From the AntiFa Trenches, c. 1938 (contd)

The last installment of excerpts from Magil and Stevens' 1938 antifascist polemic, "The Peril of Fascism," focused on some of the fascistic characteristics of the early New Deal, particularly the National Recovery Administration ("We do our part"). This was a particularly interesting observation to me because the hagiography of FDR and the New Deal doesn't allow for these sorts criticisms of the Roosevelt efforts to tame if not end the Great Depression.

It was interesting to me partly because from the time I first learned about the New Deal, I was aware that it was at least partially based on fascist models, and the N. R. A. was among its most fascistic elements. It might be hard to imagine now, but at the time, there were only two activist models for dealing with the recurring Crisis of Capitalism: Communism and Fascism. The Standard Model for dealing with economic downturn and the suffering it caused was for government to do nothing, the theory being that the downturn would be rectified shortly by usual economic means and forces, bugger the sufferers (the herd could always benefit from a good cull, after all. Haw. Haw.)

But the Standard Model was tried during Hoover's Administration -- he was much more of an economic activist than he is usually given credit for, but he (like Obama)  delivered almost all of his activism at the top of the economic pyramid and left those in the middle and those on the bottom to fend for themselves -- and get severely punished if they got out of line.

This installment of Magil and Stevens looks into some of the characteristics of the pre-Depression "boom" and the Hooverite acts against the People:

Revealing the whole character of the "prosperity" era are the estimates of the distribution of income in 1929 published by the Brookings Institution, in a study, America's Capacity to Consume. According to these figures, 36,000 of the wealthiest families -- or one-tenth of one percent of all the families in the United States -- received an aggregate income of 9.8 billion dollars. At the other end of the social scale were 11,653,000 families, 42 per cent of the total receiving an aggregation of about 10 billion dollars -- or approximately the same as that of the 36,000 families at the top of the heap.

...

In the period of apparent prosperity, the weaknesses and contradictions of capitalism, not only in the United States but throughout the world, were combining to make inevitable the crash of 1929. These weaknesses in the New Era were discernable to all who cred to see, but there were not many who were willing to look. Marxists who attempted to call them to the attention of the country were denounced as crackpots too demented to glance at the soaring lines on the stock market charts for confirmation of the New Era of permanent prosperity. The loudest denunciation of these sour prophets of collapse came from the gentry in high offices of the American Federation of Labor, who assured the workers that those who doubted the New Capitalism and the benefits of collaboration with employers were troublemakers in the pay of Moscow.

In November of 1928, workers, farmers, and lower middle class people went to the polls and in overwhelming numbers cast their votes for Herbert Hoover or Alfred Smith -- the tweedledum and tweedledee of capitalism, both closely connected with the most powerful groups on Wall Street. The combined vote of the Socialist and Communist parties was less than half a million.

...

The 1929 crash came as a profound and bewildering shock to a country which had been fed the New Era buncombe. All classes shared in the bewilderment and incredulity, unable to believe that the rosy promise of the New Capitalism could end in the wreckage which they saw accumulating around them.
...

The great majority of workers were desperate and confused; they had been forced by the crisis to abandon the New Era philosophy and they had not yet acquired a clear conception of the source of their difficulties or of the method of solving them. But life, rather than formulated doctrine, dictated militant struggle. Gigantic unemployment demonstrations and hunger marches swept the country, striking panic in the "well-stocked clubs" where bankers and businessmen fearfully discussed the possibility of imminent revolution. The more clear-sighted and progressive sections of the labor movement demanded that the capitalist class shoulder the burden of the crisis, for which it was responsible, and they succeeded in mobilizing large mass movements behind demands such as adequate unemployment relief, social insurance, and a shorter working week without a reduction in pay. In these movements, the Communist Party played a leading and the most dynamic role.

Gradually, under the pressure of its membership, even the top leadership of the A. F. of L. was compelled to revise its position. During three years of acute crisis, Green, Woll, and other chieftains of the A. F. of L. stubbornly opposed unemployment insurance, echoing Hoover's pronouncement that the "dole" was un-American and more degrading than picking scraps of refuse from garbage pails.

