What is happening
      Has not happened,
      And if it has,
      We do not want to know.

      People I worked with yesterday,
      Today are suddenly whisked away;
      No one asks where they go –
      Or even really wants to know.

      There is no blood to show
      For all their disappearance;
      They just are
      Not around any more.

      The signs all
      Read the same –
      On the highways, in the stores,
      On the elevators, in the halls:

      What is happening
      Has not happened,
      And if it has,
      We do not want to know.

The Triad of Change-Loss-Grief and the Tyranny of Corporatism

Since the early 1980’s the tyranny of corporatism in the United States has left in its wake widespread organizational inconsolability and despair. The triad of change-loss-grief characterizes the experience of all the forms of managed social change – except that mourning is short-circuited.

To begin to awaken from our cultural nightmare, it is vital to name and honor those organizational and personal experiences that would otherwise be lost, and unconsciously repressed. In this spirit, I offer three vignettes that typify our Age of Organizational Inconsolability. Following the vignettes, I discuss their broader implications for understanding organizational despair.

Vignette 1: Of Downsizing and Disappearance

My first vignette developed from an interview I had with a computer company’s chief financial officer during an organizational consultation. I will first provide some of her narrative:

Am I glad to see you today! Howard, the strangest thing happened Monday. I was off sick Friday. I came in to work on Monday morning and the office next to me was cleared out. There was a desk, a chair, a computer, a couple of file cabinets and bookcases, a wastebasket. And that’s it. Empty. I still can’t believe it, and it’s already Friday. It’s like there’s a big hole in this place. I knew the guy ten years. His name is Don. He was one of our numbers crunchers. A quiet guy, just did his work. It seemed like he was always here, always working. He is a computer whiz anyone in the unit could go to for a computer glitch. We aren’t – maybe I should say weren’t, since he’s gone ‑‑ weren’t exactly friends, but we worked together a lot on projects. He was kind of part of the furniture.

It’s so eerie. I’m numb over it. I keep going next door to look in his office expecting to see him. Maybe I’m imagining that he’s gone, and he’s not. But the place is so empty. I’ve heard of this kind of thing happening other places when people get RIFed. Here today, gone tomorrow. But I’ve not heard of this here. It’s like he disappeared. Like he never was here. Howard, I’m not being sentimental about him. He and I didn’t have something going – if you’re thinking that. I just can’t believe they’d do it – and the way they did it. I asked around the firm, and everybody gave the same story. Because it wasn’t just him. It happened all over the place. About five hundred people RIFed in one day.

I asked around, and nobody knows where Don went. No forwarding address or telephone number. It’s weird, Howard. Like he just disappeared. You wonder if you’re next. You try not to think of it. Work harder, maybe they’ll keep you. It’s ridiculous, because you know it’s not true. But you’ve got to believe that you’re valuable to them.

Events and experiences like this have occurred millions of times in American workplaces since the mid-1980’s. Forms of “managed social change” variously called RIFs (Reductions in Force), downsizing, rightsizing, outsourcing, offshoring, separation, and deskilling, when they occur, give those who are fired no warning or preparation – except perhaps gossip and rumor. They are experienced as terrifying, dehumanizing attacks. Sometimes they occur as unexpected letters of dismissal in the U.S. mail or as e-mail. Sometimes they take the guise of a fire drill, where everyone is supposed to leave the building, and those who are summarily fired are not let back in after the false drill is over.

However the firings are executed, they are designed to maximize surprise and to achieve a “clean break” from those who are cast away. They psychologically terrorize the workplace. People are suddenly and efficiently “disappeared.” There are no metaphoric bodies to see and step over. The carnage is attested to by absence, void. Those who remain are left with only images in mind. The symbolic kill is swift and clean. Work is expected to continue within this empty shell.

Frequently, security guards show up on a Monday morning or a Friday morning all over the plant at the offices and workstations of people who have been designated to be fired. They escort them to the big auditorium over in the corporate conference center. They don’t even tell them why they have to go, except that there is an important announcement. After they walk them in, they leave and lock the doors behind them. The CEO or CFO then enters and delivers a brief speech on how the company has to downsize radically in order to survive and be competitive. He tells them not to take it personally, that it’s just business, and maybe thanks them for their service to the company.

The security police escorts them back to where they worked, helps them clear out their personal belongings, then takes them down to administration to hand over all their keys and receive their last paycheck. The police walk them to their cars, and that’s the last they see of the corporation. They are told not to come back. They virtually disappear. They are rarely talked about. Management often justifies managing the firing this way because those who are about to be fired could not be trusted not to sabotage the computers, or to steal equipment.

Following the firings, employees, managers, and executives try to work at their jobs as if nothing has happened. They rarely speak of those who are now gone; still, they are haunted by their absence. Those who remain are told that they should be grateful they still have a job. They all know that they could be next, so they live in dread of the future, trying to do the job of two if not three people. Admonished to forget the (devalued) past and those who occupied it, many of those who experience themselves as “survivors” of the RIF are afflicted with the survivor syndrome, feel pangs of guilt for having survived, and then attempt to rid themselves of the guilt by finding fault with those who were fired. The thought of randomness is unbearable.

Those who remain behind with jobs often have “survivor guilt,” wondering why they were spared and others fired. Sometimes, survivor guilt is quickly repressed, rationalized, and projected in the form of saying to oneself and to others, “They must have done something to get fired.” And conversely, stories arise about the specialness and value to the organization of those who were temporarily spared. Often those who remain feel like the “living dead.” The sense of individual responsibility, culpability and guilt (“I must not be good enough”; “I must have done something.”) militates against any resistance or other collective action.

Whatever sense of vital and interconnected community existed prior to all the firings and rearrangement of people and tasks, there is little sense of “we” or “us” afterwards. In its place is a collectivity of frightened monads. Those “old timers” who knew whom to contact “to get things done” in the informal system of relationships, and those whose “Rolodexes” of contacts were once seen as the lifeline that kept the corporation going, have long been fired. Life proceeds now impersonally by protocol, “by the book.” Unable to mourn for whom and what all has been lost, those who remain become an inconsolable organization who try through pep-talks, admonitions, threats, and dogged productivity to console themselves.

Vignette 2: A Corporate Pep-talk: The Finger in the Waterbowl

I now offer a vignette of what might seem to be a tiny, discountable incident – but one that goes to the heart of the experience of downsizing and its wake. In 1999, following a presentation I had made about corporate downsizing and reengineering, I spoke with a secretary who had worked for many years for a multinational petrochemical firm that had undergone several waves of firings. First thanking me for validating her own experience during my lecture, she said that she wanted to offer an example of what I had been talking about. A new mid-level manager had arrived and was eager to make his mark on the organization. At a meeting of his supervisees, he admonished them: “We have a lot of work to get done here. Don’t think for a minute that you’re essential to this corporation. Everyone here is dispensable. There are a hundred people out there hungry for your job. And if you leave, your absence will be as noticed as a finger taken out of a bowl of water. They won’t even know that you’d been here.”

She and I both shuddered. We briefly mused on the effect of this meeting for worker morale: inducing, perhaps, identification with the aggressor, and feverish productivity, accompanied by chronic terror, indifference, and deep rage at such humiliation. We also wondered about the new manager’s own sense of vulnerability and expendability, and about the kind of childhood that might have set the stage for such drivenness. Does the conviction of inner worthlessness cultivate, via projective identification, worthlessness – and hopelessness – in others in order for one to feel superior and momentarily invulnerable? Here, a third managerial philosophy – management by terror – supplements the traditional distinction between “carrot” (reward) and “stick” (threat of punishment).

What in the workplace, we wondered, does the threat of symbolic homicide look and sound like? The employees were not only threatened with the loss of their job, but their very dignity and self-respect were also attacked. Even as they labored to increase their productivity to try to create the illusion of indispensability, they were thrown into inconsolable grief over the loss of self. They lived and worked in the knowledge that at any moment they could be made to disappear, and never be missed.

Under these circumstances of psychological assault and the expectation of assault, what happens to the organization and to the remaining people? The organization that remains behind can no longer contain the anxiety, dread, and even terror that management inspires. It becomes what Michael Diamond calls a “defective container.” The workplace is increasingly experienced as persecutory. A “paranoid-schizoid” atmosphere prevails, in which employees experience themselves as a “them” at the mercy of management “us.” An employee is expected to do the work of another who has been “downsized” as well as his or her own, and to do so not only without complaint, but with gratitude for still having a job.

For many employees, where once there was loyalty to a company, there is now the garnering of skills and the readiness to move on to the next job at a moment’s notice. One feels redundant even before he or she is fired. From the stockholder’s obsession with the next quarterly report to the employee’s uncertainty about tomorrow, there is only short-term planning and the palpable presence of symbolic death and loss. Meanwhile, upper management touts slogans of “excellence” and “higher productivity” as evidence of having “turned around” the organization. For middle management and employees, the picture is surreal.

Vignette 3: The Threat at the Christmas Party

My third and final vignette illustrates the nationwide (and increasingly global) psychological terrorizing of managers and workforce into capitulation and dependency upon corporate decision-makers. The process affects blue collar and white collar workers alike. Consider the following:

At one American Great Plains hospital’s mid-1990’s Christmas party, the invited speaker, a physician-administrator, admonished his largely healthcare professional audience to accept managed health care (HMOs, PPOs, etc.) as the inexorable wave of the future. He told the group to make up their minds that it was simply a matter of altering their thinking to conform to the changes that made them primarily responsible to the corporation rather than to the customers (patients). To make his point, he showed a cartoon depicting a steamroller smashing down one doctor in the asphalt, while another wisely sidestepped his destruction. The caption read: “You can become part of the solution or part of the pavement.” The physicians’ response was uncharacteristic of prairie decorum, in which you politely listen to someone with whom you disagree, then go about your business as you had been doing. Instead, several physicians got up in the middle of the talk and walked out in disgust.

A week later, a physician colleague who had been in the audience wrote to me: “Does this [cartoon, presenter’s haughty attitude] not instill a sense of helplessness? A sort of ultimatum? This doesn’t smack of fascism, does it?” What he inquires in the negative, he affirms in the act of asking. It is as if what is not supposed to be happening – in the caring professions, of all places – is in fact happening. It is a matter of trusting – and mistrusting – one’s senses and one’s emotional response. The heavy boot of managed health care promises to crush all opposition. The looming threat, the anxious wait, conspire to create an organizational atmosphere in the medical community at once of dread, rebellion, siege, resolve, and anticipatory, inconsolable grief at the prospect of losing their way of practicing medicine and their very autonomy as physicians.

Increasing numbers of physicians in the United States feel demoralized, robbed of their identity as professionals, and treated as disposable employees. Many become disillusioned, embittered, pulled to be more answerable to medical insurers and healthcare corporations than to their patients. What had begun for many physicians as a “calling” to care for sick people, has turned out to be a grueling job in which seeing as many patients as possible and income generation become the central corporate virtues.

The core value of the physician-patient relationship is replaced by the invisible industrial time-clock according to which each patient merits but 7 ½ minutes. The psychological control of workers studied and advocated a century earlier by Frederick Winslow Taylor triumphs in the practice of medicine. Many physicians feel trapped in their careers and betrayed by their employers. Physicians’ own proud individualism militates against effective collective action in their own behalf.

Discussion of the Three Vignettes

These three vignettes do not prove the existence of inconsolable organizations, but I think that they give the concept a certain plausibility. As illustrations, I think they provide at least preliminary encouragement for “inconsolable organization” as a working hypothesis. They also suggest that inconsolable organizations can occur in a variety of situations of organizational change: downsizing or RIFing, managed health care, and organizational crisis. At the conscious and unconscious level of what these organizations feel like, how they are experienced, and what they are like in the fantasies of their members, they are indeed the same phenomenon in different institutional forms. The vignettes offer support for the concept of inconsolable organization as at least approximating organizational reality.

In the first vignette, the CFO felt the horror of sudden absences that characterize RIFs, restructuring, reengineering, and other forms of radical organizational change. Here, people do not so much leave the organization as they are abruptly severed from it. Loss takes the form of vast holes, gaps, in experience, both in space and time. One day co-workers are present, performing their jobs, taking part in the everyday relationships of the workplace. The next day they are gone. There is no group-sanctioned transition for either those who are fired or those who remain behind. There is neither permission nor assistance to grieve the loss. Only work – productivity – counts. Here the living dead commingle with the haunting presence of those who vanished from sight. The atmosphere is thick with spiritual deadness. The absent ones wander the halls like the characters in Marc Chagall’s paintings. Inconsolable loss is experienced as horror.

The second vignette is the story of another hole in time. If in the first the void consisted of the sudden absence of others, the second is the undisguised threat of one’s own annihilation from institutional memory. The employees addressed in this surreal pep-talk are good only for productivity, and their very existence is already declared to be nonexistence. They are nothings now, and will be nothings if they are fired or leave. They will not be missed; their absence will not even be noticed. It will be as if they never existed. They will not be grieved over, for there is nothing, no one to mourn. Their very existence is already tainted with nonexistence. Their life already embodies the death that is projected into them. Here, someone else is not the hole, but one is the hole oneself. One is thrust into inconsolable, anticipatory grief over the loss of one’s self.

The third vignette is yet another surreal experience: a Christmas party that threatens death. Eerily, the “savior” the speaker touts is not the “Prince of Peace” (the Christ Child), but an Angel of Death who threatens to crush anyone in its path. One is “saved” as a physician if one joins the momentum of the steamroller – that is, if a physician, a healer, joins league with the agent of death! Managed care is depicted as an invincible juggernaut. The wave of the future of medical practice lies in identification with the aggressor and a repudiation of those “softer” values and virtues that characterized the covenantal relationship between doctor and patient. Paradoxically, if one chooses to “live,” one also chooses death-in-life. In the Brave New World of corporately managed health care, one loses, gives up, the allegiance to the patient and swears primary fealty to the corporation. Corporate totalitarianism creates and enforces clinical totalitarianism. I have heard many physicians despair over being ever again adequate to relate to their patients and to deliver thorough medical care. Beneath the frenzy of productivity and high “patient volume” and “patient flow” (a borrowing from the hydraulic model of physics) is inconsolable grief, a loss of professional vitality, spiritual death, and all-consuming miasma.

Is There a Way Out of the Tyranny of Corporatism and Organizational Inconsolability?

In order for an organization to get “unstuck” in inconsolable grief and miasma, it is first necessary for executives, manager, employers, and shareholders to acknowledge that something – and many “someones” – has been lost. Those who have been so cavalierly disposed of are not “dead meat” or “dead wood” or “fat to be trimmed” – to cite three widespread euphemisms of managed social change. Those who have been symbolically killed off, together with those who remain behind as survivors to perform the job of two or three people, are vulnerable human beings who are stuck in a miasma of grief and organizational despair.

Transition to a renewed future requires coming to terms with the past. To lessen the traumatic impact of the change, those who are to be fired and those who remain as survivors need to be emotionally prepared for what is going to happen to them. This will help them to feel as human beings rather than as disposable objects, and give them at least some sense of control. To help create a healthier and less haunted workplace, the names and identities of those who have been fired need to be uttered, remembered, honored, and assimilated into the evolving organizational identity. Instead of being told to “suck it up” and “Be glad you still have a job,” employees need to have their fears, dreads, and anticipatory loss acknowledged.

In place of acknowledging that great loss has taken place and collectively mourning it, the organization, from leaders to employees, attempts to negotiate, manage, and fix it through a frenzy of various magical remedies, ranging from frequent, peremptory firings to spasms of restructuring and reengineering. Beneath what Yiannis Gabriel calls the “organizational miasma” lurks an inconsolable organization that creates and sustains the miasma. Until the inconsolable grief can be thought, named, and felt; until the sense of guilt, shame, loss, futility, and hopelessness can be acknowledged, the miasma can only deepen.

To facilitate the recognition and mourning of losses, management and consultant need to create a safe and trusting interpersonal environment for the organization. Genuine organizational renewal does not come through endless waves of “sacrifices” – these only deepen the miasma of despair. Rather it comes about through recognition of the trauma that has been visited on the people who were and are the organization.

Genuine organizational renewal also rests upon group empowerment. This means that individuals would need to have the emotional capacity to make collective decisions rather than act as frightened, isolated monads who hold their heads down hoping they will not be noticed. In our cultural climate this will be difficult if not impossible. American individualism carries with it self-blame and guilt for losing one’s job or for not being able to find a better job. Misperceptions and indoctrinated cliches such as, “I must have done something wrong,” and “There must be something wrong with me,” make it difficult to recognize one’s corporate victimization and traumatization. Certainly, persecutory paranoia can play a role in any perception of victimization. And self-blame is a kind of wresting some sense of power over the acknowledgment of utter powerlessness. Notwithstanding whatever explicatory factors legitimize the RIFs, the beginning of personal, organizational, and cultural resilience is the courage to perceive and accept the reality of corporate traumatization and its decisive role in creating inconsolable organizations.

Suggestions For Further Reading:

Allcorn, Seth, Baum, Howell, Diamond, Michael., and Stein, Howard F. (1996). The Human Cost of a Management Failure: Downsizing at General Hospital. Westport, CT: Quorum Books; Ehrenreich, Barbara. (2006). Bait and Switch: The (Futile) Pursuit of the American Dream. New York: Henry Holt; Ehrenreich, Barbara. (2009). This Land is Their Land: Reports from a Divided Nation. New York: Henry Holt; Faludi, Susan. (2000). Stiffed: The Betrayal of the American Man. New York: Harper; Stein, Howard F. (1994). “Change, Loss and Organizational Culture: Anthropological Consultant as Facilitator of Grief-Work,” in National Association of Practicing Anthropologists (NAPA) Bulletin 14, “Practicing Anthropology in Corporate America: Consulting on Organizational Culture,” (1994), p. 66-80. Ann Jordan, Ed. Washington D.C.: American Anthropological Association; Stein, Howard F. (1998). Euphemism, Spin, and the Crisis in Organizational Life. Westport, CT: Quorum Books (Greenwood Publishing Group); Stein, Howard F. (2001). Nothing Personal, Just Business: A Guided Journey into Organizational Darkness. Westport, CT: Quorum Books (Greenwood Publishing Group); Stein, Howard F. (2005). “Corporate Violence,” Chapter 23, in A Companion to Psychological Anthropology. Conerly Casey and Robert Edgerton, Editors. Blackwell. p. 436-452; Stein, Howard F. (2005). Beneath the Crust of Culture. New York and Amsterdam: Rodopi; Stein, Howard F. (2008). “Organizational Totalitarianism and the Voices of Dissent,” in Stephen P. Banks, Editor. Dissent and the Failure of Leadership. Cheltenham Glos, UK: Edward Elgar Publishing Ltd, 2008. p. 75-96. New Horizons in Leadership Studies; Uchitelle, Louis. (2006). The Disposable American: Layoffs and Their Consequences. New York: Knopf.

Michael Yates: Corporate America began to wage what turned out to be a one-sided war against working people in the mid-to late-1970s, when it became apparent that the post-World War Two “Golden Age” of U.S. capitalism was over. As profit rates fell, businesses began to develop a strategy for restoring them. This strategy had many prongs, and one of them was ideological, that is, a struggle for “hearts and minds,” to use a military term now being applied to Afghanistan. The presumed failure of Keynesian economics, marked by the simultaneous existence of escalating inflation and unemployment, gave the ideological struggle its foundation. Maybe there had been too many restrictions placed on the market, and these restrictions (minimum wages, health and safety regulations, laws facilitating union organizing in labor markets; public assistance in the form of money grants, housing subsidies, and the like; restrictions on the flow of money internationally) had led to results opposite those that liberal Keynesians had thought most likely. If these complex arguments could be tied to simple cliches, like “get the government off our backs,” “the unions have gotten too powerful” (with always a hint that they are too radical thrown into the argument), and “welfare queens” (with that always popular whiff of racism), they could provide ideological cover for what was really a matter of corporate economics, namely the making of money.

This ideological attack bore fruit quickly. President Carter appointed Paul Volcker to chair the Federal Reserve Board of Governors, and Volcker, under the guise of fighting inflation, immediately began to snuff the life out of working class communities by forcing interest rates up to nearly 20 percent. Today, Volcker is treated like a hero by Democrats and above reproach (though ignored by President Obama’s more right-wing economic advisors), which shows just how far to the right economic discourse has moved. What Carter began, Reagan completed, firing the Air Traffic Controllers and putting the nail in labor’s coffin. Behind the scenes in all of this and growing in strength for the next twenty years (funded by wealthy business leaders) or so were the right-wing think tanks you mention. Just as retired generals go to work for military contractors and defeated politicians become lobbyists, government economic advisors get jobs at Heritage or the American Enterprise Institute or the Cato Institute. The staffs of these ideological centers churn out endless position papers and studies, which find their way into our newspapers and the offices of our congresspersons. A gigantic network of professors, journalists, politicians, lobbyists, and, today, a television network (Fox) bombard us with right-wing propaganda. That all of this has been successful is seen by the fact that the shibboleths of neoliberalism—such as the needs for privatization of public entities, the free reign of markets, the obviousness of the success of welfare reform, the evils of raising the minimum wage—are all commonplaces today.

While the public now knows that something is rotten, I am not sure that neoliberal ideas are so under attack that they will lose their sway. I think that the tenacity of these ideas owes something to the lack of an ideological alternative, which, in turn, is due to the abject failure of organized labor to provide one. For example, we need universal health care. Labor, however, has not consistently argued in favor of this or supported it at all. Now Congress is poised to enact healthcare legislation that might well be worse than the profit-driven system we have all come to hate. Labor should refuse to support this legislation, but I doubt it will. Then, when the new healthcare plans fail to deliver the goods, the right-wing will be lying in wait, ready to pounce and say, “See, we told you so. The government always makes things worse.” In other words, until there is a radical ideology to replace right-wing thinking, the latter is unlikely to lose its drawing power.

Fred Magdoff: Although these institutions were very successful, along with a number of other forces, in shaping public attitudes toward the economy, the reality of the current severe economic conditions are causing many, including some economists, to rethink their views of how “efficiently” markets function in the real world (as opposed to their ideological make-believe world) and that some different approaches may be needed. People seem to understand that the “big players” played a major role in the crisis, but most of the anger has been placed on the outrageous salaries of the top echelon. Of course, this is just “chump change” compared to the massive amounts at that are transferred to the wealthy through the speculative casino that our economy has become.

　
MW: Socialism has a huge public relations problem. Wouldn’t you agree that socialism has been effectively discredited in the U.S. media and that, even now–with unemployment soaring at 10 percent and more than 300,000 foreclosures per month–the average American worker still believes in the virtues of capitalism? How do you explain this phenomenon?

Michael Yates: Part of my answer here can be seen in my response to your first question. Socialism has, indeed, been discredited here, partly due to its rejection by its natural supporter, namely the labor movement. The CIO expelled in the late 1940s and early 1950s the left-wing forces who built the great industrial unions. When it did this, it abandoned the worker-centered ideology that might have laid the basis for support here for at least the kind of social democracy we find in the Scandinavian nations. This left the ideological field to the enemies of social democracy and socialism. Of course, we cannot ignore the long and inglorious history of police-state repression of those persons and organizations that championed socialism. Our government has never hesitated to arrest, imprison, and even kill the enemies of capitalism. So it has been dangerous to be a radical here, though not so much today when radical ideas aren’t taken seriously and there are no powerful radical organizations left. Suppose that after the Second World War, the left in the labor movement had grown, and the left-led unions had continued to successfully organize workers and win good collective bargaining agreements. Suppose that they had built upon their impressive worker education programs, made inroads in the South, and fought hard against U.S. imperialism and the Cold War. We might have a much different political terrain on which to fight today.

Two other factors that must be considered in the attachment of the working class to capitalism are racism and imperialism. In the past, employers routinely pitted white workers against black, and one weapon they used was to associate black workers (and the civil rights movement) with communism (It was interesting to note in this connection the attempts to make Obama out to be a radical socialist). The claim that black union supporters were reds helped to solidify white support for capitalism. By the same token, anti-imperialist struggles in the poor nations of the world (often former colonies of the rich countries) were typically led by political radicals. These could be made out to be anti-American, and then those in the United States who allied themselves with these struggles could also be labeled anti-American, despite the fact that they might also be supportive of policies that would benefit working people. The schools and the media could be counted out not to try to set anyone straight on any of this.

