We are overdue for a new strategy. Labor and the left are at low points in long decline processes. One cause of that decline has been adherence to a failed strategy, something admitted by AFL-CIO chief Richard Trumka early in 2013. After over 5 years of continued crisis, the audience for new strategic initiatives is larger and more sympathetic that has been the case in decades.

 

Capitalism is generating extreme and widening gaps between the very rich and everyone else, between business’s and other social groups’ influences on government policy, between merely formal and real democracy. Government policies reflect those realities. Unemployment and foreclosures persist as do banks’ and other corporations’ bailouts, subsidies, and tax avoidance schemes. The pay, benefits and security of wage work keep shrinking while top executives resume high salaries and bonuses. What assets some working people still own, chiefly homes and pensions, suffer falling values. States and towns raise taxes and fees while cutting the public services that distressed people increasingly need. Labor and the left lack sufficient power to move Obama or the Democrats in progressive directions, let alone beyond capitalism. Nothing comparable to the politically effective CIO, socialist, and communist movements of the 1930s shapes today’s capitalist crisis. That is why we have austerity policies in the US today rather than the creation of Social Security, unemployment compensation, and a federal jobs program in the 1930s: literally an anti-austerity policy then.

 

However deep today’s capitalist crisis, the crises of labor and the left are worse. We need to acknowledge that reality and answer two linked questions: (1) what part of getting into this situation was our own doing? and (2) what changes in labor’s and the left’s strategy could revive them and rebuild their coalition into a powerful instrument for social change? Part of the answer is that labor’s and the left’s strategic attitude toward capitalism undermined both partners and their coalition. Changing their strategic attitude toward capitalism could, I believe, revive them significantly in the immediate future.

 

The Old Strategy

The strategic orientation of labor and left toward capitalism has focused one-sidedly on the nature and extent of state economic interventions. Thus it stressed taxation, targeting enterprises rather than workers, rich rather than the middle or poor. It favored state regulation of the private economy rather than laissez-faire, public over private enterprises, and state planning/controls over private/free markets. Welfare state, social democracy, socialism, and communism – all understood chiefly in the macroeconomic terms of state interventions - were labor’s and the left’s strategic objectives, albeit understood somewhat differently according to left-right divisions within them.

 

In contrast, they paid little attention to capitalism’s micro level, the internal organization and operation of the enterprise. They only demanded state-enforced limits on employers’ exploitation of workers, deception of customers, and abuse of surrounding communities and nature. The position of capitalist employers (typically boards of directors and major shareholders) as appropriators and distributors of the profits or surplus produced by other people – their workers - went unchallenged. Inside enterprises, the vast majority of workers were totally excluded from those appropriating and distributing functions: not only in private enterprises, but also in the state enterprises often celebrated by labor and the left. Whether employers were private corporate boards of directors or officials in state enterprises, they excluded workers from the appropriation and distribution of the enterprise’s surplus. Rarely did anyone raise the idea of workers themselves becoming, collectively, the appropriators and distributors of the surpluses produced in each enterprise. When that idea surfaced, it was usually dismissed as unworkable, hopelessly utopian, and/or irrelevant to workers’ practical interests.

 

Labor’s and the left’s implicit strategy for the micro level of the enterprise thus reduced to improving the terms of the employer-employee relation for the workers. There was no strategy to eliminate that relation in favor of something better. It was the modern equivalent of struggles during the time of slavery that aimed for better food, clothing, housing, etc. for slaves rather than demanding the end of slavery.

 

In the US, labor and the left thus struggled to organize unions, to bargain collectively with corporate boards of directors, and to win better wages, benefits, and working conditions. Their explicit macro-level strategy sought state interventions toward the same ends. Labor and the left allied union struggles inside enterprises for better wages and working conditions with political struggles for maximum state supports (via taxes, market regulations, welfare payments, subsidized public services, socialized medicine, etc.). They ceded to capitalists the roles of running enterprises and, most importantly, appropriating and distributing the surpluses produced there. Capitalists viewed much of what labor and the left achieved as unwanted costs and obstacles to their goals (increased profits, market share, and growth). Thus, they used the surpluses they kept appropriating to evade, weaken, and undo whatever reforms and gains labor and the left could win.

 

Once labor and the left won New Deal laws and regulations, corporate boards of directors undermined them (having earlier opposed them). At first, given Great Depression memories and widespread anti-corporate sentiments, the boards focused on evading the unwanted laws and regulations while funding the academics, journalists, think tanks, and politicians to shift public opinion in favor of “private enterprise and free markets.” Post-war anti-communism campaigns proved particularly helpful for that shifting. Occasionally, evasion was supplemented by amending or repealing New Deal laws and regulations as in the 1947 Taft-Hartley law.

