers in the United States and to the recognition of
their unions by capital.20
20.
s7,~
- 103 -
companies.
193~,
Goodrich plants staged a rapid series of strikes using a new tactic - the sitdown strike.
The rest of the year saw 43 strikes with about 76,000 workers and
down technique and won partial bargaining rights after paralyzing a steel
company producing frames for Chrysler and Ford.
strike.
After a long battle that cost RCA half a million dollars, the United
But the
joined it in July; now it was the turn of electrical and rubber workers.
On the
formed the National Maritime Union with Communist leaders and affiliated to the
CIO.
This was all very good news to Roosevelt for not only did it justify
he
existence of the NLRB, but also it provided a new powerful political ally in an
environment made very unfriendly by the rabid turn of the Supreme Court against
the New Deal in the spring of 1936. In the fall of that year, as the
Presidential elections approached, the Wagner Act was believed to have only a
few months of life left before the Court struck it down upon an application
backed by business.
Deal and, thence, recovery itself depended on the support of organized labour.
Such support, however,
~auld
not come from the AFL because the rise of the CIO
- 104 -
~f
Roosevelt was forced to turn to the anti-business part of labour which in 1936
was represented by the CIO.
themselves:
Roosevelt's
campaign for a 'people's government' and against corporate business was rewarded
with an electoral landslide.
Democratic
u.s.
history.
The forces of
'I should
21.
22.
W.E. Leuchtenburg, F.D.R. and the New Deal, New York, Harper, 1963, p. 184.
- 105 -
see~
the changing asset of capitalist institutions, and not as the usual banal
instance of popular democracy against business oligarchy.
Only such a
But
there was never a single chance that Roosevelt might turn seriously against the
interests of organized capital in the name of his much-vaunted 'people's
government"'"!
The precise nature of the divergence between Roosevelt and business must
not be misunderstood; in particular, the amount of opposition to the NLRB by
both business and AFL must be viewed in context, first, because the CIO was not
very strong until the end of 1936 - and hence it could not enforce NLRB
decisions - and, second, because before the middle of 1937 - when the major CIO
unions obtained recognition from employers - the NLRB had lived in a state of
'suspended animation', settling very few disputes, while it waited for the
Supreme Court to decide its fate.
in that year and were forced to grant the UAW and steelworkers nation-wide
recognition.23
Auto
workers at General Motors went on strike between December 1936 and February
23.
Cf. D. Milton, The Politics of U.S. labor, New York, Monthly Review Press,
19 8 2 , Ch 4
- 106 -
1937, bringing the company to its knees by cutting car production from 32,000 to
6,000 units and causing General Motors severe economic damage.
Roosevelt played only a mediating role in what has been called the most critical
labour conflict of the 1930s.
workers adopt the sit-down strike while General Motors resorted to some of the
most repressive business tactics adopted in the twenties and early thirties,
General Motors was compelled to recognize the UAW as the sole bargaining agent
of auto workers.
These matters
would be taken up in later struggles, but the reformist orientation of the UAWCIO was evident already in their unwillingness to pursue demands that went
beyond union recognition and touching on the vital questions of managerial
command in the factory: - these included shop-steward representation, piecework, speed-up, and duration of the work week.
Motors, Chrysler could not last long.
similar to that of General Motors.
earlier, on 2 March, when
u.s.
for the SWOC, the company did undertake not to interfere with the process of
unionization and to deal with a majority union.
weeks, American industrial workers had set up the greatest trade union
organization in the history of the United States.
Motors and
u.s.
United States.
The
third largest after cars and steel, the electrical industry, resisted a little
- 107 -
longer until General Electric recognized the United Electrical Workers in 1938
and Westinghouse was forced to sign by the Supreme Court in 1941.
By the end
August 1937, the CIO had a membership larger than that of the AFL.
of
At its
the
first, dealing with collective bargaining, is taken from the GM-UAW contract,
and the second, concerning wage practices, is derived from the U.s. Steel - SWOC
contract, both of 1937.
two isolated cases.
feature in our analysis precisely because it was the creation of the CIO that
enabled big business to regulate the wage relation of entire
industry.
~ectors
of
mass industries
pe~itted
of workers in those industries for the purpose of setting unform wage and
conditions in the various industries across the States.
triumph of the CIO achieved was nothing less than the possibility for capital to
use the composition of the working class as a dynamic motor of capitalist
development by tying it
to
- 108 -
unionization of mass industries made possible the use of fixed capital as a tool
of relative surplus-value extraction without the risk of its violent periodic,
cyclical devalourization.
u.s.
