From New International, Vol.2 No.3,
March 1935, pp.40-43.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
IN THEIR analysis of current political events, Marxists are susceptible to a dangerous error. This error consists in supposing that their position coincides concretely and immediately with the interests of the working class. Reasoning from this supposition, they evaluate incorrectly what is actually going on, and devise wholly unsuitable tactics to meet the real situation. The truth is that the Marxian position coincides with the interests of the working class neither concretely nor immediately, but abstractly and historically. The only final proof of the actual coincidence will come if the working class makes the Marxist position its own, if it identifies its interests with the Marxian directives. Every day proves the importance of this distinction. For example, in the Sacramento criminal syndicalism trial, Leo Gallagher, reasoning abstractly that it is a contest between the capitalist state and the working class, conducts the defense as if this were the case as actually present to the consciousness of workers. He moves in a vacuum, and the effect of his presentation is on the whole to prejudice not merely the jury (thereby injuring the chances of the defendants) but the working masses of California as well. What he ought to do, on the other hand, is to conduct the defense so that the historical reality of the class opposition embodied in the trial will become concretely and immediately real in the consciousness of workers. When this is done, the class struggle is advanced a stage, though the text books remain unchanged.
This confusion vitiates nine-tenths of the comment given by alleged Marxian publications to the acts of the government. Each act that comes along is a “great blow at the working class”; the class analysis of the state shows that it is the business of the government to strike great blows at the working class; therefore this act, whatever it may be, must be such a blow; and we are inclined to leave it at that. However true this may be historically, it is far from true on the surface or in the minds of most persons. Marxists must show just why and how it is true, and must convince, not themselves – for it is to each other that they normally talk – but others. The Roosevelt social security program, now before Congress, is an admirable example. It is, of course, a blow at the working class. But it takes more than dogmatic jargon to prove this to a middle class suburbanite, who thinks it a big step toward socialism; or to a worker who believes he will get the security of unemployment insurance out of it; or, above all, to an unemployed worker on four dollar a week relief who is going to be raised to fifty a month.
Let us, in the first place, outline the program itself, to be able to keep its main features clearly in mind. The program is confused, and chaotically thrown together. The Administration apparently counts on being able to iron it out in practise, if Congress grants the Executive control that is demanded. Nevertheless, the central matters are established.
The most grandiose section deals with unemployment relief policy. Here the Administration declares that it intends to eliminate the federal dole. Of the 5,000,000 now on federal relief, 1,500,000 are to be sent back to state or local agencies as “unemployable”. The 3,500,000 remaining are to be given jobs at $50 a month on public works. Four billion dollars are to be appropriated to pay for the public works, with an additional $880,000,000 to cover relief needs during the transfer from dole to public works. The public works are to include a great variety of projects, from slum clearance and subsistence homesteads to reforestation and improvement of rivers and harbors. The money is to be raised on credit, with no increase in taxation. The whole scheme is to be administered by the Executive, with permissive legislation from Congress giving the Executive complete control.
The next major part of the program deals with unemployment insurance. Here we discover that nothing at all is to begin until 1936, and that the plan will not get genuinely started for several years after that. The plan is supposed to work on a combined federal-state basis, though in effect in the hands of the states. A federal tax on industrial pay-rolls, 1% at the beginning and increasing to 3% “as business improves” and is better able to carry the burden, is to be returned to each state that enacts its own unemployment bill. Thus each state has a wide leeway in setting up its own plan, details for which are not prescribed by the federal program. Benefits under the program are to be paid after an interval of ten weeks from the loss of job are to continue at an extremely low rate (a maximum of $12 or $15 a week) for only a couple of months; and are to be paid only to workers who can’t get jobs. This last provision, of great significance, is similar to a provision in the public works program that bars from relief work all who can get jobs elsewhere.
Next comes old age insurance. This is in two parts. The first deals with “the immediate problem” of the indigent old. Here it is proposed that the states enact old age pension laws providing what they like up to a maximum of $15 a month and that the federal government will contribute an equal amount to that paid by the states. The second is a long-time plan providing for the building up of old age pension reserves for each worker by equal contributions from the worker and the employer.