...

Hunger and destitution were rampant among those who grew the nation's foodstuffs.

Stubbornly, the farmers resisted foreclosures and fought for farm relief. Farm strikes broke out throughout the rural middle west. Farmers, who had been bullwarks of "law and order," picketed highways with clubs and pitchforks and dragged foreclosing judges from the bench. Throughout the great  corn and hog belt, where private property rights had been regarded as sacred , there arose a cry: "Human rights above property rights" -- a slogan which revealed the profound changes among the farmers of the middle west.

...

The profound unrest of these vast masses of people expressed itself in growing demonstrations for unemployment relief and unemployment insurance, in the farm strikes, in resistance to foreclosures of small homes, in student strikes and demonstrations, in war veterans bonus marches, in the leftward movement of intellectuals. Everywhere there was ferment. Millions began to question the fundamentals of the existing order, vaguely realizing there was something basically wrong with a system which condemned men and women to die of hunger next to warehouses bulging with food and to gather decaying food from garbage heaps while wheat was burned in the fields and vegetables and milk were dumped into rivers.

...

As growing numbers of workers and farmers demonstrated their refusal to starve quietly and loudly voiced their demand for relief, the capitalist class, and the government authorities representing it, increasingly resorted to force. In scores of cities, unemployment demonstrations were broken up with police bullets and tear gas; troops were sent out against strikers; Negro sharecroppers attempting to organize unions were hunted down and lynched; a wave of deportations swept the country; states revived old criminal syndicalism and sedition statutes and professional patriots clamored for new repressive laws.

As the lines on business charts dropped, the number of violations of civil liberties rose. By 1930 the wave of suppression had reached the highest crest since the post-war hysteria of 1921. One survey of civil liberties in 1930 says:

There was a marked increase in 1930 in official and mob violence, a continued and a greater violation of the rights of labor, a larger number of deportations, and increased official interference with the expression of civil liberties... The year brought 25 lynchings, compared with 12 in 1929; 27 cases of mob violence, compared with 5 in 1929; 121 meetings and demonstrations forbidden, contrasted with 52 in 1929; a nation-wide drive against Communists; denial in 6 cases of citizenship to aliens for pacifist or radical views; a large number of deportations, mainly of Communists...

Not since 1921 has official interference with freedom of speech reached such proportions as in 1930... The 1930 cases are exclusive of the police attacks on the Communist-led demonstrations of February, March, May Day, August and Labor Day. Hundreds of arrests took place at these demonstrations all over the country, accompanied by brutal police tactics, resulting in the injury of scores of persons.

An incomplete compilation by the International Labor Defense listed the arrest of 5,851 persons in civil liberties cases -- including 1,137 in strikes, 860 for distributing leaflets and other literature, and 1,703 in unemployment and other demonstrations.

Police raided headquarters of workers' organizations in Detroit, Los Angeles, Chicago, Buffalo, Portland, and other cities, destroying property, seizing private correspondence, and arresting hundreds... in California, where the criminal syndicalism law was invoked for the first time since 1924, eleven organizers of an agricultural workers strike were railroaded to long jail sentences...

Official and mob violence further increased in 1931. The most acute terror prevailed in the Harlan, Kentucky, coal fields where a local regime of fascist terror was established by coal operators in an effort to suppress a walkout by 18,000 mountaineer miners. Twelve miners were killed in the Harlan fields by deputy sheriffs and gunmen imported from the slums of Chicago; scores were wounded; several kidnapped and beaten; workers' headquarters [were] destroyed. In Texas, Iowa and South Carolina, labor organizers were seized in the dead of night by armed mobs (some of them acting with police connivance) and brutally beaten. At Pontiac, Michigan, a "vigilante" mob seized and flogged fiver men who had participated in an unemployment demonstration, and (parroting the methods of the Italian fascists) compelled one of the victims to drink castor oil. The year 1931 also witnessed an intensification of the terror against Negroes in the South, exemplified by the arrest and frame-up of the nine Scottsboro Boys in the spring.