It is
very similar provisions and that they spread in no time at all, not only
throughout the auto and steel industries, but also across U.S. industry as a
whole.
Their historic importance was not lost on the U.S. Supreme Court which,
after destroying the major reforms of the New Deal, drew the inevitable
conclusions from the surrender of General Motors and
u.s.
Steel to industrial
workers and, in April 1937, upheld the constitutionality of the Wagner Act.
There can be no doubt that the Court was merely ratifying the achievements of
the workers' struggles, aware of the new balance of power in industry.
After
all, General Motors and U.S. Steel had used every illegal means to defeat
industrial unionism and had failed; the Court could do no less than to give the
Indeed, it went
even further; in a series of decisions over the next few years, the Court was to
confirm the authority of the Board to determine the content and the exercise of
its discretion.
a half years of operation, until December 1939, it heard over 25,000 cases
involving 5.75 million workers; it settled 2,000 strikes and averted 800; it
held 2,500 elections (1,700 by consent) with 1.2 million votes cast, issuing 887
certificates.24
Apart from this general, but cardinal point, there are two
other more concrete features of the transformation of the wage relation that
24.
- 109 -
feature of the GM-UAW contract to which the parties agreed on 12 March was the
elaborate grievance procedure it prescribed for all GM plants. 25
was to have a shop committee of five to nine members.
Each plant
their grievances to the appropriate foreman and then, if not resolved, could be
refereed by stages involving the participation of the shop committee to a joint
review by the president of the UAW, the appropriate GM Vice-President, and other
optional representatives.
GM insisted on the
inclusion of a clause barring work stoppage until the grievance procedure had
been exhausted and the approval of the UAW officers had been secured in order to
avoid waves of wild-cat strikes like the one it was experiencing early in 1937
because of
lo~
contract became the first among the large corporations bargaining with the CIO
to provide for a single permanent arbitrator; predictably, the practice was
adopted soon in many other large CIO contracts.
25.
s.
Fine, Sit-Down, Ann Arbor, Uni. of Michigan Press, 1969, Ch. 10.
Also, seeM. Derber and E. Young (eds.), Labor and the New Deal, New York,
- 110 -
thereafter.
The UAW
request, but stuck adamantly to denying the first on the ground that it
infringed "managerial prerogatives ...
foreshadowed the future broadening of the concept of the wage until it came to
include productivity agreements and 'fringes' such as holiday pay, health and
vacation : ovisions.
The second main aspect relating to the contents of the new collective
agreements in mass industries was the mutation undergone by the function of the
wage. 26
u.s.
strategy that big business would adopt to deal with the new political
composition of the working class:
wages allowed the valourization of fixed capital made possible by the massive
unionization of industry; on the other hand, their combination with the
political control by the State over the monetary medium served to devalourize
fixed capital through both the inflationary pressure of higher prices and the
competitive one of higher productivity.
The
u.s.
The corporation could withstand raising the basic labour rate in the
North to 62.5 cents an hour because its current high volume of operations
26.
- 111 -
FRB, wrote to Roosevelt informing him that the price increase set by
u.s.
Steel
"has been greatly in excess of the rise that would be sufficient to compensate
for the wage advance".
by allowing the giant corporations to increase wages and to improve general work
conditions through nationwide collective agreements with powerful industrial
unions, the new inflationary regime provided a welcome escape route from the
usual downward spiral of deflation and depression.
explain the sharp recession of 1937 and the reaction of big business to it.
recession that struck the U.S. economy in August 1937 and persisted for most of
1938?
Roosevelt proceeded to cut spending sharply for fear of inflation at the same
time as the government was collecting two billion dollars in taxes to balance
its budget.
just been established and most businesses were worried about the political
- 112 -
direction of the New Deal and, in particular, about the ability of Rosevelt and
the NLRB to control industrial workers and the CIO.
months of 1937 saw an inordinate wage explosion of about 15% above the 1929
level.
1937 to June 1938 was nothing less than a protracted business strike against
Roosevelt's inability to grasp the new rules of the game, both on the fiscal and
on the political side.
stabilize wages (at 120, 1929 100) while holding prices and costs steady
throughout the period.
are based. 2 7
The object
of the exercise was not to reintroduce company unionism or to destroy the CIO as
a bargaining unit; rather, it was to break the antagonist political initiative
of this organization, which threatened to become unmanageable.
conditions for a new industrial recovery had been laid - in 1939 the GNP
equalled that of 1929 - even Congress could move to dismantle some of the more
politically ostentatious parts of the New Deal:
27.
