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American capitalism today advertises itself as the Welfare State. Many of us comfortably expect pensions, medical care, unemployment compensation, and other social services in our lifetimes. Even with one-fourth of our productive capacity unused, the majority of Americans are living in relative comfort -- although their nagging incentive to "keep up" makes them continually dissatisfied with their possessions. In many places, unrestrained bosses, uncontrolled machines, and sweatshop conditions have been reformed or abolished and suffering tremendously relieved. But in spite of the benign yet obscuring effects of the New Deal reforms and the reassuring phrases of government economists and politicians, the paradoxes and myths of the economy are sufficient to irritate our complacency and reveal to us some essential causes of the American malaise. We live amidst a national celebration of economic prosperity while poverty and deprivation remain an unbreakable way of life for millions in the "affluent society", including many of our own generation. We hear glib reference to the "welfare state", "free enterprise", and "shareholder's democracy" while military defense is the main item of "public" spending and obvious oligopoly and other forms of minority rule defy real individual initiative or popular control. Work, too, is often unfulfilling and victimizing, accepted as a channel to status or plenty, if not a way to pay the bills, rarely as a means of understanding and controlling self and events. In work and leisure the individual is regulated as part of the system, a consuming unit, bombarded by hardsell soft-sell, lies and semi-true appeals and his basest drives. He is always told what he is supposed to enjoy while being told, too, that he is a "free" man because of "free enterprise." The Remote Control Economy. We are subject to a remote control economy, which excludes the mass of individual "units" -- the people -- from basic decisions affecting the nature and organization of work, rewards, and opportunities. The modern concentration of wealth is fantastic. The wealthiest one percent of Americans own more than 80 percent of all personal shares of stock [1]. From World War II until the mid-Fifties, the 50 biggest corporations increased their manufacturing production from 17 to 23 percent of the national total, and the share of the largest 200 companies rose from 30 to 37 percent. To regard the various decisions of these elites as purely economic is short-sighted: their decisions affect in a momentous way the entire fabric of social life in America. Foreign investments influence political policies in under-developed areas -- and our efforts to build a "profitable" capitalist world blind our foreign policy to mankind's needs and destiny. The drive for sales spurs phenomenal advertising efforts; the ethical drug industry, for instance, spent more than $750 million on promotions in 1960, nearly for times the amount available to all American medical schools for their educational programs. The arts, too, are organized substantially according to their commercial appeal aesthetic values are subordinated to exchange values, and writers swiftly learn to consider the commercial market as much as the humanistic marketplace of ideas. The tendency to over-production, to gluts of surplus commodities, encourages "market research" techniques to deliberately create pseudo-needs in consumers -- we learn to buy "smart" things, regardless of their utility -- and introduces wasteful "planned obsolescence" as a permanent feature of business strategy. While real social needs accumulate as rapidly as profits, it becomes evident that Money, instead of dignity of character, remains a pivotal American value and Profitability, instead of social use, a pivotal standard in determining priorities of resource allocation. Within existing arrangements, the American business community cannot be said to encourage a democratic process nationally. Economic minorities not responsible to a public in any democratic fashion make decisions of a more profound importance than even those made by Congress. Such a claim is usually dismissed by respectful and knowing citations of the ways in which government asserts itself as keeper of the public interest at times of business irresponsibility. But the real, as opposed to the mythical, range of government "control" of the economy includes only:
In short, the theory of government "countervailing" business neglects the extent to which government influence is marginal to the basic production decisions, the basic decision-making environment of society, the basic structure or distribution and allocation which is still determined by major corporations with power and wealth concentrated among the few. A conscious conspiracy -- as in the case of pricerigging in the electrical industry -- is by no means generally or continuously operative but power undeniably does rest in comparative insulation from the public and its political representatives. The Military-Industrial Complex. The most spectacular and important creation of the authoritarian and oligopolistic structure of economic decision-making in America is the institution called "the militaryindustrial complex" by former President Eisenhower, the powerful congruence of interest and structure among military and business elites which affects so much of our development and destiny. Not only is ours the first generation to live with the possibility of world-wide cataclysm -- it is the first to experience the actual social preparation for cataclysm, the general militarization of American society. In 1948 Congress established Universal Military Training, the first peacetime conscription. The military became a permanent institution. Four years earlier, General Motor's Charles E. Wilson had heralded the creation of what he called the "permanent war economy," the continuous use of military spending as a solution to economic problems unsolved before the post-war boom, most notably the problem of the seventeen million jobless after eight years of the New Deal. This has left a "hidden crisis" in the allocation of resources by the American economy. Since our childhood these two trends -- the rise of the military and the installation of a defense-based economy -- have grown fantastically. The Department of Defense, ironically the world's largest single organization, is worth $160 billion, owns 32 million acres of America and employs half the 7.5 million persons directly dependent on the military for subsistence, has an $11 billion payroll which is larger than the net annual income of all American corporations. Defense spending in