Since the current recession broke out in Europe in the early 80s, even the most blinkered supporters of the capitalist system have made comparisons with the recession of the 30s, if only to conclude that it could not and was not going to happen again, at least not quite in the same way. Ironically this has not prevented the same people from using the example of the 30s to hammer home the idea that the only way out of the recession is through sacrifices by working people - in the name of what they hypocritically call "common interest".
Certainly in this country there is cross-party agreement among politicians as to the message that should be conveyed to the working class. The enemy is without, in Japan, in the USA, in the EC countries - anywhere except in Britain. Competitiveness and defence of British industry are the watchwords across the political spectrum. Workers should tighten their belts, accept benefit, wage and job cuts, and allow conditions to be rolled back to what they were fifty or more years ago, in order to help British capitalists to regain, maintain and if possible increase, their share of the world market - just like in the 30s.
This, we are told, is the key to new job creation and improved wages. It is the price that workers should pay to win the right to a decent life at some point, in a more or less distant future. Despite the fact that the working class produces all the wealth in society, its fate should hinge on the ups and downs of a world market over which the capitalists themselves have no control whatsoever. In the days of slavery and serfdom, the Christian religion made life after death the justification for all the sufferings of the poor. Today capitalist superstition makes life after the coming recovery the justification for the increasing degradation of social life.
Yet the 30s tell an altogether different story. Of massive state intervention to clean up the mess created by the capitalists and their crisis, and of the quick recovery of profits - for big business at least - while the screw was being turned tighter and tighter on the working class - both chapters that we have already experienced in the present crisis. It shows that at no point did the working class get any benefit from the intrinsic mechanisms of the recovery which eventually surfaced after several years of deep recession. On the contrary, the first signs of recovery coincided with the beginnings of a free-for-all arms race throughout the so-called "democratic" camp. This allowed the capitalist class to plunder the state coffers and increase their scale of exploitation of the working masses beyond their wildest dreams. In fact the only thing that the working class got out of the intrinsic workings of the recovery was to be driven straight into the butchery of World War II!
No, it was not the recovery in and of itself that allowed the working class to regain some of the ground lost, let alone to make some gains in the 30s. Where gains were made, and there were some, it was only thanks to their fighting for every inch.
While the German working class, by far the world's strongest and best organised working class at the time, was defeated by the fascist tide in 1933, soon followed by the Austrian working class, other working classes took over the flag of social emancipation. From 1934, a wave of militancy developed in many countries across the world, both in the industrialised countries and in the Third World. In some countries, this was to build up into a revolutionary crisis.
In June 1936 over one million workers occupied the largest factories in France and held out until the bosses were forced into granting large wage increases, shorter hours, paid holidays, national industry-wide bargaining and comprehensive union rights. The following month, a political crisis that had been brewing for two years came to a head in Spain when the Catalonian working class stood up against a military coup by organising its own armies, taking over the running of factories and even political power for a while.
These explosions were direct consequences of the world crisis, of the realisation that the capitalist system had failed. Those who were at the forefront of these fights were not driven by despair but by the hope and the will to build a different future. And certainly they had no time for the worshippers of market forces - they knew that, recovery or not, they could expect nothing from the goodwill of the bosses. They were out to get what they wanted themselves.
The 30s were undoubtedly times of hardship for hundreds of millions of workers across the world. But as opposed to the mythology which is floated around today by politicians, they were not times of defeatism. The capitalist class used the depression as a pretext to turn the screw on the working masses. But instead of the resignation they were hoping to find they were soon confronted by determination to fight back.
Even the then two main strongholds of capitalism, Britain and the USA, were affected. Neither the manoeuvres of the world's most experienced capitalist class, in Britain, nor those of the world's richest capitalist class, in the USA, succeeded in preventing a certain radicalisation of the working class. But it was not for lack of trying. All the tricks in the book were used to keep the working masses quiescent, to no avail. Such is the true story of the 30s, the story that the John Major's and the John Smith's of this world would rather have us forget.
Britain's ageing capitalism in crisis
In many ways Britain was a special case among the industrialised countries. Following World War I, although being among the victors, the British bourgeoisie had lost its dominant position over the world market to the United States. As soon as wartime constraints ceased to regulate the world market, the ageing British industry proved unable to compete with the massive new production facilities built during the war and after, both in the USA and in the rest of Europe. Traditional industries like coal, steel and iron, cotton and shipbuilding were deeply affected.
Long before the 1929 crash therefore, tens of thousands of jobs disappeared in Britain's traditional industrial areas. For large sections of the British working class, there was no such thing as the "affluent" 20's. The real unemployment rate probably never went below the 10% mark in that period.
This did not mean that the British bourgeoisie was experiencing the same hardship however. The recession of the early 20's, followed by the defeat of the General Strike in 1926 and the subsequent defeat of the miners the following year, provided employers with enough ammunition to slash wages and conditions. Above all, although already superseded by its American counterpart, British capital still occupied a very prominent position in the world, providing long-term investments as well as financial services such as banking and insurance. The profits produced by these foreign activities - the so-called "invisibles" - added to those produced by the on-going plunder of British colonies, more than offset the dullness of business in Britain.
Due to the state of permanent crisis in Britain's domestic production industries, the impact of the 30% fall in world trade which occurred in the period following the 1929 crash was less for the British bourgeoisie than for most other industrial bourgeoisies. Manufacturing production for instance was hit, but less than half as much as in the USA or in Germany. Much more drastic were the consequences for British finance, since in a matter of three years the "invisibles" were cut by over half. This however still left the British bourgeoisie with a considerable amount of capital to play with and it was able to recoup some of the profits lost by focusing on new activities.
Faced with a world market which could no longer absorb its industrial production, British capital reverted to its long neglected domestic market. Compared to the USA for instance, the huge purchasing power of the middle classes was largely untapped in Britain. So consumer-oriented industries were developed, producing pre-processed food, cars, electrical appliances, washing powders, cosmetics, paint, etc.. Middle-class and, to an extent, working-class consumers were targeted - Department stores such as Boots and Woolworth mushroomed, proceeding to sell the products of these so-called "new" industries.