Now, having said this, I must also say that to the extent that left forces in the United States identified themselves uncritically with the former Soviet Union and its extremely undemocratic political system, they sometimes played into the hands of those opposed to socialism. And I must also admit that socialist forces were, at their strongest, never powerful enough here to force their best ideals permanently into the consciousness of the working class majority. Finally, in the past, the success of capitalism in the United States allowed for some sharing of the wealth with workers, and this, too, made people less willing to entertain radical ideas.

Old and deeply ingrained ideas die hard, and unless there are forces at work to develop new ones and unless there is at least widespread experimentation with new ways to organize production and distribution, little is likely to change, even in the face of economic catastrophe, such as so may working men and women are facing right now. Quite the contrary, workers might be persuaded that actions detrimental to their long-term self-interest need to be taken, such as, for example, draconian measures against immigrants.

Fred Magdoff: There is no question that the term socialism has a public relations problem. But while it’s true that most people don’t fully understand the basic workings of the capitalist system nor what socialism is, there are indications that many people are ready to talk about alternatives—and that includes socialism. The positive public response to Michael Moore’s movie, Capitalism, is one indication. But a Rasmussen poll last spring found that only 58% of American’s say that capitalism is better than socialism. For adults under 30, 37% preferred capitalism and 33% preferred socialism. It’s not clear what the poll results really mean. But it does indicate that people are willing to hear about and talk about alternatives to capitalism.
　
MW: In a chapter titled “Neoliberlism” you focus on the disparity of wealth in the US today. Here’s an excerpt:

By 2006 the top 1 percent of households received close to a quarter of all income and the top 10 percent got 50 percent of the income pie. In 2006, the 400 richest Americans had a collective net wealth of $1.6 trillion, more than the combined wealth of the bottom 150 million people. This degree of income and wealth inequality was last seen just before the beginning of the Great Depression. (pg 50)

Let’s ignore the moral issue for now, and focus on the supply/demand question. Is it possible for an economy to produce sufficient demand when more and more of the wealth and income goes to the upper 5 or 10 percent of the population? (isn’t this proof that capitalism is inherently crisis-prone?)

Michael Yates: If a certain amount of output is produced, an equal amount of income is generated. So, conceptually, there could be enough demand to buy the output, no matter that the incomes generated are getting more unequally distributed. It certainly has been the case that the rich people now getting such a large share of the pie spend gobs of money. And rich foreigners spend a great deal of money in the United States as well. However, the rich also save a lot of money (the more they get, the more they save), and this money does not enter immediately into the spending flow. Working people, on the other hand, can be counted on, by virtue of the limited income that they command, to spend all of their income. Therefore, the more income the rich have, the more savings there will be, and, unless some way is found to convert all this saving into spending on newly-produced goods and services, the more likely it is that there will be a crisis caused by not enough spending (and its corollaries of unsold goods and services and unemployed labor). If we understand that growing inequality is the normal trajectory of capitalist economies, a trajectory only mitigated by the power of organized working people to win a bigger share of the pie for themselves and to compel the government to intervene in the marketplace on their behalf, then it is correct to say that capitalist economies are crisis-prone for this reason alone.

Growing inequality also creates other potential problems for the system. Sometimes it can generate a political crisis, a crisis of legitimacy so to speak. The rich exert tremendous political power, and this power grows as those at the top command a larger and larger share of a society’s income. To the rest of us, the game looks increasingly rigged, with us having little chance to improve our circumstances through individual efforts. More inequality also has harmful social and economic consequences that we don’t normally think of. Recent research has shown that if we compare two entities (two states in the United States, for example) with equal average incomes but different degrees of inequality, then the place with more unequal incomes will also have higher rates of infant mortality, arrest and imprisonment, school dropouts, low infant birth weights, and many other measures of social well-being. Growing inequality actually kills some of us, makes some of us sicker, and puts some of us in jail.

I want to add an important point. To say that capitalist economies are crisis-prone, because of a tendency toward income inequality or whatever other reason, is not the same as saying that these economies are on their deathbeds, no matter how severe a crisis may be. It is possible for an economy to exist in a crisis or a prolonged period of slow growth (stagnation) without it being ready to collapse. In the end, it is political struggle, that is, class struggle, that truly destabilizes an economy and generates conditions in which it is possible to imagine the birth of a new system.

Fred Magdoff: It is one of the many contradictions of the system. If ordinary folk are paid well they can buy a lot of stuff and help keep the system going. So from the point of view of the system as a whole, higher paid workers would help the economy. However, there is only one driving force for individual capitalists–and that’s to make as much money as possible. What might be better for the overall economy can be of no concern to the individual trying to maximize profits. For an analogy, let’s take a look at ocean fishing. Almost every fish species is being fished to the point at which the population crashes. It would make sense for all of the companies operating the large trawlers to cooperate and fish less in order to preserve the resource on which they depend. So what’s good for their long-term future is sacrificed as each individually tries to maximize their catch and therefore profits.

MW: Here’s another excerpt from the book: “In 2006, the financial sector employed about 6 percent of the workers but ‘produced’ 40 percent of the profits of all domestic firms.”(pg 56) A few paragraphs later you add that, “Making money without actually making something turned out to be the largest growth sector of the U.S. economy from the early 1980s to the present crisis.”

This seems to imply that as manufacturing and other parts of the “real” economy have become less lucrative, the trading of paper assets has become Wall Street’s new profit-center, the Golden Goose. What impact has the “financialization” of the economy had on ordinary working people?

Michael Yates: I think that an answer here has two parts. First, it was the neoliberal “revolution” begun in the 1970s that did immense harm to working people. For example, unionization rates began to fall dramatically in the 1980s, as Reagan began his “magic of the marketplace” assault on the working class. Real wages (the purchasing power of our paychecks) began to stagnate in the 1970s and are not much higher today than then. Relatively high-wage public employment began to endure a long period of privatization, which also damaged working class living standards. The move toward “free trade” did workers here no good, as manufacturing began to flee our shores for low-wage havens abroad. None of these things had to do with financialization per se.

Second, however, once the neoliberal attack on working class living standards took hold and incomes began to flow upward, those with a great deal more money began to look for ways to put this money to work. The corporations that they owned also had higher profits, and they did the same. The United States has always had a robust financial sector, though in the past, it was not the tail that wagged the dog as far as our system of production and distribution was concerned. Neoliberalism brought with it a deregulation of international movements of money and goods and services. [It is important to note that we see neoliberalism as a political response to capital’s quest for restored profits beginning in the mid-1970s when the post-Second World War two economic boom ended and the slow growth (stagnation) common to mature capitalist economies reasserted itself.] These, in turn, required a certain amount of financial innovation, to reduce, for example, the risks of fluctuations in currency exchange rates and sharp changes in political conditions that could threaten investments. From these innovations came still more, until finance began to take on a life of its own. And while neoliberalism and direct corporate actions inside workplaces did reduce costs and raise profits, they did not create nearly enough capital spending opportunities (investment) to absorb the growing individual savings and business profits. Finance of one kind or another then began to be seen as a place to dispose of surplus and make still more money. Leveraged buyouts, stock market speculations, real estate “investments,” all took off from the 1980s on, absorbing money that could not find enough opportunities in the real economy of production. As these things happened, financial “innovation” exploded, with all of the alphabet soup of financial instruments we describe in our book.

This explosion of finance proved detrimental to working people in a number of ways. Leveraged buyouts inevitably resulted in the hollowing out of what were often perfectly viable businesses. Companies were saddled with debt, assets were stripped and sold, and workers were furloughed by the tens of thousands. The inflation of asset values gave rise to the notion that it was the job of managers to increase the share price of their businesses—in any way possible. Businesses came to be thought of as mere collections of assets rather than entities that produced things. Asset inflation gave rise to asset speculation and the development of ever more complex financial instruments, all leading sooner or later to financial bubbles and the inevitable bursting of the bubbles. As we have seen, the bursting of financial bubbles has had tremendously negative impacts on working people: shuttered workplaces and unemployment to name but the primary ones. The last bubble, in real estate markets, was harmful to workers not only after it burst but also as it was developing. In the aftermath of the dot.com bubble, Alan Greenspan, former Chairman of the Fed Board of Governors, directed Fed policy to pressure interest rates down to very low levels. This helped to push loose money into real estate. As house prices began to rise, banks and brokers started to encourage working people to do two things: borrow money against the appreciated value of their homes and buy homes, either as first-time buyers or as purchasers of more expensive homes (after selling old ones). Working people were eager to do both because they saw houses as sources of cash to compensate for stagnating household incomes and as a form of wealth that could help secure them against the hazards of ill health, lost pensions, or college-age children needing money for school. Working class households began to take on large amounts of debt, making themselves more vulnerable, even as they thought they were making wise financial decisions. Ironically, those who saw their incomes rise so high because of neoliberalism were now, in effect, loaning money to those who didn’t fare so well. As banks accumulated mortgages, farsighted Wall Street swindlers saw golden opportunities to develop a slew of new financial instruments based upon the packaging and repackaging of mortgages into new and exotic instruments. Greenspan played their shill, arguing that they had uncovered the secret of hedging infallibly against risk. From here it was but a short step to the criminal schemes of Countrywide and a host of other financial institutions. The billions of dollars made were used not only to finance a new gilded age of revoltingly lavish consumption but to corral the most tractable politicians money could buy.

Fred Magdoff: Financialization of the economy created the possibilities for people to take on more and more debt—credit cards, new cars, 2nd mortgages, etc. It was the selling of a lifestyle way beyond people’s ability to pay for it plus the easy access of loans that created the bind that many people find themselves in today. In essence, it allowed people to live beyond their means. They were encouraged to take on debt as their house values seemed headed up forever, and the great rise in foreclosures and bankruptcies is the unfortunate result of the financialization of the economy. Also, those people who had retirement money in individual accounts or with pension systems and thought that they had become very wealthy, now found themselves with much less to rely upon.

MW: In the last couple of decades, consumer debt has skyrocketed, as you note, “doubling from 1975 to 2005, to 127 percent of disposable income.” (pg 60) Have we gone as far as we can without deleveraging and paying down debts? What happens to a credit-dependent economy when the consumer can no longer increase his/her debt-load? Is this just the beginning of a decades-long down-cycle?

Michael Yates: Certainly no entity—not a person, a family, a business, even a government— can take on rising levels of debt (relative to income) indefinitely. Sooner or later, the piper has to be paid. Working-class consumers took on large amounts of debt, to compensate in part for stagnating wages and incomes, and, it is important to note, to pay for health problems and other household traumas. This meant that the burden of the debt rose, since income wasn’t rising as fast as the debt, and also because the interest rates charged on credit cards and subprime mortgages were so high. We at Monthly Review have been decrying the rise of consumer debt for many years, and we said that the debt chickens would come home to roost sooner of later. I must say that I was surprised that debt could be broadened and deepened for so long. The ingenuity of creditors in extending loan periods and devising so many new forms of debt has to be admired for its audacity. Then, the ways in which these debts were packaged and sold so that more debt could be extended was truly breathtaking. Unfortunately, consumers ultimately couldn’t pay and all hell broke loose. Now, with so much unemployment, workers are truly strapped. They will not be borrowing so much or spending so much anytime soon. [One interesting recent development is that, as some households have defaulted on debts or simply stopped making payments, consumer spending has showed a bit of an upward tick!] So the question arises: what spending will fuel a sustained recovery? It won’t likely be consumer spending. Capital spending was stagnating to begin with and was the root cause of the crisis. There are no new “epoch-making” innovations on the horizon that would generate the amounts of investment that were brought forth by the automobile. U.S. exports seem a very unlikely demand support. That leaves the government. In a capitalist economy, especially one like the United States with its lack of a history of generally accepted public spending, it seems very unlikely that public spending will make up for shortfalls in aggregate demand. Already, there are widespread entreaties (and not just from the far right) urging the federal government to wind down in spending programs—well before, I might add, the economy has recovered. As we see it, the United States is, indeed, in for a long period of stagnation, a “down cycle” as you put it.

Fred Magdoff: This is one of the major constraints on the system. The economy is in a process that economists call “deleveraging,” which is just another way of referring to somehow getting rid of debt. Some are able to pay off what they owe, a few are able to renegotiate down some of their debt, many are losing their homes, and some are going bankrupt. Until this works its way out, and a lot of debt is shed one way or another, there will be a drag on the “consumer” portion of the purchases. This is particularly significant to the U.S. economy because it is so dependent on consumer purchases—in 2007, these absorbed approximately 70% of the goods and services produced.

MW: The ABCs of the Economic Crisis: What Working People Need to Know is as lucid and compelling summary of the financial crisis as any I have read. In the closing chapter you state that capitalism is undergoing a “crisis of legitimacy” and that “the system can never deliver what is needed for us to realize our capacities and enjoy our lives… That “instead of private gain” the purpose of society and the economy is “to serve the needs of people, by providing the necessities of life for all, without promoting excessive consumption (consumerism) while protecting earth’s life support systems.”

All of the things that which kept capitalism in check–progressive taxation, crucial regulations, and the power of unions–have either been reversed, repealed or greatly eroded. More and more people are beginning to see the greed which governs the system, and it scares them. But is the country really ready for structural change or will the vision of an economy which “serves the needs of its people” be dismissed as “pie-in-the-sky” Utopianism?

Michael Yates: Well, first thank you Mike for the kind words. They are much appreciated. Typically, the best we have been able to hope for from the public in the United States has been an amorphous populism; people are willing to say that the system is corrupt and that it is biased in favor of the rich. But proposals for change, much less a radical transformation of the economic system, are rare commodities. I think things would be different, however, if we had a real labor movement, one that was rooted in communities, broad in its composition, and not afraid to have principles and stand by them come hell or high water. This should be the lesson that progressives learned from the right-wing. The talking heads of Fox may seem insane to us, but they and their intellectual gurus almost never deviate from the set of reactionary principles with which they began to transform the “common sense” of the nation. We suggest at the end of our book that we ought to ask ourselves if a return to the pre-economic crisis status quo is what we want. In the best of times, there is plenty of unutilized labor, a degraded environment, poverty, dead-end jobs, and much more that is not so desirable. So we chose a number of alternative outcomes to what we have now that we think have mass appeal, from universal healthcare to basic food guarantees. However, as you say, these might well, and I think will cause people to react with a pie-in-the-sky indifference. What might make working men and women stand up and take notice would be for these goals to have a mass-based advocate, one that would make these goals matters of rigid principle and begin to fight for them through mass actions. We might think that the right-wing ideologues we see on television are insane. Yet, come hell or high water, they stick to their guns. Their political and economic adherents have wielded tremendous power for a long period of time, and even today when they seem to be losing their grip on the national “common sense,” they can still mobilize the faithful. The left needs to take a lesson from this. More particularly, the labor movement must take a firm and rigid stand on issues like national health care, food security, environmental degradation, full employment, good and cheap housing, U.S. war-making and imperialis, racism, and a host of others. Then it must educate members rigorously and constantly about such principles. Most importantly, it must begin to actively fight to achieve them, activating its millions of members and allies, wherever it can find them. It is through action, bold and unafraid, that people’s minds will get changed and a new “common sense” developed.

Having said this, I think it is clear that the labor movement, as currently constituted, is not up to the tasks at hand. Too many unions are moribund, stuck in the failed labor-management cooperation mind set of the past and run by people too old and infirm to do much of anything. So, not only will we have to have a worker-led opposition to the status quo, fighting to change it radically, but this opposition will have to be built on a new basis. There are some hopeful signs, such as the development of community-based worker centers, mainly in immigrant communities. These may be models for the labor movement of the future.

Fred Magdoff: Just getting what should be the most reasonable reforms through Congress is a major effort, which usually fails or is corrupted in the process. Look what’s happening with health care “reform.” Even if a “public option” is finally part of the bill, it will be a bill that helps some people, but is primarily a boon to the health care industry, which will get a lot of new revenue. It’s not a bill designed with the single purpose in mind: how can we supply medical care for everyone at reasonable cost. Rather it’s a bill designed with significant input from the for-profit sector that will end up supplying them with extra profits. It is clear that government-run systems (and there are a variety of ways to do this) are far cheaper and more efficient and can actually cover everyone. SO, it seems as though piecemeal reform is a) very difficult to obtain and b) can be reversed as the power of the wealthy increases. A system is needed that can break the power of the wealthy and create a real political and economic democracy in order to be able to meet the basic needs for all the people.

I had the opportunity to sit down with Ben Powless, a Power Shift organizer and member of such groups as the Canadian Youth Climate Coalition and the Indigenous Environmental Network. He had just returned from the Green For All Academy in the San Francisco Bay Area of California, where 50 attendees, 49 from the United States and one—Powless himself—from Canada, were coming up with ways to bring green jobs to the forefront of both the environmental and social/economic justice movements.

“We [the Canadian Youth Climate Coalition] started setting up our own working groups [on green jobs], and really not seeing a lot of movement on the ground around green jobs: I mean you can find a few policy documents by some environmental groups, you can find some stuff on their website, but nobody’s out there in the streets talking about it.

“The focus around green jobs is to try and imagine a society and an economy—a way of life—that is environmentally sustainable: to try and imagine the actual jobs and the transition that we would have to go through,” said Powless.

“[Green jobs] are positions from all aspects of the economy, from typically what’s called ‘blue collar’ work right up to ‘white collar’ work, from research to actual design, to manufacturing,” said Powless. “As well as things like simply going into houses and fixing them up: construction, manufacturing. So it really focuses on…fundamental aspects of our society, from our energy sources, our food sources, to the way we build things and the way we consume things, and eventually [the way we] have to recycle [those things].”
A march in support of green jobs legislation in New Mexico. Photo: Navajo Green Jobs

A march in support of green jobs legislation in New Mexico. Photo: Navajo Green Jobs

Granted, the effort is more than understanding what “green work” entails. It is also about coordinating a just transition in implementing these programs, to ensure that we are working toward social, economic, and environmental justice together.

“[The concept of green jobs] tries to address at the same time the fundamental social inequalities in our societies, especially tackling issues of poverty…[and] marginalized communities frequently not having access to most aspects of the environmental movement and not having access to a clean, healthy, safe environment.”

Green jobs are not just about making the world a cleaner place. According to Powless, there is “a human rights basis to it: that people of colour, people from poor communities, have just as much a right—in many cases even more of a right where their communities have been marginalized in the past—to participate in this new economy.

“If we don’t actually make sure that it’s led by communities, it’s not going to be the poorer communities who get access to their own sources of energy, who get access to energy audits.

“And it’s going to be especially immigrant and poorer communities who don’t have access to education and training [and] who are not going to be able to get those jobs, and are not going to be able to be involved in setting up any of those programs.”

To break the cycle of marginalization of poor and immigrant communities as the green jobs movement expands, Powless says it’s crucial for the green jobs movement “to make sure that…these communities are able to be there at the table as some of the main initiators of this discussion. And I think that’s why…we have to really start getting these people involved now.”

Another key aspect of the transition is keeping a local focus. “Remodelling a house, doing energy audits, installing renewable energy systems…local community agriculture, community gardens—these are all fundamentally local processes, and it can be replicated on a wide scale in most urban and even semi-urban centres across North America, and in a lot of other places.

“And these are the kind of things that can’t be outsourced, and [they] provide secure employment for people.”

Widespread human and labor rights violations were revealed, including child labor; illegal below-poverty wages; few or no benefits; forced or unpaid overtime; hazardous working conditions; verbal, physical, and sexual abuses; forced pregnancy testing to be hired and while employed; excessive long working hours causing physical ailments, stress, and harm; denial of free expression, association, and collective bargaining rights; and elaborate schemes to commit fraud and deceive corporate auditors.

In April 2009, Subsidizing Sweatshops II followed to provide more evidence of a global problem. It tracked developments in four factories from the first report and four new ones in five countries on three continents producing uniforms for nine major firms in China, Honduras, the Dominican Republic, Mexico, and America.

Two cases relied on investigations by independent factory monitors. Three others used personal worker interviews conducted by “credible local unions and non-governmental organizations with expertise in labor rights.” Three more are based on SFC-conducted interviews.

In all cases, the global economic crisis materially increased worker hardships leaving them more vulnerable, in jeopardy, and unable to secure their rights. Most often, the following violations were found:

• children as young as 14 forced to work the same long hours as adults and under the same onerous conditions;
• wages so low, they only cover one-fourth to one-half of essential needs;
• workers in at least two factories not paid overtime;
• because of excessive production quotas, workers forced to skip breaks, not go to the bathroom, and work sick through grueling 12-hour or longer days;
• unhealthy work environments in stifling heat and thick fabric dust detrimental to health;
• numerous sewing machine accidents causing wounds and loss of fingers; and
• instances of severe repression against union supporters and organizers, including harassment, intimidation, firing, and blacklisting from further employment elsewhere.

The report’s findings “are corroborated by scores of academic research and industry investigations.” Human and labor rights violations are the norm, not the exception. Monitoring alone won’t change them, but perhaps public disclosure can help.

The Honduran Alamode Factory

Employing about 500 workers, it makes public employee uniforms and other apparel for Lion Apparel, Cintas Corporation, and Fechheimer Brothers Company. In 2008, the Worker Rights Consortium (WRC) reported some of the worst working conditions in the region, but months later corrective measures had been taken, thanks to exposing the situation to public scrutiny.

Alamode agreed to pay minimum wages, provide back pay, enroll all workers in the Honduran social security system to give them access to health care, paid injury leave and other benefits, and establish an injury log as required.

However, other issues remained unresolved, including:

• further improvement of health and safety issues;
• ending verbal harassment; and
• making overtime work voluntary, not mandatory.

Despite improvements, Alamode workers still earn sub-poverty wages, and full compliance with labor rights falls far short.

The Mexican Vaqueros Navarra Factory

The factory produces jeans and uniforms, including the Dickies brand. In May 2007, its workers tried to form a union but faced extreme harassment and intimidation, as reported by a labor rights monitor on the scene. It’s investigation:

found that workers had been psychologically and verbally harassed, dismissed without warning, and forced to sign resignation letters for attempting to form an independent union at the factory and that at least some workers dismissed for union activities have been blacklisted….the official reason given for workers dismissed… was ‘lack of work.’

Two months after voting to affiliate with the Garment Workers Union, employees were told the plant shut down for lack of work. Yet three buyers, Gap, Warnaco, and American Eagle, placed orders with the factory in support of their right to organize.

In July 2008, the Tehuacan Valley Human and Labor Rights Commission filed a complaint with WRC alleging that another Navarra Group factory, Confecciones Mazara, discriminated in its hiring practices. WRC investigated and found “overwhelming evidence that Confecciones Mazara engaged in unlawful discrimination against union supporters in hiring decisions, otherwise known as ‘blacklisting.’ ”

Twenty former Vaqueros Navarra workers applying for jobs were rejected. Another initially hired was fired on her first day after her former union organizing activities were discovered. In response to WRC complaints, the company refused to comply and continues its blacklisting practices.

The Dominican Republic’s Suprema Manufacturing, Wholly Owned by Propper International (PI)

It operates three plants and employs about 1,000 workers making uniforms and other apparel items. PI is one of the largest makers of US military clothing. In 2008, Suprema Manufacturing’s employees described low wages, high production quotas, unhealthy work conditions, and extreme hardships, all unaddressed by the company.

At the same time, PI distributed a threatening notice to its Puerto Rico workforce accusing the union and workforce of defamation. The same notice said that SweatFree Communities’ publications expressed “a defamatory tone toward Propper (alleging) that the Department of Defense is subsidizing companies with terrible work conditions, and safety and human rights violations.” The notice concluded saying:

“SAY NO TO THE UNION. DON’T SIGN ANOTHER CARD.”

In March 2009, Federation of Workers of Free Trade Zones (FEDOTRAZONAS) workers and volunteers and their counterparts at the National Federation of Free Trade Zone Workers (FENOTRAZONAS) conducted over two dozen interviews on behalf of SweatFree Communities (SFC). They revealed extreme poverty, exhaustion, intense pressure to meet production quotas, an unhealthy work environment, and intimidation-instilled fear against openly supporting union organizing. Even though Suprema has a certified union, only a handful of workers belong. As a result, it’s weak, unable to represent workers effectively or organize to recruit more.