Roosevelt
pp. 326-9.
- 113 -
himself immolated some unpopular experiments, like the Federal Theatre Project.
Yet, as late as January 1938, Roosevelt was holding talks with corporate leaders
about a possible return to the corporatism of the NRA:
tide had turned and that business negotiated from a position of strength given
the industrial recovery.
Timely support for labour restraint came from the AFL which had
bestirred itself from the stunned torpor of 1936-37.
it
set itself up as a respectable organization as against the 'un-American', proCommunist CIO; it demanded tests of loyalty from all local bodies; it revoked
the charters of CIO locals and expelled CIO officers from state federations and
city labour councils; finally, it persuaded employers to do business with its
more conservative unions.
American capital,
which had used the craft unions to stifle industrial unionism for at least fifty
years, turned now to a revitalized AFL to stop the spread of the CIO.
After the
28.
29.
- 114 -
Roosevelt's prompt resumption of public expenditure in fiscal 1938 reestablished the terms of the new economic equilibrium.
of the State in the capitalist economy was needed to absorb huge amounts of
capital to create the conditions for the profitability of social capital and, in
particular, to ensure surplus profits for certain industrial monopolies.
The
Between the
final victory of the CIO in 1937 and Roosevelt's budgetary announcements in the
spring of 1938, a solid and lasting consensus was reached between the
Administration and big business on the new form of capitalist accumulation.
Yet there are those who argue that from 1937 onwards the
Ne~
Deal was
These are the same people who believe that the New
These people ignore, because they cannot explain it, the fact that
some of the most dramatic, 'revolutionary' New Deal reforms were instituted
precisely in this period.
ratified the NLRA and most other pieces of New Deal legislation without raising
a ripple of bourgeois anger, while Congress passed the Judicial Act and then the
Executive Reorganization Act.
- 115 -
Business~
had opposed the Wagner Act because it constituted an intolerable form of state
interference with industrial relations.
way for U.S. big business to prevent the NLRB from meddling with the content of
contracts and to ensure their legal enforcement.
for the degree of interference that it allowed the NLRB to have on the internal
affairs of unions.
~fine
This trend in
industrial relations was to be enshrined by a conservative Congress in the TaftHartley Act of 1946.
The
The
object of the law was to impose a nationwide wage minimum of 40 cents an hour
and a maximum of 40 hours of work per week.
the hours of 1,500,000 were shortened and the wages of over 750,000 were raised,
inducing a rise in the employment rate and in purchasing power.
Child labour
30.
31.
- 116 -
was finally forbidden under the Act after a progressive struggle that had lasted
twenty years.
with a degree of success, at least until the Supreme Court approved the
constitutionality of the Act in February 1941.
however, in their attempts to stop more thoroughgoing reforms for the South
announced by Roosevelt in the 1938 Congressional campaign.
Roosevelt~s
it is fair to argue that the FLSA provided a satisfactory framework for future
action.
u.s.
President stated:
- 117 -
needs occasioned by the European crisis, the fact remains that Congress, which
had planned to slash War Department appropriations in the Spring of 1940, had
voted over $17 billion.for defence by October of the same year!
Nor can it be
said that this was only a temporary emergency for military expenditures in the
United States continued at a very high level after the War.
The advent of a
permanent arms economy finally severed the link between use values and commodity
production and confirmed thereby the possibility of a politically-enforced form
of capitalist accumulation; in other words, the production of surplus value was
divorced from that of use values by means of sheer political coercion.
this a new State-form was needed:
32.
Public Papers
Q~
But for
CBAPTEB. 4
chapter will seem odd, for it is precisely in its institutional reforms that the
New Deal was most conspicuously
~revolutionary~,
and political reforms of the New Deal are essential to our understanding of its
overall significance; but their explanatory power is only secondary because they
are derived from the transformation of the wage relation that we have described
above.
fiscal policies, the State wrested control over the economy from individual
capitalists to achieve a twofold purpose:
The problem
arose, therefore, of how the old authoritarian State could be substituted with
one that could plan the overall development of social capital while preserving
- 119 -
It must
be stressed that the new State-form was not to discard the wage relation and
profitability in favour of
~the
The
Depression had evinced the well-nigh complete inability of Congress and the
other government organs to deal effectively with the crisis.
