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Massive Unemployment: Proof That Global Capitalism Doesn't Work

We may be witnessing the birth of a new permanent class of the marginalized.

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Unemployment as a recurring feature of the social landscape only caught American attention with the rise of capitalism in the pre-Civil War era.  Before that, even if the rhythms of agricultural and village life included seasonal oscillations between periods of intense labor and downtime, farmers and handicraftsmen generally retained the ability to sustain their families. 

Hard times were common enough, but except  in extremis most people retained land and tools, not to speak of common rights to woodlands, grazing areas, and the ability to hunt and fish.  They were -- we would say today -- “self-employed.”  Only when such means of subsistence and production became concentrated in the hands of merchant-capitalists, manufacturers, and large landowners did the situation change fundamentally.  A proletariat -- those without property of any kind except their own labor power -- made its appearance, dependent on the propertied to employ them.  If, for whatever reason, the market for their labor power dried up, they were set adrift.

This process of dispossession lasted more than a century.  In the early decades of the nineteenth century, its impact remained limited.  The farmers, handicraftsmen, fishermen, and various tradespeople swept into the new textile or shoe factories, or the farm women set to work out in the countryside spinning and weaving for merchant capitalists still held onto some semblance of their old ways of life. They maintained vegetable gardens, continued to hunt and fish, and perhaps kept a few domestic animals. 

When the first commercial panics erupted in the 1830s and 1850s and business came to a standstill, many could fall back on pre-capitalist ways of making a living, even if a bare one.  Still, the first regiments of the reserve army of the unemployed had made their appearance.  Jobless men were already roaming the roads, an alarming new sight for townspeople not used to such things.

Demobilizing the Workforce Becomes the New Norm

When industrial capitalism exploded after the Civil War, unemployment suddenly became a chronic and frightening aspect of modern life affecting millions.  Panics and depressions now occurred with distressing frequency. Their randomness, severity, and duration (some lasted half a decade or more) only swelled the ranks of the reserve army.  Crushing helplessness in the face of unemployment would be a devastating new experience for the great waves of immigrants just landing on American shores, many of them peasants from southern and eastern Europe accustomed to falling back on their own meager resources in fields and forests when times were bad.

The very presence of this “army” of able-bodied but destitute workers seemed to catch the essential savagery of the new economy and it stunned onlookers.  The “tramp” became a ubiquitous figure, travelling the roads and rails, sometimes carrying his tools with him, desperate for work.  He proved a threatening specter for villagers and city people alike. 

Just as shocking was a growing realization -- made undeniable by each dismal repetition of the business cycle -- that the new industrial economy wasn’t just producing that reserve army, but depended on its regular mobilization and demobilization to carry on the process of capital accumulation. It was no passing phenomenon, no natural disaster that would run its course.  It was the new normal. 

Initial reactions were varied and dramatic.  Local governments rushed to pass punitive laws against tramping and vagrancy, mandating terms of six months to two years of hard labor in workhouses.  Meanwhile, the orthodox thinking of that moment raised steep barriers to government aid for those in need.  During the devastating depression of the 1870s, for instance, President Ulysses Grant’s Secretary of the Treasury put things succinctly: “It is not part of the business of government to find employment for people.”

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