Massive Unemployment: Proof That Global Capitalism Doesn't Work
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In support of striking workers, unemployed protestors shut down the Briggs plant in Highland Park, Michigan -- it manufactured auto bodies for Ford -- pledging that they would not scab on the striking workers. A march of former and current employees of the Ford facilities in Dearborn, Michigan, made the unusual demand that the company (not the government) provide work for the jobless. For their trouble, they were bloodied by Ford’s hired thugs and five of them were killed.
President Herbert Hoover took similar action. In a move that shocked much of the nation, he ordered Army Chief of Staff General Douglas MacArthur to use troops to disperse the Bonus Expeditionary Army, World War I jobless veterans gathered in tents on Anacostia Flats in Washington asking for accelerated payments of their war-time pensions. They were routed at bayonet point and MacArthur’s troops burned down their tent city.
How the New Deal Dealt
The Great Depression was, however, so profoundly unsettling that the unemployed finally became a political constituency of national proportions. The pressure on mainstream politicians to do something grew ever more intense. The Conference of Mayors that meets to this day was founded then to lobby Washington for federal relief for the jobless. Even segments of the business community had begun to complain about the “costs” of unemployment when it came to workplace efficiency.
Unemployment insurance, work relief, welfare, and public works -- all of which had surfaced in public debate since the turn of the twentieth century -- made up the basic package of responses offered by President Franklin Roosevelt’s New Deal to the inherent insecurity of proletarian life. None were exactly expansive either in what they provided or in their execution, and yet all of them found themselves under chronic assault from birth (as they are today).
The most daring legislation under consideration, the Lundeen bill (authored by a Minnesota congressman), would have provided unemployment insurance equal to prevailing wages for anyone over 18 working part or full time. Though it never became law , it was to be financed by a tax on incomes exceeding $5,000, and administered by elected worker representatives. It was not atypical in its most basic assumption which once would have been thought intolerable -- that unemployment at significant levels would continue into the indefinite future.
Unemployment was now to be ameliorated, but also accepted. Harry Hopkins, who ran the New Deal’s relief efforts, was typical in predicting that “a probable minimum of four to five million” Americans would remain out of work “even in future ‘prosperity’ periods.” Consequently, the new relief reforms were to be considered defense mechanisms designed to recharge the batteries of a stalled economy and to minimize the political fallout from outsized joblessness. This menu of “solutions” has constituted the core of the labor and progressive movement’s approach to unemployment ever since.
“The Natural Rate of Unemployment”
After World War II, unemployment became, for the most part, a numerical and policy issue rather than a social phenomenon. By the 1960s, what once struck most Americans as unnatural and ghastly had been fully transformed by economists and political elites into “the natural rate of unemployment” -- a level of joblessness that should never be tampered with because it was futile to do so and to try would induce inflation.
More recently matters have turned truly perverse. Neo-liberals, who during the Reagan era of the 1980s eclipsed Keynesians as the dominant thinkers when it came to economic policy, were worried that unemployment might not be high enough. It was increasingly feared that, if the ranks of the jobless were not large indeed, both labor costs and inflation would rise, threatening the future value of capital investments. The world, in other words, had turned upside down.