In 1932, suppression and murder of demonstrations and demonstrators intensified, culminating with the violent eviction of the Bonus Army from Washington, DC. 

That's just a taste of how the official and its allied suppression worked in those days. Surely we can see stark echoes of those tactics in the suppression of the Occupy Movement nowadays. And of course the reasons why are very similar. Those who sponsor and own the government were the same forces then as they are now, and they demand the silencing of all but "approved" dissent, and the crushing of any movement which might threaten their hegemony.

We are right back where we were -- except for the fact that there is no Communist vanguard any more -- despite the chattering of some "progressives" who are so fearful one will re-emerge from somewhere in the shadows and take over the pleasant and secure movements for (eventual) change that have long been underway, though more as academic exercises than as real movements for fundamental changes to a failed economic and political system.

"The Peril of Fascism" is written from a CPUSA point of view. It is strikingly familiar, but at the same time we don't see the kind of ferment today as was so paramount then, and one of the reasons is that there is no ideological counter to the rising tide of fascism today as there was then. Fascists will win under the circumstances...

From the AntiFa Trenches, c.1938 (contd)

Unidad de accion en todos los frentes para aplastar al fascismo.
ca. 1938

I find I  really like "The Peril of Fascism" by Magil and Stevens. It's obviously a rush job in the face of what looked to them like the triumphant march of fascism and Nazi-ism over Europe and much of Asia and Latin America in the prelude to World War II, but their primary mission is to try to wake Americans up to the perils of fascism in their midst, and to suggest, not too subtly, that the United States was well down the fascist path itself.

This contrasts starkly with the conventional wisdom then and now that FDR was some kind of socialist, and that the New Deal was some sort of Left Wing Plot to overthrow American democracy and institute an American Soviet. Far from it.

Here's Magil and Stevens to explain:

First Stage of the New Deal

The Roosevelt program even at this stage had certain progressive features, providing partial relief to the unemployed -- which Hoover had refused through three and a half years of unemployment and hunger -- and holding out the promise of collective bargaining. But these progressive features  were heavily overshadowed during the first phase of the New Deal by the big business program. In fact, from a historical viewpoint, they helped to make the program palatable to a people driven by misery and hunger to a point where it was ready, as General Johnson put it, to hang the bankers. An openly reactionary regime such as Hoover's might conceivably have thrust the big business program down the throats of the people with bayonets. The progressive features of Roosevelt's program persuaded the people to swallow the program in its entirety.

Insofar as the first phase of the New Deal carried out the program of the economic royalists, it contained certain definite fascist elements. It was for this reason that the Communists sharply attacked the Roosevelt administration at a time when practically every other political group, including the Socialists. accorded it warm support.

Although the leading plutocratic groups camped for only a brief period within the Roosevelt administration and quickly moved into bitter opposition to it, it is important to examine briefly this aspect of the first stage of the New Deal before passing on to later developments.

The fascist elements in the New Deal program of this period were clearly the handiwork of the financial tycoons who played so important a role in the Roosevelt administration during its first few months. The duPonts, the Aldriches, the Swopes, and others who later rallied under the banner of the Liberty League, occupied key posts in the early New Deal set up and formulated many of the laws which they later denounced as subversive and unconstitutional.

Compare the program of big business as formulated by H. I. Harriman in May, 1932, with the first acts of the New Deal during the "coalition" period. Harriman in May, 1932, demanded government economy; Roosevelt, in March, 1933, pushed a bill through Congress slashing war veterans' pensions and cutting salaries of government employees 15 per cent. Harriman demanded the relaxation of anti-trust laws and the enlargement of the powers of trade associations; the N.R.A. [National Recovery Administration] set aside the anti-trust laws and gave trade associations vast powers to draft codes of "fair competition." Harriman asked for the establishment of an "economic council" to consider the fundamental problems affecting "all business"; Roosevelt set up the Industrial Advisory Board. Harriman demanded the enlargement of the powers and funds of the Reconstruction Finance Corporation; Roosevelt, in the first few months of his administration, increased the capital of the RFC from $3,800,000,000 to $4,450,000,000 and in addition authorized the RFC to issue an unlimited amount of debentures for the purpose of bank stock. Harriman demanded the strengthening of the powers of the President; Roosevelt assumed more powers than any President had exercised in peacetime.