Workers said to get by, they need other jobs and loans (at 10% weekly interest) to pay unexpected medical and other expenses. Their work load is so exhausting, it makes “my whole body hurt,” according to one employee. “When I leave work, I am tired and exhausted…. All I want to do is lie down, but I have my obligations.” Another machine operator said:

“The work is hard and the production quota is killing us (and earning minimum pay) isn’t enough for anything, for what’s needed at home.”

Other workers complained of health-related issues related to poor air quality, extreme heat, and fabric dust. According to workers interviewed, they can’t act individually or collectively to address issues as important as these or any others. According to one:

“In the event that we complain, normally they don’t listen to us but you have to suffer the consequences. One time I complained about the high temperatures in the factory and said it is not good for our health. And the manager said to me, ‘If you are not comfortable you can leave.”

Another worker said “we discuss problems at work amongst the other workers, but not with management because we are afraid…. If you complain too much, they fire you. So we don’t complain because we need employment….”

They also fear recrimination over union organizing or joining one. In 2000, 300 union members were fired. After reviewing the case, the Dominican Labor Department ordered 30 leaders reinstated with back pay. When they returned, management ordered workers not to speak to them or be fired. Workers today live in fear, endure harsh conditions, and put up with whatever they’re ordered to do.

New Bedford, Massachusetts-based Eagle Industries

Eagle supplies tactical gear to the Pentagon and state governments. In November 2007, it acquired a New Bedford, Massachusetts facility that made headlines in March 2007 when Immigration and Customs Enforcement (ICE) agents raided the factory, discovered sweatshop conditions, and arrested hundreds of alleged undocumented workers.

In its 2008 report, SweatFree Communities (SFC) highlighted Eagle’s failure to address abusive sweatshop conditions as well as its hostility to an ongoing union organizing campaign at the time.

In February 2009, SFC conducted in-depth interviews with eight union supporters and learned the following:

• Eagle raised its minimum wage by 50 cents an hour to an average of about $9 an hour;
• it included a week’s vacation in worker benefits bringing the total to two, including an annual July shutdown;
• a new sick day policy requires a doctor’s note, and time off remains unpaid; and
• workers expressed concerns over low pay, poor benefits, dangerous working conditions, and everyday harassment of union supporters by company managers.

Examples cited:

• machines need lots of oil; in operation, it “shoots into your eyes,” according to workers;
• excessive heat, lack of circulation, smoke and oppressive smell causes dizziness, head and stomachaches, and for some vomiting;
• forklifts go everywhere and sometimes hit people, causing injuries;
• fabrics used are so heavy and stiff, they inflict abrasions, leave fingers bent and stiff, and cause chronic pain;
• no health insurance is provided;
• without a doctor’s note, no sick days are offered and if taken are unpaid;
• workers are constantly watched and checked, even when they go to the bathroom;
• action is taken against anyone suspected of supporting a union; new hires must sign a declaration agreeing not to join one;
• pressure and harassment are constant “to produce a lot;” and
• departments are shut down and workers reassigned to divide and separate them from each other.

As a result, workers feel a union is their only hope because it “offers a contract and a negotiating table with the owner of the factory where he will have to realize the suffering we have endured working for him for so long, making money for him so he will have a good future while our future is bleak,” according to one worker.

Tijuana, Mexico’s Safariland

A division of Armor Holdings, a wholly-owned subsidiary of BAE Systems, Inc., Safariland’s 700 employees produce bulletproof vests and accessories, belts and personal accessories, and grenade and pistol holsters.

Workers told researchers that management told them in response to questioning to say everything is fine and not complain. Reality, however, concealed lives of extreme poverty, living at home with:

“No water, no electricity, and no terrace. One room made of garage doors and cardboard. The electricity we have is stolen. We buy water because there is no running water. There is no floor. The roof is made of laminate and cardboard.” Workers expressed little hope for future change, even less now in economic crisis hitting Tijuana like most everywhere.

In recent months, thousands lost jobs, and when openings exist, long lines queue up to apply. Women must take pregnancy tests, a violation of Article 3 of Mexico’s labor law requiring equal treatment of both genders. Article 26 requires worker contracts with wage guarantees, their amount, how they’re paid, working hours, breaks, vacations, and other benefits. Yet Safariland offers only temporary ones, then chooses whether or not to renew them, a violation of Article 37.

Pressure and harassment are constant to meet quotas, arrive on time, and respect supervisors. Failure is punished by suspensions without pay for one to three days.

However, Mexican Labor Law is clear, yet Safariland disobeys it. The Constitution’s Article 123 establishes an eight hour work day, including breaks. So does the Labor Law’s Article 61 and under its Article 67, double pay is required for overtime. In addition, Article 110 prohibits pay deductions for any reason, but Safariland gets around it by suspending workers.

Articles 177 and 178 let 14-16 year old minors work for up to six hours daily, including a one-hour rest after three hours, if they pass a medical examination. Workers said children worked the same hours as adults.

They also reported dangerous and unhealthy conditions, including accidents with sewing and riveting machines and material cutters, resulting in wounds and lost fingers. In addition, hazardous substances are used, including thinners, solvents, and Resistol 5,000 glue, the notorious narcotic used by Latin American street children.

Other complaints included supervisors’ indifference to worker concerns, and according to one account: “They do not listen to us, and if we complain they treat us like troublemakers.” Anyone caught supporting a union “would be fire(d) or at least consider(ed) troublemakers,” said another. “They would put us on the blacklist,” a believed widespread practice in Tijuana.

The Dickies de Honduras Factory

Located in Choloma, its 1,000 workers produce apparel under oppressive conditions. Wages are sub-poverty, and at best cover half a family of four’s basic necessities. Work days are long, 11-12 hour days, four days a week, and constant pressure to produce. According to one worker, illness is no excuse for missing work.

Union organizing is forbidden, and those caught or suspected are fired. One union leader explained how organizers are treated. In 1998, Dickies fired 80 supporters. In 2003, alleged leaders were fired, then in 2005, 280 workers got legal recognition to form a union. A month later, a Mexican Ministry of Labor representative and three union officials attempted to deliver official documents to the company. They were denied entry. The officials and others were fired, and Dickies stonewalled government summonses to answer for the action. Other firings followed, and the company refused to recognize a union, bargain collectively with it, or address employee grievances.

Workers nonetheless persisted until the current economic crisis became challenging. Claiming lack of orders and a need to cut costs, worker dismissals began in December 2008. By March 2009, 58 were gone, in all cases for supporting a union, in violation of Honduran Labor Law’s Article 96 that prohibits employers from “firing or persecuting their workers in any way because of their union affiliation.”

China’s Genford Shoes

Located in Guangdong Province, its 10,000 employees produce work, exercise, casual, and dress shoes, 80% for Ohio-based Rocky Brands. According to the company, Genford is independently audited for social compliance, but SFC research found evidence of widespread labor law violations.

Workers are constantly pressured to produce for low pay under poor conditions:

• new employees get no income for their first three days; they also must pay $4 for a physical examination, $10 for housing, and another $10 for ten days’ meals in the company cafeteria – in total, around a week’s wages;
• wages are sub-poverty;
• no rest days are allowed for an entire month during peak production periods, in violation of Article 38 of China’s Labor Law requiring at least one per week;
• children as young as 14 work the same hours as adults and are hidden when customers visit the factory; Article 28 of China’s Labor Law prohibits employing children under age 16; it also protects 16 – 18 year olds from “over-strenuous, poisonous or harmful labor or any dangerous operation” and requires employers to follow state laws regarding types of jobs, hours worked, and labor intensity for adolescents;
• excessive over time is mandatory at below the legal double hourly pay rate for daytime work on weekends;
• by law, workers can cancel their labor contracts by giving 30 days notice, but are penalized by loss of wages when they do;
• they live 12 to a room in crowded dorms of around 200 square feet with ten cold showers for 264 workers;
• pollution levels are oppressive; workers describe discharged black, foul smelling effluent into the adjacent river; and
• at the end of every work day, body searches are conducted, similar to but not full strip searches.

Genford employs a complex system of bonuses and fines to achieve output. Workers get bonuses for meeting quotas that must be maintained hourly, but no one understood how they’re calculated. They also complained that they’re hard to reach, and they’re constantly pressured to work faster for maximum production. In addition, fines are levied for arriving a few minutes late, leaving early, skipping work, or causing trouble.

It’s also not easy to quit even though Article 37 of China’s Labor Law lets workers do it by giving 30 days advance written notice or three days during their probationary periods. Employers must then fully compensate workers, but they don’t.

Frackville, Pennsylvania’s City Shirt Company

Its owner, Elbeco Inc., a producer of public employee uniforms, “was the first major uniform company to endorse SweatFree Communities’ campaign for worker rights,” and it shows in how it treats its employees.

According to one, “I am pretty much able to cover my needs. Anybody can always use more money, but I do pretty well, I can say.”

The average worker makes about $11 an hour, but some get up to $19 because the company is unionized and was able to bargain collectively for decent wages and benefits. In addition, workers have “a seat at the table with the company… affording them a sense of ownership and respect.”

City Shirt’s employees are also much older than at other factories studied, a sign of greater stability and a contented workforce staying in place, happy to be there, and for many, hoping to stay for the rest of their working lives.

Yet they worry that their jobs may not last because of factors beyond the plant’s control forcing layoffs to cut costs and stay viable. Apparel manufacturing in America is dying. In addition, the current environment is taking its toll closing factories across America, and City Shirt has had to cut one-third of its workforce in the past 18 months.

The alternative is the global sweatshop as oppressive or worse than the ones described above. The company’s employees hope to reach retirement age before their operation gets outsourced, but making it won’t be easy.

In today’s global economy, in good times and bad, worker rights are subordinated to greed and private profit, and future prospects look grim. Job losses are continuing. Wages are stagnating at best. Benefits are eroding, and job security is a thing of the past at a time governments, in alliance with business, are indifferent to protecting them. The result, more and more, is that workers are on their own to endure against very long odds. It’s all the more important for harder struggle because it’s the only way they have a chance.

Anti-Sweatshop Legislation in Congress

On January 23, 2007, S. 367: The Decent Working Conditions and Fair Competition Act was introduced in the Senate “to amend the Tariff Act of 1930 to prohibit the import, export, and sale of goods made with sweatshop labor, and for other purposes.” It was referred to committee but never passed.

On April 23, 2007, HR 1992: The Decent Working Conditions and Fair Competition Act was introduced in the House for the same purpose. It, too, was referred to committee but never passed.

Both bills were introduced in a previous congressional session and failed. They may be re-introduced later in 2009.

Sweatshop labor takes different forms, some far worse than others. On February 14, 2007, Charles Kernaghan, Executive Director of the National Labor Committee in Support of Human and Worker Right, testified about the worst kind at a Senate committee hearing on Overseas Sweatshop Abuses, Their Impact on US Workers, and the Need for Anti-Sweatshop Legislation.

Citing the December 2001 US-Jordan Free Trade Agreement, he gave examples of human trafficking and involuntary servitude abuses that followed:

• Jordan’s 114 garment factories employ over 36,000 foreign guest workers from Bangladesh, China, Sri Lanka and India;
• Bangladeshi guest workers had to borrow at exorbitant interest rates $1,000-$3,000 to pay unscrupulous manpower agencies for two-to-three year contracts to obtain work;
• they were trapped in involuntary servitude at one factory and couldn’t leave;
• they were promised benefits, then reneged on, including free food, housing, medical care, vacations, sick days, and at least one day a week off;
• on arrival in Jordan, their passports were seized;
• they were forced to work shifts of “15, 38, 48, and even 72 hours straight, often going two or three days without sleep;”
• they worked seven days a week for as little as 2 cents an hour, 98 hours a week;
• those complaining were beaten and abused;
• 28 workers shared one small 12 x 12-foot dorm with access to running water only every third day;
• legally owed back wages were never paid nor were factory owners prosecuted for human trafficking, involuntary servitude, or treating their employees abusively;
• they sewed clothing for Wal-Mart; and
• other Jordanian, Chinese and other factory workers are treated the same way; some worked under conditions so hazardous that “scores of young people (are) seriously injured, and some maimed for life.”

Kernaghan’s National Labor Committee (NLC) web site highlights the problem by saying that corporate predators “roam the world to find the cheapest and most vulnerable workers… mostly young women in Central America, Mexico, Bangladesh, China, and other poor nations, many working 12 to 14-hour days for pennies an hour.”

Corporate unaccountability is responsible for this moral crisis of our time — a dehumanized, expendable workforce ruthlessly exploited for profit. NLC believes worker rights are as inalienable as human rights and civil liberties and says “now is the time to secure them for (everyone) on the planet.”

But, aren’t tough times good for union organizing? Unfortunately the answer, so far in this economic crisis, is no. So far there has been no rush to join unions, no mass mobilizations of the unemployed and no growth of militancy of any kind. Perhaps if the crisis continues workers will once again become militant, just like in the Depression of the 1930s when it wasn’t until five years into the economic crisis that there was an explosion of organizing, which included sit-down strikes, factory occupations, mass political movements and the creation of huge new industrial unions.
But it won’t happen without hard work.

The truth is the Depression only became “good times” for union organizing once millions of workers had lost faith in capitalism. The truth is unions grew along with political movements that claimed to offer alternatives to capitalism. And there is every reason to believe the same will be true today.

Why is this so? Because if workers believe in capitalism, or are satisfied by their personal situation under capitalism, they are more likely to buy into the ideas of capitalism. And joining a union is not at the top of the list of things recommended by Ayn Rand or the Wall Street Journal. In fact, ideologues of the system usually claim unions and collective bargaining to be an illegitimate interference in the “proper” working of capitalism.

In other words, organizing a union is seen as a challenge to the rules of capitalism. This is true despite the motivations of actually existing unions, some of which claim to be “just part of the system.”

The key to most successful union organizing drives is motivated members, both in the organizing target and in the larger union. History and common sense tell us that the number of people committed to union organizing rises and falls in inverse proportion to the popularity of capitalism. The more people are dissatisfied with capitalism, the more people believe another economic system is possible and unions can help bring about change, the more people will be motivated to put themselves on the line to build unions.

In other words, if we want to grow our unions, if we want to organize the unorganized, we need to focus on the flaws of capitalism and begin defining an economic system that is a realistic and attractive alternative.

The good news is there seems to be a vast and growing discontent with the existing economic system as shown by the opening this weekend of Michael Moore’s new film, Capitalism: A Love Story and the popularity of books such as Naomi Klein’s The Shock Doctrine.

The more difficult task, however, will be describing an alternative that is both attractive and realistic. We need to develop a vision of a better system that can be a powerful motivation to do the hard work that is necessary to create a better society.

If people think capitalism is the best that is possible, of course they will continue to follow the true believers in the system. If people believe there is no better way, disenchantment with the existing capitalist system will breed nothing more than cynicism and a retreat to private spaces. In fact, that is the result purveyors of capitalism are banking on.
It is time for unions and our allies to offer hope that a better world is possible. Professing loyalty to a sick system that glorifies greed and promotes war will only make the rut we are in deeper.

It’s time for unions to regain their momentum by offering a vision of society in which one person one vote is the basis of both our political and economic system.

It’s time for economic democracy.

New Unionism: The union movement is the largest democratic force in the world today, by far. However, too many union members complain about bureaucratic behaviour at leadership level. Do you accept this is a problem, and, if so, what do you think are the root causes?

Dan Gallin: First, let’s get the problem in perspective. The level of bureaucracy in unions is constantly overstated. We have much less difficulty in this area than corporations do, for instance. Of course corporations are, by their very nature, top-down power structures – what could be less democratic than your average workplace? – and I cannot imagine anything as wasteful as some management bureaucracies. Similarly, think about bureaucracy in government, or in tri-partite bodies, or in non-governmental organisations. The difference is that unions, by their very structure and purpose, are consciously committed to internal democracy, and so failures are clearly seen as such. The basic structures of unionism are democratic and the internal struggle to assert and reassert democracy is always there. Trade unions have to deliver; there is a very short time span between demand and the delivery. Think of collective bargaining, for instance. Unions are constantly being held to account by their members.

NU: Are you trying to tell us there’s no real problem, then?

DG: No. I am not trying to minimize the problem. What I am saying is that bureaucracy is a pervasive feature of all institutional and organizational life. What, after all, is a bureaucracy? It is an administration, and all organizations need an administration. The problem arises when this administration develops a collective interest of its own, separate and eventually even opposed to the interests of the people it is supposed to serve.

This is serious enough in government, where the civil service constitutes a bureaucracy that can easily overreach its authority. In a democracy, the civil service is supposed to be the servant of the people. When it starts to act as its master, democracy is in danger.

In the trade union movement, the problem is even more serious because its administration, its own civil service if you wish, must represent people who have no other source of power than their organization. If this organization ceases to be responsive to their needs, they lose everything. An administration that builds its own power at the expense of the membership is betraying its trust – that is treason.

NU: If, as you say, trade unionism is inherently democratic, why is it that we hear these complaints about unions being run as dictatorships and/or oligarchies?

DG: Actually, there are not so many cases of this, in proportion. What happens is that we have some spectacular examples of organizations which degenerate and then become notorious. They are falsely represented as typical of the movement, most often in anti-union propaganda. But there is never any guarantee against an organization, even with the best democratic traditions, being hijacked by anti-democratic cliques or personalities.

The hijacking of the Russian revolution by the Communist bureaucracy led by Stalin is a classical example. After four or five short years, a vibrant, radically democratic, revolutionary mass movement started giving way to the rule of a bureaucracy which first asserted, then consolidated power by means of terror, police and military terror against its own people, on a scale not seen before in modern times. A whole new society with a bureaucratic ruling class!

How do these things happen? In order to work, democracy needs the active support of large masses of people at all times. In a union, this means the active participation of most of the membership. Democracy is not a state of being, it is an activity, it is in fact hard work, and it is a constant work in progress. You might say the same thing about freedom.

Most people are not able to maintain a high level of commitment over time. They are not organization professionals, they need to get on with their lives, as they should, so “democracy fatigue” might set in; especially after periods of great social stress. They might not pay attention to what happens in the organization for a time, routine sets in and the professionals take over. If the leaders are not trained in the right kind of politics, if they are not persons of the highest individual integrity, and if they are not supervised and controlled, they may start treating the organization as if it were their own property.

This is why it is the responsibility of every progressive and democratic trade union leadership to maintain constitutional and practical conditions in which membership participation and control is ensured and welcomed, without making conditions of participation too onerous for ordinary members.

NU: Just by way of clarification, can you explain what you mean by “trained in the right kind of politics”?

DG: Socialist politics, of course. And by that I mean the kind of politics based on the values that were at the origins of the labour movement and that made it great: solidarity, selflessness, respect for people, a sense of honour, and the modesty that comes with the awareness of being a soldier in the service of a great cause, a contempt for self-promotion, or “le refus de parvenir” as Monatte¹ called it.

NU: Do you think the Cold War contributed to bureaucratizing the movement?

DG: It certainly did. In a situation of extreme political polarization by outside forces, it is easy to lose sight of the original purpose of the exercise.

First, let us be clear what we are talking about. The Cold War was a conflict between States, between two blocs of States, led by the two superpowers of the time: the United States and the USSR, more or less from 1949 to 1989.

However, this conflict had nothing to do with a much older conflict within the labour movement. This earlier conflict arose after the October Revolution, when the Russian Communist Party created an International of its own and declared war on all other movements of the Left unless they accepted total subordination to its dictates.² That conflict became unbridgeable once the Communist leadership had moved to imprison and execute activists of other Left tendencies in the territory under its control, including its own opponents and dissidents. Under Stalin, this became a systematic campaign of extermination, with hit men spreading out all over the world to assassinate opponents.

It is small wonder that a majority of the Left, of all tendencies, became “anti-Communist”, meaning that they organized to defend themselves as best as they could against Communist claims of hegemony and terror.

When Nazi Germany attacked the USSR in 1941, breaking the treaty it had signed two years previously, the USSR found itself part of the anti-fascist war-time alliance. Despite past history and experience, much of the Western trade-union movement, which was predominantly social-democratic, was ready for organizational unity with Soviet bloc labour organizations. The result was the World Federation of Trade Unions (WFTU), which was founded in 1945. However, it lasted only four years as an inclusive organization of the world’s labour movement (though it continued, and still exists, as a Communist rump).

The unity on which the WFTU had been founded was the temporary unity of governments, not a unity of labour – none of the contentious issues between the Communists and everyone else on the Left had been resolved. When the unity of governments gave way to the rivalry between the US and the USSR for world power, the artificial top-down unity of the WFTU also broke apart.

What happened then was a race between the two blocs to secure the support – in fact, the control – of civil society organizations (labour, youth, students, women, etc.), with trade unions as prime targets.

And now comes the complicated part, which must be clearly understood. The Western governments and the non-Communist Left suddenly had the same enemy. The conflict between governments – the “Cold War” – and that earlier conflict within the labour movement, became superimposed. For some, they became indistinguishable.

This is how the war-time relationships which some socialists – and others – had formed with the political services of the US or UK governments (among others) to fight the Nazis continued seamlessly into the fight for a “free world”, against the new totalitarian menace.

In reality, we were of course still dealing with two different conflicts and two distinct interests. One was fighting Stalinism to defend working class interests, the other was fighting the USSR as a rival imperialism to that of the US. These are hardly compatible positions, but the most difficult thing to comprehend in politics, especially if you have the knife at your throat, is that the enemy of your enemy is not necessarily your friend!

Despite the apparent symmetry of the situation of the trade union movement within the two blocs, the reality was quite different. In the Soviet bloc, the trade union apparatus was part of the government structures of a police state, and a fairly subordinate structure at that. Dissidence was treated as a criminal offence or as a mental disorder. So in that context, the bureaucracy issue does not even arise in connection with the Cold War — the whole system had been thoroughly bureaucratized long before. In its first decades, that system was impossible to crack from within.

The situation in the West was much different: here a three-way battle was being fought between the advocates of an alignment on pro-American policies, the advocates and apologists for Soviet policies, and those who kept saying that neither option represented working class interests and that the labour movement should refuse to be aligned with either side.

Those of us who held the latter position believed that the lines of cleavage that mattered most in the world were not the vertical ones separating the two blocs, but the horizontal ones between the working class and the rulers of both systems, a fundamental division cutting across both blocs.

This was not an easy position to hold. The pressures to align and to conform were very strong. Having been put in charge of the AFL-CIO’s International Department by George Meany,³ Jay Lovestone⁴) — the Dr. Strangelove⁵ of the labour movement — with his acolyte Irving Brown⁶ and the various AFL-CIO Institutes, were running around the world buying unions with US government money, in close cooperation with the CIA , and trying to destroy any organization or individuals that did not accept their line, whether Communist or not. They were not looking for allies, they were recruiting agents.

The Soviet bloc operators were doing the same for the other side, also backed by considerable diplomatic and financial resources. The result of this competition is not difficult to guess: it spread a culture of corruption, especially in Africa where the movement was weakest and most vulnerable, but also in parts of Asia, Latin America, Europe and the United States itself, where some labour leaders were co-opted into Cold War politics, although most had no idea what the International Department was up to, and did not much care until all these operations were exposed in the mid-1960s.

In that sense the Cold War was a very powerful factor of bureaucratization in the West: it created and strengthened corrupt leaderships who no longer had to take their memberships into account, it enforced political conformity, stifled discussion, suppressed dissent and isolated all radical opposition through ‘red baiting’.

NU: Some labour writers contend that the acceptance of Cold War politics, and anti-Communist purges by the leadership of the American labour movement, contributed to its paralysis during the conservative onslaught of recent years.

DG: Yes and no. It’s not that simple. True enough, after the anti-Communist purges in the Congress of Industrial Organizations (CIO) and the merger with the American Federation of Labor (AFL) in 1955, the conservative elements of the AFL prevailed in the merged AFL-CIO. These people would later prove totally at a loss in the face of globalization and the conservative onslaught launched by Reagan, and continued by his successors, both Republican and Democrat.

