The “Other” Aspect of Capitalist Domination. “Democracy” in Action in the United States

On November 3rd, Roosevelt broke all records. He won 46 out of 48 states in the election of the “presidential electors” tasked with appointing the president who will take office next year. This second election was a mere formality, after all.

Presidential electors are elected in numbers proportional to the population of each state—ranging from 47 electors for the state of New York to 3 for each of the six least populous states. Thus, out of an Electoral College of 531 electors, Roosevelt would face opposition from only the 6 votes of the states of Vermont and Maine. An overwhelming success unparalleled in the annals of presidential elections for at least a century.

If the votes cast for each party were to be tallied, the picture would change: out of 45 million voters, Roosevelt’s party secured 27 million—approximately 60%—while the remaining 40% (16 million) went to the Republican Party and other parties that garnered few votes.

First and foremost, a few words must be said about the two traditional parties—one called “Democratic ”—for a party that was the voice of the agrarian slaveholders of the South and that, time and again, has proven to be the most reactionary—and “Republican”—in a country where there is no monarchist tendency and never has been—seem to have been chosen deliberately to create confusion. Both are naturally bourgeois parties that, in accordance with the tenets of the purest democracy, regularly alternate in power—as is the case in certain European countries, such as England with the Whigs and Tories—yet with a distinctly American twist: not only are most offices (starting with the judiciary) elective, but employees and civil servants lack job security, and the victorious party hastens to share the spoils of power among its members.

 The historical and economic reasons that led to the creation of these two parties have gradually faded, eventually merging into one. Only contingent factors can distinguish between these bodies—instruments of banking, industrial, and commercial pirates.

The New Deal is one of those contingencies that contributed to increasing confusion not only in the bourgeois camp but also in the proletarian camp.

One seeks to see the Democratic Party as the expression of the Rockefeller industrial-capitalist bloc, and the Republican Party as that of the financial predators—the Morgans, the Melons, and the DuPonts, the latter being the party’s designated financier. Today, the Republican Party represents the interests and aspirations of that segment of the bourgeoisie which is satisfied, wishes to “digest” in peace, and fears any innovation, whereas the Democratic Party represents the “progressive” wing of the bourgeoisie, which seeks to adapt to the exigencies of the moment in order to avoid an awakening of the masses. But while the Republican Party is backed by the country’s most reactionary elements—the “merchants of death” of the Liberty League and pro-fascists like W. H. Hearst with his 28 daily newspapers—lining up behind the Democratic Party are the Southern “slave-drivers,” the Tammany Hall pro-fascists, and their Italian-American fascist counterparts; for both sides, the goal is essentially to find the best way to serve capitalism. Republicans, being in the opposition, criticize the Democrats for their “intervention” in industry, the restriction of agricultural production, and the increased government control of the economy—though it remains to be seen whether, had they held power, they could have acted any differently.

There is a certain difference between the two parties in their attitude toward the labor movement: the New Deal, with its codes and arbitration boards, allows for an apparent improvement in the workers’ lot, even though inflation strips them of the benefits conferred. The Republican Party, on the contrary, advocates a frontal attack on the living conditions of workers, coupled with a frontal attack on trade unionists. As for foreign policy, the Republican Party agrees with Roosevelt’s policy of promoting reciprocal trade agreements with other countries, while declaring itself in favor of “absolute neutrality”—and “non-intervention”—at least until the next conflict.

We have already discussed Roosevelt’s “constitutional” dictatorship in Prométéo. Following American capitalism’s attempt—during 1932 and early 1933—to maintain its market dominance through mass layoffs, wage cuts, and increased working hours, the unemployed workforce had reached the staggering figure of 45.4%. Roosevelt achieved his initial success thanks to the severity of the crisis: a rebellious nation swept Hoover aside and looked to the newly elected president to work the miracle of restoring prosperity. Roosevelt set to work using measures he declared infallible: the National Recovery Act (NRA) and currency devaluation in the form of “managed currency”.

The fundamental principles of his entire policy—commonly known as the “New Deal”—were state government intervention in the economy and massive spending financed by inflation resulting from currency devaluation. The primary aim was to take transitional measures to save economic sectors and social groups facing a desperate situation. Banks—with two-thirds or three-quarters of their loans frozen and panicked depositors demanding their money—had been forced to close their doors; the railways found themselves in an equally desperate situation. Farmers—saddled with debt and having seen their incomes drop by 60%—could no longer meet their financial obligations; meanwhile, the 3 million jobless people of 1929 (the onset of the crisis) had swelled into an army of 16 million fully unemployed individuals, joined by several million more working only part-time.