The program includes also certain paragraphs about sickness and accident insurance, and maternity and child welfare. It does not propose to do anything much about these now, but states that they are excellent ideas. For maternity and child welfare, an initial appropriation of $1,000,000 is proposed. The Senate, with a generous gesture, has raised this to $1,500,000.
It should be noticed that the program, as it is shaping up, excludes farm, domestic and professional workers from the provisions of the unemployment insurance and old age insurance plans.
Why does Roosevelt put forward this particular scheme at this particular time? There are a number of alternatives that he might have chosen: to slide along on the current basis; to abandon public works in favor of outright direct dole, as the Chamber of Commerce seems to want; to push the Lundeen Bill, or something of its character. Roosevelt’s scheme is neither the least “expensive” in budgetary terms, nor the most; it does not entirely satisfy any group either in Congress or the country. Let us answer the question first from the Administration point of view, before attempting to trace somewhat deeper the social meaning and effects.
The program, to begin with, carries on its surface the social democratic marks that Roosevelt finds it necessary to attach to his acts during these first years of his regime. We shall have no dole, but a real chance for the unemployed to rehabilitate themselves with actual jobs on constructive public enterprises. We shall lay the foundations for the great social reforms that will give security and peace of mind to the working masses of the country.
The social democratic surface is emphasized by the way in which maternity and child welfare are dragged in with the rest. There is nothing of them there but the name; there is not even a suggestion as to when or how they are to start operation; but the name is important. Old age insurance is shoved into a distant future, with hardly more than a gesture for the present; and unemployment insurance, too, is far enough away to be vague and safe. But they all appear, along with the public works. And if we look at them as a whole, we see that these are the slogans of generations of social democracy.
Anyone who read the issue of the New Leader the weekend after the program was announced will realize how true this is. In full headlines, the socialist party hailed the Roosevelt program as a great victory for socialism. Here, they said, is the acceptance “in principle” of all we have stood for. Patience now, they suggest to their readers, and the practical working out of the principles will follow, handed kindly down from the White House. The impression is confirmed by talking to middle class wiseacres, who see their beliefs in a socialist Washington substantiated, and sell their odd lot holdings on the stock market.
And this manoeuvre is still able to carry along the feelings of the majority of the people. The minds of the masses move slowly to self-consciousness. Marxists should not be deceived by their own analyses. Their audience is still decimally small, and Roosevelt’s program is a large enough straw for the moment.
But the relation of Roosevelt to Congress and to the rest of the country is altered from two years ago. This program is presented at the beginning of the session not to lead Congress to action, but to prevent it from action. And only a program of this kind would do the job. There has been too much talk of Townsend Plans, Share-Our-Wealth, Social Security, Utopia, and what not. The program had to be dressed up in reformist clothing to get through. A minimum dole would not get by the many Congressmen who have learned in their constituencies how popular it is to spend lots of public money in the neighborhood. These had to be checked, and Roosevelt moved fast to check them, putting them on the defensive. And such is the political backwardness of the masses, so generally absent is a class point of view that could judge the real social meaning of the program, that Roosevelt can get away with it.
Another idea lurks in the program, contributed by the remnants of the Brain Trust. They still hope that a public works program of this kind will revive business in the old way, both directly by providing a market for certain supplies used in the work, and indirectly through “cumulative reemployment”. This latter idea has been developed into a theory, according to which putting one man to work, through the materials he uses up and the additional commodities he can buy, actually brings about reemployment for anywhere from one to three others. The truth is that probably about one-tenth of a man is cumulatively reemployed; but public works does always mean sounder profits for the companies that sell the supplies and materials. And this is not forgotten.
Much more important, however, is the ability of the program to lower general wage scales. The tendency of wage scales under capitalism, unless sustained by unions, to seek the lowest level is inescapable. This is particularly important in the present case. Many construction projects under the public works plan will employ workers whose “normal” prevailing wages are among the highest. These – various branches of the building and construction industries – are, moreover, the backbone of the AF of L. Thus at one and the same time the government, through the $50 monthly wage of the program, hits at the prevailing wage levels and at organized labor. Roosevelt’s contention that the McCarran amendment to substitute prevailing wages for the $50 a month would “take the heart out of the whole program”, is understandable.