Given their low overheads - with a high level of mechanisation they required few skills and a comparatively small workforce - profits were high. But the "new" industries were not the only ones to show booming profits. So too did the traditional industries. Paradoxical as it may seem, once the low point of the Depression was reached, in almost every manufacturing sector, production actually grew faster in that period in the midst of generalised poverty and dereliction, than in the previous so-called "affluent" period! This was a measure of how effectively the British bourgeoisie had used the Depression to screw more surplus value out of the working class.
Here too the parallel with the fast increase of manufacturing productivity and the boom of small-scale, high value-added industries, over the past few years, is striking.
"Love on the dole"
British workers found little consolation in the fact that they already had a long experience of a state of permanent recession. In any case it certainly did not make unemployment any more bearable.
Within three years following the Wall Street crash, the dole queues shot up to 3 million or 23% of the working population. This figure only referred to insured workers and as many had never been insured because they had never had a proper job, the real unemployment figure must have been much greater.
Some sections were harder hit than others. Unemployment was over 30% in the mines and the tile industry, over 40% in cotton, cast iron and steel, and over 60% in shipbuilding. But such sections which had been considered protected from the ups and downs of the economy were affected too. Thus the 1931 census revealed that 70,000 clerks were out of work. Some subsequently achieved a fairly precarious existence amongst the growing number of door-to-door sellers, others drifted back into the ranks of the manual working class from where they had often originated.
The resulting social deprivation was still visible long after the highest point of the Depression. For instance, in 1936, a social investigator found that 31% of the working class population suffered from poverty in relatively well-off York. It was much worse in the depressed areas: Scotland, the industrial North of England and South Wales.
In 1933 Arthur Greenwood published what was to become probably the best-known novel about the Depression. Set in working class Salford, by Manchester, "Love on the Dole" was a graphic account of the social deprivation resulting from the Depression. Its vivid description of the daily grind of thousands struggling to make ends meet, of the dole, or the threat of it, the low wages, the frequent visits to the pawn shop, etc.., sounds almost familiar today - in any case not very far from the experience of many working-class families in derelict areas of 1993 Britain.
Of course, just as today, the silent mills and empty shipyards, the photographs of dole queues and urchins playing on cobbled streets were only one side of the picture. The "new" industries were soon booming in England, above all in the Midlands and the Greater London area. And as there was very little hope of jobs in the older industrial areas, many travelled or more often walked to Birmingham or London in search of work. Between 1931 and 1938 alone the population of Greater London increased by nearly half a million. By contrast the population of South Wales, worst hit by the decline of coal exports, fell by 115,000.
Fully 80% of all the new factories built were in the Greater London area. They were often very large, employing thousands as at Hoover in West London or tens of thousands as at Ford in Dagenham. Wages, initially at least, were low and hours long (48 or more). As living accommodation was a problem, workers often had to travel long distances to get to work. The threat of the sack and the dole was there to keep workers quiet. In Morris Motors at Oxford this was referred to as an offer of a "one-way ticket to Russia"....
The mainly unskilled or semi-skilled jobs remained insecure as workers were normally laid off during slack periods. During the rush periods there were constant speed-ups. Along with long working hours, speed-ups were a major cause of industrial accidents which officially totalled 175,000 in 1937 - hardly any improvement on the situation in 1900.
Labour bails out Capital
A Labour victory in the general election of May 1929 resulted in Ramsay MacDonald forming a minority government for the second time. There was no run on the pound after the election. After all, the Labour leadership had already proved its "responsibility" towards capitalist interests. They had played a crucial role in the running of the wartime economy during WW1. The first Labour government in 1924 had done nothing to upset big business and more importantly, Labour's leaders had been instrumental in defeating the General Strike in 1926.
Beyond its election programme promising "social justice", the blueprint for Labour's policies in office had already been drafted back in 1927, during talks involving the then president of the TUC, Ben Turner, and Sir Alfred Mond, chairman of ICI. The gist of the Mond-Turner talks, summarised by the TUC general council itself, was that "the trade-union movement must say boldly that not only is it concerned with the prosperity of industry, but it is going to have a voice in the way industry is carried on". In return for union recognition and various facilities granted to union officials, the Mond-Turner strategy was to integrate union representatives in the running of affairs with the responsibility of enforcing productivity improvements and preventing industrial action.
In line with the Mond-Turner strategy, the role of Labour in government was therefore to facilitate the collaboration between business leaders and union bureaucrats and to take whatever measures were required to improve the "prosperity of industry", in other words profits - another familiar tune strikingly similar to the line promoted today by Smith and Monks.
Even before the slump, the nature of Labour's policies was illustrated by their half-hearted attempt to win back some credit in the coalfields. Not only had miners been forced to take a wage cut after 1926, they had also had their working day extended from 7 to 8 hours on a 6-day week. Labour's election programme promised a reversion to the 7-hour day. In the event they legislated for 7.5 hours which could be "spread over" so that the normal 8-hour day was retained but miners accrued a rest day every fortnight.
With the Depression, even minor concessions of this kind were ruled out. By December 1930, unemployment had leapt to 2.5m. The government was running an increasingly high budget deficit. The enormous burden of repaying wartime debts - partly to America but mainly to the British bourgeoisie itself - was now compounded by the rising cost of maintaining the gold parity of the pound. Unemployment benefits, although totally inadequate for those who were forced to live on them, weighed even more heavily as income from taxes and duties was shrinking at the same time.