the Eisenhower era totaled $350 billions and President Kennedy entered office pledged to go even beyond the present defense allocation of sixty cents from every public dollar spent. Except for a war-induced boom immediately after "our side" bombed Hiroshima, American economic prosperity has coincided with a growing dependence on military outlay -- from 1941 to 1959 America's Gross National Product of $5.25 trillion included $700 billion in goods and services purchased for the defense effort, about one-seventh of the accumulated GNP. This pattern has included the steady concentration of military spending among a few corporations. In 1961, 86 percent of Defense Department contracts were awarded without competition. The ordnance industry of 100,000 people is completely engaged in military work; in the aircraft industry, 94 percent of 750,000 workers are linked to the war economy; shipbuilding, radio and communications equipment industries commit forty percent of their work to defense; iron and steel, petroleum, metal-stamping and machine shop products, motors and generators, tools and hardware, copper, aluminum and machine tools industries all devote at least 10 percent of their work to the same cause. The intermingling of Big Military and Big Industry is evidenced in the 1,400 former officers working for the 100 corporations who received nearly all the $21 billion spent in procurement by the Defense Department in 1961. The overlap is most poignantly clear in the case of General Dynamics, the company which received the best 1961 contracts, employed the most retired officers (187), and is directed by a former Secretary of the Army. A Fortune magazine profile of General Dynamics said: "The unique group of men who run Dynamics are only incidentally in rivalry with other U.S. manufacturers, with many of whom they actually act in concert. Their chief competitor is the USSR. The core of General Dynamics corporate philosophy is the conviction that national defense is a more or less permanent business." Little has changed since Wilson's proud declaration of the Permanent War Economy back in the 1944 days when the top 200 corporations possessed 80 percent of all active prime war-supply contracts. Military-Industrial Politics. The military and its supporting business foundation have found numerous forms of political expression, and we have heard their din endlessly. There has not been a major Congressional split on the issue of continued defense spending spirals in our lifetime. The triangular relation of the business, military and political arenas cannot be better expressed than in Dixiecrat Carl Vinson's remarks as his House Armed Services Committee reported out a military construction bill of $808 million throughout the 50 states, for 1960-61: "There is something in this bill for everyone," he announced. President Kennedy had earlier acknowledged the valuable anti-recession features of the bill. Imagine, on the other hand, $808 million suggested as an anti-recession measure, but being poured into programs of social welfare: the impossibility of receiving support for such a measure identifies a crucial feature of defense spending: it is beneficial to private enterprise, while welfare spending is not. Defense spending does not "compete" with the private sector; it contains a natural obsolescence; its "confidential" nature permits easier boondoggling; the tax burdens to which it leads can be shunted from corporation to consumer as a "cost of production." Welfare spending, however, involves the government in competition with private corporations and contractors; it conflicts with immediate interests of private pressure groups; it leads to taxes on business. Think of the opposition of private power companies to current proposals for river and valley development, or the hostility of the real estate lobby to urban renewal; or the attitude of the American Medical Association to a paltry medical care bill; or of all business lobbyists to foreign aid; these are the pressures leading to the schizophrenic public-military, private-civilian economy of our epoch. The politicians, of course, take the line of least resistance and thickest support: warfare, instead of welfare, is easiest to stand up for: after all, the Free World is at stake (and our constituency's investments, too). Automation, Abundance, and Challenge. But while the economy remains relatively static in its setting of priorities and allocation of resources, new conditions are emerging with enormous implications: the revolution of automation, and the replacement of scarcity by the potential of material abundance. Automation, the process of machines replacing men in performing sensory, motoric and complex logical tasks, is transforming society in ways that are scarcely comprehensible. By 1959, industrial production regained its 1957 "pre-recession" level -- but with 750,000 fewer workers required. In the Fifties as a whole, national production enlarged by 43 percent but the number of factory employees remained stationary, seventenths of one percent higher than in 1947 [2]. Automation is destroying whole categories of work -- impersonal thinkers have efficiently labeled this "structural unemployment" -- in blue-collar, service, and even middle management occupations. In addition it is eliminating employment opportunities for a youth force that numbers one million more than it did in 1950, and rendering work far more difficult both to find and do for people in the forties and up. The consequences of this economic drama, strengthened by the force of post-war recessions, are momentous: five million becomes an acceptable unemployment tabulation, and misery, uprootedness and anxiety become the lot of increasing numbers of Americans. But while automation is creating social dislocation of a stunning kind, it paradoxically is imparting the opportunity for men the world around to rise in dignity from their knees. The dominant optimistic economic fact of this epoch is that fewer hands are needed now in actual production, although more goods and services are a real potentiality. The world could be fed, poverty abolished, the great public needs could be met, the brutish world of Darwinian scarcity could be brushed away, all men could have more time to pursue their leisure, drudgery in work could be cut to a minimum, education could become more of a continuing process for all people, both public and personal needs could be met rationally. But only in a system with selfish production motives and elitist control, a system which is less welfare than war-based, undemocratic rather than "stockholder participative" as "sold to us", does the potentiality for abundance become a curse and a cruel irony:
The Stance of Labor. Amidst all this, what of organized labor, the historic institutional representative of the exploited, the presumed "countervailing power" against the excesses of Big Business? The contemporary social assault on the labor movement is of crisis proportions. To the average American, "big labor" is a growing cancer equal in impact to Big Business -- nothing could be more distorted, even granting a sizable union bureaucracy. But in addition to public exaggerations, the labor crisis can be measured in several ways. First, the high expectations of the newborn AFL-CIO of 30 million members by 1965 are suffering a reverse unimaginable five years ago. The demise of the dream of "organizing the unorganized" is dramatically reflected in the AFL-CIO decision, just two years after its creation, to slash its organizing staff in half. From 15 million members when the AFL and the CIO merged, the total has slipped to 13.5 million. During the post-war generation, union membership nationally has increased by four million -- but the total number of workers has jumped by 13 million. Today only 40 percent of all non-agricultural workers are protected by any form or organization. Second, organizing conditions are going to worsen. Where labor now is strongest -- in industries -- automation is leading to an attrition of available work. As the number of jobs dwindles, so does labor's power of bargaining, since management can handle a strike in an automated plant more easily than the older mass-operated ones. More important perhaps, the American economy has changed radically in the last decade, as suddenly the number of workers producing goods became fewer than the number in "nonproductive" areas -- government, trade, finance, services, utilities, transportation. Since World War II "white collar" and "service" jobs have grown twice as fast as have, "blue collar" production jobs. Labor has almost no organization in the expanding occupational areas of the new economy, but almost all of its entrenched strength in contracting areas. As big government hires more, as business seeks more office workers and skilled technicians, and as growing commercial America demands new hotels, service stations and the like, the conditions will become graver still. Further, there is continuing hostility to labor by the Southern states and their industrial interests -- meaning " runaway plants, cheap labor threatening the organized trade union movement, and opposition from Dixiecrats to favorable labor legislation in Congress. Finally, there is indication that Big Business, for the sake of public relations if nothing more, has acknowledged labor's "right" to exist, but has deliberately tried to contain labor at its present strength, preventing strong unions from helping weaker ones or from spreading or unorganized sectors of the economy. Business is aided in its efforts by proliferation of "right-to-work" laws at state levels (especially in areas where labor is without organizing strength to begin with), and anti-labor legislation in Congress. In the midst of these besetting crises, labor itself faces its own problems of vision and program. Historically, there can be no doubt as to its worth in American politics -- what progress there has been in meeting human needs in this century rests greatly with the labor movement. And to a considerable extent the social democracy for which labor has fought externally is reflected in its own essentially democratic character: representing millions of people, no millions of dollars; demanding their welfare, not eternal profit. Today labor remains the most liberal "mainstream" institution -- but often its liberalism represents vestigial commitments self-interestedness, unradicalism. In some measure labor has succumbed to institutionalization, its social idealism waning under the tendencies of bureaucracy, materialism, business ethics. The successes of the last generation perhaps have braked, rather than accelerated labor's zeal for change. Even the House of Labor has bay windows: not only is this true of the labor elites, but as well of some of the rank-and-file. Many of the latter are indifferent unionists, uninterested in meetings, alienated from the complexities of the labor-management negotiating apparatus, lulled to comfort by the accessibility of luxury and the opportunity of long-term contracts. "Union democracy" is not simply inhibited by labor leader elitism, but by the unrelated problem of rankand -file apathy to the tradition of unionism. The crisis of labor is reflected in the coexistence within the unions of militant Negro discontents and discriminatory locals, sweeping critics of the obscuring "public interest" marginal tinkering of government and willing handmaidens of conservative political leadership, austere sacrificers and business-like operators, visionaries and anachronisms -- tensions between extremes that keep alive the possibilities for a more militant unionism. Too, there are seeds of rebirth in the "organizational crisis" itself: the technologically unemployed, the unorganized white collar men and women, the migrants and farm workers, the unprotected Negroes, the poor, all of whom are isolated now from the power structure of the economy, but who are the potential base for a broader and more forceful unionism. Horizon.
In summary: a more reformed, more human capitalism,
functioning at three-fourths capacity while one-third of America and two-thirds
of the world goes needy, domination of politics and the economy by fantastically
rich elites, accommodation and limited effectiveness by the labor movement,
hard-core poverty and unemployment, automation confirming the dark ascension
of machine over man instead of shared abundance, technological change being
introduced into the economy by the criteria of profitability -- this has
been our inheritance. However inadequate, it has instilled quiescence in
liberal hearts -- partly reflecting the extent to which misery has been
over-come but also the eclipse of social ideals. Though many of us are "affluent",
poverty, waste, elitism, manipulation are too manifest to go unnoticed,
too clearly unnecessary to go accepted. To change the Cold War status quo
and other social evils, concern with the challenges to the American economic
machine must expand. Now, as a truly better social state becomes visible,
a new poverty impends: a poverty of vision, and a poverty of political action
to make that vision reality. Without new vision, the failure to achieve
our potentialities will spell the inability of our society to endure in
a world of obvious, crying needs and rapid change.
NOTES:
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