The promotion of monopoly through governmental sanctions was the most conspicuous fascist element in the first stage of the New Deal. The N.R.A. -- fathered, as Professor Moley later admitted, by the Chamber of Commerce -- frankly listed among its major aims "the organization of industry for the purpose of co-operative action among trade groups." Actions taken under the industrial codes were exempt from prosecution under the anti-trust laws. The provisions of the N.R.A. industrial codes -- which for the most part encouraged price fixing and monopolistic practices -- were legally binding and violators were liable to heavy penalties.

Thus, in effect, the N.R.A. placed the full weight of the law and governmental authority behind the big business offensive against small competitors. With the government threatening to "crack down" on small price-cutters, the monopolies and trusts were able to raise prices and force out of business thousands of petty establishments. In March, 1934, the Federal Trade Commission informed the Senate that the iron and steel code strengthened monopolistic practices and price-fixing. Two months later the official National Recovery Review Board, headed by Clarence Darrow, published a report charging that the N.R.A. was encouraging monopoly to the disadvantage of all consumers and was crushing small business.

The implications of this policy of promoting monopoly with the aid of government sanctions were clearly stated by William O. Thompson, a member of the Darrow board, in his letter of resignation to President Roosevelt:

The trend of the National Recovery Administration -- he wrote -- has been and continues to be toward the encouragement as development of monopoly capitalism in the United States ... Its development day by day reveals more clearly a marked trend toward fascism in the United States.

The N.R.A. was later deemed unconstitutional and was shut down, but there was a very heavy propaganda campaign while it lasted promoting the concept of "paying more" for goods and services as a means to support economic activity and recovery. Workers, however, were not to receive higher wages in order to pay these higher prices, and of course unemployment was still at nearly 25%. The devastation to small businesses brought on by the Crash and its aftermath was deliberately and consciously compounded by the advent of the N.R.A. and its monopolistic, corporatist and fascist characteristics.


 

Some Notes: Ways of Thinking

Currently in Salon is a long and intriguing article detailing the bitter rivalry between Hoover and Roosevelt, and consequently between Hooverites and Rooseveltians for the "soul" of America -- well, at least the economic part -- which, as we know, the Hooverites are winning hands down.

I recommend reading it because it helps to challenge conventional wisdom and thinking about the differences between the Hooverite and Rooseveltian viewpoints, and it helps to understand that neither president was quite what their caricatures would have use believe.

For example, I've long felt that something "changed" Hoover from the radical activist who had literally saved Belgium and then Europe and then even the newly hatched Soviet Union from starvation during and after WWI, who would let nothing stand in the way of his mission -- to feed the starving masses -- and who was able to act quite forcefully over agricultural policy in the United States during the War, into someone who was indifferent to the plight of the masses during the Great Depression and who insisted it was neither desirable nor possible for him to act on their behalf. What changed him? The article doesn't really say, but it notes the stark difference in his approach to crisis abroad as opposed to his apparent indifference to suffering at home.



And then there is a long and really quite stunning article in Truthout, translated from the French, that essentially re-envisions the world as it ought to be -- or at least could be if we and our leadership and governments had the vision to go forth.

By all means, sit with them, read, review the past, contemplate A Better Future.

We've been in a downward spiral for many a long year, and the Rightists sense the Bottom is near for them too. Their predatory and destructive natures are ruling the roost so to speak. The way forward is not with them -- it never was -- but finding the alternative path is still a work in progress to say the least.

Whatever it turns out to be, it cannot be based entirely on preserving scraps of the status quo.

The Lessons of 1935

Hazy memories of the Great Depression are often in the forefront of consideration during this seemingly endless and profoundly destructive Great Recession. What would Roosevelt have done, and why isn't Obama doing that now? Why is he making things worse?