To deal with the budget deficit, several schemes emerged from within the Labour cabinet. One, promoted by Arthur Henderson, the Foreign secretary, was to create a 10% import tax. A second one, backed by the union leaders was to devalue the pound in order to boost exports while increasing subsidies to major companies. MacDonald's favoured scheme was however, in line with the advice provided by the Bank of England and City firms, to reduce unemployment benefits. Significantly enough neither of these schemes hinted at the possibility of financing the public deficit out of the capitalists' enormous assets and profits and, in fact, all of them were to be implemented one way or another by MacDonald.
The ground for cuts in public sector wages and unemployed benefits were prepared by the reports in July 1931 of various committees that MacDonald had authorised. In fact in their timing Labour were stampeded into action by a run on the pound in August caused by unrelated factors. When it came to decision time, the Cabinet failed to agree: only 11 out of 20 ministers backed the cuts and MacDonald resigned.
The turn of the screw.
Who was going to form the new government? No party was keen to take on the responsibility of implementing cuts which were bound to be extremely unpopular. Eventually, the Liberals came up with a compromise. They suggested a "National" government along the lines of Lloyd George's war-time cabinet. The Tories seconded the idea and MacDonald agreed to remain prime minister.
An "emergency" cabinet was formed with 4 Labour, 4 Tory and 2 Liberal ministers. Apart from MacDonald and Snowden, Labour ministers included J.H.Thomas, the general secretary of the railway union NUR. While MacDonald and his small group of supporters were being thrown out of the Labour Party, those ex-Labour ministers who had voted for the cuts a few days earlier now opposed them along with the vast majority of backbenchers. Meanwhile the pound stabilised as the cuts were imposed on public sector wages and salaries as well as unemployment benefits.
Reaction to the cuts came from a most unexpected quarter - ratings in the Royal Navy. They had learnt that their basic pay was to be cut by 25% - from 4s to 3s. Sailors on shore leave at Invergordon gathered at the naval canteen and decided to test opinion on all the ships making up the Atlantic Fleet. If the mood was right they would strike - to be indicated by a system of cheering. Support for the strike was so overwhelming that the cheers of 12,000 ratings roared across Cromarty Firth in unison.
For the government and the City it was the deathknell of their strategy for preserving a strong pound attached to the gold standard. Despite a concerted news blackout, foreign holders of sterling panicked. Comparisons were drawn with the mutiny of the German navy in 1918. Within two days sterling was detached from gold, its value falling by over 20% against the dollar.
Six weeks after Invergordon MacDonald called a new general election. Although he seemed to be caving in under Tory pressure, MacDonald may well have sought to get rid of a Parliament in which his former opponents in the Labour party were too strong - in which case it was an unquestionable success.
The election was a contest between the Labour Party, whose time in office had just been a resounding failure, and MacDonald's policies, represented by the National coalition. In the light of Labour's record, what was surprising was not that they lost the election but that they retained as many as 6.65m votes. Far from being a landslide for the National coalition, the result reflected a shift of 3m votes from the shrinking Liberals to the Tories. And the huge majority won in Parliament by the National coalition, and in particular by the Tories, was primarily a product of the British electoral system which reduced Labour to 52 MPs.
MacDonald stayed on as prime minister. Significantly his replacement by the Tory party leader Baldwin following another general election in 1935, did not alter in any way the government's policies, which remained unchanged until the war broke out in 1939.
On the other hand the National Government proved quite prepared to follow in Labour's footsteps and legislate to streamline competition and bolster profits for the benefit of big business. This had started under Labour, in 1931, with the setting up of the Agricultural Marketing Board to the benefit of the big capitalist farmers. By 1936, the National government provided the farmers with subsidies worth £40m per year, a quite enormous sum. Likewise London Transport was set up to remove costly competition on London's buses and ensure steady profits for the operators involved. In the shipbuilding and textile industries excess capacity was ruthlessly pruned, over 6m spindles, for example, being destroyed. The steel industry was reconstructed, concentrated and turned into a gigantic price-fixing cartel co-ordinated by a government body, the Import Duties Advisory Committee, which saw to it that foreign competitors were kept away while domestic prices remained well above world market levels. In other sectors, like in broadcasting, electricity supply and overseas airways, the government intervened directly by setting up public corporations to run them.
None of this state-engineered restructuring was ever designed to create jobs, as was shown by the example of agriculture where 10,000 labourers lost their jobs every year throughout the decade. But it was certainly meant as a mechanism to inject vast amounts of public funds into the private sector, partly in the form of direct subsidies, partly through massive state contracts. It was all about restoring and boosting profits, even if it meant sometimes imposing a measure of discipline among the bosses and going against the deep-rooted suspicion towards state intervention among some individual capitalists.
Looming strikes in textile
After the coal mines, it was in textiles that the full combination of outdated technology and world slump was most felt. Between 1928 and 1934, two-thirds of all strikes were in this industry. The attempts of employers to step up the work rate while cutting wages on what already amounted to a pittance produced head-on collision.
The first major dispute came in 1930 in West Riding where wool textile workers were locked out for two months. Employers had feared that the Labour government might intervene to support the workers. Their fears were unfounded: the Minister of Labour remained "neutral".
In January 1931 Lancashire cotton mill owners pushed for weavers to operate six or more looms instead of the traditional four for little or no extra pay. A third of operatives stood to lose their jobs. Resistance produced strikes and lock-outs. Eventually the bosses agreed to withdraw their plan. But the weavers had only won the first round. In February 1932 an advance guard of mill owners tore up agreements signed with the unions, cut wages and introduced the 6-loom working. When notices of a 12.5% wage reduction were posted in Burnley's mills, the workers struck. Mass picketing closed down every mill. Strikebreakers, known as "knobsticks", were quickly chased out of town. Within 3 days the strike was rock solid with 25,000 weavers out.
During August the union leaders dilly-dallied between negotiating and calling a Lancashire-wide strike. While they did this, weavers all over Lancashire spontaneously struck in support of Burnley. Soon 150,000 weavers were out and the major weaving towns closed down. Mill managers had to be escorted home under strong police escort.
