Below is  a text the class that I gave last Thursday on U.S. History.  Unfortunately, the last part of the text was truncated.  I will also send the suggested readings and video clips which I sent to those participating, along with my response to questions in a subsequent blog

Norman Markowitz

The Great Depression and the Rise of a New Politics

”The Old Order” and the global crisis of Capitalism (1920-1933)

When we ended our second class, the "Great Betrayal" of the four million former slaves had been orchestrated by the Republican and Democratic Parties in the deal that made Rutherford B. Hayes President, withdrew troops from the last former slave states and used those troops againstthe national railroad strike of 1877.  While these events were taking place, Marx, always a keen observer of events in the U.S., wrote the following to Engels

"What do you think of the workers in the United States?  This first eruption against the oligarchy of associated capital which has arisen since the Civil War  will of course be put down{meaning the national railroad strike}   but it could quite well form the starting point for the establishment of a serious labor party in the United States.   There are more over two favourable circumstances.  The policy of the new President will turn the Negroes into allies of the workers{Hayes betrayal of the last state governments defending the civil rights of the former slaves} and the large expropriations of land[especially fertile land] in favour of railways, mining, etc., companies{meaning the use of the land reform policies enacted by the Lincoln administration to redistribute huge amounts of public lands to corporations} will bring the peasants of the West,  who arealready  very disenchanted, into allies of the workers....(Marx to Engels, July 25, 1877)

Marx as it turned out was overly hopeful in his predictions although he understood keenly what was happening.  The betrayed four million former slaves did not ally themselves with the working class; as they became prisoners of the semi-feudal sharecrop system. Marx also did not grasp the power of color racism to distract and divide the working class.  Color racism became the great “legacy” of the slaveholders to the new industrial-finance capitalist led ruling class of the United States.

 The working class faced both ruthless repression and ethnic fragmentation, which undermined its ability to advance.

 The coalition of workers, farmers, and former slaves, which to be successful would have to have been led by the working class did not develop.  Instead an agrarian movement, which sought unsuccessfully in the south to unite black and white farmers, and failed in large part because it accepted social segregation, the peoples or populist movement, came into existence.  This movement also made gestures to solidarity to the workers but once more failed to develop a policy that would unite workers and farmers, which is no surprise, because of the petit bourgeois class base of this movement, indebted farmers and the small business people of the towns who depended on them.  The demands of this movement for credit inflation in the form of “free silver”  regulation of the railroads to control shipping costs, federal crop loans and other positive agrarian reforms, had little direct meaning for the urban working class, as against the movement’s general anti-Trust aka anti-monopoly rhetoric.

This movement did create the Peoples or Populist Party, which for a few years in the 1890s became the largest mass third party in the post civil war era, electing governors, Senators and Congressmen in Western states and becoming a major force briefly in the South, where it faced  massive repression, a repression which resulted  the revival of the worst racist terror since the KKK guerrilla war against reconstruction in the complete disenfranchisement of the Blacks, and a hugely heightened racism to pit poor whites against Blacks.     After the Populist Party collapsed, some of its activists joined the new Socialist Party, but the great majority either returned to the Republican and Democratic parties or withdrew from politics.

At the beginning of the 20^th century, a unified socialist party came into existence and ran Eugene Debs, leader of the American Railway Union which the federal government had crushed in its suppression of the Pullman Strike(1894)  in four presidential elections, won some local elections, seats in state legislatures, actually won leadership in small cities like Reading, Pennsylvania and Schenectady, New York, built a base in a few mid-sized cities like Milwaukee, Wisconsin., districts of large cities like New York, and in some Western state among former populist supporters, but lagged behind most other socialist parties in other industrial countries, .

The Socialist Party of America (SPA) failed to develop policies to adapt to U.S. conditions, failing largely to address the question of color racism, or to develop a unified strategy to deal with either the far right craft union AFL or the far left anarcho syndicalist IWW

Also, the SPA failed to advance a policy on U.S. imperialism.