I've fallen into that pattern of thought myself from time to time, pointing out with malicious glee that Obama's economic policies are essentially the same as Hoover's -- which I know is not entirely accurate, but the point is to emphasize the contrast between how Hoover dealt with the Great Depression and how Roosevelt would deal with it, and then to note that Obama's economic policies are more aligned with Hoover's than with Roosevelt's.

It's time to revise and extend my remarks.

Things were not quite the way we think they were during the Great Depression. While Roosevelt's administration came up with all kinds of innovative programs and efforts to deal with the suffering of the People, these efforts were quite anemic considering the need.

Republicans and Conservodems fought even modest provisions for the poor and unemployed, and to a great extent, they won the day.

David Cushman Coyle is my source for much of what follows. He is described in the Virginia Quarterly Review as:

An esteemed engineer and economist, Cushman designed the Washington State Capital and sold over a million pamphlets espousing persuasive economic theories. He is best known for his books "The United States Political System and How it Works," "The United Nations and How It Works," and "Uncommon Sense."

He's also considered to be quite an eccentric, even a crank. Yet his insights into what was going on during the Depression, and his considerations about why conditions really weren't improving for the poor and working classes of the day resonate strongly today. Some of the very same factors were aligned against the poor and the working class during the '30s as we see today, and with very similar results.

The takeaway is that Roosevelt was more like Hoover than we know, and Congress was always loathe to tax the rich to pay for programs that would benefit the lower orders.

Hm.

This is from Coyle in 1938; the essay is "Inefficient Efficiency":

Somewhere in the national picture there should be an understanding of the overhead efficiency or inefficiency of the whole system in which the engineers build their machines. Someone besides a simple mountaineer needs to observe that while industries improve their methods, industry as a whole flourishes only for a few years and then withers away, leaving the fine new machines idle and the personnel management with no one to manage. Why should Americans who are thrifty and have saved up a little money so often find themselves destitute? Why should factories stand unused? Why should a great oil field have twenty times as many expensive wells as are necessary for getting out the oil? Why should ten million workers go on for years without producing any valuable thing whatever?

The United States as a producing organization is about as efficient as a factory that has half its machines broken down and half its workers playing pinochle. How does it happen that a poor farmer, whose father made a bare living with a mule, can buy a tractor from Mr. Ford and raise his efficiency to the point where the sheriff takes the farm? There is an island on the Maine coast that supported a fine stone house in the old primitive days when lobster fishermen tended their traps in a dory, standing up and rowing patiently from one trap to the next. But now, in an age of motor boats and ten traps to a buoy, the house is falling to ruin, the farm has grown up to weeds, and the fisherman grows poorer year by year. It doesn't make sense.

Indeed.

In a certain sense, that same sort of thing is happening all over again.

We are right back where we started from; for some of the country, it's been like this for decade upon weary decade, but for most Americans, this sense of being trapped in an ongoing economic decline and debacle is something new. As workers are "shed" and manufacturing declines nationwide or is off-shored, as the public sector withers, as the safety net is shredded, the more the upper 1% flourishes -- as much of it did back in the day.

According to Coyle in 1935 [Harper's Magazine, January, 1935, subscription needed], the great public works programs of the Roosevelt Administration weren't actually doing what they were supposed to do -- jumpstart the economy from its stall and depression and most especially get the unemployment rate down. They weren't doing it because the way they were designed they couldn't do more than provide temporary, stop-gap employment for a declining percentage of workers. That deficiency was built in to the programs due to the concept of "self-liquidation." The programs had to be "self-liquidating." In other words they had to pay for themselves through fees and assessments on their "customers", ie: the poor and the working classes themselves, and on the municipalities and localities that benefited from infrastructure and other improvements provided by public works programs.

And they had to be "self-liquidating" because it was an article of faith that income taxes on the rich could not be raised to pay for what was necessary. Income taxes on the rich could not be raised at all.

Where have we heard that before?

This is not to say that the programs were useless. They just couldn't kill the Depression.