In retaliation the full resources of the state were deployed against the strikers. Mass arrests and baton charges by the police became the order of the day and relief agencies refused to assist strikers. Nevertheless the strikers held solid for a month - two months in the case of Burnley - until the textile unions agreed to refer to government arbitration. The resulting settlement imposed a wage cut and more or less allowed the introduction of the 6-loom system. Its reinstatement clause was largely ignored by the employers. Many lost their jobs and joined Lancashire's army of unemployed who numbered 38% of the working population by the end of 1932.
Rebellion on the dole
There was another section of the working class who were fighting back at the same time - the unemployed who were the main targets of the National Government's budget cuts.
Unemployment benefits bore little comparison to today's DSS payments. There was no cover for rent or anything extra. Everyone on the dole had the same miserly amount to live on, except for regional differences due to the fact that the rates were determined locally. Not only had the National Government reduced these benefits by 10%, they had also introduced a 26-weeks maximum period of entitlement. Thereafter claimants were subjected to a means test which could entail a cross-examination of every source of income however insignificant. Having paid into the unemployment fund for many years, most workers considered this means test as an invasion of their privacy. They were being deprived of what was rightfully theirs. After all, they had not asked to be made redundant.
Prominent among the unemployed was the NUWM (National Unemployed Workers Movement) which was to spearhead most of the unemployed struggles in the 30s. This organisation had been set up in 1921 by Communist Party activists. By 1931 the NUWM, although not a big organisation by any means, had a strong cadre of experienced activists. Many of them were former shop-stewards and union organisers who had been sacked and black-listed for their union activity or their political ideas and often booted out of their unions as well during the witch-hunting period following the defeat of the General Strike.
The first clash took place in Birkenhead, opposite Liverpool on the other side of the Mersey. Owing to the collapse of shipbuilding, it was one of the hardest hit towns in Britain. In August 1932, 1,000 unemployed dockers marched through the streets of Birkenhead protesting against the means test. When a large crowd assembled outside the Town Hall in the pouring rain and had to spend 5 hours before hearing the usual vague promises, they grew angry. They were dispersed by police baton charges.
Two days later another assembly took place, this time organised by the Communist Party outside the unemployment office. When the police attacked with batons again, it sparked off a full-scale riot. The following evening the police broke up a meeting convened to build up support for a bigger demonstration. It led to a night of long drawn-out fighting in the backstreets during which the leading CP activists were arrested. But this in turn set off another night of rioting which could only be quelled after mounted police reinforcements arrived the following day.
Three days later other riots broke out in Liverpool followed by disturbances in West Ham, Croydon and North Shields. But it was early the following month in Belfast that the most violent protests took place, where barricades were built to prevent police entering into working class areas, where the differences between Catholics and Protestants were forgotten as they fought against the common enemy and where it tooks the army's bullets to stop the rioting.
While in Belfast, the Stalinist activists of the Revolutionary Workers' Group played a decisive role in the revolt, in Britain, the NUWM was at the forefont of all these movements. It had 400 members jailed in 1932 alone. As well as local actions, its activists organised hunger marches involving 2,000 marchers from different regions and the bringing of a million-signature petition to London. Its success forced the TUC into organising their own hunger march in 1933. Probably the NUWM's most visible success however came in 1935 when the agitation of the unemployed forced the government to cancel plans to create a single national scale for unemployment benefits which would have resulted into cuts in many working-class areas.
The year 1935 marked the beginning of a new wave of strikes which indicated a rebirth of confidence in the working class. This was signalled by a series of successful "stay-down" strikes in the Welsh coal mines directed against company unions. Miners occupied their pits until they were allowed to join the union of their choice. When management threatened to cut off food supplies being sent down the mines, the miners threatened to hold safety officials as hostages while the strikers' wives staged demonstrations at the pitheads. The coal owners caved in within a fortnight. It was the advance campaign in a war which would end a couple of years later with the trouncing of company unions in the Nottinghamshire coalfields.
In the new, largely semi-skilled industries of the Midlands and the South East the absence of trade union traditions was exploited by the bosses. The leadership of the craft unions which traditionally organised skilled men and that of the general unions organising the unskilled were not prepared to make the resources available which could have led to a big union drive. As a result the factories remained largely unorganised before the war.
But despite the lack of official TUC interest, some progress was made. As with efforts to organise the unemployed, it was usually members or supporters of the Communist Party among the rank and file who led the unionisation drive. Thanks to their efforts important sections of the car industry became unionised as at Ford (Dagenham), Pressed Steel (Oxford) and Lucas (Birmingham). However formal recognition of the union by the bosses was usually not the end but rather the beginning of the fight in these companies. There were no protections whatsoever for the new branches. Retaining the membership as well as the recognition of the union was entirely a question of the balance of forces which depended heavily on the dynamism of the shop stewards and on the extent of union democracy operating on the shop floor.
It was largely owing to democratic organisation on the ground that the engineering apprentices strike in 1937 ended in complete victory despite the hostility of the unions' leadership. Because of increasing mechanisation, apprentices had for years been used mainly as cheap labour as the skills required could be learnt quickly. When they had finished their "apprenticeship" they were given their certificate and often sacked by the company who employed a new batch of apprentices. Unofficial strike action started on Clydeside and spread rapidly all over the country. At the point where they were about to call a national strike, the employers conceded union recognition. The wage-for-age scales subsequently negotiated consolidated the power of the engineering unions and helped lay the foundation stones for shop steward power in WW2.
In the London buses, it was the militant activity of rank and file members of the Communist Party which had built a strong union organisation amongst the London busmen. Already in 1932 the London Omnibus Co had announced plans for wage cuts and redundancies which they had withdrawn in front of the determination of the busmen to fight. This owed nothing to the leader of the Transport and General Workers Union (TGWU), Ernest Bevin, who had tried to negotiate despite a 4 to 1 ballot in favour of strike action.