 In this period (1900-1920) variety of small capitalist led reformist movements also came into existence to fight against political corruption and to restructure politics in order to keep the monopolies from forcing the old small business  “middle” classes and the new white collar professional “middle classes”  down to the level of the working class,

 But the working class really gained very little from these reforms, which produced a new and largely ineffective anti-trust act, a federal reserve banking system which were better for regional bankers but not especially for workers, and no real labor or social welfare legislation of significance. Capital, while not happy with these regulatory reforms, was able, to limit their implementation and even use them to protect itself

  After WWI both these reformers and the socialists and all elements of the left were all subject to a massive “red scare” initiated at the national level by the Wilson administration, which had previously identified with some of these movements and sought to bring them into the Democratic party, leading to a crushing defeat for the Democrats and the “return” of conservative Republican leadership over the Federal Government

   1. after WWI, Wall Street replaces “City” of London as the center of world finance capital and U.S. becomes leading banker/creditor of world capitalism

    2. “Old Guard” Republican administrations (Harding, Coolidge, Hoover) and Secretary of the Treasury under all three, financier Andrew Mellon, seek to reduce greatly income and business taxes, deregulate business, sell off government owned facilities, under slogans “the business of America is business” and business profits and prosperity will “trickle down” to the people in a “new era” of new products and “democratic capitalism” in which the masses of people will own stocks and bonds. This they say will make capitalism “democratic”. Even with women’s suffrage achieved, the period sees a large decline in voting as old guard Republicans and faceless content less democrats act to contain and isolate progressive elements in both parties

3.  Internationally, U.S. finance capitalists lend money at high interest to European countries while maintaining protectionist trade policies, which, combined with U.S. technological advantages, means that the money will be spent by European countries to purchase U.S. exports, an irrational but very lucrative system.

 European industrial nations, as they recover from the war, erect their own protectionist policies in self defense and U.S. exports drop sharply, along with the need abroad for U.S. capital.

4. These  policies, foreign and domestic, combined with union busting,  as the number of workers in unions drops from 5 million(peak) in 1919 to around 3 million in 1924 , making it harder for workers to see wages increase as production and profits increased, produced economic stagnation as domestic markets are saturated, the nation sees large but very unequal income growth, between upper and lower income groups   and greatly increased income  inequality between urban and rural areas, all of which meant that mass purchasing power in the U.S. was not adequate to absorb the increase in production and that foreign markets were also not adequate to absorb surpluses,

 This is temporarily covered up  for the capitalist class for a few years  by huge stock market expansion and real estate speculation, and for the masses  new products, autos, consumer appliances, bought on consumer credit, which expanded.    But this only postpones the crisis and makes it worse  eventually as lack of mass purchasing power and foreign markets  to sustain new industries, leads to overproduction, inventories that cannot be sold along with unchecked stock market and real estate speculation (what would in our time be called “casino capitalism”) leads to great crash of 1929 which given the lack of what later capitalist economists would call a “safety net”(insured bank deposits, pensions, unemployment insurance) ushers in the depression in the following ways.

 capital responds by mass layoffs to  sustain profits; banks that had speculated in stock and real estate markets collapse and millions lose savings;  senior citizens who were conned into investing in mutual funds as retirement annuities lose these annuities and have no pensions to fall back on; the  unemployed fall back on anything they can without unemployment insurance; and mass unemployment, mass homelessness, hunger  spread, as “austerity policies” become the order in the day in the U.S. and other advanced capitalist countries

Neither Democrats nor Republicans offer anything but platitudes as downward spiral continues and escalates for next three years.

Through the 1920s, the economic crisis in income inequality  as it effected the masses was denied by ruling groups and blamed by fundamentalists and Klansman or foreigners, Catholics, Jews, Blacks, foreigners taking jobs from real Americans, controlling the big cities which were exploiting the countryside, behind bootlegging and crime With the coming of the depression, the danger of fascism in the U.S., given its racist history, was very great.