Lastly, the part this program plays in Farley’s patronage structure should not be underemphasized. Farley has been building his party machine more skillfully and ruthlessly than perhaps anyone has done before in American history. And here will be $4,880,000,000 to reward friends and punish enemies.
It may be asked whether the program is workable even from the point of view of the Administration, and it may very readily be answered that it is not. In the first place, it will not go through Congress unscathed. Amendments of a dozen varieties are being proposed, and many of them energetically pushed by one faction or another. The Senate is having a great deal of trouble over the McCarran amendment to provide prevailing wages in the place of the $50 a month provision for jobs on public works. There are complaints about the unlimited authority that the program turns over to the President. I believe, however, that in the end the program will go through with its major lines substantially unchanged. The character of the opposition to it is too inchoate to agree on a clear-cut substitute. This is brought out with particular clarity in connection with the McCarran amendment, which is chiefly supported by the die-hard Republicans – supported, of course, not because they are in favor of the higher wages, but because they want a chance to vote against the President. The result of the opposition will be merely to make more confused a bill that was sufficiently chaotic to begin with.
There are also certain questions of constitutionality which will effectively interfere with smooth working. These arise especially in connection with the unemployment insurance scheme: the payroll tax, by which this is to be financed, may be found an invasion of the federal government into intra-state business. This possibility will allow employers to prevent even these meager unemployment insurance plans from getting into operation without long court battles.
More significant is the absurdity of the whole conception of handling relief. The Administration reasons: there are now 5,000,000 persons getting federal relief (representing in their families 20,000,000 persons; 1,500,000 will be returned to local relief rolls as unemployable; 3,500,000 will be put to work on the government projects. To this it may be replied, first, that local relief rolls cannot carry the 1,500,000 without federal aid. Second, 3,500,000 cannot be put to work at once when there is no coordinated plan of public works to take care of them. This second point the Administration seems to recognize by insisting on a two-year limit to the appropriation instead of the one-year limit within which it is theoretically supposed to be used. To these must be added an additional consideration. There are at least 12,000,000 unemployed, that is 7,000,000 more than are now receiving federal relief. These 7,000,000 now live from savings, loans, help from relatives, occasional local relief, temporary jobs, etc. These means are gradually being exhausted. There must be inevitably expected an increase in relief applications even if there is some upturn in employment. The Administration program makes no provision for this whatsoever. We may conclude in general that the Administration statement that jobs on public works can be substituted for the dole is necessarily false. The necessity for the dole will, in fact, remain so long as capitalism lasts.
It is necessary to enquire further into the actual social meaning and effects of the Administration program.
To begin with, it means a hardening in the distribution of cash payments. In some cases the $50 a month paid on the public works jobs will be less than what is now received by families in the form of rent vouchers, cash relief, electricity and gas payments, etc. The indirect effect will be more widespread. The “principles” of returning unemployables to local relief rolls and giving jobs to all others, though they cannot work to that end in practise, will provide the basis for a general slashing of relief payments, will, in the administrative changes involved, give an opportunity to bleak down relief levels that have become more or less standardized in many localities.
Second, the program will aid in lowering the general level of wages, particularly in industries where the prevailing level is higher than the average. The effect of the low wages to be paid on public works in bringing this about has already been stated. The unemployment and old age insurance plans also, however, contribute to the same effect. The contributions by the employee under the old age insurance plan will be a form of wage-cut, disguised, but none the less real in diminishing the pay envelope. The pay-roll taxes called for by the unemployment insurance plan will be compensated for by the employers by drives to lower wages and raise prices proportionately, the latter as well as the former acting to reduce real wages.
Third, both the public works and the unemployment and old age insurance plans work as strike breakers. The unemployed worker will be immediately confronted with the following situation: if he doesn’t take a public works job, he will be cut off from relief; but if any job in “private industry” is open – as such jobs become open, for example, in strikes – he will run the risk by not taking it of losing the public works job also; thus, with no relief to turn to, he will have the de facto choice between strikebreaking and starvation. Under the unemployment and old age insurance plans, the worker will of course run the risk of cutting himself off from all possible “benefits” by striking.
