On the Decline of the Labor Movement

Steve Fraser provides a review of two books that address the transformations that occurred in the 1970s.

Pivotal Decade: How the United States Traded Factories for Finance in the 1970s by Judith Stein
Yale, 367 pp, £25.00, May 2010, ISBN 978 0 300 11818 6

Stayin’ Alive: The 1970s and the Last Days of the Working Class by Jefferson Cowie
New Press, 464 pp, £19.99, September 2010, ISBN 978 1 56584 875 7

Fraser titles his article Thanks to the Tea Party, a reference to the reemergence, or at least the reinvigoration, of the US labor movement caused by the right-wing assault on unions’ right to exist. Both the books reviewed focus on the 1970s as a period in which the US economy and the labor movement endured dramatic changes. The Stein work is broader based and more relevant to the economic issues.

“As Judith Stein observes in Pivotal Decade, the 1970s was the only decade except for the 1930s during which Americans grew poorer. By the late 1960s, around a quarter of all new investment by US companies in electrical and non-electrical machinery, transportation equipment, rubber and chemical manufacturing was being made abroad. As the new decade began the US suffered its first trade deficit since 1893. By its end productivity had slowed and turned negative; the US share of the world market for manufactured goods shrank by 23 per cent. America’s share of world steel production shrank from 50 to 20 per cent. Only the UK had a lower rate of gross capital formation as a percentage of GDP.”

“Stein argues that this was a fundamental structural crisis, not merely a low point in the economic cycle. Core sectors of American industrial capitalism could no longer compete: plant and equipment were increasingly antiquated; productivity was declining compared to European and Japanese producers, whose revival had been made possible by Cold War imperatives. Trade, currency and other measures favoured Western Europe and Japan even when that meant loading American industry with burdens it couldn’t bear: this was the price of empire.”

This was a turn of events that seemed incomprehensible to political leaders. A response was required, but none was forthcoming.

“None of this happened despite some political and business support. Keynesian orthodoxy had long since abandoned any serious interest in structural economic reform, government planning or frontal attempts to redistribute wealth and income. What began as a political decision aimed at warding off postwar Red-baiters had evolved into an intellectual conviction sustained by postwar prosperity. Democrats and Republicans alike embraced a policy of demand management through the manipulation of tax rates and government spending....Once conventional Keynesianism collapsed the result was stagflation, with simultaneous postwar highs for unemployment and inflation, a combination once thought to be impossible. The old liberal order was discredited and the organised working class blamed for the mess.”

Meanwhile structural changes were occurring in the Democratic Party, the natural ally of the labor movement—changes the Republicans would use to their advantage.

“Revolution inside the Democratic Party – played out first on the streets of Chicago in 1968 – left it even less prepared to respond effectively to industrial and working-class decline. The New Politics embodied in George McGovern’s 1972 presidential campaign was deeply estranged from the labour liberalism of the party’s New Deal wing. McGovern’s core constituencies – anti-war and counter-cultural youth, minorities and middle-class social liberals – were interested in identity politics rather than class politics, in individual rights rather than collective ones. Moreover, they had come to perceive white working-class men as the enemy: racist, patriarchal and jingoistic, fatally tainted by ‘white skin privilege’.”

Fraser attributes to Cowie the notion that the labor movement was never ordained to be long-lived.

“Was this fated? Cowie never quite says so but much in the book suggests that he thinks it was. He stresses the inherent fragility of the New Deal moment. An extraordinary outburst of militant class solidarity established the modern industrial labour movement and provided much of the social energy for the political reforms that helped define the New Deal political order for half a century. But, according to Cowie, this ran against the American grain. After that exceptional – Cowie calls it ‘unique’ – démarche, the social vision narrowed and historic racial, ethnic, occupational/skill and gender divisions reasserted themselves. The trade-union leadership succumbed to the iron law of bureaucracy, becoming estranged from the rank and file and beholden to the Democratic Party establishment. By the time things fell apart in the 1970s the Popular Front enthusiasm of the 1930s was a fading memory.”