In the past,
government expenses had been seen as a burden on the economy; any extension of
governmental functions had been thought to be a certain precursor of higher
taxes.
Therefore, the aim of government reform had been always to cut expenses
1.
On the necessity and character of the new State form see J. Agnoli, Die
Transformation der Demokratie, Berlin, Voltaire, 1967, and A. Negri, La
Forma Stato, Milano, F<rinelli, 1975.
120 -
provide the social framework for capitalist production, pushed economy out of
the reckoning.
capital, its expenditure could only detract from total surplus value; but now
that it was a crucial factor in reproduction, its expenses became simple
overheads.
'authoritarian democracy'.
Specifically,
the link between state action and private profitability had to be dissolved in
favour of collective categories such as national economic growth and aggregate
demand.
Thus, despite its collapse under the old institutional guise of the
free market, the law of value had to be reinstated as the supreme guiding
principle of state action in the new inflationary regime.
2.
- 121 -
The potential
danger of inflation was precisely that it could distort fatally the exchange and
realization of value so as to frustrate capitalist enterprise.
come four decades later.
the equivalence of various kinds of reified labour, could render legitimate the
arrogation of socio-economic power by the State on the grounds that it ensured
the fair, rational and planned distribution of socialized surplus value, while
it preserved the function of money as the homogeneous medium of capitalist
command over society.3
State intervention in
the economy clashed necessarily with the old Rule of Law and its individualist
notions of private ownership and civil rights.
3.
For a first delineation see A. Negri, Forma Stato, op.cit., and the
s.
- 122 -
existence of a middle class removed from the productive cycle of capital and
therefore free from the wage relation.
spheres of production early in this century, the middle class was progressively
proletarianized until it could play no longer a valid role in the new Stateform.4
the growing concentration of ownership in the economy and the media in the hands
of powerful corporations, the salariat became even more dependent on the
sprawling mass media- radio, newspapers, magazines and cinema- for its
opinions, and on organizations such as pressure groups and associations for
their atomized expression.
th~
Far from
_hysterical
It is piped to
central factories, and there it is flavoured and coloured, and put into
cans".6
abandoned for the reality of the 'public interest' subordinated to the law of
value.
4.
u.s.,
see
c.w.
5.
For the
6.
Notes On Democracy,
N~
- 123 -
scientific devices such as public opinion polls and statistical surveys compiled
by administrative departments and deciphered by experts.
any public with which political decisions could be entrusted; rather, the
political system itself had to be made rationally safe for 'democracy'.
No less
a social critic than Walter Lippmann commented that "no reform, however
sensational, is truly radical, which does not consciously
provi~e
a way of
reforms sought by the Roosevelt Administration that as early as 1935 they had
sparked what was soon to become one of the gravest constitutional crises in U.S.
history.
For in that year the Supreme Court dealt two severe blows to the
u.s.
and in Humphrey
v.
United States. 9
invalidated the NIRA on the grounds that it exceeded the power of the federal
government to regulate interstate trade and commerce and that it conferred on
the Chief Executive the authority to set up agencies with legislative and quasi-
7.
w.
8.
295
u.s.
495 (1935)
an~
judicial powers.
124 -
The Humphrey
President~s
(ultra vires) because, although the FTC was an administrative body, it had been
created by Congress to carry out legislative policies prescribed in the statute,
free from executive control.
'political~
the New Deal, the decision in Humphrey's Case seemed unwittingly to breach the
doctrine of separation of powers.
the system was "a headless 'fourth branch' of the government, a haphazard
deposit of irresponsible agencies and un-coordinated powers".
10. Cf. E.S. Corwin, The President, Office and Power, New York, New York Uni.
Press, 1957, pp. 85-95.
11. Generally for the history and membership of the Committee as well as a
brilliant analysis of its Report, see B.D. Karl, op.cit.
- 125 -
As they
He will no
The report itself was the creation of three academics who wished to put an end
to the traditional piecemeal approach to government and who sought to establish
a science of planning.
observation and experience, the visit to Europe of two leading members of the
Committee, Merriam and Brownlow, was decisive in shaping the final report.
While in Europe, the two had occasion to draw from ancient administrative
traditions, to meet with leaders such as Hitler, to read the work of politicians
and administrators like Leon Blum, and to converse with students of government
12.