But the problem with this story is that it exonerates the American Communist Party of any responsibility in these developments. The CP and its trade union activists are cast in the role of innocent victims. This overlooks the war the CP waged against all of the Left from its earliest days: first against the IWW and the socialists, then against the Trotskyists and against every other kind of radical group it didn’t control, and of course against most union leaderships, progressive or not. The CP did what it could to destroy the American Left and, like in Niemöller’s poem,⁷ when they came to get it there was nobody left to defend it.

This said, most conservative labour leaders didn’t need the Cold War in order to be ferociously anti-radical, super-patriotic and, eventually, helpless before the anti-labour campaigns of the Right. You have to remember that we’re dealing here with very stupid people. They may have been street-wise and cunning, but they knew nothing about the world and couldn’t think strategically. The roots of conservatism in the American union movement are very perceptively described by authors such as Daniel Fusfeld and Patricia Cayo Sexton.⁸) What the Cold War situation did, was to give people like Lovestone the opportunity to organize the right-wing of the American trade union bureaucracy as a base for a major international operation, and to isolate leaders of the labour Left, like Walter Reuther,⁹ Ralph Helstein¹⁰ and Pat Gorman,¹¹ as well as some good unions with a Communist history, like the ILWU and the UE.

NU: Did the Communists not at least denounce the clandestine right-wing operations the American unions were involved in?

DG: Not at all. Of course they would denounce operations like the overthrow of Arbenz in Guatemala, or of Goulart in Brazil, as examples of American imperialism in action, but there was never any exposure of the union involvement. The CIA and British government operations in the labour movement were blown open by Trotskyists and independent radicals in the mid-1960s. Then the New York Times picked up the story and it became a major scandal. But the CP had nothing to do with it at any stage. Afterwards, of course, everyone started writing about it.

NU: While all of this was happening in the US, bureaucratization must surely have been a growing problem in the European trade union movement as well?

DG: In Europe and elsewhere, for instance in Japan, the polarized politics of the Cold War also enforced political conformity and stifled dissent, but Europe is a complicated place with many political and trade union cultures, so generalizations are not very useful. In some countries Cold War politics played a major role in the labour movement, in others hardly at all.

Far more pervasive and general were the consequences of the war. Today it is hard to imagine the extent to which the historical labour movement had been destroyed, first by the rise of fascism in the 1920s and 1930s, then by the war itself, with the occupation of most of Europe by the Nazi armies and police. In most of Europe, the structures of the labour movement were wiped out, parties and unions of course, but also the entire institutional network that rooted the movement in society: welfare institutions, credit unions, co-ops, cultural and leisure time activities – everything.

Most of the leadership of the movement, right down to local level, had to go into exile, or into concentration camps, or died in the war. Many of the best people were lost. One of the important parties of the Socialist International, the Jewish Labour Bund,¹² was destroyed entirely, together with the population that supported it. No one had imagined anything like this could happen, and those who had hoped that the end of WWII would usher in another period of social revolution, a re-play of 1918, had lost touch with reality.

Superficially, the unions emerged in a strong position – after all we were on the side of the victors, whereas big business had collaborated with fascism throughout Europe and had much to be forgiven for. In fact, labour was far weaker than it appeared, and far more dependent on the State than before the war. That too did not seem to be a problem at first, since most post-war governments were pro-labour in one way or another, but it did eventually lead to the loss of the political and material independence of the movement and, yes, it did promote bureaucratization.

Whereas the pre-war movement conceived of itself as a counter-culture and an alternative society, at least in principle, the post-war movement made its peace with the “social market economy” and demanded no more than a better life within the system (full employment, welfare, social protection, good wages and working conditions).

In that situation, the leadership of the movement became increasingly unwilling to maintain a whole network of flanking institutions. If you don’t want to change society then you don’t need to build an alternative counter-culture or an alternative economy. Think of all the money you can save. So the unions concentrated on their presumed “core business” – collective bargaining with “social partners” – the parties concentrated on elections, and the movement lost its roots in society, lost many of its think tanks and educational institutions, and lost its periphery, a sphere of influence and protection.

At the same time, you had the surge of prosperity in post-war Western Europe through the Marshall Plan. An exhausted working class, after the deprivation and the sufferings of the war, started to get its life back and became gradually more comfortable over the next thirty years. And why not? But as it played out, as a major political factor, it created a problem the movement couldn’t cope with, because it also coincided with the rise of media empires, with television, financed largely by advertising. Our movement was not ready to compete at that level. This is where we lost the communications war. We lost our press and any independent expressions of working class culture, with the long-term effect of losing the culture wars in the 1990s.

Many of the issues of the vanished civil society of labour eventually got taken over by others (feminists, environmentalists, human rights activists, etc.), but that’s another story.

Then, in countries like France, Italy and Greece, where the CP was dominant in the labour movement, the working class became hostage to Cold War politics and political positions, as well as labour alignments. They were frozen for about thirty or forty years. In some other countries, notably Germany, Cold War polarization also contributed to deadening the political debate and distorting trade union priorities.

Finally, European unions have become accustomed to State subsidies, in general for specific activities, such as education or participation in a host of official and quasi-official institutions and meetings. Today, in many countries, unions would be unable to function without the government subsidies they have become accustomed to.

So what do you get? A heavily bureaucratized and passive movement, initially led by survivors, then rapidly replaced by complacent and arrogant careerists who are happy to depend on the State. They administer the gains of past struggles but are unwilling to conduct any new ones, opposing any ideas they have not thought of themselves and believing that nothing must ever happen for the first time. That kind of leadership educates union members to be passive consumers of union services, not participants in struggle.

NU: You said before that, as far as Europe was concerned, generalizations were not very useful. Should we take that to include what you just said?

DG: You got me there. I think what I have tried to do is draw a common denominator, a composite picture which applies in general but not exactly in any one country. For example, in the Nordic countries, except for a short-lived split in Finland, the Cold War had hardly any impact at all. In Spain, where the labour movement emerged from a fascist regime only in the 1970s, rank-and-file democracy is a strongly-felt aspiration. All of Eastern Europe is a different situation again, and a very complicated situation, with many cross-currents. And of course there are always exceptions. There have been outstanding labour leaders like Otto Brenner,¹³ Wilhelm Gefeller¹⁴ in Germany, Jack Jones¹⁵ in Britain, André Renard¹⁶ in Belgium. So, one has to fine-tune every national situation. But some will recognize my descriptions and, as the saying goes, if the shoe fits, wear it.

Neither do I want to idealize the pre-war labour movement in Europe. There were too many entirely avoidable and disastrous defeats. The leading labour parties of Germany and Austria had armed militias ready to fight which were awaiting orders that never came. The French Popular Front government refused to support the Spanish Republicans in the civil war, who, had they won, would have changed the course of history. Not to speak of the catastrophic Communist policies, in Germany, in Spain, all over. One needs to reflect on these defeats and learn from them. But even so, the level of ambition in those days was higher.

NU: You were general secretary of the IUF for many years, and active in the international union movement. How does the international movement cope with the problem of bureaucratism?

DG: With difficulty. You have to realize that the international movement is yet another level removed from the rank-and-file: the actual members of international trade union organizations, in a statutory sense, are national unions, not individual workers, so the international organization will reflect to a very large extent the culture and practices of its affiliated unions, particularly the large affiliates.

So, structurally, it is almost inevitably bureaucratic. The politics of the leadership, basically the secretariat and the governing bodies, makes a big difference. You can have an organization with a deeply rooted culture of militancy and a democratic culture, which will do two things: first, ensure that democratic practices are respected and encouraged in the way it operates, within its own governing bodies, and, second, encourage democratic participation within its affiliates wherever it can, for example through its educational programs, in its publications, etc.

NU: And then you have the others…

DG: Indeed. Again, it is a question of politics, of how you interpret the situation and, consequently, how you evaluate the union response required. If you believe that “social partnership” is an accurate description of labour/management relations, and that social change occurs through conversations between political leaders and experts – “social dialogue” – then you will invest your resources and energies in a lobbying operation. The privileged counterparts in these conversations will be the bureaucrats of government organizations and of employers’ organizations. In meeting after meeting, you will be bargaining about words, and you will believe you have won a significant victory when you have changed a sentence in a statement. This can go on forever, and no one will ever know the difference. The workers who are members of such organizations don’t even know they exist.

NU: How can workers, at rank-and-file level, learn to tell the difference between useful and useless organizations? Where does usefulness become apparent?

DG: Very simple: workers certainly can tell the difference when they become involved in a conflict. When it comes to conflict, the differences are very quickly apparent. And whether our international sell-out artists like it or not, unions are about conflict. Either the international organization pulls out all stops and the saying “one for all, all for one”, (especially the second part) becomes a concrete reality, for as long as it takes, or else the international organization starts mediating instead of fighting, tries to minimize and kill the conflict, even sides with the employer just to be rid of the problem.

NU: How does this relate back to the issue of bureaucratism? Are you suggesting that bureaucracy and politics are related?

DG: They are, very much so. However, the relationship is not a mechanical one. For instance it would be simplistic and wrong to say that left-wing politics protects us against bureaucracy. If we are talking about the Communist tradition, the opposite is true, almost always, and this includes Maoism, which is actually an extreme form of Stalinism. People who come out of that school are often dangerous authoritarians. Even when they change their politics, they don’t necessarily change their methods.

And of course social-democracy has its own awesome bureaucratic traditions; even anarchist and syndicalist organizations, contrary to legend, can be run in extremely authoritarian and bureaucratic ways.

No, the only form of politics which is an effective antidote to bureaucratism is the kind of socialist politics that contains a strong element of radical democracy. This goes back to Marx himself, but despite appearances, this current was never dominant in the socialist movement. It surfaces from time to time, a person like Rosa Luxemburg would be fairly typical, there were others within the political families of the Left. Eugene Debs in the United States would be another example.

NU: That’s not a very broad political base. If that’s all we have, is the struggle against bureaucratism lost in advance?

DG: No, because in fact we have very much more. The politics of radical democracy respond to a very deep and fundamental need felt by workers. They keep coming back to this on their own, and they very often spontaneously develop democratic forms of organizing, of conducting struggles, of running their organizations. Rosa Luxemburg understood this. This aspiration is very strong. That is the basic reason why the labour movement has such a democratic culture, despite all the pressures to the contrary from the society that surrounds it… the “old shit”, as Marx called it.¹⁷

NU: Do you see workers’ desire for deeper forms of democracy extending from union HQ all the way down into the workplace?

DG: Yes, except I would put it the other way around, from the workplace – the “point of production”, as the IWW used to say – to union HQ. It has to start at the point of production. As I said, this is a very fundamental need of workers, and actually very often of people in general. Think of women’s movements or peasant’s movements – in all progressive mass movements there is this demand for transparency and accountability in the leadership.

The point is to nurture and strengthen the politics of radical democracy, the particular strand of socialist politics which I believe is the authentic Marxism, which insists that power, where it matters, always has to remain in the hands of the workers. Today this means almost all of society, since nearly everybody is part of the working class, whether they know it or not. To get there, you have to start from the bottom, the point of production, and then build democratic institutions, like democratic unions, impose democratic procedures at every level, democratize the decision-making mechanism in public administration. We don’t want to abolish bureaucracy if bureaucracy means administration, we all need administration and we want it to be honest, transparent and efficient, in our own organizations to start with, then in society at large. We want an administration built on our key values: justice and freedom. These will be the values of the society of the future – if we make it that far.

1. Pierre Monatte (1881-1960) A proofreader by profession, he was a leader of the French CGT when it was a revolutionary syndicalist organization and, in 1909, founded its journal, La vie Ouvrière. He was an anti-war internationalist during World War I., joined the French Communist Party in 1923 and was expelled in 1924 for opposing its bureaucratization. He then returned to revolutionary syndicalism, and in 1925 he founded La Révolution Prolétarienne, which is still being published. “Le refus de parvenir” means: “the refusal of social climbing”.
2. The Second Congress of the Comintern in 1920 agreed on ‘Twenty One Conditions‘, which formalised the beginning of ‘the great split’: a split which was to divide the labour movement for the rest of the century. Note in particular: ‘In the columns of the press, at public meetings, in the trades unions, in the co-operatives – wherever the members of the Communist International can gain admittance – it is necessary to brand not only the bourgeoisie but also its helpers, the reformists of every shade, systematically and pitilessly.’
3. George Meany (1894-1980), president of the American Federation of Labor from 1952 to 1955, then, following its merger with the Congress of Industrial Organizations, president of the united AFL-CIO from 1955 to 1979.
4. Jay Lovestone (1906-1989), a founder of the American Communist Party, later leader of the Right-Wing opposition group (the pro-Bukharin faction) which dissolved in 1941. In 1943 Lovestone became international affairs director of the International Ladies Garment Workers’ Union and, in 1963, director of the international affairs department of the AFL-CIO. He held that position until 1974 and as the main architect of the collaboration of the AFL-CIO with the CIA. For more on Lovestone, see: A Covert Life: Jay Lovestone, Communist, Anti-Communist, and Spymaster by Ted Morgan (New York: Random House, 1999
5. Dr. Strangelove: the 1964 black comedy film by Stanley Kubrick, featuring a paranoiac American general launching a nuclear attack on the Soviet Union, hoping to thwart a Communist conspiracy to “sap and impurify” the “precious bodily fluids” of the American people with fluoridated water. The US president in the film is advised by a “mad scientist” type: Dr. Strangelove.
6. Irving Brown (1911-1989) , chief lieutenant and hatchet man for Lovestone since the 1930s, set ujp”anti-Communist” operations in the trade union movement, mostly in Europe, including the notorious Mediterranean Committee, organized with the help of gangsters in French, Italian and Greek ports.
7. Friedrich Niemöller (1892-1984), prominent German anti-Nazi theologian and Lutheran pastor. He is best known as the author of the following lines (and variations thereof):
   “First they came for the communists, and I did not speak out—because I was not a communist; Then they came for the socialists, and I did not speak out—because I was not a socialist;
   Then they came for the trade unionists, and I did not speak out—because I was not a trade unionist;
   Then they came for the Jews, and I did not speak out—because I was not a Jew;
   Then they came for me—and there was no one left to speak out for me.”
   
8. Daniel Fusfeld: The Rise and Repression of Radical Labor 1877-1918, Charles H. Kerr Publishing Company, Chicago, 1980 (ISBN 088286050X) and Patricia Cayo Sexton: The War on Labor and the Left – Understanding America’s Unique Conservatism, Westview Press, Boulder/San Francisco/Oxford, 1991 (ISBN 0813310636
9. Walter Reuther (1907-1970), leading organizer and after 1946 president of the United Auto Workers’ union, a Socialist Party member until 1939, president of the Congress of Industrial Organizations (CIO) in 1952, negotiated the merger with the American Federation of Labor in 1955, eventually clashed with Meany over the conservative policies of the AFL-CIO and formed a short-lived alternative center, the Alliance for Labor Action (1958–1972) with the Teamsters and a few smaller unions. On May 9, 1970, Reuther and his wife May were killed when their chartered plane crashed while on final approach to the airstrip near the union’s recreational and educational facility at Black Lake, Michigan. In October 1968, a year and a half before the fatal crash, Reuther and his brother Victor were almost killed in a small private plane as it approached Dulles airport. Both incidents are amazingly similar; the altimeter in the fatal crash was believed to have malfunctioned. When Victor Reuther was interviewed many years after the fatal crash he said, “I and other family members are convinced that both the fatal crash and the near fatal one in 1968 were not accidental.”
10. Ralph Helstein (1908-1985), president of the United Pckinghouse Workers of America (UPWA) from 1946 to 1968. Under his leadership, the union, a CIO affiliate, became one of the most militant and democratic unions in the US. It organized the meat packing industry in the US and Canada and played a leading role in fighting for minority and women’s rights. When the UPWA merged with the Amalgamated Meat Cutters union in 1968, Helstein became vice president and special counsel. He worked with the union until 1972 and died in Chicago in 1985.
11. Patrick Emmet Gorman (1882-1980), a life-long socialist, International Secretary-Treasurer of the Amalgamated Meat Cutters and Butcher Workmen (AFL) from 1942 to 1976 (the Meat Cutters were an old socialist union which had a European constitution, where the secretary-treasurer, not the president, was the chief executive officer). Gorman opposed Meany on the Vietnam war and on many other political issues.
12. The General Jewish Labour Union of Lithuania, Poland and Russia, in Yiddish the Algemeyner Yidisher Arbeter Bund in Lite, Poyln un Rusland, generally called the Bund (from German: Bund, meaning federation or union) or the Jewish Labour Bund, was a Jewish political party and trade union in several European countries operating predominantly between the 1890s and the 1930s with remnants of the party still active in the United States, Canada, Australia, France and the United Kingdom. The Bund opposed Zionism and fought for the recognition of Jews as an autonomous cultural community within European countries. In this and in other respects, it was strongly influenced by the Austro-Marxist school of socialism, and was a left-socialist party in the context of the Labour and Socialist International. In WWII it was active in the resistance movement against the Nazi occupation in Poland and in Lithuania, one of its leaders, Marek Edelman, was a leader of the Warsaw Ghetto uprising in 1943, and later of the Workers’ Defense Committee (KOR) in 1976 and of the Solidarity movement. Two leaders of the Bund, Victor Alter and Henryk Erlich, who had sought refuge in the USSR after the German invasion, were executed in December 1941 in Moscow on Stalin’s orders.
13. Otto Brenner (1907-1972), president of the German metal workers’ union IG Metall from 1956 to 1972. In 1931 Brenner left the Social-Democratic Party (SPD) which he had joined as a youth to join the Socialist Workers’ Party, founded by Left Socialists and dissident Communists, too late to prevent the seizure of power by Hitler. Brenner became active in the anti-Nazi resistance, was arrested in 1933, sentenced to two years’ prison and kept under police supervision until the end of the war. In 1945 Brenner re-joined the SPD and became active in the reconstruction of the trade union movement. At the head of the IG Metall he played a leading tole in the defense of democratic rights and against rearmament. In 1961, he was elected president of the International Metalworkers’ Federation.
14. Wilhelm Gefeller (1906-1983), president of the German chemical workers’ union IG Chemie from 1949 to 1969, one of the founders of the post-war German trade union movement, active in the SPD. Strong advocate of co-determination in German industry and at international level, and of democratic rights. President of the International Chemical and General Workers’ Unions (ICF) in the late 1960s.
15. James Larkin (Jack) Jones (1913-2009), general secretary of the Transport & General Workers’ Union (UK) from 1968 to 1978. Throughout his career he strove to increase the power and influence of shop stewards. In 1937 he joined the International Brigades in the Spanish civil war and was wounded in 1938. Jones was also Vice-President of the International Transport Workers Federation and, after his retirement, was a campaigner for pensioners’ rights. His autobiography, Union Man, was published in 1986.
16. André Renard (1911-1962), Belgian trade unionist, active in the resistance under Nazi occupation,created an illegal united trade union movement independent of political parties and advocated its extension to the entire country at liberation, but could not overcome the split between socialist and Catholic unions. Deputy General-Secretary of the socialist trade union center FGTB, leader of the six-week general strike in 1960-1961 against the austerity policies of the conservative government. A strong advocate for the autonomy of Wallonia (the French-speaking part of Belgium).
17. ”…revolution is necessary, therefore, not only because the ruling class cannot be overthrown in any other way, but also because the class overthrowing it can only in a revolution succeed in ridding itself of all the old shit and become fitted to found society anew.” Karl Marx: The German Ideology, Part I: Feuerbach. Opposition of the Materialist and Idealist Outlook 1845.

During the spring of this year the membership of LO-affiliated¹ unions fell to under one million wage earners. It was a symbolic mile post for a development which has been going on since the middle of the 1990s when membership began to fall after decades of uninterrupted growth. Some have on the basis of this predicted the approaching death of the trade union movement.

But is there a good reason for allowing the bells of doom to ring out over the Danish trade union movement? No, not yet anyway.

Membership figures and union density continue to be very high when applying an international yardstick, and seen with international eyes we have a uniquely powerful influence regarding the development of society.

The Danish model, in which the trade union movement and the employers play a central role, has, through the passage of time, proved to be a brilliant way of regulating the labour market. Those parties which have their fingers on the pulse in relation to the labour market and its challenges have a decisive influence on and a co-responsibility for the area.

But in spite of this powerful point of departure, the development of the trade union movement in a negative direction in recent years is unequivocal – and many unions are feeling the pinch. Union density is declining and membership is falling.

Consequently, to the best of my judgement in the coming years, we will continue to see a range of structural changes in the trade union movement. In my opinion, the union amalgamations which we have already seen between the Danish General Workers Union (SiD) and the Women Workers Union (KAD), to form the United Federation of Danish Workers (3F), will mean that in ten years’ time there will be 6-7 unions in the Danish LO.

As trade union leaders, we can choose to allow this development to take place on the principle of laissez-faire, in which structural changes spring up according to some relatively short-term considerations within the individual unions.

Or, we can choose to use the crisis constructively and create a range of long-term changes which can put the Danish trade union movement into line with the enormous changes that have taken place in the working lives of ordinary wage earners and on the labour market in general.

Let us start a debate on the development of the trade union movement. It is my vision that we, in the coming years, should work towards amalgamating the Danish LO-affiliated unions into one large single union: a modern locally-based union and an effective trade union and political actor.

I know that this for many people sounds dramatic. But when I look at the challenges in the coming years I believe that it will be the best way of ensuring Danish wage earners a powerful, future–oriented trade union movement in a globalized world.

My vision is the conclusion of how we best can address the four central challenges facing the trade union movement in the coming years. I will now attempt to describe these in more detail.

The first major challenge is the change to a far more flexible labour market.

A generation ago, you became a skilled fitter, then you probably worked as a fitter until you were pensioned off.

Globalization has changed this model for ever. Manufacturing moves in and out of the country, workplaces emerge and are closed down at an ever increasing rate, and the individual wage earner has to constantly educate him/herself in order to keep up with the demands in the new job or move to another sector or industry by way of re-training.

At the same time Danish wage earners are changing jobs more frequently. A generation ago you could quite easily be employed at the same workplace during the whole of your working life and retire with a gold watch and a speech from the director for long and faithful service. In the future 25th anniversaries will be very rare. Forecasts show that a young Dane starting work today will, on average, change jobs nine times before retiring.

The big problem is that the Danish LO, with its division into individual trades, is to far too great an extent, geared to the old reality. This is no new insight – it was in actual fact one of the reasons why six LO cartels were set up in the 1990s, based on sectors and industries: manufacturing industries, building and construction, local government, central government, the media and trade, transport and services.

But in my eyes this division is also outdated. Wage earners don’t just change jobs more often – they change sectors as well; for example, many of them who are being made redundant at the moment in traditional manufacturing industries are starting a new working life in the municipal nursing and health care sector.

The sharp division into unions based on trades or sectors is a relic from the labour market of the previous century, and it creates a lot of unnecessary problems for the trade union movement for being locked into this framework. The trade union movement is very inflexible when it comes to working across the organisational divide. Organisationally many resources are spent on transferring members between the different LO unions and every year the movement loses thousands of members in conjunction with change of jobs.

In my opinion, the best answer is to create one powerful LO trade union for wage earners which you can depend upon throughout your working life, irrespective of job, trade or sector.

The second major challenge for the LO trade unions is development of membership, especially flagging recruitment amongst young persons.

A generation ago joining a union was a matter of course. It was a natural part of a young person’s entry onto the labour market and part of that set of values related to solidarity and fellowship amongst workers, which were often implanted by the young person’s parents who quite naturally were members of a trade union. That’s what you did.

Young people today have a far more individualistic attitude to being on the labour market. They think more about their own career and their own opportunities in life – in many ways a quite natural development in keeping with a more individual and flexible labour market.

You can be pleased about it or bewail it, according to your temperament. But it is a fact which the Danish LO will have to address far more actively. Young people no longer become members as a matter of course and do not know much about the trade union movement and the labour market. Much more information can be given by schools and from society in general on the matter, but the main task lies with us. We have to earn every single young LO wage earners’ confidence and inform them about the advantages and results achieved by the trade union movement.

The alternative is that the trade union movement will be in competition with the DanAge Association.

Let me use my own union as an example.

Almost half of 3F’s members are 50 or over. In 15 years’ time these members will have retired, and if the present pattern of membership development amongst young people continues, then 3F in 15 years’ time will be reduced by more than a third – corresponding to more than 100,000 members. If this development does not change, then it will not be workers from Eastern Europe who are a major threat to the Danish model, but Danish workers under 40.