Coyle in Harpers, January, 1935:

By a partial relief of unemployment,
by creating an organization capable of
administering a public works program
of a more adequate type at some future
date, and by initiating two important
agencies for an intelligent treatment of
our national resources, the three billion
dollar fund has more than justified
itself. But it did not kill the depression.
The reasons for its failure to
accomplish its main objective were to
be found not in the administration of
the Act, but in a whole series of economic
misconceptions that were written
into the Act itself. The program
was foredoomed because the elements
of a successful attack on the depression
along this line were not well understood
at the time when the Act was under
consideration.

The most vital error in the public
works program was the idea that self liquidating
public works are a "sound"
instrument of recovery.

In fact, they're not, as Coyle would show.

The theory of self-liquidation springs
from the general assumption on which
the policies of the previous Administration
were based-that expenses must
be chiefly borne by the people with
small incomes, so as to avoidthe necessity
of taxing further the people with
large incomes. A "sound self-liquidating"
project is one that is so arranged
that charges can be laid directly
upon the consumer, so that no expense
will fall on the Federal treasury (and
the income tax). The logic is quite
simple, except for the joker. Major
premise: the Government cannot spend
money indefinitely without getting any
back. (Silent axiom: the income tax
is unthinkable.) Minor premise: the
most direct way to get the money
back, without rousing any dangerous
thoughts about taxation, is by charging
fees to the consumer. Conclusion:
self-liquidating projects are the soundest
projects. The name "self-liquidating,"
like so many other relics of
the New Era, has that fine nutty flavor
that characterized the period. The
idea was that such projects paid for
themselves, because the people who
paid for them were not visible, to the
conservative eye. The consumer, however,
though microscopic in size, is all the business man has to live on.

A bit dense, to be sure, but strikingly familiar, no?

But not all public works can be
made self-liquidating. Schoolhouses
and streets can hardly be made "selfsupporting"
by stationing a policeman
to collect one cent from everybody who
passes a given point. However, there
is more than one way to levy upon the
consumer. Local projects can be paid
for by local taxes or assessments on real
estate, mainly borne directly by the
people with small incomes, or indirectly
by the same people through
higher rents and prices. Under the
late Administration this principle was
called "local self-help," and meant simply
that those taxing bodies that cannot
effectively levy income taxes ought
to be the ones to carry the costs of work
relief, rather than the Federal Government
which might possibly tax the
higher brackets.

There is a piquancy and sadness in these paragraphs, especially so given the current economic situation, and the apparent fact that policy-makers were stuck in the same or a similar frame of mind back then.

Coyle was well aware that the economic policies and the thinking behind those policies were doomed to fail because they could not do what was necessary to break or kill the Depression. In many ways, they would prolong it.

Coyle again:

But not all public works can be
either self-liquidating or local. About
ten per cent of the public works in the
past have been done directly by the
Federal Government. Here the problem
can be quite easily solved by the use
of special Federal sales taxes. Roads
can be financed by gasoline taxes.
Someone has suggested that grade crossings
can be financed by a combination
of taxes on railroad tickets and on automobiles.
Thus the consumer can be
made to take up the forgotten man's
burden, and any risk of having to think
the unthinkable can be avoided. This
was called, under the late Administration,
"broadening the base of taxation,"
and was considered a highly
satisfactory solution not only by conservative
Republicans but also by such
distinguished Democrats as Mr. Hearst.

Note the Hooverite concept of "broadening the base of taxation." And we are right back to that today. Don't raise taxes on the rich, broaden the base of taxation instead. This is practically a universal article of faith among the high and the mighty who rule us.

Broaden the base of taxation instead.

That was a prime objective of the Catfood Commission. Lowering tax rates at the upper end of the income scale has long been a core principle of our rulers. The way to do it, without further reducing revenues, is to decree that more people pay the income tax, and that other taxes (such as a value added tax) be assessed on all, on top of "broadened" income tax assessments. And we will soon see how it works in practice.

Lucky us.

These two concepts, that public works and other Depression fighting projects had to be self-liquidating, and that income taxes on the rich could not be raised to pay for programs and projects to fight the Depression stalled recovery in the 1930's and they're among the factors stalling recovery now.

Yes but, Social Security passed, and Unemployment Insurance was instituted. So there was that.