 

Reagan’s election signaled that the corporate roll-back of the New Deal had assembled sufficient means and adequately prepared public opinion for a direct counterattack. The era of deregulation, neo-liberalism, and revived conservatism had arrived. It continued through the second Bush. Then the current crisis quickly exposed major corporate boards begging for massive government supports for their failed, bankrupt private enterprises. Massive government bailouts of major US corporations (e.g., AIG, Citibank, General Motors, and many more) compromised neo-liberal conservatism. In politics, journalism, and the academy, some spaces and opportunities reopened for neo-liberalism’s enemies. But the absence of an organized, politically focused alliance of labor and the left enabled top policy to oscillate between a very centrist, mild Keynesianism and the austerity programs promoted by major leaders of both parties as well as the Tea Party Republicans.

 

The 1930s and subsequent strategy that did not challenge corporate boards of directors in their traditional positions within enterprises had disastrous consequences for labor and the left. Yet those allies have been very slow and hesitant to criticize, let alone abandon, that old strategy. Thus, they press Obama for laws and regulations favoring workers, especially those unemployed, foreclosed out of their homes, victimized by abusive credit practices, and so on. They demand new government regulations especially of the financial industry, and so on.

 

Yet, such demands for “reforms” again leave unchallenged the position of corporate boards of directors as appropriators and distributors of the surpluses produced in their enterprises. Even if labor and the left mobilized enough workers to achieve such reforms – far from certain – corporate boards of directors would immediately reapply the techniques they developed and fine-tuned to roll back the New Deal. Their think-tanks, lobbyists, mass media connections, academics, and politicians are already nicely in place. Corporate evasions, weakenings and reversals of unwanted new reforms will then happen faster and be more cleverly packaged than their post-1930s precursors.

 

The New Deal’s deconstruction since the war exposed labor’s and the left’s incapacity to secure, let alone advance, the reforms, regulations, and other gains workers won in the Great Depression’s wake. Mass worker mobilizations in the 1930s required, trained, and inspired the militants they produced. When the reforms they had won were subsequently eroded or lost, militants became demoralized, the public reputations of labor and the left deteriorated, and their decline set in. Calling workers now to mobilize and struggle again to win reforms again that corporations will eviscerate again is a losing strategy. To retain the old macro-focused strategy as the current crisis distresses masses of people risks dissolving the remaining organized labor and left formations. For labor and the left, the old strategy neither renews their growth nor revives their coalition.

 

A New Strategy

A new strategy would not leave in place a corporate adversary with both the incentive and resources to first oppose and then undo what labor and the left can win. A new strategy would be micro-focused, aimed at transforming the internal structure of enterprises from capitalist to workers self-directed (WSDE). Enterprise directors must increasingly consist not of boards elected by shareholders, but rather of the collective of all its workers. This new strategy identifies new objects for struggles: the internal transformation of enterprises into WSDEs and the formation of new WSDEs. Transformed job descriptions for every worker would henceforth include both his/her particular tasks in an enterprise’s division of labor and also full and equal participation in its collective board of directors.

 

This new strategy, if successful, would democratically transform production. Workers who were also their own board of directors would make different decisions from traditional boards elected by shareholders: about what to produce, how and where to produce, and what to do with the surpluses their labor generates. Their decisions would be made democratically by themselves rather than being made for them by others (the boards) chosen by still others (major shareholders). Workers who must live with the consequences of board decisions would finally be the ones to make them. Because various residential communities must likewise live with WSDE decisions, and vice-versa, a system of democratic co-determination by both workplace and residential communities would need to be established. Workers functioning in and responsible for democratically structured enterprises will more likely understand and demand parallel democracy and responsibility in their communities and from their government. This new strategy thus fosters a society-wide transition from today’s merely formal to a genuine democracy.

 

The new strategy calls workers to recognize the need for, make, and take responsibility for change in their workplaces, inside the enterprises that occupy most of their adult lifetimes. It gives workers the sequential tasks of either establishing new WSDEs or else transforming capitalist enterprises into WSDEs and then maintaining and developing the new production organization. Beyond their role as the laboring foundation for society’s economic development, they would finally also become its decision-making foundation. This could concretely realize long-standing commitments of labor and the left to workers’ empowerment, liberation, and self-actualization: commitments that too often remained only vague, rhetorical gestures.

 

This new strategy also offers workers their best chance to secure reforms against the undermining reactions of capitalist boards of directors. The micro-level transformation of enterprises would finally give workers the position, incentives, and means to pursue and successfully sustain their traditional macro-level goals (planning, social welfare, greater wealth and income equality, and so on). Workers in WSDEs would be the tax base for government both as individuals and as members of the collective board of directors. State policies would change as a result.

 

The new strategy emerges from the exhaustion of the old as the means to revive an alliance of labor and left adequate to the struggles of the 21^st century.

 

This blog was adapted from an article “Taking Over the Enterprise: A New Strategy for Labor and the Left” by Richard Wolff that was published in New Labor Forum 19(1): 8-12, Winter 2010