My Alternative Visions radio show of friday, April 16, 2021 discussed the recent Union election defeat at Amazon and placed it in the historical context of the 4 decade long destruction of unions in America as a result of the policy of Neoliberalism over the period.
David Baker, who listened to the show, offered a commentary on the show’s main themes. Baker’s comment follows, along with my rejoinder to his remarks.
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David Baker’s Comment
Impressive but disheartening. Disheartening because I knew so little of modern labor day history. Obviously not a mistake either by our educational institutions or mainstream media but clearly still disheartening that I was exposed to so little labor history. My other comment is that the roots of neoliberalism began with the economic defeat of this country arising out of the Indochina wars. Essentially this country could not have both guns and butter and the overheating of the economy by the war economy pushed prices out of control. That price spiral triggered a serious and successful labor movement and that movement brought on the counterattack on labor called neoliberalism. It is not a mistake that neoliberalism began with Ronald Reagan since Reagan started his political career attacking the labor movement in the film industry in Los Angeles.
Jack Rasmus’s Rejoinder to Baker
Actually, Neoliberalism began in the last two years of the Carter administration. Reagan tax policies were being formulated then by the Business Council, Business Roundtable, and Chamber of Commerce; they were then quickly launched under Reagan. Monetary policy actually began in 1980, when Carter agreed with business to replace the chair of the Fed with Volcker. Free Trade and other ‘external’ policy would have to wait until the late 1980s in Reagan’s second term; and only really implemented by Clinton thereafter in the 1990s.
But industrial and anti-union policy originated in 1979, with the Carter-Corporate imposed deal to resolve the 1979 UAW-Chrysler strike and negotiations. That’s when ‘concession bargaining’ began. Other policies to depress wages were introduced in 1980 by Reagan as well, with the deregulation of key industries legislation. Thus also passed under Carter. Tax policies to encourage offshoring of jobs were developed in 1979-80, but only implemented in 1981 and after.
So both Democrats and Republican elites were responsible for the launching of Neoliberal industrial policies that have devastated unions since 1979, and resulted in the mass offshoring of US higher paid, union manufacturing jobs, and stagnation and compression of real wages ever since 1983.
Yes, David you are right: most Americans, and union members included, have little idea of what has happened under Neoliberalism, why their benefits have eroded, why their wages have stagnated, and why their unions have almost disappeared in the private sector. In exchange for unions, decent wages, and good jobs, Neoliberalism instead has given them cheap credit (& a $12 trillion mountain of debt), multiple low pay service jobs to work more hours per week, the option to put their wives and kids to work to make up for lower wages, and cheap China made goods from Walmart, Etc. to offset the lack of wage income growth.
All that, in exchange for 40 yrs of real wage compression, less coverage & higher cost of healthcare, replacement of pensions with 401k plans, and destruction of their unions.
Destruction of unions and Neoliberal industrial policies are a big cause of the escalation of income inequality in America; the other big cause of rising income inequality has been the financialization of capitalism which has resulted in an explosion of income gains for the wealthiest 1% households and their corporations from financial markets investments. Investing in financial asset markets has meant profitability and returns are far greater than from investing in real assets that produce things requiring more jobs and wages. The shift to financial asset investing has driven wealthy incomes ever higher, while wage incomes have stagnated or fallen.
Add to that the inverting of the tax system since 1980, enabling wealthy financial asset owners of stocks, bonds, forex, derivatives, etc. to enjoy the redistribution of more than a $trillion a year, every year, for the last 20 yrs in the form of stock buybacks and dividend payouts by the corporations they own, which peaked under Trump to $1.3 trillion a year. As wages have stagnated and unions destroyed, 21st century financialized American capitalism has become a giant income redistribution machine!
The tax system + financialization + destruction of unions, wage stagnation and benefits privatization have all resulted in accelerating income and wealth inequality in America. It’s all documentable, in my 2020 book, ‘The Scourge of Neoliberalism’, and before that in my 2005 book, ‘The (Class) War At Home’. And it’s been no accident of history. It was all policies planned in the late 1970s and evolving over the last four decades, reaching an unsustainable crescendo under Trump.
What’s going on now under Biden is a last chance attempt to try to make Neoliberal policies more palatable for workers; to restore it to a more acceptable form. We shall see if the Biden wing of US capital can pull that off. I am not optimistic they will. But history and time will tell. And it won’t take long. In just the next 18 months it will become clear, which is all the time that Biden and the Democrats have to introduce an institutionalized and more acceptable form of Neoliberalism.
But that may be a contradiction in terms: Neoliberalism cannot be made more palatable in the end. It’s longer term dynamic is it can only become more oppressive (i.e. redistribute more income to the wealthy at the expense of the many). Otherwise it cannot survive as the main policy paradigm of US Capitalism.
Thus, longer term beyond initiatives of early 2021, Biden will not be able to restore it to a more acceptable form to the general US populace. By the end of the current 2020s decade, it will more likely be replaced–by either a more oppressive form of capitalist corporatism or by a more progressive, New Deal-like set of policies. The US is therefore in the midst of an historic juncture of sorts during the current first 2 years term of the Biden administration.
2021-2022 appears will be something similar to 1933-34, when Roosevelt had the choice to double down on corporate-first policies in response to the Great Depression, or to turn to New Deal policies that benefited the rest of the country and workers. He chose the latter. Obama had a similar juncture and opportunity in 2009-10 but, unlike Roosevelt, Obama chose to double down on pro-corporate policies. We know the result of that, in terms of both economic and political: Trump. Carter had the same choice in 1979-80, turned to placating corporate interests, and that gave us Reagan and Neoliberalism. Biden is at a similar juncture once again. We shall see which way he turns. Turn wrong and we’ll get another Reagan, or Trump, or almost certainly something even worse.
Dr. Jack Rasmus
April 25, 2021
Dr. Jack Rasmus @drjackrasmus
Jack Rasmus 