A year later an unofficial strike was successful in having new, more demanding, work assignments withdrawn. Once again the busmen were opposed by Bevin. Then, in 1937, again opposed by Bevin, 26,000 busmen struck for a shorter working day, just as London was gearing up for the king's coronation! Resisting calls from the busmen to extend the strike and call out trams and trolleybuses, Bevin finally disbanded the elected strike committee and ordered the men back to work, thereby effectively crushing the strike and paving the way for extensive victimisation.
Whether successful or defeated each one of the many strikes which took place in the 30s was a warning signal for the government and the bosses which kept them from pushing their luck too far and accounted for much of the improvement in conditions and wages which occured in the large-scale industry, in particular in engineering, in the latter part of the 30s. More importantly, these fights shaped a new generation of working-class militants who owed nothing to the system and its institutions, nor even to the union bureaucracy, but owed everything to their own fights.
An American nightmare
To the millions of ordinary Americans who heard the radio reports on the Wall Street crash, on 24 October 1929, the news may have seemed distant. After all, out of a population of 120m fewer than 1.5m had invested money on the stock market (and nearly 80% of that was owned by a handful of individuals). As the news came in of ruined speculators committing suicide, and bodies being fished out of the Hudson river, many could think that the sharks had only got what they deserved. But in the weeks and months that followed it became clear that the whole working population of America would be made to pay for the crash.
The speculators were the first hit by the Crash. But who was not speculating in those days? The yield was so high that no company chief executive in his sane mind would have disregarded such a quick - and apparently safe - way of improving their balance sheets. Any amount of cash available was worth playing with, even if only for a day or two, even if that cash had been set aside to pay the week's wages or the next delivery of raw materials. The most greedy companies went a step further by setting up a "finance department" whose job was to make the best of the speculative spree, in most cases using money borrowed from the banks.
As a result many companies who, at face value, had nothing to do with finance suffered heavy losses, heavy enough for a number of them to go bust overnight. This triggered a snowball effect which, at the end of the chain, landed the banking system with an enormous mountain of worthless loan certificates.
Between 1929 and 1933 industrial production halved, back to what it had been in 1921 before the boom. During the same period unemployment rose from 2m on the eve of the crash to more than 15m or nearly one in three of the workforce. It was to take a further 3 years before the figure fell below 10m. And even that was to be only a temporary respite, the boom within the slump, before the figures rose again - to last until general mobilisation for war finally mopped up all America's unemployed.
Both the lower middle class and the working class were affected. With between a half and two-thirds of America's productive capacity lying idle for most of the decade, people poured into low-paid service jobs. An army of salesmen moved around the country seeking out the lucky few with money to spend. Graduates took jobs as pump attendants, park sweepers or worked as waiters. Others who could not pay their rent were reduced to living in shanty towns known as Hoovervilles after the then president's name. With few social agencies, they were forced to rely on charity and soup kitchens.
For a century the towns and cities had been growing. Now there was a drift away from the towns back to the countryside. Families moved in with relatives or travelled round farms looking for seasonal work. But where there was no work, people had to move on. This was the setting for John Steinbeck's novel "Grapes of Wrath". Here natural disaster - disastrously dry summers in the Mid and South West had created the Dust Bowl - was added to man-made economic disaster. As Steinbeck described:
"And then the dispossessed were drawn west - from Kansas, Oklahoma, Texas, New Mexico; from Nevada and Arkansas families, tribes, dusted out, tractored out. Carloads, caravans, homeless and hungry; twenty thousand and fifty thousand and a hundred thousand and two hundred thousand. They streamed over the mountains, hungry and restless - as ants, scurrying to find work to do - to lift, to push, to pull, to pick, to cut - anything, any burden to bear, for food. The kids are hungry. We got no place to live."
Not that California greeted them with open arms. Herded into camps, they could look on as food was destroyed in front of their eyes. Steinbeck again: "The roots of the vines, of the trees must be destroyed to keep up the price. The people came for miles to take the fruit, but this could not be. Men with hoses squirt kerosene on the oranges - angry at the crime, angry at the people who have come to take the fruit."
A "new deal" - but guess who held all the cards...
In the year preceding the crash the election of a Republican president, Herbert Hoover, had been greeted with delight by the stock markets. After October 1929 Hoover's first reaction was to say nothing. Later on, with the crisis deepening, he held a series of meetings with top capitalists designed to bolster confidence. They were actually not intended to take any action. With his supine indifference to the fate of the unemployed, his name became linked to the cardboard cities which were seen as a byproduct of his lack of policies.
In the 1932 presidential election Hoover's Democrat challenger, Franklin Roosevelt, did not represent a different policy. But Roosevelt was a big talker and a shrewd demagogue who could not be seen as responsible for the disastrous years since the Crash. The majority of voters found him preferable to the do-nothing Hoover and he won by a landslide majority, even though his promise of a "new deal" was extremely vague.
In fact what was to come out of the New Deal years was a considerable increase in the role of the state. As Roosevelt pointed out himself, the choice was between a programme of reconstruction under state control and a wave of radicalisation which might destroy the state and the existing order. So, despite the frantic anti-statism that was a trademark of the American bourgeoisie, the state did intervene and it did so in every aspect of social and economic life.
One of Roosevelt's first measures was aimed at bailing out the banks. A government body was set up which virtually took over control of the whole banking system by exchanging massive amounts of state funds against worthless stock. Ironically in the land of liberalism this amounted to a wholesale nationalisation of the banking system, although no-one ever dared to pronounce the word. A few years later, when business got better, the banks were allowed to regain their independence by buying back their stock, at a token price of course.
As it turned out, the "New Deal" did little to improve the lot of the unemployed. Federal agencies provided job creation schemes for unemployed young men doing outdoor manual work. If the wages were derisory, at least food was included. It also provided favourable photo opportunities for the president. Temporary jobs for 4m people were created through the winter of 1933-34. However, come the spring, they were thrown back on the dole. This caused a sharp drop in Roosevelt's popularity.