In order to address and resolve these issues, I believe we would be stronger having only one united union. In part we can strengthen our work informing young people about trade union work and undertake special campaigns and offers directed at the young people.

And in part the trade union movement will in this way gear itself to addressing the working lives of young people. Often young people will only be in a trade or job for some few years – e.g. Think about a young person who works as a bartender for a few years, or on the till in a supermarket – and, therefore, will not join a union in the sector in question.

And finally, for many young people trade unions seem to be a Babylonian confusion of unions, local branches, main organisations, unemployment insurance funds, and I don’t know what. Unfortunately this is not without good reason. As an example, it can be difficult to state what it costs to be a member of a union. It all depends upon the local branch and the sector you work in, etc.

In the coming years we have to put every ounce of our energy into strengthening organizing among young people. I believe it is best done in a joint trade union framework, in which we draw up a strong and comprehensible offer.

Thirdly, the Danish LO is facing competition from the so-called “yellow” trade unions, who entice people with cheap offers in the local radio and news bytes. In reality, they are not direct competitors, as none of them can deliver the major trade union product – collective agreements. It is only genuine trade unions that can do that.

But as many wage earners are being enticed by these inane yellow offers, we have to address them. I believe that here too the answer is to create a still-stronger, more effective, service-minded, democratic union. Our fundamental goal is not to run a business. The foundation of the trade union movement is its local, democratic trade union base, and this base has to be maintained as our strength.

By amalgamating we can get rid of the work duplication which takes place in the unions and in the Danish LO, and there would be considerable large-scale advantages to be gained in trade union methods of working and operating. It would be completely wrong to turn the trade union movement in the direction of being more business-oriented as a consequence of this new competition. On the contrary. Quite naturally we have to give our members excellent service. No doubt about that. But a strong united trade union has to strengthen internal democracy and emphasize that our movement is a trade union. This applies to the individual workplace, where a shop steward is elected among his/her colleagues, and to the position of General Secretary.

The trade union movement must be a strong and visible actor within local society, with membership centres on the main street of all Danish municipalities and a strong joint unemployment insurance fund. This would be a marked improvement on the service afforded to many Danish LO members today, who live a good distance from their local branch, or work in another place than where they live.

Finally, a united trade union movement would do away with all the demarcation and internal disputes which unfortunately mar the work being done by the Danish LO, and which create a distorted picture in relation to the results achieved.

Let me emphasize that my vision is not to create a bureaucratic colossus managed from the top. It is a decisive factor that an amalgamation of trade unions can create a space to encourage different trade union identities within a common framework. Therefore, an effective, large single union has to have a flexible structure, which ensures close proximity to the individual member’s everyday life, irrespective of his/her job and workplace. It is a balancing act which we are already aware of in the large trade unions.

Fourthly, during the last 5-10 years there have been dramatic structural changes in the organisational structure on the part of the employers. DI (the Confederation of Danish Industries) has, through a series of mergers, expanded considerably and now encompasses a larger area than its traditional manufacturing base. The desire to be all-embracing can be clearly seen in the organisation’s change of name, from the Confederation of Danish Industries to DI – the organisation for business and industry, which embraces persons working in an office environment. Apart from this, DI has expanded its membership to include a wide range of large companies selling services, for example, ISS and PostDanmark. Today DI is the dominant actor on the employers’ side.

We have still to see the full consequences of this development, but it is quite clear that it will have consequences for political as well as trade union work in the trade union movement.

A strengthened DI has sharpened its political profile and influence on a willing government. A long-lasting campaign to lower taxes for persons at the top of the pyramid was crowned by the tax reform in February, which historically will give marginal tax reductions to the richest members of society.

The strengthening of DI’s political work means partly that the Danish Confederation of Employers has died a de facto death as an independent political actor, and partly that the trade union movement must, out of necessity, sharpen its own political work in order to match that of the employers.

A single united LO trade union movement would have the muscle to be one of the most powerful lobby organisations in Copenhagen and Brussels, as well as in the Danish municipalities, for the benefit and interests of wage earners.

Yet another more far-reaching consequence of these employer mergers is the concentration of influence during collective bargaining. DI has for a long time been the most important player on the employers’ side of industry, and dominates the trend-setting collective agreements in the manufacturing sector in the so-called ‘minimum wage’ area. After the merger with the Transport, Commerce and Services Confederation, DI has, however, dominated the other collective agreement area, the standard wage area, which covers the transport sector.

After next year’s round of collective bargaining we will have a much better idea of how far-reaching the consequences are of this development are. But in fact the situation is that a range of different constellations of trade unions will have to negotiate all these key collective agreements with a unified DI.

It is thought-provoking that a corresponding centralization has taken place in the public sector, where municipalities and The National Association of Local Authorities in Denmark (KL) will, in the future, be the single central actors, with the Ministry of Finance as the puppeteer. It is here that the predominant part of future “welfare production” will take place, while the central government area will shrink and the regional areas will no longer have any economic independence.

You could ask yourself whether this would mean the creation of two unions – a public sector union and a private sector union. I believe this to be a bad idea. In the first place individual members will, to a greater extent, transfer between the private and the public sector. Take a look at the volatile out-sourcing and buying back of the ambulance services, which at the moment is taking place through regional tendering.

But still more important is preserving the alliance between private sector and public sector wage earners. We would risk creating two Frankenstein monsters which would run amok in a welfare society: a public sector trade union which would quite rashly demand irresponsibly high wages and more of every thinkable service, and a private sector trade union which would always put the conditions in the private sector in pride of place, above the welfare society as a whole. It would be a tragedy for the trade union movement – and for the Danish welfare state.

If the trade union movement is to emerge strengthened from its encounter with the most pressing challenges it faces, the best strategy, in my view, is to join forces into one single union.

I’m quite clear about the fact that the thought of one large single LO union is a drastic vision to place on display. There are many interests at stake – camels which have to be swallowed, and hobbyhorses which have to be put out to pasture, before such a vision becomes reality.

And other people probably have alternative ideas on how the trade union movement can gear itself up for the future. I’m willing to listen to them, but one thing is certain: we cannot just stand by and do nothing.

The crisis in the trade union movement will become a disaster if we, as trade union leaders, close our eyes and ears and muddle through using stop-gap measures. Instead, under the auspices of the Danish LO, we have to start a discussion with one another, and with our trade union representatives and members, about long-term visions for the trade union movement.

I’ve made a contribution.

1. LO: Landsorganisationen i Danmark – the Danish Confederation of Trade Unions. Poul Erik Skov Christensen is the General Secretary of LO’s largest affiliate: the United Federation of Danish Workers (3F).

Out of fear of the possibility of a terrorist attack, authorities militarize our towns, scare our people away, stop daily life and quash our constitutional rights.

For days, downtown Pittsburgh, home to the G20, was a turned into a militarized people-free ghost town. Sirens screamed day and night. Helicopters crisscrossed the skies. Gunboats sat in the rivers. The skies were defended by Air Force jets. Streets were barricaded by huge cement blocks and fencing. Bridges were closed with National Guard across the entrances. Public transportation was stopped downtown. Amtrak train service was suspended for days.

In many areas, there were armed police every 100 feet. Businesses closed. Schools closed. Tens of thousands were unable to work.

Four thousand police were on duty plus 2500 National Guard plus Coast Guard and Air Force and dozens of other security agencies. A thousand volunteers from other police forces were sworn in to help out.

Police were dressed in battle gear, bulky black ninja turtle outfits: helmets with clear visors, strapped on body armor, shin guards, big boots, batons, and long guns.

In addition to helicopters, the police had hundreds of cars and motorcycles , armored vehicles, monster trucks, small electric go-karts. There were even passenger vans screaming through town so stuffed with heavily armed ninja turtles that the side and rear doors remained open.

No terrorists showed up at the G20.

Since no terrorists showed up, those in charge of the heavily armed security forces chose to deploy their forces around those who were protesting.

Not everyone is delighted that 20 countries control 80% of the world’s resources. Several thousand of them chose to express their displeasure by protesting.

Unfortunately, the officials in charge thought that it was more important to create a militarized people-free zone around the G20 people than to allow freedom of speech, freedom of assembly or the freedom to protest.

It took a lawsuit by the Center for Constitutional Rights and the ACLU to get any major protest permitted anywhere near downtown Pittsburgh. Even then, the police “forgot” what was permitted and turned people away from areas of town. Hundreds of police also harassed a bus of people who were giving away free food — repeatedly detaining the bus and searching it and its passengers without warrants.

Then a group of young people decided that they did not need a permit to express their human and constitutional rights to freedom. They announced they were going to hold their own gathering at a city park and go down the deserted city streets to protest the G20. Maybe 200 of these young people were self-described anarchists, dressed in black, many with bandanas across their faces. The police warned everyone these people were very scary. My cab driver said the anarchist spokesperson looked like Harry Potter in a black hoodie. The anarchists were joined in the park by hundreds of other activists of all ages, ultimately one thousand strong, all insisting on exercising their right to protest.

This drove the authorities crazy.

Battle dressed ninja turtles showed up at the park and formed a line across one entrance. Helicopters buzzed overhead. Armored vehicles gathered.

The crowd surged out of the park and up a side street yelling, chanting, drumming, and holding signs. As they exited the park, everyone passed an ice cream truck that was playing “It’s a small world after all.” Indeed.

Any remaining doubts about the militarization of the police were dispelled shortly after the crowd left the park. A few blocks away the police unveiled their latest high tech anti-protestor toy. It was mounted on the back of a huge black truck. The Pittsburgh-Gazette described it as Long Range Acoustic Device designed to break up crowds with piercing noise. Similar devices have been used in Fallujah, Mosul and Basra Iraq. The police backed the truck up, told people not to go any further down the street and then blasted them with piercing noise.

The crowd then moved to other streets. Now they were being tracked by helicopters. The police repeatedly tried to block them from re-grouping ultimately firing tear gas into the crowd injuring hundreds including people in the residential neighborhood where the police decided to confront the marchers. I was treated to some of the tear gas myself and I found the Pittsburgh brand to be spiced with a hint of kelbasa. Fortunately, I was handed some paper towels soaked in apple cider vinegar which helped fight the tears and cough a bit. Who would have thought?

After the large group broke and ran from the tear gas, smaller groups went into commercial neighborhoods and broke glass at a bank and a couple of other businesses. The police chased and the glass breakers ran. And the police chased and the people ran. For a few hours.

By day the police were menacing, but at night they lost their cool. Around a park by the University of Pittsburgh the ninja turtles pushed and shoved and beat and arrested not just protestors but people passing by. One young woman reported she and her friend watched Grey’s Anatomy and were on their way back to their dorm when they were cornered by police. One was bruised by police baton and her friend was arrested. Police shot tear gas, pepper spray, smoke canisters, and rubber bullets. They pushed with big plastic shields and struck with batons.

The biggest march was Friday. Thousands of people from Pittsburgh and other places protested the G20. Since the court had ruled on this march, the police did not confront the marchers. Ninja turtled police showed up in formation sometimes and the helicopters hovered but no confrontations occurred.

Again Friday night, riot clad police fought with students outside of the University of Pittsburgh. To what end was just as unclear as the night before.

Ultimately about 200 were arrested, mostly in clashes with the police around the University.

The G20 leaders left by helicopter and limousine.

Pittsburgh now belongs again to the people of Pittsburgh. The cement barricades were removed, the fences were taken down, the bridges and roads were opened. The gunboats packed up and left. The police packed away their ninja turtle outfits and tear gas and rubber bullets. They don’t look like military commandos anymore. No more gunboats on the river. No more sirens all the time. No more armored vehicles and ear splitting machines used in Iraq. On Monday the businesses will open and kids will have to go back to school. Civil society has returned.

It is now probably even safe to exercise constitutional rights in Pittsburgh once again.

The USA really showed those terrorists didn’t we?

I don’t yet see much reciprocation, mindful of D. H. Lawrence’s line, “Never trust the teller. Trust the tale.” Obama’s “telling” is full of poise, personality, and eloquence, but what realized tales of action benefit union workers or offset falling membership – or relieve distressed blue-collar families, for that matter? What’s even on the domestic table for all of labor, now that health reform looks at best like a general no-decision between industry and patients?

Trust for me is not about feel-good, pie-in-the sky projections. Trust needs confirmation to sustain confidence partners or leaders advance mutual interests: it is, for the prudent, more about the past and present than future. Thus, surveying his Senate career, campaign, and eight months as president, I have less trust now than ever Obama will propose or achieve substantial, structural reforms. I don’t trust top Democrats have the independence, courage, or wisdom to restore good government, let alone the working middle-class. There are broken dikes untended well beyond New Orleans.

Where’s the beef for labor?

Why does big labor “trust” Obama, or the Democratic Party, except by default (not the worst defense)? Where’s the New Deal for non-auto workforces, or poor people outside New Orleans, or millions of hurting Main Streeters. Is $75 billion budgeted for foreclosure relief enough? Cash for Clunkers succeeded, but whether such costly subsidies simply enable staggering dinosaurs – or delay the worst – remains to be seen. Check out Obama broken promises; the president didn’t end income tax for seniors making less than $50K, toughen rules against revolving lobbyist doors, create a $3K new job tax credit, or allow penalty-free hardship withdrawals from retirement accounts. Over a trillion dollars for bankers and brokers, ungodly billions more for unpopular, failing wars – and small change for workers (modest tax cuts, health benefits for needy children). In short, average Americans feel besieged because they are besieged.

So far, this president and his party (it’s never just about Obama) are hitting under .200, timidly battling for their own agenda. Is this shocking from a low-achiever, ex-junior senator close to Big Ag (ethanol producers), coal and nuclear energy, softer on health care and more hawkish on Afghanistan in primaries than Hillary? Obama the ambitious politician won statewide office thanks to the Chicago machine, then brashly ran for Congress (and got thumped), before lucking out when his GOP Senate foe imploded. Notably, the president rode one premature anti-war comment into effective anti-Iraq rhetoric, wrote an elegant, cagey manifesto, The Audacity of Hope, gave a great ’04 Convention speech, and leaned right in Democratic primaries. No complaints or excuses, folks: what we got is what we saw, if we looked behind his glitzy, brilliant campaign.

How many who bet on Obama the reformer are counting winnings? Or those still hoping for often promised boldness? Politically, Obama’s risk-taking peaked 15 months ago, after dispatching Hillary (tougher vote-getter than any living Republican), then his steady march rightward to consensus, as if allergic to controversy. For lovers of irony, considering Obama’s extreme campaign caution (except in fundraising), his greatest, single gamble, a true long-shot, happened three years ago when this unknown threw his hat in the ring. That was this president’s chutzpah highpoint, bolder than anything since, especially today’s knee-jerk party and administration rulebook, “Play it safe, then punt when blitzed” (even by idiot teabaggers!). What contradicts this past and present won’t be prologue?

Greatness feeds, not chokes, on crises

I’ve been soliciting Obama loyalists – and readers – to stick up for the president. I don’t relish bashing incipient greatness. After all, I could be wrong. Yet my simple question, “What has Obama done that delights you?” has gone unanswered. Was the question tricky, too hard? All excuse low performance with inherited quagmires from Bush-Cheney’s Age of Cronyism, Ineptitude and Demagoguery (that’s A.C.I.D., burning from the inside). I concede birth calamities, but how does more of the same produce hope or change? Does Obama deserve lots of leeway because the problems are great? Isn’t the opposite more logical: the worse the conditions, the greater the pain, the more the hue and cry, then the greater the opportunity to renovate capitalism? Opportunity makes for greatness, not the other way around.

If Wall Street crashed from rotten, high-risk eggs in too few baskets, doesn’t further concentration into still fewer hands invite depression? When the predatory status quo turns into unregulated quo vadis (literally, “who goes there”?), won’t a great president defy, not subsidize establishment disasters? FDR was excoriated for taking on big banks and big business. Obama caves to budding monopolies in finance, colludes with Big Pharma, even props up corrupt governments in broken, no-win states instead of cutting counterproductive militarism. A third straight administration in denial, refusing to confront failed schemes and systems, is no improvement, nothing that deserves our hard-won trust.

Treating sickness, not symptoms

If saving capitalism is the goal, fine, but the price must include fixing conspicuous excesses with enlightened reforms, like Glass Stiegel. We have a government, and increasingly a country, ready for life support, and we’re arguing which aspirins to take. Don’t Bush’s plague of treacheries mock Obama’s cordial bedside manners, the band-aids delivered with a smile? Doesn’t survival depend on surgery, mandated after facing the causes of really big problems, especially the domestic delusion the business of America is catering to big business? Eventually, adults must confront the context and values behind huge meltdowns, the brutality of torture, and endless imperial wars – educating about terrorism, global warming, pandemics, endangered food production, and population growth.

Gridlock before apocalypse, with one party in power, defines paralysis, the opposite of the “can do” spirit informing every healthy nation. Otherwise, bank on getting steamrollered by lean and hungry nations that fund productivity, education in science and technology, infrastructure and workers’ skills – then master economic power, access to resources, and intellectual capital – as the U.S. of A. did for 150 years. External dangers aside, like those raising ocean levels, our own internal deluges from wrecked economic and political systems threaten our affluence – while leaders argue whether to pass out swim trunks, build a few life boats, or hope the wind changes. Teabaggers, I fear, are not our only citizens suffering from magic thinking.

Republic workers captured the attention of the world when they occupied their plant on December 5, 2008 calling for the severance and vacation pay they were due. The sit-in ended six days later when the Bank of America and other lenders to Republic agreed to pay the workers the approximately $2 million owed to them. Recently, the workers won another victory with the arrest of Gillman.

The prosecutors charge that Gillman defrauded creditors of over $10 million, and then went ahead to use company money to complete payments on leases for two luxury cars — while his employees went without pay.

According to court records Gillman also secretly sent three semi-trailers full of equipment from the Republic factory to a non-unionized factory in Iowa without the consent of Republic board members and creditors. Luckily, however, the organized Republic workers followed the trailers, and during the occupation, prevented executives from entering the factory to take company documents that now make up much of the case against Gillman and other Republic officials.

“Gillman and others knew this company was headed for closure,” Anita Alvarez, the Cook County state’s attorney, told reporters. “And instead of fulfilling their legal obligations to their creditors and their moral obligations to their employees, they devised a scheme to benefit themselves.”

“We knew Gillman was lying to us for a long time, now the rest of the world knows it too,” said Armando Robles, the President of UE Local 1110, the Republic workers’ union. “Workers suffer with bad bosses all the time so this is a victory for all workers.”

Gillman’s arrest is just one of the results of the Republic workers’ actions. In February of this year, Serious Materials ended up buying up Republic for $145 million, promising to put the unemployed workers back on the job. The California-based Serious makes heating efficient windows.

“Having another company reopen the factory was always our hope when we occupied the factory in December,” Robles told the New York Times.

Kevin Surace, the chief executive officer of Serious, was drawn to the Republic workers’ story, leading him to eventually acquire the bankrupt factory. “It was very sad to see what looks like it could be a world-class operation just fall on terrible hard times and then all of the workers quite abruptly laid off,” he said. “We saw a great opportunity with a great facility and great workers.” Another thing that attracted Surace to the Republic plant was that 90% of the equipment was still there — thanks to the workers who prevented the bosses from hauling it away.

However, only fifteen former Republic employees have been rehired so far. According to Chicago-based journalist Kari Lydersen of In These Times, the delay in hiring more workers could have to do with the fact that Obama’s federal stimulus for green jobs and heating efficient windows has been slower in producing results than people had hoped. Yet Lydersen points out that the Republic workers “know they can’t just sit back and wait for the stimulus or the factory’s new owner to make everything all right.”

Meanwhile, Gillman is facing justice thanks to the workers’ actions. Melvin Maclin, a former Republic worker who is currently unemployed and the father of six children, commented on Gillman’s arrest in a UE statement, “We feel like justice has finally come and we all hope that this is the beginning of more bosses being held accountable for their crimes against workers.”

Thus say both Chairman Ben Bernanke and Treasury Secretary Tim Geithner. And the public believes them. How come?

It all began in March. In the first televised interview by any sitting Fed chairman in 20 years,¹ Bernanke used the term, “green shoots” for the first time. He pointed out that the Dow Jones index had recovered from 12 year lows in 2008 and the banking system had stabilized. No more big banks would fail, he predicted.²

Two months later, His Timness echoed Big Ben. Geithner cited reduced spreads on corporate and muni bonds, the reduction in costs in credit protection at the big banks, and smaller risk premiums in the interbank market. He too said the economy was recovering.³

In June, World Bank President Robert Zoellick joined the ’shooters.’

Zoellick is a former US trade representative notorious for forcing US government subsidies and trade policies inimical to small farmers onto emerging markets. Zoellick noted “signs of global recovery,” but cautioned that they might be killed off if protectionism were adopted.⁴

Translation: foreigners had better not object to US government-managed trade policies…or the global recovery will fold.

Put out… or look out.

Zoellick added his own revealing metaphor to the shooter lexicon: “Right now there is a low-grade fever; it isn’t full influenza, but we need to keep a close watch…” [my emphasis]

Oddly, Zoellick’s own employees at the World Bank contradicted their boss’s assessment in a report only a couple of weeks later. (See “World Bank Global Economic Outlook” below.)

By then billionaire hedge-fund manager George Soros was also seeing green. And in July, chief wonk of the Obama economic team Lawrence Summers detected greenery in remarks to the Peterson Insitute for International Economics.

Green shoots were now being sighted by everyone:

• In July the International Monetary Fund published its World economic outlook update. The Fund revised expected global growth in 2010 upward to 2.5%. The main source of the improvement, it claimed, was a brightening outlook for Asia.
• Simon Johnson, IMF economist–turned-Peterson-Institute-spokesman-turned green-shooting-star even went on PBS to announce, “we are turning some sort of corner.” (August 20, 2009)
• Surveys of economists and business leaders in the summer showed that, in contrast to only a few months earlier, slightly more than half thought that the economy had bottomed.

Question: How can a depression heralded as equal to or worse than the Great Depression, a depression described as a ‘reckoning’ for over a quarter of a century of economic misdeeds, correct itself in less than a year?

Answer: It can’t.

Yet, by mid-year, that’s exactly what pundits were telling the public. And that’s exactly what the public was beginning to believe. Not surprisingly, by mid-year, stock markets the world over had rebounded sharply.

White Hats and White Lies

But the economy hadn’t really turned any corners. What was unfolding was a giant sleight-of-hand. The “good guys” of the liberal corporate-state were pulling a fast one, doing two contradictory things at the same time.

On one hand, Team Obama had to admit the enormity of the crisis, in order to justify the size of its own rescue efforts. Thus Tim Geithner in his statement to the banking committee in May took care to note the following:

1. The economy had lost 2.1 million jobs from December to February ‘09, the largest three-month decline since 1945. (the second-largest three-month decline in 1975 was only half as big).

2. GDP fell at an average annual rate of 5.9 percent in Quarter 4 ‘08 and Quarter 1 ‘09 — the fastest six-month rate of decline since 1958.

3. Even before policy changes, the Congressional Budget Office was projecting a budget deficit for 2009 well in excess of a trillion dollars because of the weak economy.

4. The US faced economic problems of such a “unique character” that Congress had had to adopt the largest fiscal stimulus package in the nation’s history, at 5% of GDP.

On the other hand, Team O also had to pretend that the rescue had improved things dramatically or people would ask what the point of it was.

The Obamites managed to pull this off with a slew of white lies.

Some of the biggest ones:

Fudge One: Goldman Sachs had a great quarter, making a profit of $3.5 billion and the government made $1.4 billion on its investment in Goldman Sachs. The government also got a 15% return on its investment in the eight biggest banks.

Truth: Goldman had a great quarter only because it moved its reporting calendar to cut out December 2008, when it had a loss. And the goverment only made a profit on the TARP money it gave to Goldman because

• It funnelled more money via the bail-out of insurance giant AIG to AIGs counterparties, including Goldman (which took in $13 billion of the AIG money).
• Warren Buffett made a pre-TARP financial investment in Goldman.
• Goldman got the benefit of exceptionally low interest rates from the government at the expense of savers and to the benefit of borrowers.
• Goldman was issued FDIC-guaranteed bonds.