Republicans took advantage of these divisions within the populace in their much vaunted—and largely successful—attempt to convert working-class whites to voters more interested in “values” than political empowerment.

“The collapse of the New Deal coalition opened another door as well. Through it walked Richard Nixon. Stein examines the strategy that aimed at making the Republicans the party of the white working class. It was an audacious political move that took advantage of the racial, nationalist, religious and patriarchal resentments and fears unleashed by the 1960s – civil rights, black power and ghetto insurrections, women’s and gay liberation, anti-war protest and defeat in Vietnam, the War on Poverty, affirmative action and busing – and used them to transmute class grievances into cultural ones, resulting in a white working-class version of identity politics.”

Fraser claims that the importance of cold-war anti-communism eluded Cowie.

“A series of fateful decisions made during the five years following the end of World War Two permanently crippled both the social democratic wing of the New Deal and the labour movement itself. The shadow of anti-Communism did away with any thought of universalising the welfare state, establishing state economic planning, or an institutionalised role for the labour movement in the distribution of national income and the day to day management of the economy, finally cracking the non-unionised South, or mounting a frontal assault on the South’s racist political economy and its outsize influence on national politics. Anti-Communist hysteria split the labour movement down the middle and led to the purging of some of its most militant industrial unions. Intimidated into abandoning its role as champion of the working class, it tried instead to create a privatised version of the welfare state through collective bargaining with big industry, cutting itself off from the unorganised black, immigrant and female workers in other sectors of the economy. The politics of fear became an essential part of the repertoire of postwar liberalism, driving every alternative underground.”

Fraser and Cowie both interpret the past and consider the future, coming to two different conclusions.

“Early and late in his book, Cowie refers to America’s two gilded ages: the one that garishly lit up the late 19th century, and the one that began with the rise of Reagan and the financialisation of the economy. These bracket what Cowie sees as the New Deal parenthesis in the longue durée of American history. Before and after that detour the country combined a commitment to self-seeking individualism with a myth of America as the world’s first classless society, an environment hostile to any instinct for collectivism and a graveyard of class consciousness.”

While Cowie projects a bit of pessimism about the future of society, Fraser finds some reason for optimism.

“Cowie’s ‘unique’ moment can be seen as the culmination of, rather than the exception to, a great wave of resistance: the ‘long strike’ that lasted for a hundred years between 1870 and 1970. The labour liberalism of the mid-20th century has it own distinctive historical contours, more proletarian in character than earlier upheavals. However, by transforming outcasts into citizens of a reformed industrial republic, it helped bring that era of resistance to an end, closed down alternatives, calmed energies that once threatened to breach the borders of the capitalist order: Cowie refers to the ‘golden cage of postwar industrial relations’. But what he so richly describes could be seen as the marginalisation, disinheritance and dispossession of those descendants of industrial democracy’s pioneers. Primitive accumulation drove the first Gilded Age: self-cannibalising powers the second. The shift in the centre of gravity of the political economy from industry to finance has bred a demoralised politics of economic underdevelopment, social decline and malignant cultural fantasy. The New Deal moment made a great noise, but it is the near-acquiescence of our own era which is more exceptional.”

Excess breeds a response, and we are definitely in a period of excess.

“Indeed, without trying to read too much into the events in the Midwest and elsewhere, it is not inconceivable that the second Gilded Age is reaching its limit. Demonstrators around America have not been shy about mentioning Tahrir Square in the same breath as Madison. Why long-lived acquiescence suddenly gives way to resistance is always a bit of a mystery. But it happens.”

One can only hope that Fraser’s optimism is not misplaced. The culture of individualism that seems dominant now, and that led to the Southern anti-union bias, is the same culture that led to two centuries if poverty and political manipulation in the South. Individualism and political impotence go together. The wealthy and the powerful understand that and while they preach the doctrine, they are at the same time banding together to ensure that the government is there to protect and further their interests.


The continuing erosion of the wages and purchasing power of the lower half (90%?) of society is a threat to us as individuals and as a society. The only group with a coherent voice to speak out against this is the labor movement. It is time for the counter-reformation.