 Following these initial rescue measures, the aim was to trigger a general business recovery and a rise in prices, thereby providing the under-consuming private sector with the purchasing power needed for that recovery. While increasing aggregate income, efforts had to be made to achieve a more equitable and active distribution of income by correcting price disparities caused by the crisis: wages needed to rise more than the cost of living, and agricultural prices more than industrial prices. Finally, it was necessary to safeguard producers, savers, and wage-earners and employees against a recurrence of the catastrophe through a set of lasting reforms regarding organization and economic and social security. As if it were possible to stabilize the mortal crisis of capitalism in our era, which represents the final phase of imperialism.

The NRA codes—the product of the “Brain Trust” members’ “ideas”—included both regulations on competition designed to restore profit margins eroded by cutthroat rivalry, and labor regulations concerning working conditions and the relationship between employers and employees. Each industry was invited to form a federation and submit for the President’s approval a code of “fair” competition, under which each employer pledged not to lay off staff, to pay a minimum wage, and to limit the workweek to a maximum of 40 hours.

The President had the right to amend this Code, which subsequently acquired the force of law, and he alone could grant licenses. In the event that an industry failed to reach an agreement and approve a Code, the President could impose one upon it—one devised by the experts of the “Brain Trust.” In other words, he wanted to curb—if not completely prevent—competition, reduce overproduction on the one hand, and, on the other, bring about wage increases and a reduction in unemployment. In our opinion, this problem is of the same nature as the problem of squaring the circle.

For its part, the agricultural regulation known as the AAA—established following a referendum—introduced payments for agricultural restrictions, offset by processing taxes, with the aim of restoring rural purchasing power. But its success is primarily due to three successive poor harvests!

The “Reconstruction Finance Corporation” established banking laws. Through it, the State provided the banks with all necessary advances, but at the same time imposed a distinction between deposit banks and investment banks, a mutual deposit insurance scheme, and stricter oversight by the “Federal Reserve Board”. Finally, the reforms envisaged health, old-age, and unemployment insurance, established through a tripartite contribution from the insured, employers, and the State.

This entire series of reforms has cost, and will continue to cost, considerable sums drawn from the federal budget. These sums were almost entirely provided by the banks, in the form of credit inflation. Of the 12 billion dollars spent to date, a large portion went toward public works—a means by which the State came to the aid of the army of the unemployed, replacing private charity, which had become wholly inadequate.

It would also be interesting to examine in depth the problem of the increase in the President’s power—already so vast. Roosevelt has been called the “tenth” dictator, and in reality, the power he acquired through constitutional means exceeds that of many sovereigns. The ministers are chosen by him and are accountable only to him. His right of veto makes him the arbiter of laws, and he thus concentrates both executive and legislative powers in his own person. Indeed, state intervention is evident in every sphere, and Roosevelt’s entire course of action can be seen as akin to that of the various authoritarian regimes tending to supplant economic liberalism—a system now obsolete. With the help of the NRA, AAA, Reconstruction Finance Corporation, etc., the President directs the entire process involving key industries and the distribution of wealth in the United States. However, unlike the systems in Italy, Germany, Austria, and Portugal—where the managed economy operates through corporations that are merely cogs in the state apparatus—in the United States, this same experiment is carried out through what might be termed “economic self-government,” which mitigates state intervention.

And now, let us briefly examine the influence of the New Deal on the labor movement.

We have already noted that the NRA codes contained, in principle, legal recognition of labor unions or, to be more precise, the right of a company’s workers to organize for the purpose of demanding an employment contract. The employer class—particularly in major industries such as steel, automobiles, coal, transport, and textiles—continues to refuse to recognize this right, acknowledging it at most for company-controlled (“yellow”) unions; furthermore, in its struggle against the workers, it has consistently secured the favorable backing of government arbitrators.

 Thus, alongside the unrest caused by the unemployed (Minneapolis, 1934) and the farmers’ revolt (Iowa and Wisconsin), there emerged a massive wave of industrial strikes—a wave that began in 1933 and peaked in 1934 with the San Francisco general strike and the textile strike, which involved half a million workers. The reactionary actions of the AFL and the absence of a genuine class party rendered this entire spontaneous effort by the American working class futile, as demonstrated by the results of the 1936 elections.

How did the working class take part in these elections, which—in addition to the President—were to elect new deputies and a portion of the senators?

“There were, as always, Socialist and Communist candidates,” writes Le Peuple (it could have added, this time, a presidential candidate put forward by a Revolutionary Workers’ League), “but the working class rallied behind Roosevelt in its overwhelming majority.” And this is unfortunately true, not only regarding the votes won by Roosevelt but also those for the other candidates, given that the 36-million-strong working-class population of the United States did not, so to speak, cast its vote for candidates representing—to a greater or lesser extent—class interests.