Without that extra welfare thrown at it, Goldman would actually be broke, not showing a profit. Ditto for the other banks.

Fudge Two: The labor market is getting better because jobs are growing. The unemployment rate fell from 9.5% in June to 9.4% in July.

Truth: That number only shows a slowing in the growth of unemployment. And even that small improvement has been offset by other aspects of the labor market that are worsening quite sharply:

• The duration of uemployment is increasing.
• Temporary jobs are declining.
• The percentage of the eligible population receiving unemployment insurance has increased (0.1 percentage point to 4.7%. by September).
• The four-week moving average of initial claims has moved to its highest level in a month⁵

Even when jobs have been added, they’ve been created by government spending and they’ve been in areas like education, health, and government. In the purely private economy, in manufacturing, construction and retail, job losses have been huge.”⁶

Note: Recent improvement in the ISM (Institute of Supply Management) Index that signals expansion of production (and thus hiring) also needs to be discounted against the huge price inflation an increasingly pressured dollar will entail. That’s beside the effects of a hike in the Federal Funds rate that’s bound to follow a dollar crashing scenario.

Note also: The ISM is a leading indicator of executive expectations for future productions, orders, inventories hiring, and deliveries.

Fudge Three: Increases in real personal income in April and May will increase consumer spending.

Truth: The increases were caused by tax-rebates and unemployment benefits kicking in, and most of it was saved, not spent (80 cents on the dollars). There was a temporary lift in consumer spending, but it petered out quickly. And as unemployment rises, benefits decline, and credit tightens in the future, consumption will decline even further

Fudge Four: The bank stress tests came out better than expected.

The bank stress tests led Ben Bernanke to conclude that nearly all of the banks had enough capital to absorb higher losses should the economy worsen, and that the Treasury stood ready to provide more.⁷

Truth: The bank stress tests used an unemployment figure of 10.3% (the most adverse case). But unemployment is likely to be 11% and above by next year. If you take into account discouraged and partially employed workers, some economists suggest the figure is more likely to be 16%.

Another point. The stress tests overlooked all the other ways in which the government was paying for the banks, through FDIC guarantees and cheaper loans, for instance.

Fudge Five: The housing market is improving.

In July, the Pending Home Sales Index was up 3.2%.

Another improvement was in the value of U.S. homes. In the second quarter that number fell year-on-year (the 10th consecutive quarterly decline), but it fell by a smaller amount than in the previous quarter, for the first time since 2007.

Truth: The improvement in home sales has been mostly in the lower end of the market and it largely reflects foreclosure sales and government credit, not real improvement in the market.

The slow-down in price decline has been offset by negatives in other areas:

• 23% of all homeowners owe more on their mortgages than their houses are worth.
• 22% of all home sales nationwide in June were foreclosure resales.
• 29.2 percent of all homes sold in June were sold for less than the owners originally paid.⁸

Loan problems aren’t confined to subprime. Prime mortgages are going underwater too.

Meanwhile, the market also has to deal with the decline in commercial real estate, which is undergoing one of the greatest contractions in retail in decades. Rents, even in the best urban shopping districts, have been declining.⁹

Beyond commercial real estate, there are also all the other plagues about to visit us, when personal loans, auto loans, and student loans tighten over the coming years.

Bottom line? There is no real basis for sustained optimism about the economy yet. Simon Johnson’s relatively upbeat assessment reflects only temporary inputs:

• the government’s reflation effort (that created cheaper credit)
• business write-downs (that created better balance-sheets)
• the business cycle (that leads to restocking and inventories rising)

Johnson cites low inflation as another positive factor. However, with all the money pumped into the economy (including the latest cash-for-clunkers scheme), that’s also unlikely to be anything more than temporary.

This harsh reality is reflected in the World Bank Global Outlook Report of June 22, 2009. It notes the following for 2009:

• Global growth is set to fall by 2.9%
• World trade is likely to shrink by nearly 10%
• Industrial production in rich countries will drop by 15% from August 2008
• Developed economies will contract by 4.5% in 2009 and grow only in 2010 and 2011
• The US economy will decline by 3%
• Private capital flows to developing countries are likely to be halved, from $US 707 billion (2008) to $US363 billion (2009)
• Industrial production in developing countries, excluding China, is set to fall by 10%
• GDP growth in developing countries will fall from 5.9% (2008) to 1.2%.

A Verbal Pandemic Infects the Economy

Given this underlying reality, the media’s success in manipulating market sentiment has been nothing short of astounding.

And all it seems to have taken was the viral proliferation of a single meme. Call it a verbal pandemic.

Go back to March, when there was a second rescue of AIG and Citi in the offing, the Madoff investigation was expanding, and the US had a face-off with China.¹⁰ Fear was widespread and consumer and business confidence were at multidecade lows.

To take one indicator, Google searches for “economic depression” were four times what they were before the crisis broke in 2008.

Then Bernanke came out with the phrase, “green shoots.” After he introduced it, it showed up 3,123 times in news articles that month. Compare that to 436 in February (according to Nomura Holdings Inc. research).

Bulls and bears both used it. It was applied to the Israeli-Palestinian conflict and to the Iranian demonstrations.

In four months, ‘green shoots’ had grown seven-fold. Today, a Google search for the meme fetches 3.31 million hits.

As the phrase spread across the media, Bloomberg noted that business and consumer confidence spread with it. Sentiment changed. People stopped panicking and started talking about buying opportunities. It was that change in mood that let administration economists build their flimsy case for economic recovery.

Take a look at Summers’ list of improving indicators in his speech at the Peterson Institute on July 17. You’ll see the proof. At least five of the metrics Summers cites relate to sentiment. I’ve highlighted the relevant words.

• Most businesses are now expecting better times, not worse, as they’d expected 6 mths earlier.
• Consumer sentiment is improving.
• Options are showing a less than one percent chance of the Dow falling below 5000 in 2009 (they were once showing a better than 15% chance).
• Private forecasters are expecting positive growth at the end of 2009.
• Google searches for economic depression are back to normal. (Yes, that’s on Summers’ list).

Let me repeat this.

It took two simple syllables, neither beyond the reading ability of a pre-schooler, for people to discount the hard evidence of the numbers and the harder evidence on the streets in favor of a sales pitch by the government.

We might even go a bit further. The stimulus by itself can have done no more than buy time for the banks and take the pressure of the interbank market. It’s taken sustained propaganda for banks and businesses to regain enough confidence to operate.

And they’ve regained confidence not in the economy, but in the government.

In brief, a story-line two words long shows up rational man of for a fiction and a fraud. Economic man, the maximiser of his self-interest, turns out not to exist.

Of course, outside economic text books, he had never existed. Man, as we find him in the world, adds up numbers as an afterthought to his feelings. When he feels good, he massages his numbers upward. When he feels bad, the numbers are downcast with him.

Economists who have caught on to this know that what they practice is no science of enlightenment. It is a black art. The knowledge keeps them humble.They stick to describing things the way things actually work. They look just ahead of their noses and count themselves lucky if they can balance their check books at the end of the day.

But government economists labor under the delusion of omnipotence. To a man, they believe they can make bull frogs sing in tune and bats bathe in the sunshine. It isn’t enough that their theories blew up the market. For that alone, lesser men would have cut open their veins or thrown themselves under a passing tram.

Now the delusion is they can fix it. And that is where the meme of ‘green shoots’ figures. It’s task was not so much to boost confidence in the markets as it was to boost confidence in the ability of government experts to fix markets.

For that, visible success.. or even marginal competence.. is no longer needed. The old rain-men had to make rain or they were fed to the lions. The rain-men of today can produce drought… or famine, or even plague and they become lions.

The more they fail, the more they are believed. When they have been completely refuted, they become Nobel laureates. They may not know what ails the market, but they know for certain it takes a village of economists to fix it.

Or, as economist Robert Samuelson put it in a sharp criticism of Summers’ speech at the Peterson Institute: “If the president and his allies claim often enough that their policies have succeeded, most Americans may believe them.”¹¹

1. CBS, 60 Minutes
2. AFP, March 15, 2009.
3. Tim Geithner, Statement before the Senate Banking Committee, May 20, 2009.
4. Reuters, June 8, 2009.
5. Thomson Reuters, September 3, 2009.
6. Brown manure not green shoots,” Nouriel Roubini, Forbes, July 9, 2009.
7. AFP, “Hope is alive for ‘green shoots’ as stress tests trigger optimism,” May 11, 2009.
8. Portfolio.com August 11, 2009.
9. Colliers International Spring 2009 Retail Report, May 14 2009.
10. ”Nightmare on Wall Street,” Lew Rockwell, April 1, 2009.
11. ”Summer’s Spin: We Did It,” Newsweek, July 17, 2009.

We don’t know that the Knights of Labor created the first Labor Day in 1882 and that Congress made it a national holiday in 1894.

Almost none of us, including life-long union workers, know the personalities of the labor movement. About Mother Jones (1830-1930), the militant “angel of the coal fields” for more than six decades. About “Big Bill” Haywood (1869-1928) who organized the Industrial Workers of the World, a universal coalition to fight for the rights of all labor. About cigar-chomping Samuel Gompers (1850-1924), the first president of the American Federation of Labor, a job he held for 38 years.

We don’t know about Sidney Hillman (1887-1946) who led strikes in 1916 to reduce the work week to 48 hours, from the standard 54–60 hours, and then helped create the Amalgamated Clothing Workers of America and the Congress of Industrial Organizations (CIO) before becoming a major political force for workers during the labor-friendly Roosevelt administration. Missing from our collective knowledge is the life of Saul Alinsky (1909-1972), known as the “father of grassroots political campaigns” who worked alongside Cesar Chavez (1927-1993) who used Alinsky’s tactics to organize the United Farm Workers.

Most of us probably never heard about Eugene Debs (1855-1926), Joe Hill (1879-1915), and thousands of others who went to prison or were murdered defending the rights of the workers not only to organize, but to demand better working conditions. The names of Tompkins Square, Cripple Creek, Homestead, Lattimer, Lawrence, and dozens of other places where police forces massacred workers are unknown. We don’t know about the Avondale mine fire that killed 110, because of faulty construction of the colliery and a disregard for worker safety, or of the fire at the Triangle Shirtwaist factory, where 148 women, some as young as 12, working under brutal sweat-shop conditions, died because a fire door was chained. We won’t become involved in the struggle, risk our jobs and futures. That’s someone else’s responsibility. We’ll just follow inane rules and complain privately.

Most Americans, and certainly most journalists, don’t know the story of Horace Greeley, a social activist and the nation’s most prominent ante-bellum publisher, who created The New York Typographical Union for his typesetters and printers because he believed they needed representation. Most journalists also don’t know about Heywood Broun (1888-1939), one of the nation’s best-paid columnists who risked his own financial stability to create The Newspaper Guild in 1935 to help those reporters making one-hundredth of his salary. Most media don’t even have local stories about Labor Day, preferring to run nationally-distributed stories and not “waste” any of the few reporters they have left.

The national syndicates and wire services, plus a few socially-conscious newspapers, may make the effort to find a current labor leader who will say organized labor is having a tough time but is still strong and vital, the only recourse against poor working conditions and unfair labor practices. The stories will tell us that about 12.4 percent of all workers are in unions, down from a peak of 35 percent in 1954, but the reporters don’t dig into myriad ways of intimidation by Management, or of the professionals who mistakenly believe because they are professionals and not workers they don’t need unions.

The reporters may interview the workers. An elderly man’s remembrance of his life in the coal mines or breakers, and what Black Lung did not only to his own health but to his family and friends. They might chat with an elderly woman who worked 12-hour days six days a week for $3–$4 a day in the heat and humidity of a garment factory. They may talk with a few current workers who tell us the Recession has cut deep into their lives, but they work hard and are pleased that they still have a job.

Some stories may even dryly point out statistics—that the unemployment rate, according to the Bureau of Labor Statistics (BLS), is 9.7 percent, up from 4.8 percent when the Recession began in December 2007, that 14.9 million Americans are unemployed, up from 7.4 million. The stories might even note that 9.1 million Americans work part-time either because their hours and wages were “downsized” or because they couldn’t find full-time work. Another 2.3 million Americans are “marginally attached,” according to the BLS; these are unemployed Americans who aren’t listed as “unemployed” because they haven’t looked for work in four weeks; of these 2.3 million, about 760,000 are “discouraged”—their unemployment benefits have run out, they have tried to find work, but have given up.

Meanwhile, corporate executives are taking multi-million dollar bonuses for improving the “cash flow.” Even if executive management makes significant mistakes, and the “return on investment” isn’t what the Board of Directors expects, or the companies fail because of management incompetence and greed, almost all CEOs and their immediate underlings have the “golden parachute” that allows a soft drop from employment, yielding termination packages that amount to millions of dollars and considerable benefits and bonuses that no working class person will ever receive.

Business euphemistically claims because of “downsizing,” “rightsizing,” and “outsourcing,” mostly to foreign countries, the “bottom line” is improved; corporate investors are being “optimally compensated.” Since the recession began, more than a year before President George W. Bush left office, about 4.3 million Americans have been “downsized,” according to data compiled by Challenger, Gray and Christmas Inc. Data collected by NowPublic reveals that 2008 was “the worst year for layoffs and job losses in the United States since World War II.” Although terabytes of data reveal the Recession is slowing under the massive Obama stimulus package, another one million Americans will be laid off this year. Recent Department of Labor studies report that American workers are “the most productive” ever. That’s because not only are they are doing so much more to compensate for their fellow workers having been laid off, but because they live with the fear if they don’t work even harder they, too, may be laid off or lose promotions in an economy that went as far south as our manufacturing plants.

Of course, there are some industries that have gained in the past year’s plunging economy. Retail sales, which the Department of Labor reports as having the lowest average wages, is gaining workers. But, that’s because it’s just “good business sense” to hire 75 low-paid part-timers and save the cost of benefits than to hire 50 full-time clerks. Only about 16 percent of all retail workers even receive health care benefits, according to the BLS.

To the 50-year-old who worked hard for one company more than half of his life, showed up for work on time, left on time, and tolerated the company’s banal preaching about everyone is “part of our happy family,” and then is laid off as an “economy measure,” the numbers don’t matter. To the worker who put in 20 years in one job, and then is fired for reasons that would be questionable under any circumstance, the numbers don’t matter. To the $20,000-a-year worker who is told she won’t receive a raise because “we’re having a bad year,” but sees upper management not only get raises and more stock options, but also hire other managers, all of them making five times or more than her salary, the other numbers don’t matter.

But, millions of Americans will have their bar-b-ques and family reunions, they’ll splash in the ocean or hike mountain trails, and they will have no idea why the struggle for worker rights must be fought every day by every worker.

In Vermont workers from other countries keep the dairy industry operating. These workers — in a xenophobic culture — often face discrimination but many Vermonters, including Senator Bernie Sanders, Senator Pat Leahy, and Congressman Peter Welch have come to their defense. Some of the farm workers have the required legal documents — many others do not. Vermont dairy farmers have testified that without these workers the Vermont dairy industry could not survive.

Kevin O’Connor, Rutland Herald Staff Writer, has written about the plight of Vermont’s farm workers in an article titled “Of Milk and Mexicans.” published on March 9, 2009.

Workers from across the border, as well as native born workers, often experience hostility. They work on farms and in factories. They empty bed pans in nursing homes. They scrub toilets and make beds in the hotel industry. They work in retail outlets. They work in the construction industry as carpenters and roofers. They educate our children. They care for our elders. They have earned our respect and gratitude.

Below are typical statements made by bosses to their employees – workers who struggle for survival on the dark side of Capitalism.

1. Look, it doesn’t matter if the fumes are making you sick. OSHA says everything is OK.

2. I already told you that you couldn’t have the morning off. Your Father’s funeral can wait till the weekend.

3. Union, did I just hear somebody say, “Union”? Fire that damn Commie !

4. You want a raise……..hahhhhahhhahahahhhah. Who do you think you are, a Hedge Fund Manager!

5. If you want health insurance, move to Costa Rica. This is the USA. Love it, or leave it. Besides, we don’t have any sick people here. We fire them when they get sick.

6. You say you want paid maternity leave. If the corporation wanted you to have a baby we would have issued you one.

7. What’s the big deal – it’s just asbestos.

8. Next time that you want to go to the bathroom, ask for permission first. That’s the rule.

9. You say that the school called and told you that your child was just injured on the playground and needs to go to the hospital. Who gave you permission to use the phone? Get back to work.

10. A little bit of ionizing radiation never hurt anybody.

11. Think of it as an adventure. Nobody dies from black lung anymore.

12. You say you want a week of paid vacation — move to France, this is America.

13. Hell no, you can’t leave. Wait till your shift is over. I don’t care if your labor pains are just 3 minutes apart.

According to its website, the Group of 20 was created in the late 1990s as a response to the financial crisis that hit the capitalist world during that period. It was convened under the notion that so-called emerging economies should be provided a greater say in the control of the capitalist world that was then dominated by the Group of 7 (G-7( which in turn is dominated by Washington and London.) In other words, the primary purpose of the G-20 is to coordinate plans among capitalist nations that will ensure the continued existence of capitalism and, more precisely, the continued domination of that system by Western economies, especially Washington. In the current economic climate, the G-20 sees its role as one that requires “send(ing) a strong signal that it is prepared to take whatever further actions are necessary to stabilise the financial system and to provide further macroeconomic support. At the same time, the G-20 must commit to maintaining open trade and investment, to avoid a retreat to protectionism, and direct necessary additional support to emerging markets and developing countries.” In short, the G-20 must do whatever it takes to keep the current system of free trade and financial speculation going, no matter what the cost to the working and poor people on the planet.

It is quite fitting that this summit is taking place in Pittsburgh. If there is one US city that epitomizes the failure of late-twentieth century capitalism to provide for its working people, then Pittsburgh certainly fits the bill. If there is one US city that demonstrates capitalism’s need to pursue cheap labor in order to maximize profits, Pittsburgh certainly fits the bill. If there is one US city that forecasts the future of regular people under the domain of capitalism’s latest stage–a stage that has taken decent-paying unionized jobs away and replaced them with lower paying service positions for those lucky enough to have another job, Pittsburgh fits the bill. Like Richard Fox, a resident and shop owner in Pittsburgh who supports the intention of many of the protests, wrote to me in an email: “When the steel industry died, easily 1/2 of the city’s population as well as huge numbers of citizens of small mill towns (remember “the deer hunter” settings?) simply picked up and left. South or southwest. In some ways, the city has never recovered from the loss. When I was growing up here, the mills stretched, literally, for miles on both sides of the Monongahela river. employing tens of thousands. Three shifts all day everyday. It was quite a sight. Chicago the city of the big shoulders, had nothing on us…. How do you re-build a local economy and infrastructure after that sort of disaster? It is appropriate to mention something about the development of Pittsburgh as an important center for medical arts and the computer/hi-tech industry, but that fact in no way refutes or undermines the argument that the city was devastated by the loss of tens of thousands of industrial jobs. The balance between blue collar and professional jobs has swung in favor of the latter with predictable results. ” Those predictable results Fox refers to include not only a disparity in income but also in education and other social factors.

As any astute working person can tell you, the fate of Pittsburgh is slowly becoming the fate of hundreds, if not thousands, of other towns and cities around the world. The total domination of the capitalist giants of Wall Street in collusion with the sycophantic politicians in Washington and other capitols has drained the financial life from municipalities and their citizens at an astonishingly rapid rate. Behind the statistics showing rising unemployment and mortgage foreclosures lies the breakup of families in the western nations, while in the developing nations, the most recent crisis of the capitalist system means an even further deepening of the health and other human crises already in existence. In another metaphor for the greater economic havoc wreaked upon the world’s working and poor, those good-paying union jobs at the steel mils also impacted the African-American community in Pittsburgh. Such jobs were held by black men and women, too. Not only did this create stability and hope in that community, it also ensured a cultural vibrancy. Since the removal of those jobs from Pittsburgh, it has arguably been the communities of color that have been hurt the most.

This reality is repeated on a considerably larger scale throughout the world in the wake of the globalization of modern capital. Yet, the leaders of the capitalist world, as represented by the G-20 and other such organizations, prescribe more of the same. If it wasn’t clear before it should be now–these organizations are not interested in the welfare of those they consider their subjects. They exist only to ensure the continued existence of their profit making machine. Furthermore, they will do whatever it takes to ensure that that machine continues to run.

This is why it is necessary to protest the Pittsburgh Summit. The protests will begin several days before the summit itself. Much of the legal and organizing work for the week of protests is being coordinated by Pittsburgh’s Thomas Merton Center. According to a press release from the Center dated August 16, 2009, there will be a mass march on September 25, 2009 that is endorsed by all of the organizations planning to protest in Pittsburgh that week. As Jessica Banner of the Center’s Antiwar Committee eloquently stated: “Anyone who has lost a job, a home, a loved one to war, lost value to a retirement plan, gotten sick from environmental pollution, or lived without adequate healthcare, water, or food has been directly affected by policies set by the G20 and should join us on Sept. 25th.”

Several tent cities are being planned, among them a Music Camp beginning September 18th that will be situated at the South Side Riverfront Park near 18th Street and another encampment that will begin September 20th with a National March for Jobs on September 20th. This march and tent city is being facilitated by the Bail Out the People Movement (BOTM) and is but one part of the organization’s plans for the week. According to a spokesperson for the Pittsburgh branch of the BOTM, there is a struggle brewing over the permits which are being denied for sites in the downtown area. This is but one of the actions awaiting permits. According to the city of Pittsburgh, no permits have been issued yet because the city is waiting for the Secret Service to determine the so-called security perimeter it considers its right to impose whenever officials under Secret Service protection are present. Protest organizers have told the press that they hope they will get the necessary permits and continue to insure the public that there are no plans for violence among any of the protest groups.

There is also a women’s tent city being planned, a People’s Summit featuring speakers and debate regarding the nature of the G-20 and popular alternatives to these types of organizations, a direct action on the afternoon of the summit, a religious procession calling for social justice and a concert. Although the city continues to debate whether or not to grant these exercises in democracy permits, they have notified the public that there will be 4000 extra police on hand during the G-20 meeting. It seems that, once again, the state wants to portray ordinary citizens who are planning to peacefully assemble as potential criminals. We must not allow that to happen. If you can be in Pittsburgh while the capitalists are gathering hoping to determine the future according to their needs (which are not usually the same as ours), please be there. If you are a citizen who believes in the First Amendment, heed the suggestion of Anne Peterman of the Global Justice Ecology Project and call the White House to encourage Barack Obama to “tell the Secret Service to obey the Constitution and respect the First Amendment-protected rights of protesters.” (White House phone number is 202-456-1111). If you live or work in Pittsburgh, encourage the city council and other officials to grant the permits being requested. Most importantly, if you support the purpose of the protests let the organizers know, especially if you live in the Pittsburgh region. If you can afford the time, please attend.

If the U.S. populace somehow imagines that its members are viewed any differently than any other populations across the world that are used to produce maximal profits for the top economic class, there’s a rude awakening in store ahead. Further, most legislators simply do not care whether middle and lower class interests are or aren’t well served as long as they, themselves, can somehow make out well in the times ahead.

Besides, why should any Americans feel that they deserve to be treated more favorably by the transnational moneyed elites and their government backers than their counterparts across the rest of the world? As A. H. Bill reminds: “The richest 225 people in the world today control more wealth than the poorest 2.5 billion people. And… the three richest people in the world control more wealth than the poorest 48 nations.”

Occasionally someone making a staggering amount of money in a crooked sort of way might raise a few officials’ eyebrows or induce a mild reprimand. In addition, he might, occasionally, be singled out as the token fall guy so as to be made into a warning example as was Bernie Madoff. Most of the time, though, no action is usually undertaken to correct the situation when directors of major companies carry out activities that are, obviously, right on or over the edge of fraudulent practices.

As Barak Obama, perhaps hypocritically, chastened, “Under Republican and Democratic administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productive and sound business practices. We let the special interests put their thumbs on the economic scales.”