Quotations can be found readily in the Report of the Committee with Studies
of Administrative Management in the Federal Government, U.S. Government
Printing Office,
1937~~
- 126 -
As they wrote in
the introduction to the report, '"If America fails, the hopes and dreams of
democracy all over the world go down".l3
later in the Executive Re-organization Bill of 1937 proposed five changes to the
executive structure:
1.
2.
3.
13.
- 127 -
4.
5.
The major aim contained in the recommendations was obviously to strengthen the
bureaucratic efficiency of the executive and to ensure at the same time that it
remained subordinate to .political command.
~public
interest~
Deal measures three times in 1935 because they involved unfettered delegations
of power.
the
constitutional order of the United States - the Rule of Law, the Separation of
Powers, and Dual
Federalis~-
- 128 -
economy.
For in that year the Court adopted all three principles to demolish
u.s.
federalism
the industrial transformations in both labour process and capital structure had
convinced many of the need to update legislation, and legislatures at federal
and state level had intervened to regulate key areas of economic activity.
But
bit by bit they saw their work be nullified by the Supreme Court. Decision after
decision, the Court kept social legislation at bay for nearly fifty years by
means of two devices:
clause and the application of the "due process of law" requirement in the Fifth
and Fourteenth Amendments in a substantive sense..
extremism" of the Court were the old values and ideologies of laissez faire to
which it held firmly. 14
however.
became felt more intensely than ever before, pressure mounted on the Court from
all sides.
which he criticized the decision in Schechter as a return to the days of "horseand-buggy" and drawing the attention of the nation to the inadequacy of Supreme
Court doctrines to resolve great national economic problems. 15
There followed
14.
15.
- 129 -
Steel to industrial workers gave a clear signal to the Court that pillars of
conservatism were crumbling.
reform plan on 5 February, 1937, must have altered decisively the balance of
opinion within the Court.
Another proposal
toward the Bill at first, a conservative campaign mounted by the Republicans and
accusing Roosevelt of dictatorial designs soon gathered momentum and the Bill
looked certain to be defeated.
take the campaign for the Bill in his own hands and began to mobilize the
Democratic Party.
finally surrendered.
proponents. 17
Parrish18 where the Court upheld the right of New York State to regulate the
minimum wages of women and children.
16.
17.
18.
300
u.s.
379.
130 -
But a few days later, on 12 April, 1937, the Court shocked the country with its
validation of the Wagner Act in NLRB V. Jones and Laughlin Steel Corp.20
In a
similar case, the Court acknowledged openly one of the probable causes of its
reversal.
relations, the Court's judgement stated that collective bargaining was often "an
essential condition of industrial peace".21
Next were three Social Security cases of historic importance in that they
established the federal power to tax and spend for the "general welfare".
Finally, the Fair Labor Standards Act was validated by the "New Court" in 1941
in U.S. V. Darby.22
substandard goods, but also their production "intended for that commerce.
19.
~-,
2 0.
301
21.
Ibid., p. 42.
22.
312
pp. 399-400.
u.s.
u.s.
1.
100.
This
- 131 -
time, unlike previous occasions, Justice Stone could deliver the judgement for a
unanimous Court:
~is
complete in
It was the end of dual federalism and the beginning of a co-operative federalism
in which the federal government was bound to play the senior role. 24
Parallel
discounted a priori, these moves must be seen partly in the context of the new
inflationary regime and its foundation on mass consumption.
In the
23.
Ibid.
24.
- 132 -
in particular developed during the New Deal and soon outweighed all others
primarily through the use of legislative powers on both sides.
First, the
federal government brought its great powers over interstate commerce and
communications to the assistance of States whose internal legislation was
frustrated often by extraterritorial activities.
in-aid" permitted the fusion of the financial might of the national government
with the greater coercive powers of the States.
example of this type of co-operation was the Social Security Act of 1935.
The
What did happen, however, was that the power of the federal government
grew disproportionately under the new federalism in comparison with that of the
States.
'authoritarian democracy' for, on the one hand, the new role of the States
allowed the continuation of a seemingly democratic filtering of public opinion
with a local, autonomous and coercive implementation of measures that, on the
other hand, were determined by centralized decision-making institutions in
Washington.
IJ
- 133 -
The timely 'switch"' by the Supreme Court sealed the fate of the
Judiciary Reorganization Bill.
The
Executive Office of the President was erected; the Bureau of the Budget and the
National Resources Planning Board were transferred to the Executive Office.