But what is false—utterly false—is what the P.O.B. newspaper adds: namely, that the working class declared itself for Roosevelt because “he achieved an economic and social revolution (???) using strictly democratic and parliamentary means.” The organized labor movement in the United States is controlled by the AFL, which comprises 4 million members. The AFL is dominated by a clique of reactionary bosses who have consistently declared themselves opposed to the creation of a labor party. Not because the labor organization had to remain apolitical—as was the case with the CGT in France—but because they considered it more advantageous to sell their votes to those candidates who declared themselves in favor of certain workers’ demands. And it was always a matter of candidates from one of the two bourgeois parties, since only they had the possibility of being elected.

The American Labor Party of 1936 emerged from the New Deal and is therefore a legitimate child of Roosevelt. The NRA, by recognizing the right of coalition  to secure a labor contract, favored industrial unions and strengthened the movement seeking to reorganize American trade unionism on that basis rather than on a craft basis. Industrial unions—such as those representing miners, textile workers, and garment workers—formed a committee to spread this organizational model (the CIO), and in their struggle against the AFL bureaucracy, Lewis and his associates adopted a “leftist” stance. However, they all favored supporting Roosevelt and together formed a Workers’ League  (Labor Non-Partisan League) to advocate for his re-election in 1936. The New York branch of this league, in alliance with the breakaway “Old Guard” of the Socialist Party, subsequently formed the American Labour Party, which fielded…Roosevelt as a presidential candidate alongside Labour candidates in the other elections.

There is no class-based gesture in that. And the same applies to the Socialist and Communist parties.

The Socialist Party—the American section of the Second International, which once again fielded Norman Thomas as its presidential candidate—chases the mirage of that million votes: a figure always predicted but never achieved, and even more questionable today following the “Old Guard” split and the trade unions’ declared support for Roosevelt.

 The Communist Party—whose influence had always been negligible, especially among “American” elements—nominated Browder for the presidency. However, although Roosevelt was still being denounced as a fascist in the party organ, the Daily Worker, in 1933, all the Communist candidates this time opposed the Republican bids and—even more than their own candidates—supported that of Roosevelt, who had recognized the USSR. After having consistently fought the Centrists over their support for Roosevelt, the Lovestoneites finally issued the directive to vote for Browder.

The entire election campaign was therefore conducted under the banner of the NRA, the most controversial of the New Deal’s innovations. Some attribute to it part of the recovery the United States is currently experiencing. Its opponents argue, on the contrary, that by driving up prices, it has delayed economic recovery and, above all, necessitated a vast bureaucracy. As Republicans waved the “Red Specter” of communism and accused Democrats of being “Bolsheviks,” the “Rooseveltians” accused them of being “fascists.” To Roosevelt’s supporters, the Republican candidate—a mediocre campaigner—was the standard-bearer of fascism; to Republicans, Roosevelt was a new Kerensky paving the way for communism.

 Democrats sang the praises of Roosevelt, who had lifted the country out of the quagmire of the crisis : national income, which had fallen from $85 billion in 1929 to $45 billion in 1932, had risen back to $65 billion by 1936—and warned of the danger of sliding back into it should a Republican return to the presidency. The Republicans’ main argument was that the recovery was very weak—with 10 million people still unemployed—and that, in any case, it was less significant than the recoveries seen in various European countries. The electoral circus is over, and the curtain has just come down for four years. In the name of “democracy,” Roosevelt has handed six million dollars to the banks, the railroad companies, and the insurance companies. He enabled a massive concentration of financial capital, and all of this was termed “protection of small savings.” In the name of democracy, too, agricultural production was curtailed to the benefit of expanding American imperialism: three billion dollars were handed to landowners and their agricultural banks; yet this AAA policy was dubbed “aid to farmers.” Still in the name of democracy, Roosevelt carried out the most formidable rearmament program the United States had ever seen—yet this was done in the name of “strict neutrality,” and Roosevelt, “the pacifist,” could well be nominated for the next Nobel Peace Prize!

With the NRA, workers experienced a fierce reaction against their class movements. Not a single one of the major strikes that have broken out over the past four years was not crushed by machine-gun fire and gas. Under the NRA, prices reached their highest level, while purchasing power declined and industries increased their profits by 600%. Despite all this, Roosevelt has today become the “socialist,” just as Mussolini and Hitler are “friends” of the workers. The sovereignty of the people found expression through universal suffrage—as is fitting in a democratic country—and gave a resounding mandate to Roosevelt.

Is all this not yet enough to definitively condemn this “democracy”—of which universal suffrage is the linchpin, and in whose defense the workers of Spain—and, along with them, those of other countries—are being slaughtered? Unfortunately, so far the answer can only be negative.

Gatto MAMMONE