  B.The Role of the Communist Party and the World Communist Movement

1.    Many European and also U.S. analysts  contend that the fascist danger was not great in the U.S. because the communist and socialist left was weak and did not constitute a direct threat to capital as in Germany or earlier in Italy.  But I disagree. 

This kind of thinking is a mechanical sort of determinism.  The depression was as devastating in the U.S. as it was in Germany.  The German left, although very large, was divided against itself and fighting a kind of civil war within.  And rightist forces advanced politically.  In reality, the European left was in crisis and decline as the depression struck, while the American left, with a much smaller base, was, due to the role of the Communist party, beginning to rise  In the U.S. some representatives of big capital called for a “Supreme Economic Council” to run the economy in the interests of large capital.  Small but potentially dangerous fascist groups began to proliferate, and the Klan remained a force.  Also, capitalists in the U.S. and other countries had looked favorably since the early 1920s on Benito Mussolini, the fascist dictator of Italy, for eliminating the socialist and communist parties and especially “order” in the interests of industrialists and landlords.  There were some who saw in U.S. military figures, especially General Douglas MacArthur, who had brutally suppressed the Veterans Bonus March in the Summer of 1932, as a “strong man” leader

 The Depression was international and Communists organize through the world an International Unemployment Day(March  1930)in the U.S. tens of thousands participate in demonstrations, suppressed by the police, but forcing mass media to at least confront the crisis, which they had been minimizing as just another business cycle “slump”

. Communists following these demonstrations organize national unemployed movement, Unemployed Councils, USA through the country, fighting forced evictions, mostly of tenants in urban areas, launching sit ins at   “welfare offices,” demanding “work relief” for the unemployed and “home relief” for women with dependent children, the handicapped, and also raising a new demand, “unemployment insurance,” leading hunger marches to challenge the capitalist propaganda that “nobody is starving”

. Communists through the  trade union unity league(tuul) continue to struggle to form new unions, inclusive industrial unions  in basic industry where the AFL craft unions refuse to organize, and also struggle to organize migrant farm workers

Communists make anti-racism in the working class and “Negro Liberation” as the struggle for the most oppressed sector of the working class  into major areas of concentration, fighting racism in their own ranks and mobilizing support here and through the world for the Scottsboro prisoners, the most important international anti-racist campaign since the abolitionists publicizing the crimes of the fugitive slave law. Communists become by 1932  the most openly and clearly integrated movement in the U.S. since the abolitionists.  “Black and  White, Unite and Fight” an example of militant CPUSA slogan in this period. Communists fight for integrated industrial unions and, along with many other groups, a national anti-lynching law, playing a central role in the campaign for such a law

    C. The New Deal government and the Politics of Change

1.       Franklin Roosevelt governor of New York, associated with progressive policies, with aides and advisors that include former socialists Francis Perkins and Harry Hopkins,(both of whom hid their earlier socialist party involvements, which were in the pre WWI and WWI period) but with a Democratic party composed of urban machines and Southern reactionaries, wins the presidency and seeks  initially to “bail out” capitalism from the top through policies to control industrial and agricultural prices, establish industry by industry regulation with government support for corporate dominated authorities(state capitalism) but also with significant  early reforms in the interest of the working class, including  the right of workers under the system to organize unions, a federal deposit insurance corporation to protect small savings accounts, limited public welfare programs

2.        Communists initially oppose the major  state capitalist programs and mobilize mass strikes in 1934, including the San Francisco General Strike, the most successful in U.S. history to that time, organizing and coordinating strikes and demonstrations of the unemployed, calling for a national jobs program and for immediate federal relief and for the organization of industrial unions

3.       Losing support from capital, who demand that his government suppress the strikes, Roosevelt , still with widespread support among the working class because of  the early reforms, yields to mass pressure and moves sharply to the left in 1935, supporting a national labor relations law, old age pensions and unemployment insurance, a large public  jobs program, the WPA, including arts, music, and theater programs, a National Youth administration, programs previously associated with Communists and Socialists, although all of these programs are watered down versions of what Communists and socialists had advanced and are further undermined in Congress primarily by Southern Democrats who force “exemptions” of agricultural and domestic workers and others from the programs, and capital itself, which successfully has the programs funded by regressive payroll taxes as against progressive income and corporate taxes.  In some of the debates in Congress, New Deal supporters argue that if this legislation is not passed, especially the labor legislation, the mass struggles may lead to revolutionary upheavals.