Yet, he, himself, showed no hesitation during his election campaign over collecting $40,925 from the bailout fund recipient and nearly bankrupt investment house Bear Stearns, $161,850 from the bailout fund recipient and mortgage underwriter Morgan Stanley, as well as benefits from countless other institutions that have received government favors at taxpayers’ expense. As such, it’s hard in actuality to deliver more than just a mild verbal rebuke about these organizations’ modus operandi if one picks up a personal windfall from not meddling. Thus, the financial corruption continues at all levels of government.

A case in point is the self-serving oil trader Andrew Hall. His relationship with Citigroup’s (C.N) Phibro energy-trading unit brought him approximately $100 million in 2008 despite that his parent company registered a net deficit of $18.7 billion for the same year and received $45 billion in TARP funds.

However, it’s been pointed out that he could moderately adjust his current level of gain and continue to maintain the same procurement pattern if he manages to stay out of the limelight. If he follows this plan in the near future, his earnings and bonuses won’t likely duplicate the $250 million personal compensation that he’d received in the past five years. Yet, he could still make out quite well all the same!

In any event, one has to question such lavish rewards considering that Citigroup suffered a 95% loss of its share value since 2007 in relation to which Phibro “occasionally accounts for a disproportionate chunk of Citigroup income.” At the same time, the U.S. government will shortly be the owner of 34% of this company. Put more bluntly, is Andrew Hall’s personal prosperity and propensity to add to his private art collect the best use of taxpayers’ funds?

As long as he’s a lavish beneficiary, would he care if they weren’t? As the economist John Kenneth Galbraith once suggested: “The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself.” Naturally, Andrew Hall aims to keep such a cozy arrangement intact.

Besides, his personal take is relatively inconsequential. It’s a mere pittance contrasted to the almost two and a quarter billion dollars grand total — roughly $2,217,800,000 — that the top ten U.S. business moguls collectively grossed as their own recompense in 2008.¹

At the same time, it cannot not be expected, in a market based economy, that political influence is not also a purchased commodity. Clearly, opinions are bought and sold just as easily as are any other products and services with payment being campaign funds, such as Obama’s, from big industry — offers of high paying future jobs and other lavish advantages dangled as bait.

On account of this kind of shady deal, tax subsidies connected to executive pay amounted to $20 billion in 2008 according to United for a Fair Economy (UFE) and Institute for Policy Studies. (Imagine if this money, instead, were allocated towards improvements in public education, provision of a universal heath-care plan or any number of other programs that could uplift the American public as a whole.)

During the same period, average CEO pay, at $10.54 million, was 344% higher than typical worker pay. This disparity, also, is generally indicative of a trend that increasingly funnels wealth upward rather than having it more equitably distributed across class lines.

Another sign of this ascendant drift can be found in the change between the first Forbes 400 report (1982) and its 2008 version. In 1982, an entrepreneur only needed slightly more than $100 million dollars to get on the list. By 2008, he wouldn’t be in the top 400 unless he’d garnered at least $1.3 billion. In other words, so much more wealth shot upward in the last twenty years that $100 million now is almost viewed as chump change in comparison to the new top gains.

In addition, Congressional reports have indicated that widespread tax avoidance tricks, like use of overseas banks that do not report amounts to the IRS, have cost taxpayers more than $2 billion annually. Certainly, these lost moneys could well be used to help people less fortunate. For example, the hidden $2 billion could be used to create job training programs for any of the one in nine Americans currently forced to rely on food stamps as an alternative to starvation.

To be eligible for such aid, a family of four, for example, has to have no more than $2,389 as its gross monthly income or 130% of the official poverty level and no more than $1,838 net monthly income or 100% of the poverty level. (There are few deductions and exceptions to the requirements allowed, along with limits for owned property value imposed, that further determine whether one meets qualifications.)

In other words, a typical household of four cannot receive this help if the gross income for the foursome exceeds $28,668 annually and, for an individual, the gross not to be surpassed is $14,088. Additionally, recipients cannot have a great deal of assets with a clearly defined, too high level of worth.

As such, they have to be nearly broke across the board. Meanwhile, it’s clearly disgraceful that more than 27,651,388 Americans are so extremely poor they require food assistance to try to make ends meet.

Even that help, though, is often not enough to prevent further poverty and many folks are unable to avoid outright destitution across the so-called wealthy U.S.A. So next, they lose their homes… and they lose them in droves.

The huge portion of Americans who do so are staggering: While the number of U.S. foreclosure filings climbed by more than 81% in 2008, the total is still sharply rising in 2009. In relation, 300,000 homes foreclosed per month from March to May in 2009 and 1.8 million homes represented the anticipated total for the first half of the year. With such a backdrop, one out of every 398 homes received a filing in April and a whooping 6.4 million homes are anticipated to be in foreclosure by mid-2011. Simultaneously, a record number of individuals, also, applied for bankruptcy.

In a similar vein, the jobless rate, despite some minor dips downward, is still seemingly on the rise. Therefore, the current number of out of work adults could well exceed 20% if all of the hopeless ones, who are no longer collecting unemployment benefits and who gave up looking for opportunities, are added into the mix.

Moreover, they will not be able to jump-start the economy so long as they cannot find work, and especially work at a living wage. After all, how can anyone make lots of purchases or take out bank loans if he has no reasonable income? So it follows that even more retail and wholesale stores, along with banks, will go belly up.

At the same time, the supply side of the market, itself, has created labor troubles. This is because goods have been overproduced. Consequently, there is overstock piled high in warehouses and shipping containers across the world ready to resume its path to the market once the spending reinitializes. However, spending cannot resume as long as the money has largely flowed to the top economic tier and away from average former and low wage workers, who can not expect to have decent paying jobs to create more goods until the current product glut diminishes.

In other words, consumers can’t buy much when money’s tight and work won’t be provided when there’s an oversupply of merchandise largely produced in second world sweatshops whose workers are paid so little that they hardly can put food on their own tables let alone make many more extravagant purchases — ones like toothpaste, soap and shampoo. Besides, they, too, face employment opportunities diminishing because worldwide sales are down for many of the products that, previously, their companies too copiously produced.

Concurrently, the bailouts, oriented towards fixing the credit side of the equation, are not addressing these sorts of supply side problems. Therefore, they will not keep the financial collapse from worsening.

Alternately put, TARP and other payoffs to the self-serving, unconscionable banksters and Wall Street high rollers largely responsible for the downturn will not produce an abundance of jobs. So the reasonable salaries, ultimately needed to buy the wares to cause industrial output to resume, won’t materialize any time soon.

It’s rather simple to understand, really. So why don’t Ben Bernanke and his colleagues seem to notice that massive job loss, itself, needs to be addressed posthaste? Why hasn’t a public works program been initiated? Why don’t they grasp that the act of offshoring all kinds of American jobs to maximize profits at the top tier does not ensure that products will be avidly snapped up by a greatly unemployed and underemployed public?

Since they, apparently, don’t understand, the downturn, with a few small upward twists, will remain in its plunging slide, which in turn will create further layoffs. All the while, the über-wealthy and their corporate supporters, such as most members of Congress, will continue to pamper themselves with capital largely derived from struggling taxpayers and massive loans that raise the federal deficit.

More to the point, how could the slump not last when the affluent elites gamble away huge fortunes comprising of their own and others’ money while manufacturing bubbles and Ponzi schemes in the process? How could anything change when they keep amassing more and more assets for themselves while indifferent to their impact on society as a whole?

Such practices as theirs, obviously, cannot sustain the American middle and under classes and it cannot buoy up the utmost bottom rung either. On account, scores of individuals of all ages continue to wind up in tent cities or ensconced on public park benches. (Supposedly, families with children represent the fastest growing subset of the homeless population in the U.S.A. at present and the average age of a homeless person is nine years old.)

When the upper-crust keeps getting richer by taking an ever greater portion of the overall wealth and government schemes assure that the process continues, nearly everyone else becomes increasingly cash poor. When every now and then big investors suffer hefty losses, the government steps in to shore them up again and again. However, this practice, clearly, does not help the populace in general. The evidence that it does not can be seen everywhere across the American landscape and the entire world.

It follows, then, that, “in the United States, wealth is highly concentrated in a relatively few hands. As of 2004, the top 1% of households (the upper class) owned 34.3% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.3%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one’s home), the top 1% of households had an even greater share: 42.2%…”, according to G. William Domhoff, a sociology professor at University of California at Santa Cruz.²

Another way to measure the shift in wealth is by noting some of the corporate trends, themselves. As Sarah Anderson and John Cavanagh, at the Institute for Policy Studies, point out:

1. Of the 100 largest economies in the world, 51 are corporations; only 49 are countries (based on a comparison of corporate sales and country GDPs).
2. The Top 200 corporations’ sales are growing at a faster rate than overall global economic activity. Between 1983 and 1999, their combined sales grew from the equivalent of 25.0 percent to 27.5 percent of World GDP.
3. The Top 200 corporations’ combined sales are bigger than the combined economies of all countries minus the biggest 10.
4. The Top 200s’ combined sales are 18 times the size of the combined annual income of the 1.2 billion people (24 percent of the total world population) living in ‘’severe” poverty.
5. While the sales of the Top 200 are the equivalent of 27.5 percent of world economic activity, they employ only 0.78 percent of the world’s workforce.³

Especially exemplifying this type of corporate immensity is the Wal Mart company. For example, the Walton heirs have a collective worth of around $65 billion and over 1.7 billion shares, or 43%, of Wal Mart stock in addition to earning $29 billion off the stock price rise alone from November 2007 to June 2008.

Meanwhile, the Waltons pay their jean laborers in Nicaragua approximately $1.50/ day. Simultaneously, their average U.S. workers are given wages of about $12,000/ annum causing a full one half of Wal Mart’s 720,000 employees to qualify for food stamps.

At the same time, the clearly exploitive Wal Mart business model is considered an unqualified success — one that should be more often duplicated across the board. After all, it shows the capitalistic free market with its best possible outcome — profits beyond imagination and the American Dream come true (for the few who manage to take unfair advantage of the actual wealth producers)!

Perhaps, though, the best way to look at the new arrangement between citizens, State and the rising corporate structures is through this superlative summation by Benito Mussolini:

The corporate State considers that private enterprise in the sphere of production is the most effective and useful instrument in the interest of the nation. In view of the fact that private organisation of production is a function of national concern, the organiser of the enterprise is responsible to the State for the direction given to production.

State intervention in economic production arises only when private initiative is lacking or insufficient, or when the political interests of the State are involved. This intervention may take the form of control, assistance or direct management.⁴

Even if Benito Mussolini’s position has an alarmingly familiar ring to it, no one still should expect U.S. legislators to create laws any time soon that would enact tax code changes in order to remove subsidies that encourage overpayment to executives and that cost taxpayers $20 billion a year. Indeed, nobody should expect any major changes at all that would level the financial playing field, remove a sense of economic injustice or bring back jobs and reasonable wages to the American people.

As Joel H. Rassman, Toll Bros. CFO in 2006, explained about CEO Robert I. Toll’s $20 million compensation while shareholders were suffering a 22% loss: “I have yet to meet the person who has enough money.”

Like Toll, a majority of Congressional representatives, of whom many are multi-millionaires, apparently imagine that they never have quite enough for themselves and justify their dodgy choices accordingly. They, also, know who butters their bread and it surely is not the increasingly impoverished average U.S. citizens, who continue to be the indirect victims of corporate rapacity and pathetic corporate oversight by executives and Congressmen alike.

In relation, one wonders when a significant number of Americans will, finally, recognize that they’ve been had. Put another way by Andrew Greeley: “It should be no surprise that when rich men take control of the government, they pass laws that are favorable to themselves. The surprise is that those who are not rich vote for such people, even though they should know from bitter experience that the rich will continue to rip off the rest of us. Perhaps the reason is that rich men are very clever at covering up what they do.”

This explanation in mind, we need not worry as much about the terrorists from abroad as the terrorists from above and the duped voters who repeatedly fall for political candidates pandering to this broadly malignant upper class. The latter bunch and their sycophantic legislative admirers, more than any foreign guerrillas, are leading the world’s wealthiest nation into ever deeper ruin.

1. ”Top CEO collected $702 mln in 2008,” Yahoo! News.
2. ”Who Rules America: Wealth, Income, and Power.”
3. CorpWatch, “Top 200: The Rise of Corporate Global Power.”
4. Benito Mussolini, Fascism: Doctrine and Institutions (Rome, ‘Ardita’ Publishers, 1935): 133-135.

We wrote that: “It is in the best interest of the United States to directly support Haitian democracy, good governance, development, self-reliance and self-sufficiency. This cannot be done if the Haitian government has to compete with foreign funded NGOs and charities who are not elected or accountable to the people of Haiti, but are predatory and promoting
dependency and their own organizations “interests for self-perpetuation in Haiti.”

All of these points, were replicas of the seven-points made in HLLN’s Haiti Policy Statement for the Obama Team, with added emphasis on demands, now that Clinton is the UN Special Envoy to Haiti that are already made in our FreeHaitiMovement Demands, particularly asking for the release of Haiti’s political prisoners, return of President Aristide and investigation of the Bush 2004 kidnapping and coup d’etat in Haiti.

Subsequent to Ezili’s HLLN issuing the 7-point statement on What Special UN Envoy Bill Clinton may do to help Haiti, we posted an article, from the Nouvelliste paper in Haiti, that reported that 600 checks being given out at the Ministry of Public Health in Haiti were given to folks who never worked there. We posted the article (which is in French) and noted that NO ARRESTS were made or being contemplated by the puppet Preval/Pierre Louis government.

These criminals are getting paid every day; these “zombi” employers get away scott-free with this crime. Meanwhile, our poor people are dying on the open seas, being eaten alive by sharks, rammed by Turk and Cacaos Coast Guards for just trying to find a better life elsewhere. Or, our 9 million are starving in Haiti in intense hunger where they are so hungry their stomachs burn as if they’ve swallowed Clorox or battery acid. Thus, the post pointed out how in Haiti the educated and well connected commit crimes with impunity and are not sent to jail.

We contrasted that, in particular, with the over 6,440 very poor Haitians in jails, many since 2004, most for no crimes at all, never, ever, seeing a judge or having a trial and pushed, again, for speedy trial and immediate release. We referred to our statement — The slavery in Haiti the mainstream press won’t expose — about how the rich get away with murder in Haiti while the poor suffer mercilessly, die and get imprisonment, setting forth the following example taken directly from the Free Haiti Demands’s resolution.

Release of all political prisoners

Many Haitians from poor neighborhoods were summarily rounded up into preventive or indefinite detention during the 2004 Bush/Bicentennial coup d’etat without ever being charged, tried or convicted of any crime. As of 2008, it is reported that there are 8,204 prisoners in Haiti and of this only 1,764 have been convicted of a crime. Before the 2004 coup d’etat, Haiti barely had 3,000 prisoners throughout the country. [During the coup, the military and their militias emptied the jails, killed police and guards to recruit members to bolster up their small ranks. So, most of the 3,000 were freed by the US-financed coupnappers and Boca Raton regime imposed on Haiti, first with US firepower then through this UN proxy military power for the Western powers].

Today in UN-occupied Haiti, more than 6,440 still await trial, remain in jail, some going on for five years of prolonged detention, without ever having been charged, tried or convicted of any crime. These prison population statistics come from the 2008 US State Department Human Rights Report on Haiti and do “not include the large number of persons held in police stations around the country in ‘preventive detention’ (without a hearing or filed charges).” Also, many Haitians were summarily disappeared post the 2004 coup d’etat. There must be a complete investigation of such disappearances and political kidnappings, including the disappearance of Lovinsky Pierre Antoine.

Release Haiti’s children

At end of 2008, approximately 88 percent of the country’s 316 incarcerated minors were in prolonged detention, not charged, or having seen a judge, or been tried or convicted on any crime, some “since 2005.” This figure does not account for children confined with adults or held in indefinite detention at police stations around the country. (See, State Department 2008 Human Rights Report: Haiti).”

We noted, as a preamble to the posting, our consternation. I wrote:

600 “zombi” checks and no arrest? But if this included some ti malere – poor guy or gal – from Site Soley, he/she would be vilified and the jail keys thrown away as so many are experiencing right now for never having committed a crime – just put in jail, post coup detat 2004, for being poor and suspected of having voted for Aristide. But the suited criminals ak kravat e bon rad – the “good,” literate, well-connected and (educated?) folks enjoy complete impunity as they fleece the poorest… and the beat goes on.

An HLLN reader sent us an email giving us more examples of such injustices, expounding more on the vile systemic corruption in Haiti supported by the UN occupation and US coup d’etat authorities and implemented by the “schooled” and suit-wearing bourgeois Haitian. The reader suggested we should have translated the piece I was referring to where 600 checks were being paid out to educated and connected folks who never worked at the Ministry of Health, yet no arrests. (See: 600 chèques ”zombi” récupérés, aucune arrestation.)

This detailed HLLN comment by one of our members (who prefers to remain anonymous out of fear of being marginalized, or worse) gives a good picture of the impunity raging in Haiti that is carried out just by the tiny few, emboldened by US policies favoring dictatorship and military rule. The majority are just turned into restaveks — servants — by the ruling Haitian oligarchy. That’s the real slavery in Haiti, and the mainstream won’t ever expose it!

But their time is ending. Haiti’s majority will, one day soon, be able to vote in a President who will not be ousted by the US because he looked out for the interests of the people of Haiti, not foreigners, not the oligarchy nor the corrupt and greedy charitable NGOs maintaining the status-quo. That time is at hand and we who help give voice to the voiceless in Haiti and denounce these injustices claim it for those who can’t.

The corruption of the ruling Haitian oligarchy, their UN/US/Euro military back-up and all of their rank greed, terror and tyranny simply reinforces our commitment to un-tethering the voiceless 9-million Blacks from the cruelties and greed of the 13 “white Haitian” families – Haiti’s ruling oligarchy and their sycophants and wannabees. The 600 Haitians who were fleecing the Ministry of Public Health ought to be arrested and tried. Money, power and profit ought not be the measure for guaranteeing liberty, health , shelter, freedom and justice to human beings. The lives of the materially poor, no matter their skin tone, are valuable.

The impoverished and imprisoned in Haiti, the more than 6,440 wasting in Haiti’s overcrowded jails, sleeping in shifts, being abused by guards, catching diseases that go untreated, starving to death, some in jail going on five years in UN/US-occupied Haiti, without ever being charged, tried or convicted of any crime, MUST BE RELEASED. Bill Clinton and Ban Ki Moon, the UN Secretary General, ought to stand for this and stop giving interviews and going to meetings with well-to-do Haitians, many uncaring about the plight of their brethrens, just talking about the “success” of the UN mission in Haiti.

Such Haitians are only interested in US/USAID/Clinton Global Initiative dollars that will maintain the status quo in Haiti. They do not care that the US kidnapped a Constitutionally elected president, presided over the anarchy and slaughter, and then sent in the UN to maintain their bicentennial “gains” in Haiti. They cringe at the mention of the name Aristide and want to forget the gross bicentennial injustice that took place on the 200th anniversary year of Haiti’s independence. They want US approval, US dollars, US invitations, not justice. They’ve settled for the path of least resistance and paternalism.

There’s hardly any mention in these pat-ourselves-on-our-own-backs feel-good sessions that only the very, very poor in Haiti and those who reject this vile global system of wealth distribution and voted against the ruling oligarchy and its agents end up in jail. None of those convicted thugs and drug dealers whom the US financed to help with the ouster of Haiti’s democratically elected government have spent time in jail. We won’t mention Louis Jodel Chanblain. Lame Timanchet, the Gran Ravine assassins and death squads still roam free in UN-occupied Haiti. It’s mostly folks who stood against the second unconstitutional ouster of the Aristide government who are in jail today, very poor Haitians.

In fact, US authorities keeps saying they are looking to arrest Guy Philippe, the military leader of the coup against president Aristide, for drug dealing. Yet Guy Philippe, accused by Human Rights Watch of being a death squad leader, roams free in UN-occupied Haiti, still at large, last seen, I’m told, a few weeks ago, being interviewed on CNN! I wouldn’t be surprised if this were true. I vividly remember, sitting in my dying mother’s hospital bed, during the 2004 coup d’etat rape and rampage, watching Wolf Blitzer interviewing this Special Forces’ trainee and Haiti assassin, calm as you please asking him if he planned to run for President!

It’s been a long, endless, bloody trek to here from then and the suffering and humiliation continues for us pro-democracy and justice Haitians.

The US and poverty pimping-”International friends of Haiti,” create the circumstances and allows thugs and drug dealers to roam free, prohibits President Aristide from returning from exile in South Africa, deports Haitians back to storm-ravaged and coup d’etat destabilized Haiti, presides over the UN occupation, saying nothing about the UN and foreign forces’ raping and molesting Haitians, trafficking in children, killing of civilians and the unfair imprisonments. President Preval chauffeurs Special UN Envoy Bill Clinton around, all smiles, as the people flee on rickety boats, die of starvation, curable diseases, or wrongful imprisonment. He never mentions the UN rapes, coup d’etat killings or indefinite detentions. In fact, the Haitian Parliament, in a rare moment, raised the minimum wage from 70 gourdes (or $1.75 per day) to 200 gourdes (about $5 a day or .63 cents per hour) for an eight-hour workday. President Preval, citing the US-HOPE II Act, vetoed it. The act allows for duty-free exports of clothing to the U.S.

Although labor costs are a tiny fraction of the prices of goods, it seems the President of Haiti is worried that if he raises the minimum wage to the equivalent of 0.63 cents an hour for desperately poor Haitian workers, US businesses would no longer be able to sell US consumers clothes and shoes produced in Haiti, but from somewhere else where labor is cheaper. Now, the proposed $5 raise still keeps Haiti at the lowest minimum wage in the Western Hemisphere, and less than half the industrial minimum wage in the neighboring Dominican Republic. But big business are outraged, OUTRAGED, by the very notion of paying Black Haitians the increase to about 0.63 cents per hour! They basically, as per usual, want to use the historically low Haitian wage to bargain with globally and further drive down wages or keep them from rising elsewhere. This private sector — enslavement sector — depends on Haiti’s impoverishment. That’s the truth of the matter.

In fact, President Jean Bertrand Aristide raising the minimum wage from 36 gourdes to 70 gourdes (about 0.22 U.S. cents an hour!) six-years ago was part of the reason the Bush Administration and Haitian oligarchy got angry enough to violently overthrow him in 2004, just as the Honduran elite with Washington have done, in part, to President Manuel Zelaya because he raised the Honduran minimum wage.

It seems clear that Wall Street can get angry not Main Street and that their profit interests are valued above human life, health and liberty.

So, if a Latin American president raises the minimum wage or some such no no that hinders Messrs.-Let’s-Hoard-It-All’s profit margins, it’s perfectly alright for the corporate, corrupt and greedy elites to get angry enough to turn to financing coup d’etat, war, indefinite detentions and torture.

Apparently a minimum wage of 0.63 cents per hour to desperately impoverished Haitians will hurt US consumers and big business, according to Haitian President Preval. But 0.38 cents per hour (or $3 per day) is enough according to Preval, although poor Haitians have to pay high US-prices to the mercenary families (Haitian oligarchy) for imported US goods in Haiti: rice, soap, oil, clothes, food, toothpaste, shampoo, all supplies, etc.

Here’s what a young Haitian from Site Soley, who is probably dead now or rotting in prison for his dissent to the ouster and occupation, had to say right before the 2004 coup d’etat in a demonstration to stop the ouster:

… it’s this tiny group of folks who want to continue monopolizing everything in Haiti. Because for 200 years everything has been in their hands. They sell us our food, what we drink, all that we must have to live. They are the ones selling it to us…” (Go to the transcript of the video, When Haiti Was Free — video evidence that media lies led to occupation not only in Iraq but in Haiti).

Ultimately, pressure from Preval and the Oligarchy serving foreign business interests in Haiti, pushed the Haitian parliament to rescind the $5 per day and vote in a mere $3.75 per day (47 cents per hour) minimum wage.

Last year, gasoline in Haiti was $6 U.S. dollars per gallon at the pumps. The monopoly families who control all imports, many times charge Haitians higher prices than goods and staples would cost to buy in the US. 70% of the population is unemployed. Many work in the informal sector (street vendors, market women, peasant farmers, et al) or depend only on Diaspora remittances. Only some 250,000 people of Haiti’s 9 million Blacks have jobs covered by the minimum salary law. But the 0.47 cent an hour won’t cover much more than food and transportation to work and is more about guaranteeing huge profits for foreign multi-national corporations such as Levi’s, Disney, Wal-Mart and Hanes.