Though forbidden to erect two new departments, the President created the Federal
Security Agency and the Public Works Agency to oversee welfare and public works
projected by the Planning Board.
the War Powers Acts and then restored with the Reorganization Act of 1945.
Thereafter, reorganizations followed the pattern set in 1939. 26
administration was born thus, quietly.
25.
26.
See, generally,
Karl~vop.cit.,
Public
Ch. 5.
- 134 -
the
He appeared
proposals to focus the public gaze on them and force Congress to meet its
responsibilities.
congressmen, the pork barrel, and secret negotiations with congressional leaders
were all part of Roosevelt's strategy to rally or bribe Capitol Hill. 28
27.
28.
- 135 -
closer relationship between the two heads of power very desirable, on top of the
existing amount of co-ordination between them.
instead, would have allowed the immediate unity of legislative and executive
power displayed for instance by the British system of government.
For, despite
all the political transformations inspired by the New Deal, it was still true
that Congress remained a haphazard collection of individual representatives
unchecked by party discipline.
Against a
recalcitant Congress that would not pass the much-needed measures on the
judiciary, executive reorganization, and fair labour standards, Roosevelt had
had to resort to exploiting his double role of President and progressive leader
of the Democratic party in a
members of his party.
despera~~
needed an organized opposition party that would at one and the same time absorb
political movements starting outside the constitutional framework and force
decisively the alignment of legislature and executive.
29.
30.
The problem is stated with due emphasis in Negri et al., Operai e Stato,
op.cit., pp. 131-2,
~din
- 136 -
The
spectacular emergence of the CIO on the political horizon showed the necessity
of an oppositional
~social-democratlc~
Indeed, twice
industry and working-class political composition was the fact that the only
reliable voting bloc in Congress was formed by the Eastern Democrats.
Roosevelt
felt that the spread of industry to South and West together with that of the CIO
made a realignment of the party and political system along class lines feasible.
But his tour of the States befoe the elections of November 1938 was rather
unsuccessful.
The time was not ripe for this other ambitious Rooseveltian
project.
31.
- 137 -
the factory.
doubt that it was the working-class strike explosion of 1936-37 that gave the
final decisive push to the constitutional and political revolution of the late
1930s.
aside by the Depression, it became clear to them that a new durable response to
the antagonism of the working-class was needed.
State was called finally to act as a collective capitalist against the imponent
emergence of the working-class
(}
CONCLUSION
These can be
Of
course, the latter are partly a product of the former; but whereas only the
historiographical discoveries can be listed here with sufficient brevity, the
methodological points are too integral to the text to be severed from it.
Whenever the latter loses its composition with regard to the former,
the process of accumulation runs against an absolute limit in the size of the
labour force and the length of the working day.
Thereafter, greater
accumulation can be achieved only through the annihilation of the working class.
But this does not remove the basic barrier to expansion; on the contrary, by
breaking the political composition of the working class, the absolute extraction
of surplus value can start a downward spiral of capital depreciation and
depression as the vital link between constant and variable capital is dissolved.
This is exactly what happened in the United States during the 1920s.
The
ensuing depression could be overcome upon condition that this link between the
political composition of the working class and constant capital was reestablished.
- 139 -
industries with a high organic composition of capital (that is, with a higher
proportion of constant to variable capital) and higher productivity generally in this sense, the New Deal achieved little; it was rather a matter of tying
wages to the various organic compositions of capital, of redefining the function
of the wage. This called for a new relationship between workers and capital.
In
~society-as-
factory~.
despite what New Deal historiography would have us believe, the new
role assumed by the State in the thirties was not the result of a conscious
capitalist plan to reform the economic system - although, as we saw in the
Appendix to Chapter One, there were early forms of bourgeois awareness of the
inadequacy of the laissez-faire order and projects for future renewal of the
capitalist order with which even Marxist-socialist analyses converged.
Rather,
the New Deal was a slow and hesitant response to the dysfunctions of capitalist
society as signalled by the level of working-class antagonism - by its absence
in the twenties and early thirties, and by its tremendous surge from 1934.