But the most significant general aspect of the whole program is the rapid stride forward it makes in the consolidation of bourgeois rule which, under Roosevelt, is preparing the United States for the comparatively smooth transition to Fascism. This can be brought out in a number of ways. For example: Under Fascism, the government must represent as fully as possible the class interest of the big capitalists as a whole, rather than the interests of any particular section or group of the capitalists. This contrasts with the situation often possible under laissez-faire economy and parliamentary democracy, when the government, while representing the capitalist class in general, may nevertheless at a given moment be in a special sense the organ of a particular section (industrialists, bankers, those needing a big tariff, those needing a smaller tariff, etc.). The decline of capitalism does not permit the degree of internecine warfare among capitalists themselves that was formerly allowable. It may be remarked in passing that this is the reason why large sections of the bourgeoisie oppose Fascism up to the last moment, and why Fascism takes occasional measures against the immediate interests of any or even all groups of the bourgeoisie. The ability of the totalitarian state to act thus, as agent of the big bourgeoisie as a whole and independent in large measure of the intra-bourgeois quarrels, is based in part upon shifts in the economic foundation of the state apparatus. It means, for one thing, that the state becomes increasingly and more directly involved in the basic economic structure of the country. Thus, we discover, that through the RFC the US government has tied itself to the banking system, especially the large banks (by the purchase of preferred stocks in the banks – often against the desires of the banks concerned, by loans against frozen assets, etc.), to the railroads, insurance companies, etc. Roosevelt is now engaged in entangling the government with the utility system, by the big government built dams, the TVA, and the rest. The government entered ship and airplane building, and ocean transport some time ago, on a large scale at the time of the war. Now, with this new relief program, the government becomes more outstandingly than ever the greatest employer of labor, the dominant “monopoly trust” of the country, and intertwines itself with the thousand and one businesses implicated in the public works projects.
The political trend of the new program is analogous. The whole plan is to be turned over to the Executive, to be arranged, allotted, administered by what amounts to Executive decree, with no legislative check. The legislative branch of the state continues its withdrawal toward totalitarian obscurity. Parliamentarism, the political luxury of ascendant capitalism, moves further toward its decline.
Lastly, there should be noticed a feature of the program that has been strangely ignored by both the capitalist and the working class press. The program quite openly establishes the principle of forced labor. The unemployed worker will not be given a “choice” between relief and the $50 a month job on public works. He will take the job or starve. And he will take the job that is assigned to him, whatever it may be, and however little fitted he may be for it. From this to labor camps is not so long a step.
A question remains which I cannot take up at length in this article. What kind of workers’ security program should Marxists oppose to the plan of the Administration? This is by no means an easy question to answer. We must start with the recognition that only a workers’ state can solve the problem of unemployment and security in general; and with the additional recognition that capitalism in decline is increasingly powerless to grant concessions to the working class. We must also keep in mind that, for Marxists, a social security program is not a mere piece of legislation to be filed in Congress; but a class slogan to promote independent working class mass activity in its support, and to seek immediate gains only as part of the broader aim of weakening the structure of capitalism and organizing the working class forces in a revolutionary direction.
This suggests at once a major criticism of the Lundeen bill, which is offered as a working class answer to the Roosevelt program. The fight for this bill has been almost entirely reformist and parliamentary in character, and thus, even if it were passed (which it will not be), it would not represent an important victory for the working class. Even from a parliamentary standpoint, there are serious objections to the Lundeen bill. It of course avoids most of the directly anti-working class aspects of the Roosevelt program. But it is an odd and confused mixture. In some of its provisions it is openly unconstitutional (not necessarily bad, since mass pressure could enforce a lenient interpretation of the Constitution); whereas in others it leans over backwards to remain within the Constitution. It offers a plan of raising the money by taxation, to avoid inflation, which would not raise the necessary money. The kinds of taxation are correct enough in principle, but the bill should not pretend to provide money that any statistician can prove it does not. And, lastly, the bill is incomplete, since it takes no notice of necessary parts of a workers’ security program without which unemployment insurance at the present time would mean little.
The immediate requirements for a rounded workers’ security program are included in the plan recently adopted by the National Unemployed League. In outline, these are as follows:
Last updated: 12.3.2005