As a matter of fact, the New Deal's primary aim was not to create permanent jobs nor ease the misery of the unemployed. It aimed to provide a framework in which the capitalist class would be compelled to accept a certain amount of discipline and in return the resources of the state would be used to rescue it from the chaos it had created. The working class would have to be disciplined into accepting whatever sacrifices were deemed necessary. To this end Roosevelt sought the collaboration of the union bureaucracy - a tried and tested method of muzzling the workers in Europe.
Far from being progressive, as they are still often described, Roosevelt's plans smacked of Mussolini-style corporatism. The National Recovery Administration or NRA, which was introduced in 1933, first involved a mechanism to bring every industry to agree on production levels and prices - thereby performing at the scale of the economy as a whole what the National Government had done for the steel industry in Britain. Of course, as compulsion alone was unlikely to work with the bosses, this was to be backed by an intricate system of incentives such as direct subsidies through state contracts, the underwriting of loans by the government, tax rebates, etc.. - there again, Roosevelt was turning out to be MacDonald's twin, only with a lot more cash in his hands.
At the same time the NRA introduced guaranteed minimum wages for workers and a code of working practices - both to guarantee a degree of social peace and to prevent the bosses from shrinking the domestic market further, by cutting wages. Lastly, Section 7a stated the right of all workers to collective bargaining and to join the union of their choice - a measure that was clearly designed to secure the support of the union bureaucracy for the NRA as a whole.
The NRA had a short and rather chequered career before being declared unconstitutional by the Supreme Court in 1935. In a low paid industry such as textiles, workers benefited from the working code. The 40 hour week and $12 minimum wage vanished with the disappearance of the act. The point was that the bosses objected to the paperwork and resented state interference even where they were able to offset higher wages favourably by charging higher prices.
The end of the NRA did not mean the death of Section 7a however. Given the political tension as a result of the slump and the explosion of strikes following the passage of the act, officials within the Roosevelt administration sought to prevent industrial unrest from getting out of control. The new National Labor Relations Act, or Wagner Act, upheld the right of workers to join a union. It banned unfair practices used by management such as forcing workers to join company unions or making employees promise not to join a union.
From the point of view of some ambitious union leaders, such as John L. Lewis, the leader of the United Mining Workers, it was the green light to shake the hold that the old craft unions of the American Federation of Labour still retained on the union movement. But as it turned out, section 7A and the Wagner Act provided an opening for millions of non-skilled workers who had been left aside so far by the craft unions and were seeking to defend their interests. And the way it happened certainly did not fit exactly with what Roosevelt or Lewis, let alone the bosses, had in mind.
The pioneer strikes
By the beginning of the 1930s the American Federation of Labor or AFL had been in existence for nearly half a century. Its members were overwhelmingly the old skilled or craft unions and the AFL leaders deliberately sabotaged any attempt by unskilled labour to organise. This meant that the vast majority of American workers were left to their own devices.
In 1933 the numbers of strikes began to rise sharply. In January there was the first major strike in the Detroit car industry. 10,000 workers at Briggs manufacturing demanded "safe and sanitary" working conditions "particularly for women". The owner claimed it was a "communist plot". Strike leaders were arrested by the police and then handed over to company thugs for a beating. Afterwards they were kicked out of town. With the friendly cooperation of the AFL's leaders, the automobile bosses hoped to keep Detroit's car workers under their thumb.
In the summer there was a bitter textile strike in Philadelphia over union recognition. The National Labor Board intervened. It was the first test of negotiating machinery set up under the NRA. In the meantime, faced with a miners strike in Pennsylvania which threatened to sabotage his plans, Roosevelt intervened. In the end the coal owners recognised the union, doubled the wages and granted a 40-hour week.
From this point on the class struggle took a more radical turn and a series of successful radical strikes marked the beginning of a new period. Not surprisingly those who came to the fore as initiators and leaders of these strikes were mostly political activists who were influenced by communist ideas - those of the Communist Party, of the American Trotskyist organisation and radical groups like Muste's American Workers Party.
It started in February 1934, at the Auto-Lite factory in Toledo (Ohio) where workers struck for union recognition and a 10% pay rise. The company reneged on the first settlement and the strike resumed in April. By May two armies confronted each other - striking workers led by members of the radical American Workers' Party and assisted by unemployed workers, opposed by the police and company men on the inside. On May 23 the so-called "battle of Toledo" began. The company men discharged tear gas, iron bolts, water hoses and occasional gunfire. The workers responded with a 7-hour barrage of stones and bricks and then managed to occupy the factory for a while. The next day National Guards arrived. They were confronted by an angry crowd who forced them to retreat. The guards then opened fire killing two demonstrators. At this stage the strike spread to the rest of the town and a general strike threatened. But the threat was enough to bring the employers to cave in, granting a wage increase and recognising the local union.
Simultaneously the longshoremen's strike was unfolding in San Francisco. Here again workers had to take on the local officials of the AFL as well as the employers. After endless, fruitless talks the longshoremen led by local Communist Party activists who had worked for years on the docks went on strike despite the opposition of the union. The strike spread rapidly all along the Pacific Coast, as far south as Mexico, as far north as Canada, mainly thanks to the links established beforehand by the CP leadership of the strikers. Teamsters struck in solidarity. When the strikers rejected a settlement agreed by the union officials, the employers tried to bribe the strike leader with $50,000 - to no avail. Thereafter the port authorities resorted to violence. Drafting in 1,500 scabs, they declared the port open. This provoked an attack from the longshoremen who were shot at by the police. One striker was killed. Three more were killed two days later. A general strike was now inevitable. For 3 days the city was at a standstill. It was called off only after both sides had agreed to arbitration. The results were entirely satisfactory to the longshoremen who won the 6-hour day, 30-hour week, agreed overtime rates and just under the dollar an hour rate they had demanded.