Bill Clinton’s commitment to bringing more of such “investors” into Haiti isn’t investment and certainly not about raising Haitian standard of living or long term development. The majority’s access to health care, political freedom, food, clean water, schooling, social justice and security from arbitrary arrest and indefinite detention is worst than before the 2004 Bush coup d’etat and UN/US occupation. The UN mission makes more than $600million per year in Haiti, their soldiers live in hotels, have turned Haiti into a brothel, a penal colony and may be seen in their shorts at the beach on the weekends. With no living wage and the odds so stacked against them, it’s no wonder hopeless Haitians are fleeing to shark-infested waters on rickety, overcrowded boats.

And imagine the millions of dollars being siphoned out of Haiti by the schooled Haitians — the coup d’etat Haitians, who don’t pay taxes and whom this US-puppet government supports with UN/US firepower, diplomatic and media power, at the ready. In fact, the Oligarchy and foreigners are making so much money in Haiti, since the 2004 coup d’etat, Haiti is no longer the “poorest in the Western Hemisphere, Nicaragua is! (See also “Haiti’s Riches“).

Meanwhile human rights and advocacy networks, like Ezili’s HLLN, are marginalized by the International friends of Haiti, by Haiti’s ruling oligarchy and their wanabees, for urging justice be done in Haiti and for the poor and speaking against the indefinite incarceration of poor people without voices. The danger to us who denounce the reality and tell the truth that is hidden behind the headlines on Haiti is not imagined.

Lovinsky Pierre Antoine, one of ours, was disappeared in UN-occupied Haiti on August 12, 2007, not long after he gave an interview denouncing the coup d’etat, the UN and the Haitian oligarchy.

The US government must stay out of our affairs and let us run our country. Each time they organize a coup d’état in Haiti – we have already 35 or 36 coups d’état in our history – we have to start over. This US policy of wanting to control everything in Haiti is blocking development as well as political, social or sociopolitical progress… (–Lovinsky Pierre Antoine, from an interview entitled “Sovereignty and Justice in Haiti.”)

There has been no investigation into the disappearance of Lovinsky Pierre Antoine. Nothing. But it is par for the course and also very telling about the reprehensible Haitian economic elite’s and their wannabees’ mentality of wanting to be on the “winning team” no matter how criminal, unjust and stank that is!

Have these retards (bafyòti) ever heard of “Do the right thing” or, “Fight the Power-that-be!” Should we send them the soundtrack? Oh yeah, I forgot, Bill Clinton just told them yesterday at that Miami Conference “not to be hostile” when pointing out injustice and demanding justice and/or TPS! Yup, it’s that Louis Gates no, no. Can’t be Angry-While-Black thing! Besides, Clinton’s gonna bring foreign investments (Ndòki) to Haiti!

President Preval has outsourced the Haitian presidency to Bill Clinton to go begging for aid charity not justice and to bring more folks from the enslavement sector to Haiti. The plan for Haiti’s development is for Bill Clinton, per the dreams of Paul Collier/Ban Ki Moon, to entice more transnational companies, particularly big textile companies, perhaps like Coteminas from Brazil, to Haiti that shall feed off Haiti’s impoverishment and slave wages. (See also “Obama’s offered HOPE is sweatshop slavery“).

Uhmmm, the Haitians we know at HLLN wanna know, when is Santa Claus-Clinton and the US coup d’etat instigators going to respect the $2 billion REAL AND DIRECT INVESTMENT of Haitians from the Diaspora to Haiti that’s destroyed by the wannabees and Franco-PHONIES — moun ak kravat e bel ròb yo — and their corrupt Oligarchy in Haiti, and in the US.

Somewhere over the next 40-plus years, the game became a multi-billion dollar sports industry with lucrative TV contracts, merchandise galore, corporate sponsorships and public subsidies for constructing luxury sports domes.

But some things haven’t changed. The owners are again digging in their heels, citing a tough economy to wring concessions from the NFL Players Association (NFLPA).

One of the big sticking points is money. Currently, players get almost 60 percent of the NFL’s revenue; owners want an even bigger piece of the pie and blame players for the high ticket prices fans are forced to pay.

The union counters that the average profit of an NFL team is $24.7 million. NFL commissioner Roger Goodell, spokesperson for the bosses, claims “there is a lot of fiction in that.” The NFLPA’s reply? Open the books!

In March 2008, NFL owners voted to terminate their collective bargaining agreement (CBA) with the players’ union after the 2010 season — two years ahead of schedule. The owners are also threatening to lock out players in 2011.

The strike of 1987.

The last NFL labor dispute got pretty ugly. The bosses hired scab players and convinced the networks to put the games on TV. The union didn’t have a strike fund and some players gradually crossed the picket line. After the strike of 1987, the NFLPA’s Executive Director Gene Upshaw eventually formed a less adversarial relationship with owners. Both sides duked out their issues in court, and players prospered a little in the subsequent years, although not nearly as much as the industry, which last year raked in $8 billion.

Players who retired from the game were an entirely different story. As anyone who watches football knows, players suffer bone-crushing injuries that affect them long after they leave the field. Only a select few parlay their success into TV careers. In 2006, USA Today reported that 78 percent of players wind up bankrupt or unemployed three years after retirement.

Unlike owners, who typically come from money and earn their wealth elsewhere, players come from poverty and spend years playing football in high school and college before earning a dime in the big leagues.

Former players, such as the late Hall-of-Famer Mike Webster, have wound up homeless because of sky-high medical costs the union health plan doesn’t cover. A star player with the Pittsburgh Steelers in the ’70s, Webster earned the owners fabulous profits.

As a union rep, Upshaw formed a cantankerous relationship with retirees even though he was one himself; retirees are shortchanged on pension money and the millions being made by companies that sell their images to a thirsty fan base. Upshaw, who lived a lavish lifestyle, took the position that retirees didn’t pay his salary.

Perhaps a new era.

Upshaw died of pancreatic cancer last year and in March, the players elected DeMaurice Smith, a lawyer, as Upshaw’s successor. Smith, 45, comes from a working class background. He was elected on the first ballot by 32 union reps — one for each NFL team — after he presented the Players Association with a comprehensive plan for the future. Key was his view that the union had “a moral and business obligation to former players.”

And in a departure from Upshaw’s top-down style Smith is meeting with players in an effort to unify them. This summer, he has travelled from one team to the next, educating players about their business — how much the owners make and how the stadiums they play in are publicly financed.

In June, Smith reached out to former players agreeing to settle their lawsuit against the union. Herb Adderly was the lead plaintiff in a class action suit representing 2,056 former players who won a claim that the union had breached licensing and marketing terms. The players were awarded $28 million but the union promised not to appeal and settled out of court for $26 million.

Meanwhile, with the retirement of NFL Commissioner Paul Tagliabue, owners also have a new rep. Roger Goodell sent a message to the NFLPA in March: get a new labor contract done before the 2010 season or the bargaining will get much tougher. Goodell’s strong-arm message came at the owners’ meetings where it was also announced that the NFL had just received $1 billion per year for 2011-2014 from DirecTV.

The owners get that money even if games aren’t played in the 2011 season. In other words, the owners have lockout insurance; they are guaranteed $31 million per year, whether or not football is played.

Are football players well off?

While some fans have trouble sympathizing with the NFL players they watch on TV every week the reality is that most players are anything but rich. The average salary for football players is about $750,000, while baseball players cleared an average of $3 million. For NFL rookies, it is around $400,000.

On the surface that sounds great, but NFL salaries, unlike those in pro basketball and baseball, aren’t guaranteed. Players receive signing bonuses up front, but can get released at any time without severance pay.

The average length of an NFL career is about 3.5 seasons, compared to 6 for major league baseball players.

While some leave the game with their health relatively intact, many are literally carried from the gridiron and live the rest of their lives in pain. Given this, it’s easy to see why current players voted for Smith’s vision to do better by retirees. They know their time will also come soon.

The owners clearly have the money advantage as negotiations start, but players have incentive and, increasingly it seems, unity.

“Our guys understand the cost of playing football on a Monday or Tuesday morning when they struggle to stand upright,” said Smith. “What they don’t understand is what does the average team make per game?”

As both sides prepared for a possible lock out, Smith is coaching his players to tackle that question. Stay tuned. Fans may be asked to turn off a blank TV screen in 2011 and join real players on the picket lines.

You play football and basketball, but you don’t play boxing.

– the late Buster Mathis, Sr.

This July, all the boxing news of note has been in the obituaries. Death has visited the sport like a plague, shocking even the most callous observers.

On July 1, Alexis Arguello, 57, who became the mayor of his native Managua, Nicaragua, and battled depression for years allegedly shot himself through the chest.

Then, on July 11, recently retired 37-year-old brawling icon Arturo Gatti met a brutally violent end in Brazil. Gatti was choked to death by a purse strap belonging to his wife, Amanda Rodrigues. Brazilian authorities are labeling it a suicide. Virtually no one else is.

Two weeks later, on July 25, 38-year-old former WBC welterweight champion Vernon Forrest was murdered. Two men attempted to rob him. Forrest reportedly pulled a gun, gave chase and took several bullets for his efforts.

Arguello, Gatti and Forrest were the most famous boxing casualties in the boxing world of July, but there were several more.

On July 22, a 23-year-old junior welterweight named Marco Antonio Nazareth died of a brain hemorrhage four days after being knocked unconscious in the ring. That same day, Marc Leduc, the openly gay 1992 Canadian silver medalist, died of heat stroke at age 47. On July 25, 21-year-old Francisco “Pancho” Moncivais died twenty-four hours after an in-ring knockout. Also on July 25, 37-year-old Colombian boxer Nicolas Cervera committed suicide. Finally there was welterweight William Morelo, gunned down in a gym in Colombia on July 27.

Eight deaths, occurring all over the world, and on the surface entirely unrelated. Yet they are bound by an athletic endeavor that remains, as the late sportswriter Jimmy Cannon, “the red light district of sports.” Imagine eight current and former NFL players, including two Hall of Famers, being buried over one month. Or baseball. Or even fatality-familiar sports like auto racing.

If any other sport were visited by the array and diversity of death we have seen in boxing, Congressional hearings would already be in full swing. But we don’t talk about what happens in the “red light district.” It’s a Vegas mentality: What happens in boxing stays in boxing.

It starts with the metronome-like punishment to the head. The brain begins to bruise, the words start to slur, the interviews become painful and the price paid for our pleasure becomes pernicious. This was especially the case with the freewheeling Gatti, whose bouts often resembled Guernica more than a boxing match. It made him very popular, very rich and very hurt.

As Jack Todd wrote in the Montreal Gazette, “[Gatti] was what they used to call ‘punch drunk’ and he was still fighting. My father, a veteran of more than 100 fights as an amateur and pro, was also called punch drunk: prone to sudden, explosive rages and memory loss. It isn’t pretty. From what we know of Gatti’s death, it is a particular variety of tragedy that seems to follow the warriors of the ring, a shadow they are never quick enough to outbox. Violent backgrounds, a violent sport, violent deaths.”

We need to confront everything that’s rotten in boxing. Right now there is no commissioner and no governing authority. There are no unions, and there is no collective bargaining on behalf of fighters. There is no healthcare, no mental health treatment and no one watching out for those who suffer from the debilitating effects of brain damage and its conjoined twin, depression.

Furthermore, no one is charged with counseling fighters who have been unable to keep the violence of the ring out of their personal lives. Gatti’s death, no matter what the police assert, was most likely the result of a domestic dispute with his wife. This spring she had a restraining order slapped on Gatti, demanding he stay 200 meters away from her at all times. The great boxing writer Thomas Hauser wrote to me, “I don’t know a single person who believes that Arturo Gatti killed himself. That’s not denial on our part. It’s our disbelief with regard to an apparently corrupt criminal justice system in Brazil.” No one has been brought to account for the deaths of Nazareth and Moncivais either. Did they belong in the ring? Was there ringside healthcare that could have saved them? There are no inquiries, only eulogies.

So despite spirited efforts by groups like Joint Action for Boxers (JAB), boxers still have no union protections. As former light heavyweight champion Eddie Mustafa Muhammad said, “Every professional sport has a union. They have a pension, they have a medical plan, they have a chance at a life. In boxing, they don’t have anything.”

The biggest boxing fan I know, the poet Martín Espada once told me, “In this country, as a rule, boxers come from the bottom: Black, brown, immigrants, the poor, the uneducated. This society treats such human beings as contemptible and disposable, channeling them into the military, into prison, into the shadows. Our collective attitude towards boxing is nothing more or less than a reflection of our attitude towards those who become boxers.”

Those who become boxers battle more than their opponents, the industry and crooked promoters–they have to fight our indifference.

In addition to this, American corporations have hired part-time workers and independent contractors in order to avoid having to provide healthcare. Yet the executives in the company have very attractive and robust health and welfare benefits. The majority of U.S. part-time workers are women who earn 69% of what males earn. One projection is that, by the year 2014, there will be around 38 million people who will be job hunting in underdeveloped countries,² adding to the already one billion plus people across the world who are unemployed and underemployed.³ In a November 2003 study by Alliance Capital Management which reviewed manufacturing jobs in the world’s twenty largest economies, it showed that, between 1995 and 2002, a total of 31 million manufacturing jobs were eliminated due mostly to advanced technology replacing the need for human beings.³ One example serves to highlight this. In 2002, Sprint’s productivity rose 15 percent and revenue increased 4.3 percent, yet the company eliminated 11,500 workers from its payroll. Jeremy Rifkin, author of The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era, says that, of all the CEOs he has had discussions with, most agreed that intelligent technology, not human beings, will make up the workforce of the future.

In 1995, the rate at which U.S. corporations were eliminating jobs was two million annually. More than 75 percent of workers in most of the industrial nations are performing work that is primarily simple and repetitive.³ As of 2003, in the United States, out of 124 million workers, more than 90 million jobs were at risk for replacement by machines. As of the early 1990s, approximately 3.6 billion people (67%) in the world lacked adequate cash or credit to purchase goods and services.² As Barnet and Cavanagh (1994) state: “A huge and increasing proportion of human beings are not needed and will never be needed to make goods or to provide services because too many people in the world are too poor to buy them” (p. 17). With automated machinery and robots taking over, there is the very real possibility of a permanent underclass consisting of hundreds of millions, if not several billion people. Nobel laureate, Wassily Leontief, states that “the role of humans as the most important factor of production is bound to diminish the same way that the role of horses in agricultural production was first diminished and then eliminated by the introduction of tractors.”⁴ This unprecedented global travesty will create a worldwide situation in which upwards of 80% of the world will be unemployed or underemployed. With several billion people unable to find work, what will prevent society from disintegrating into a state of perpetual lawlessness and chaos? Other ominous predictions regarding robots include the concern that when artificial intelligence is developed, these robots may be given similar rights to humans, including the right to vote.

Japanese Professor Ishiguro has created a human android that is so eerily like a real human being that, one day, the unreal will be indiscernible from a real human being.⁵ In December 2006, one of 200 studies commissioned by the British government was published which stated, “If granted full rights, states will be obligated to provide full social benefits to them [robots] including income support, housing and possibly robo-healthcare to fix the machines over time.”⁶ While it was nay-sayed by most in the scientific community, the fact that it surfaced is alarming. One scientist commented on his concern about who would be responsible if a robot kills or injures someone saying, “We need a proper debate about the safety of the robots that will come onto the market in the next few years. Military use of robots is increasing fast. What we should really be bothered about is public safety.”

Bill Joy, co-founder of Sun Microsystems, wrote an article in Wired magazine in 2000 which very clearly elucidates the extreme ethical and moral dangers of technology, and specifically robotics, genetic engineering, and nanotechnology. Perhaps one of the most frightening about all three is that they can self-replicate which, as Joy points out, carries with it great power. In Joy’s article, he talks about the book, The Age of Spiritual Machines, written by Ray Kurzweil, the famous inventor of the first reading machine for the blind. In the book, Kurzweil advocates for a utopian world in which human immortality is attained by becoming one with robotic technology. The following frightening scenario is printed in the book:

THE NEW LUDDITE CHALLENGE

First let us postulate that the computer scientists succeed in developing intelligent machines that can do all things better than human beings can do them. In that case presumably all work will be done by vast, highly organized systems of machines and no human effort will be necessary. Either of two cases might occur. The machines might be permitted to make all of their own decisions without human oversight, or else human control over the machines might be retained.

If the machines are permitted to make all their own decisions, we can’t make any conjectures as to the results, because it is impossible to guess how such machines might behave. We only point out that the fate of the human race would be at the mercy of the machines. It might be argued that the human race would never be foolish enough to hand over all the power to the machines. But we are suggesting neither that the human race would voluntarily turn power over to the machines nor that the machines would willfully seize power. What we do suggest is that the human race might easily permit itself to drift into a position of such dependence on the machines that it would have no practical choice but to accept all of the machines’ decisions. As society and the problems that face it become more and more complex and machines become more and more intelligent, people will let machines make more of their decisions for them, simply because machine-made decisions will bring better results than man-made ones. Eventually a stage may be reached at which the decisions necessary to keep the system running will be so complex that human beings will be incapable of making them intelligently. At that stage the machines will be in effective control. People won’t be able to just turn the machines off, because they will be so dependent on them that turning them off would amount to suicide.

On the other hand it is possible that human control over the machines may be retained. In that case the average man may have control over certain private machines of his own, such as his car or his personal computer, but control over large systems of machines will be in the hands of a tiny elite – just as it is today, but with two differences. Due to improved techniques the elite will have greater control over the masses; and because human work will no longer be necessary the masses will be superfluous, a useless burden on the system. If the elite is ruthless they may simply decide to exterminate the mass of humanity. If they are humane they may use propaganda or other psychological or biological techniques to reduce the birth rate until the mass of humanity becomes extinct, leaving the world to the elite. Or, if the elite consists of soft-hearted liberals, they may decide to play the role of good shepherds to the rest of the human race. They will see to it that everyone’s physical needs are satisfied, that all children are raised under psychologically hygienic conditions, that everyone has a wholesome hobby to keep him busy, and that anyone who may become dissatisfied undergoes “treatment” to cure his “problem.” Of course, life will be so purposeless that people will have to be biologically or psychologically engineered either to remove their need for the power process or make them “sublimate” their drive for power into some harmless hobby. These engineered human beings may be happy in such a society, but they will most certainly not be free. They will have been reduced to the status of domestic animals.⁷

Kurzweil had included in his book ideas that Theodore Kaczynski, the Unabomber, had written about a dystopian society. Joy goes on to say that he found Hans Moravec’s book, Robot: Mere Machine to Transcendent Mind, and it gave him more cause for concern. Moravec is a leaders in robotics research as well as the founder of the world’s largest robotics research program at Carnegie Mellon University. In Joy’s (2000) article, he provides an excerpt from Moravec’s book that is similar to Kaczynski’s disturbing vision.

The Short Run (Early 2000s)

Biological species almost never survive encounters with superior competitors. Ten million years ago, South and North America were separated by a sunken Panama isthmus. South America, like Australia today, was populated by marsupial mammals, including pouched equivalents of rats, deers, and tigers. When the isthmus connecting North and South America rose, it took only a few thousand years for the northern placental species, with slightly more effective metabolisms and reproductive and nervous systems, to displace and eliminate almost all the southern marsupials.

In a completely free marketplace, superior robots would surely affect humans as North American placentals affected South American marsupials (and as humans have affected countless species). Robotic industries would compete vigorously among themselves for matter, energy, and space, incidentally driving their price beyond human reach. Unable to afford the necessities of life, biological humans would be squeezed out of existence.

There is probably some breathing room, because we do not live in a completely free marketplace. Government coerces nonmarket behavior, especially by collecting taxes. Judiciously applied, governmental coercion could support human populations in high style on the fruits of robot labor, perhaps for a long while.⁸

These excerpts written by men echo the profoundly disturbing, dominating, and destructive quality that is inherent in masculine pathology, particularly in psychopathy in which there is a complete objectification of humankind, and an absence of human compassion and moral conscience. It has eery commonality with the story of Frankenstein: The Modern Prometheus published in 1818 by Mary Wollstonecraft Shelley in which man, egomaniacally obsessed with power and control, creates that which destroys him. This is a psychopath—a man with no heart; essentially, a beast. Joy’s (2000) article is his vocalization of the extremely dangerous and unprecedented potential for extinction that exists as pertains to threats from technology, especially robotics. He emphatically states that “certain knowledge is too dangerous and is best forgone” (p. 11). The reason for his urge for moral caution is best summed up when he states:

By 2030, we are likely to be able to build machines, in quantity, a million times as powerful as the personal computers of today…And once an intelligent robot exists, it is only a small step to a robot species — to an intelligent robot that can make evolved copies of itself…A second dream of robotics is that we will gradually replace ourselves with our robotic technology, achieving near immortality by downloading our consciousnesses…I think it is no exaggeration to say we are on the cusp of the further perfection of extreme evil, an evil whose possibility spreads well beyond that which weapons of mass destruction bequeathed to the nation-states, on to a surprising and terrible empowerment of extreme individuals.⁹

Jacques Attali, French minister and technology consultant to former president Francois Mitterand, declared: “Machines are the new proletariat. The working class is being given its walking papers.”¹⁰ This is one reason for large increases in productivity despite the fact the employees are working harder than ever and putting in longer hours, and even though large numbers of workers have been laid off. With the elimination of layers of traditional management, shortening production processes, and streamlining administrative duties, restructuring and layoffs in corporations can result in a 40% to 75% workforce reduction.

American workers have been left standing at the curbside for decades holding the proverbial bag. They are paying more for the cost of those products and services which the corporation is producing for an estimated 30%-70% less cost due, in large part, to massive savings in the cost of labor as corporations lay off U.S. workers and hire cheap labor from foreign countries at a rate up to 90% of the cost of labor in the U.S. Meanwhile, the compensation of U.S. executives continues to escalate and skyrocket into the tens and hundreds of millions per executive. In addition, this creates a financial windfall for CEOs, senior executives, and the 5% who own stock in these corporations that are saving 60-90% in labor costs. Corporations have betrayed the American workers and have done so without many people being aware of the enormity of the betrayals. Because multi-nationals own virtually all major and mainstream media outlets, they have, for the most part over the past three decades, hid any news that was unfavorable to corporations and the wealthy elite. Hidden from front page or headline news in these mainstream media sources such as CBS, NBC, ABC, CNN, and Fox News was any news that had the potential to incite large groups of people to unite, engage, and oppose their agenda. The media did not inform the public, to any large degree, about the mass drain of labor out of America that began in the late 1980s. It was not until the early 21st century that large numbers of Americans became aware of the scope of the numbers of lost jobs as well as the fact that the hiring of overseas labor had been occurring for well over a decade. Some of this increased awareness was due to internet access which has non-mainstream sources that provides what many consider are far more accurate pictures and data that are representative of contemporary financial, social, cultural and psychological reality. The wealthiest power brokers have been very aware of the threat that the internet plays in the potential to educate and inform tens and hundreds of millions of people across the world. More crucially, they are cognizant of the potential that this creates for a worldwide organization and uniting of people against what has now become, when combined with overpopulation and global warming, the psychosocial pathology of free market capitalism.

1. Henwood, D. (1998). Wall Street: How it works and for whom. New York: Verso.
2. Barnet, R.J. & Cavanagh, J. (1994). Global dreams: Imperial corporations and the new world order. New York: Simon & Schuster.
3. Rifkin, Jeremy. (2004). The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era. New York: Jeremy P. Tarcher/Penguin.
4. Cited in Rifkin, 2004, pp. 5-6.
5. Whitehouse, D. (2005, July 27). Japanese develop ‘female’ android. BBC News. Retrieved 4/4/08.
6. Henderson, M. (2007, April 24). Human rights for robots? We’re getting carried away. The London Times online. Retrieved 3/20/08.
7. Joy, B. (2000, April). Why the future doesn’t need us. Wired magazine online. Retrieved 3/20/08.
8. Joy, 2000, p. 2.
9. Joy, 2000, p. 5.
10. Cited in Rifkin, 2004, p. 7.