Nor
was there any fundamental difference between the First and the Second Hundred
- 140 -
If a
on
the one hand, there were policies of a fiscal and monetary nature that derived
their efficacy from money, that is, the specific embodiment of value; on the
other hand, there were measures apt to regulate the labour force as a political
entity, as a working class that could keep the mechanism of accumulation in
motion; finally, both these objectives gave rise to a third type of measure that
concerned the state institutional control of the economy.
that weakened money as the social medium for the enforcement of the law of
value.
whole.
politically the survival of the law of value, that is, the social validation of
capitalist command over wage labour.
move, Roosevelt was forced to make it permanent, first, to maintain prices and,
later, to accommodate the new inflationary regime.
But all this could not suffice in the long run; the process of
accumulation had to be resumed by re-establishing the link between constant and
- 141 -
Our third
discovery is that this essential reform, and many others as well, was not
adopted independently by the Roosevelt Administration but was imposed on capital
by an increasingly militant working class in the years 1934-37.
The early
attempt with the NIRA failed partly because it proved impossible for the State
alone to beat the resistance of individual capitalists, but partly also because
of the State's unwillingness to promote a potentially dangerous political
unification of the working class.
Administration to support the Wagner Act, but also to coerce the big employers
to deal with the new industrial unions.
agreements spread to most mass industries, capital was able to use the
organizational cohesion of industrial unions to impose wage differentials
commensurate with its own organic composition.
These were the quite dramatic changes in the political and economic life
of American society in the thirties that were to set the pattern for the
development of the capitalist West for the next forty years.
- 142 -
Henceforth, capital
would exist as social capital and capitalist society as the society of capital.
The State, which had played a determinant role in the triumph of early
capitalism, was called again to guarantee its survival.
that it was from 1937 onwards that U.S. state institutions began to be
transformed as a response to the new wage relation and conditions of capitalist
accumulation.
In this sense, the history of the New Deal in the United States
continued until the early 1970s when it was unmade by the internationalization
of capital and the collapse of the Bretton Woods system.
neither conceal nor belittle the importance of an entire epoch of class struggle
for the future transformation of the society of capital into that of communism.
BIBLIOGRAPHICAL ESSAY:
exercise restraint, I listed not less than sixty-five titles(!), already too
many to include in a Bibliography suited to the needs of a thesis like this one.
I
reached the obvious conclusion that a Bibliographical Essay was the only
Franklin D. Roosevelt and the New Deal, New York, Harper, 1963,
Rauch~s
~as
dell~
s. De
Press, 1978.
Nee-Marxist Theories of
the State and the Case of the New Deal', Politics and Society, Vol. 10, No. 2
(1980), pp. 155-201.
- 144 -
Rinehart, 1947,
The best account
of the 1937 Recession is in K.D. Roose, The Economics of Recession and Revival,
New York, Anchor, '196 9.
Hofstadter""s two great books, The Age of Reform, New York, Vintage,
The American Political Tradition, New York, Vintage, 1973.
1955, and
The Fiscal
19 7 3 ,
and S. De
Bernstein"' s
two famous books, The Lean Years, New York, Da Capo, 1960, and The Turbulent
Years, Boston, Houghton Mifflin, 1970.
Derber and E. Young (eds.), Labor and the New Deal, New York,
in~.
Da Capo, 1957.
The conflict between the AFL and the CIO is narrated from the political angle in
E. Levinson, Labor on the March, New York, Harper, 1938 and from the industrial
angle in W. Galenson, The CIO Challenge to the AFL, Cambridge, Harvard U.P.,
1960.
in his Labor and Monopoly Capital, New York, Monthly Review Press,
1974; but we
1{/
- 145 -
There is no good history of the NRA, but B. Bellush, The Failure of the
NRA, New York, Norton, 1975, and E.W. Hawley, The New Deal and the Problem of
Monopoly, Princeton, P.U.P., 1966, provide essential information and analyses.
The history of the NLRB, on the contrary, has been written exhaustively by J.A.
Gross with his two works, The Making of the National Labor Relations Board,
Albany, State Uni. of New York Press, 1974, and The Reshaping of the NLRB,
Albany, State Uni. of New York Press, 1981.
contribution by C.L. Tomlins, The State and the Unions, Cambridge, C.U.P., 1985,
where the history of industrial relations is seen in its aspect of
struggle~
~class
The
political effects of welfare measures are analysed by F. Fox Piven and R.A.
Cloward, Regulating the Poor, New York, Vintage, 1971.
The apologetic
orientation, E.S. Corwin's works on the contitutional history of the New Deal
are very valuable and perc~ptive; see above all,
Power, New York, New York Uni. Press,l957, and The Constitutional Revolution,
Westport, Greenwood, 1977.
----_.ji~-