Capitalism’s current crisis is not the same as the crisis called capitalism. The former was caused by elite efforts to free themselves from constraints on profit making, which not only worsened material conditions for millions of people, but jeopardized their own wealth. The latter is an institutionalized class war waged by elites on the rest of us and is characterized by extreme disparities in material wealth and decision making power. The two combined could prove a detonator for class conflict in the U.S. and some have already begun to fight back.
Conditions for the bottom 80 percent of the U.S. population continue to worsen. Home foreclosures are forecast to be roughly 2.25 million for this year alone, over double the annual rate before today’s housing crisis. The month of November saw the loss of over half-a-million jobs bringing total losses to almost 2 million since the start of recession in late 2007. Two-thirds of these losses occurred since last September and there are forecasts for more. The auto industry is undergoing almost certain restructuring with hundreds-of-thousands more jobs and connected businesses in jeopardy. Republican opposition to the auto bailout plan demanded a 50 percent wage cut for workers implemented over the next few months. Now Washington is considering tapping into part of the $700 billion bailout plan under the Troubled Assets Relief Program (TARP). However, Republican opposition to the auto bailout has further antagonized class relations in an already volatile economic environment and uncertain future.
Among those who have fought back—and won—are the 240 workers in the Chicago Republic Windows and Doors factory. They gained international attention on December 5th by occupying their workplace using Depression-era tactics. The detonator to their struggle was also related to class antagonisms in the U.S. Weeks after taking $25 billion in TARP bailout money Bank of America cut off its line of credit to the factory causing the company to halt operations and terminate its workers with only three days notice and without severance. Their struggle and victory earned them a settlement totaling $1.75 million covering eight weeks of pay, two months of continued health coverage, and pay for all accrued and unused vacation. United Electrical Director of Organization Bob Kingsley described the outcome as "a victory for workers everywhere,"…"an historic victory for America’s labor movement," and "a win for all working men and women who face uncertainty, unfairness and job loss in a troubled economy." And this is just the beginning of another struggle for the Republic workers who have created a new foundation they have named the "Window of Opportunity Fund," dedicated to reopening the plant.
Victory also occurred last October when Jocelyne Voltaire was scheduled to lose her home in Queens Village where she had lived for 20 years, and where she raised her four children. She was unable to keep up with skyrocketing mortgage payments. A donation call went out and within two hours $15 thousand poured in stopping the auction and saving her home. People came together and succeeded where the state and market have failed.
However these victories exist in a past and present sea of rising economic failures. Many analysts see today’s crisis as an accumulation of poor policy choices, bad practices, and ideological decision making, which certainly made conditions worse, but overlooks the huge disparities in wealth and power that existed prior to the current crisis and add to today’s class antagonisms.
In 2005 we saw the largest growth in share of national income for the top one percent of Americans since 1928. In that same year the top 300 thousand Americans collectively enjoyed almost as much income as the bottom 150 million. The top ten percent reached a level of income share not seen since before the Great Depression.
Just last year and amid worsening economic conditions, U.S. CEOs were paid 344 times the pay of a typical worker. The top 50 hedge and private equity fund managers earned more than 19 thousand times as much as the average U.S. worker.
Additionally, the myth of class mobility is nearly bankrupt. Most people stay in the class they are born into and their economic fates are pre-determined. In The State of Working America 2006/2007 (Economic Policy Institute, 2007), while looking at intergenerational class mobility, its authors ask "To what extent are children’s economic fates tied to their parent’s income or wealth? Do most families end up about where they started on the income scale?" and "Is the United States’ less-regulated economy characterized by greater economic mobility?" The authors’ research found that income, wealth, and opportunity are "significantly" correlated across generations. A daughter of a low-income mother has only a small chance of achieving very high earnings in her adulthood. "Almost two-thirds of children of low wealth parents (those in the bottom 20 percent of wealth scale) will themselves have wealth levels that place them in the bottom 40 percent of the scale." Their research also shows that the U.S. has become "considerably" less mobile over time, and has even less class mobility than other advanced economies.
It is important to note and remember that while less mobility is worse, more mobility isn’t the end of injustice. If an elite monopolizes wealth all the time, the fact there is some movement into and out of that elite doesn’t diminish the inequality that rules every moment. Additionally, reforms can also be made to increase class mobility while at the same time make wealth and power disparities greater than they were before the reform and also further strengthen elite rule over their class position.
While the current crisis is characterized by job loss, home foreclosures, and uncertain economic futures, the crisis called capitalism is characterized by class rule, alienation of labor and product, merciless competition, and vicious greed. It is an economic system defined by private ownership of productive assets, market roles for buyers and sellers, corporate divisions of labor, and unfair remuneration schemes. It forces workers to decide between either (a) working under conditions where duration, location, production, and remuneration are out of their control, or (b) suffering a pauperized material existence in dire conditions, without work and pay, and with all the associated social, mental, and physical health costs. Market competition not only drives worker wages and bargaining power downward, it hides the social costs and consequences of consuming and producing social bads, and drives consumption towards private goods rather than public ones, for example education and health care. The current crisis is symptomatic of the institutionalized crisis but not the same thing. To end the current crisis with a return to elite enriching business as usual is better than drowning in catastrophe. But ultimately we need to replace the economics of competition, greed, and class rule with the economics of solidarity, self-management, and participatory classlessness, and our efforts in the present would be well served, for short gain and long-term continuity, by leading toward that end.