In Minneapolis the Teamsters' (or truckers') strike for union recognition and higher pay was also underway during the same period. In the city where the bosses ran an extremely efficient strikebreaking Citizens' Alliance, it was to prove the first successful strike for decades. Under the leadership of five Trotskyist activists the Teamsters' local was to increase its membership from 75 to 3000 in less than two months. But even that was not the main aspect in the Minneapolis strike.
Of key importance was the democratic organisation of the strike which was led from beginning to end by a 75-strong strike committee elected by all sections of workers involved, with its own daily newspaper. The strikers knew no sectional or industrial boundaries. It was a battle between the working class of Minneapolis and theirs exploiters. All groups of workers were brought into the fight, including the unemployed, and not just for the sake of supporting the Teamsters, but in order to fight for their own interests. For those who took part in this battle it was a unique experience of a working class acting as a class rather than as a collection of trade groups.
The violence of the police who on one occasion killed 2 and wounded 67 strikers, proved to be no match for the mass organisation of the workers. There again, the bosses had no option but to cave in and, in the words of a leading member of the Citizens' Alliance, to "turn over the town to the union".
The CIO rides the tide
Faced with this wave of radical strikes, what was the AFL leadership to do, since opposing them had prove a complete waste of time? John L. Lewis, having seen his own union grow from 75,000 to 500,000 in 1933 as a result of the strike wave, urged that they should go with the times and start organising the non-skilled workers who made up the vast majority of strikers in the 1934 wave. His main argument had nothing to do with working-class interests and came down to saying: if we don't do it, the "reds" will. Ironically, although a staunch anti-communist who knew how to talk to other anti-communists, Lewis was soon to embark on a lasting collaboration with Communist Party activists, thereby showing that his opportunism was after all stronger than his anti-communist prejudices.
In the end, when the AFL leaders refused to set up new industrial unions, he and other industrial union leaders broke away from the AFL and set up the CIO or Committee for Industrial Organisation which immediately embarked in the setting up of industrial unions.
It was not long before the CIO was tested. In January 1936 Lewis was called in to Akron, America's rubber city, where bosses had torn up agreements made with government and AFL representatives. He spoke of Goodyear and the others as "enemies" who had to be forced to give up a share of their wealth. In the resulting successful strikes a new workers' tactic was introduced - the sit-down strike or plant occupation, which first originated during the post-war strikes in Italy but seem to have been re-invented in Akron. The major advantage was obvious in that it prevented scabs being brought in through the back entrance.
The biggest test of the CIO came a year later - the General Motors strike in January 1937. GM was a "union-free" company operating a comprehensive system of spies and thugs among its workforce. Initially the new CIO union, the UAW (United Auto Workers), had to be set up underground, using strict conspiratorial methods in order to avoid the clubs of GM's thugs. All this preparatory work was done by a few UAW organisers who were members of the Communist Party.
Eventually workers took the initiative by occupying their plants in mid-winter. The movement started in Atlanta against the suspension of a worker for wearing a union badge. A few days later, the Cleveland factory joined in against a cut in the hourly rate. Finally the strike reached Flint in Michigan, GM's stronghold. From there the strike spread to all of GM's body plants. Soon 140,000 workers in 14 plants across the land were involved. The heart of the fight was Flint. There several hundred workers stayed in the factories throughout the 44 days of the strike and were supplied with food and changes of clothing by their families. Management turned off the heating and tried to freeze out the workers. The police was called in using tear gas to smoke the strikers out. Not only did they fail but they were given a beating by the strikers and by the women's flying squadrons who were armed with sturdy 3-feet long wooden clubs - this was to become known as the "battle of the running bulls"....
As the call went out for the National Guard to intervene, the governor refused to sign the order. He was afraid of the backlash. So was Roosevelt. Pressure was put on GM's bosses to negotiate. With the competition eating up their markets, they finally capitulated on the question of union recognition.
The GM strike proved to be much more far-reaching than was initially expected. Following the strikers' victory, US Steel, the largest US steel company, approached John Lewis with an offer to recognise the CIO, probably out of fear of having to face a confrontation on a similar scale. Other companies were to follow this example, although some like Ford were to hold on until the 40s or even later.
In 1937 nearly 2m workers were involved in 4,650 strikes with the loss of 28m working days. The impact of the GM strike was shown by the fact that 460 of these strikes were sit-downs. It was the high point of a struggle which had been gathering pace steadily over the previous five years. Union membership grew by over 4m within 2 years. By the end of the 30s the 40-hour week was the norm in the new industries at least and union recognition was effective in thousands of companies.
Right from the beginning, the CIO leaders had never concealed where they stood. They were in favour of a "reasonable" collaboration between labour and capital and, in their view, Roosevelt and the Democratic Party were the best embodiment of that aim. As long as the wave of militancy lasted, they were prepared to ride it, both as a means to build their own influence and to be in a position to call the stops in case the situation got out of hand.
But the more the CIO leaders consolidated their influence, the more they became open in their support for Roosevelt however, the more reluctant they proved to allow strike movements to develop to the full. This was already visible when they pressed the GM strikers to go back to work without the company making any concessions on wages and conditions. It became blatant in March 1937 when they called off the occupation of the Chrysler factories on the basis of mere promises. And by 1941, with a much lower level of militancy in the country, the CIO leaders came out openly against strike action both at Ford's and at Bethlehem Steel. In both cases, workers struck regardless and forced the companies to cave in, but this time it was despite the CIO leadership.
The gains which were made in that period however were considerable. They had nothing to do with the New Deal legislation nor with the relative improvement in the economic situation. Unquestionably they were the result of the determination of millions of workers and the achievement of the largest wave of militancy ever seen in the States and probably in the world.
Determined fights and lost opportunities
What became of the wealth of determination and fighting spirit displayed by the working class in the 30s? And what became of the generation of militants who were shaped by these struggles?