Communists and their allies in the labor movement then use the new national labor  act and the social legislation to demand that industrial unions be formed now, arguing that in this new political atmosphere it can be done.  When this campaign is defeating by the dominant rightist craft union elements of the AFL at its 1935 convention, Communist leadership makes an informal and “secret” settlement with Mine Workers leader, John L Lewis, an anti-Communist, but an industrial unionist, to form the CIO, on a pledge that Communist cadre would not organize for the party in exchange from a pledge from Lewis that Communist cadre would not face discrimination at any level in the organizing drives.  Of the first 200 CIO organizers, 50 are Communist party cadre, as activists were then called Many were veterans of earlier organizing drives

Roosevelt then runs on his left 1935 program, which Communists  and their allies in large part had made possible, to win the greatest victory in the history of the Democratic party, carrying 46—48 states, winning 60 percent of the vote, with overwhelming majorities in the House and the Senate, albeit paper majorities.

Now Communists and their allies in labor use this victory to organize, fight and win the most important victories in the history of the U.S. labor movement, both before and afterwards, winning the Flint General Motors Sit-down Strike organizing workers at the largest industrial corporation in the world at the time, winning, through threats of a sit-down strike union recognition at U.S. Steel, the second largest industrial corporation in the world, but also facing a massive attack from all sections of capital, the defeat of some strikes in states like Ohio, where a Democratic party governor elected by labor turns on the workers, and most dramatically the Republic Steel Massacre on Memorial Day, 1937, where the Chicago police of the ruthless Democratic party mayor and boss , Ed Kelley, open fire on peaceful picketers, shooting a number in the back

 1937 also saw a sharp recession, which capitalist media blamed on labor and the New Deal government and which the labor and leading figures in the New Deal government called a capital strike.  Communist activists inside and outside of the strikes and their allies inside government sought to mobilize support for the workers and the strikes at all levels.  The civil liberties sub-committee of the Senate's labor committee, led by Senator Robert La Follette, Jr,  held hearings exposing the use of violence and other criminal acts of corporations against the strikes and workers rights(Communist activists on the staff of the committee played an important role in these actions.  Communists working on the staff of new National Labor Relations Board did all that they could to defend the workers, the strikes, and the trade union movement

Roosevelt responded by neither supporting the repression or the strikes, calling for union recognition and an end to the sit down strikes, policies which further alienated capital(along with being portrayed as a Communist who was now  called in capitalist circles "a traitor to his class"   Labor also demanded more support from the administration, which did not come. Roosevelt turned national attention away from this open class warfare toward the Supreme Court, and largely regained working class support by fighting to reorganize and expand the court, which had blocked labor and social legislations since the 1880s

Roosevelt also acted in 1938 to oppose in the Democratic party anti-New Deal Democrats and replace them with New Deal Democrats, an initiative which like the Court reorganization plan, was defeated, although Roosevelt's subsequent appointments to the Supreme Court and the federal judiciary did begin a process of breaking the power which anti-labor reactionaries had had over the federal judiciary since the Civil War. In the South, Roosevelt faced the fact that millions of Blacks were disenfranchised and that the infamous poll tax was still in effect, disenfranchising  poor whites and thus enabling racist reactionary politicians to maintain their power.

Republicans  made major gains in the 1938 elections, having forged with anti-New Deal Democrats a "conservative coalition" against the New Deal government and labor in the period

The Center -Left Coalition on which the New Deal government had been based does enact one last great advance for the working class