Despite its visible shift against workers' militancy, the CIO leadership retained much of its influence among the working class. This was partly due to the attitude of the Communist Party whose activists had been so prominent in building the CIO and still retained many leading positions. As part of Stalin's policy of seeking the friendship of Western governments, the Communist Party had consistently wooed both the CIO leadership and the Roosevelt administration. While there were undoubtedly lots of illusions in the working class as to the real nature of the CIO leadership and Roosevelt's regime, the Communist Party did its best to feed these illusions instead of fighting them. And much the same could be said in Britain about the allowances made by the Communist Party towards the so-called "left" in the Labour Party and the union bureaucracy.
Both in the USA and in Britain, many among the best militants of that generation ended up supporting the war effort of their own bourgeoisie during World War II, in the belief that, as the governments argued, this was a genuine war between democracy and fascism. In this too the Communist Parties bear a crucial responsibility.
After Hitler's invasion of the USSR, the Communist Parties abandoned almost overnight their condemnation of the war as an imperialist war, which it was, to become the most vocal supporters of the Allies' camp. Not only did they give unconditional support to the war effort, they also gave unconditional support to the anti-working class policies of their own capitalist class. To the extent of becoming the most vocal opponents of any form of class struggle. In the case of the USA, the Communist Party even came close to dissolving itself into the Democratic Party.
The Communist Parties organised in their ranks or at least influenced most of the best militants of the 30s. Compared to the desperate weakness of the Trotskyist organisations at the time, the Communist Parties had an enormous capital of credibility even though their membership was modest. Modest, maybe, but in Britain for instance, the CP had at least four times as many members in 1936 as all of today's left groups put together, and maybe ten times more influence among workers.
The American Trotskyists who led the Minneapolis strike were able to do so only because there was still at that point a political vacuum nationally, and even more so locally. These circumstances allowed the Trotskyist activists to put their ideas to the test in front of the working class and to offer workers not just different techniques in strike action, but an altogether different perspective based on the conscious participation of workers in organising their struggles and on uniting their ranks across all industries, on a class basis.
But once the CIO was set in motion, once the strike wave started to involve hundreds of thousands at the same time throughout the USA, the tiny number of Trotskyist activists - most of whom were intellectuals - and their limited influence made it impossible to even put across a similar perpective so that it would be heard and understood by the workers in struggle. From this point of view alone, the existence of a genuine and significant revolutionary proletarian movement in the USA in the early 30s would have made a world of difference. Instead the Communist Party was alone in being seen to the left of the CIO leadership, and the most radical policy on offer to the radicalised workers remained that of Stalinism.
Likewise in Britain. A movement like the 1937 apprentices strike evolved spontaneously the sort of dynamism and explosive power that could have broken open the tight sectional barriers imposed by the union bureaucracy on the British working class. Had one of the scattered and tiny Trotskyist groups been able and willing to offer such a perspective to the strikers (and there were some revolutionary groups around the strike), it would have been pityfully impotent as soon as the strike spread ouside Glasgow. This fact alone left the left union bureaucracy and the CP leadership with a free hand to channel the militancy of the strikers towards "safe" objectives.
Prepare for the struggles to come!
History does not repeat itself. True. The explosive potential of the 30s may not exist in the 90s. But what if it does?
Two years after the defeat of the General Strike, just a year after the defeat of the miners, 1929 Britain was probably seen at the time by activists, and even more so by rank-and-file workers, as the least likely place for any kind of social unrest, on whatever scale, to happen. Yet the textile industry went through a series of spasmodic strikes while unemployed workers started marching and rioting in the North. And who would have dreamed in 1929 of the 1934 strike victories in the States, let alone of General Motors backing down in front of an industrial union?
Those who complain endlessly today about the law stifling the working class should remember that in the States, while the law sounded vaguely favourable to workers after 1933, in many companies anyone even mentioning that law would have been sacked on the spot and would have considered himself lucky not to be tarred and feathered into the bargain. As to resorting to the courts, when judges sat with the company owner on the committee of the local Citizens' Alliance, was pointless.
Circumstances may help of course. The NRA undoubtedly did in the USA, but not in the sense of providing any gains whatsoever for the working class, only in the sense of boosting its morale. But so did the Invergordon rebellion in Britain and it was outside the law to say the least!
Likewise, improving economic conditions may boost the morale of the working class. But does it have to mean that working class activists should spend their time reading the Financial Times until the sacred economic indicators show some optimism? Although if they did, they would probably get it wrong anyway... To spot an improvement in the American economic situation in 1934 may be possible today, in hindsight, but was it the case seen from Toledo with the eyes of an Auto-Lite worker at the time?
In periods of economic crisis, the working class is bound to learn faster than in periods of affluence. Today, as in the 30s, any worker knows at the back of his mind that if he wants something from the bosses he is more likely to get it by helping himself, and even more likely by having a hundred thousand workers doing it together.
The issue for us today is not whether history will repeat itself. Nor is it to discuss endlessly what economic, political or legal factor is most likely to spark off a fightback from the working class against the capitalists' greed. Because there is no answer to such a question.
The issue is to be convinced that there is no magic trick and that nothing short of a fightback on a significant scale will stop the bosses from turning the screw on the working class. It is to be convinced that this fightback can take place at any time, but also that everyone can find himself in a position to play a part, however modest, in triggering it.
The issue is to be convinced that when the working class starts fighting back, it is vital for it, and for the future of society and humanity as a whole, that workers have another perspective to choose than the narrow sectional or electoral channels which are always offered by the reformist leaders, even when, due to circumstances, these leaders disguise what they really are by using a radical language or sometimes by leading radical movements. That it is vital that a revolutionary perspective, a perspective aiming at changing the world, should be visible and available for workers to use even if it is only to be used to fight for wage increases for the time being. And finally, for this to happen, that revolutionary ideas are already a living element in the life of the working class, represented by committed fighters whose credentials have already been established.
Such are the lessons that the working class can draw for today from the battles of the 30s. We will use them.