What are we on the left prepared to do?

What will this economic crisis

mean for the working class?

What should be the response of the left?

What can be learned from the experiences

of the past and how can those

lessons be applied to the present?

The election of Barack Obama or Hillary Clinton as president in the midst of the greatest economic crisis in 75 years will present the small socialist left of the United States today with an enormous challenge.

The left will have to find a way to build an independent labor, social, and political response to the crisis without becoming drawn into the Democratic Party.

Obama, with his charisma, creativity, and flexibility, may prove to be a Rooseveltian figure who will be able to lead the social forces that can cohere and consolidate a new life for American capitalism.

The responsibility of the left is to fight to prevent such a consolidation of a new social pact between capital and labor, government and the people, and to build an independent working class movement and political party that can fight for socialism in the coming decade.

The Challenges for the Left Today

The world appears to be on the verge of an economic crisis and, if it turns out to be as serious as some think, one that could rival or exceed the great panics of the late nineteenth century and the decade-long Great Depression.

The crisis began with unscrupulous mortgage lending on an enormous scale, leading to mass housing foreclosures, then to a collapse of the securities backed by sub-prime mortgages, and finally became a crisis of the banks that held those securities.

Over the past weekend government and banking officials worked out J.P. Morgan's buyout of Bear Sterns, one of the most important U.S. banks which stood on the verge of collapse, a development that threatened to unleash an international financial crisis.

This may turn out to be only another recession, painful as those are, but if it turns out to be a genuine depression, what are we on the left prepared to do? What will this crisis mean for the American working class?

What should be the response of the U.S. left? What can be learned from the experiences of the past and how can those lessons be applied to the present challenge?

A Common Recognition of the Danger

The crisis that faces us is now clear to all, even if President Bush -- like President Herbert Hoover after the Crash of 1929 -- denies that the economy is in danger.

Already several months ago Lawrence Summers, Secretary of the Treasury in President Bill Clinton's administration, wrote in an opinion piece in The Financial Times warning that "Even if necessary changes in policy are implemented, the odds now favor a US recession that slows growth significantly on a global basis.

"Without stronger policy responses than have been observed to date, moreover, there is the risk that the adverse impacts will be felt for the rest of this decade and beyond."

John Lipsky, the number two official of the International Monetary Fund said this week that government policy makers must be prepared to "think the unthinkable." One presumes that by that he means a collapse of the world economy

Robert Brenner, the UCLA economic historian, wrote recently in the leftist journal Against the Current that "The current crisis could well turn out to be the most devastating since the Great Depression."

He concludes his article writing "banks' losses are so real, already enormous, and likely to grow much greater as the downturn gets worse, that the economy faces the prospect, unprecedented in the postwar period, of a freezing up of credit at the very moment of sliding into recession -- and that governments face a problem of unparalleled difficulty in preventing this outcome."

A Crisis for Ordinary People

There is a common understanding of the serious nature of the crisis, even if no agreement on ultimate causes and consequence, among a range of people with quite different politics.

Not only do banks, governments, and international financial institutions face a crisis, so do the working people of the world.

The crisis has tremendous potential to cause widespread suffering because it is taking the form of a crisis of stagflation, that is simultaneous economic downturn and rising prices.

Josette Sheeran, World Food Program Chief for the United Nations, recently stated that the world economy "has now entered a perfect storm for the world's hungry."

A series of developments -- soaring energy and oil prices, climate change, production of biofuels, and rising demand from India and China -- will make it increasingly difficult for millions to afford food.

"This is leading to a new face of hunger in the world, what we call the newly hungry. These are people who have money, but have been priced out of being able to buy food," she said.

"Higher food prices will increase social unrest in a number of countries which are sensitive to inflationary pressures and are import-dependent. We will see a repeat of the riots we have already reported on the streets such as we have seen in Burkina Faso, Cameroon and Senegal."

Impact on the United States

When a recession occurs, companies fail, plants close, those that survive lay off workers, and unemployment rises.

If the current crisis turns out to be merely a recession, unemployment is expected to rise to 6.4 percent by 2009, according to Goldman Sachs, while African American unemployment would reach 11.0 percent. (Blacks' unemployment is generally twice that of whites.)

However, if this turns out to be a more serious recession such as those we have experienced in the last 25 years, then unemployment could reach 8.84 percent as it did in 1975 or 9.71 percent as it did in 1982.

And, if this is the kind of economic crisis which many fear, a crisis along the lines of the Great Depression, then we would be talking about an unemployment rate of 25 percent, and for African Americans, 50 percent as it was in the 1930s.

Deep recessions and depressions have historically been accompanied by shorter workweeks and wage cuts, so income also falls for those who have work.

What would we expect to happen if such an economic crisis with such high levels of unemployment were to hit the United States?

The United States today has a social safety net such as did not exist in 1929 -- unemployment insurance, social security, and Medicaid and Medicare -- but a tremendous strain would be put on those systems and government at every level would soon face a fiscal crisis.

The Likely Failure of the Social Safety Net

With lowered corporate profits and declining incomes and sales, Federal, state and local government would not have the revenues to pay for those social programs and would also be unable to pay salaries and wages of public employees.

In fact this has already begun, as the New York Times reports, "About half of the state legislatures are scrambling to plug gaps in their budgets, shot through by rapid declines in corporate and sales tax revenue. . . ."

With private sector and public sector workers losing their jobs, more families would quickly exhaust their savings, lose their homes, and increasing numbers of those who rent would be evicted.

Homelessness of working-class families would rise beyond the capacity of government and charitable institutions. The condition of the African American and Hispanic workers will be much worse than that of the white workers, and that will be quite bad.

Significant numbers of recent Hispanic immigrants would return to their homelands in Mexico or Central America, though most would probably stay here, since things will be no better at home.

The Political Response

What will happen to American politics if there is a depression? Whether we have a government headed by Barack Obama, Hillary Clinton or John McCain, we will face similar issues.

All three candidates share a commitment to the neoliberal and global capitalist model that has dominated our political economy since the 1980s.

While a Republican government might react more rigidly and a Democratic government more flexibly to such a deep economic crisis, still it is unlikely that either will at first take dramatic measures.

Especially since the crisis will probably be developing during the first year or two of a new administration, one would expect that there will be foundering followed by experimentation.

The American experience of the 1930s under President Franklin D. Roosevelt or the 1960s under President Lyndon B. Johnson might lead a Democratic president to create a program of public workers, the expansion of the social safety net, and broadening of social programs in housing all paid for by deficit spending along Keynesian lines.

Will American capitalism today be able to afford such a political economy given the relative weakness of production and the decline in profitability?

McCain and the Republican Party are likely to seek economic recovery through a program of tax cuts for corporations and the wealthy, reduction of social programs, together with an increase in repressive measures against social movements, immigrants, African Americans, and the poor.

Whether or not it will be able to find a mass base for such policies after the George W. Bush administration's termination in the disaster of a failed war abroad and economic crisis at home remains to be seen.

When government and traditional party politics fail in times of crisis, people tend to look for other alternatives, for options to the right and left of the American mainstream.

During the Great Depression this took the form of the growth of right-wing, quasi-fascists such as the radio-priest Father Coughlin and rise of left-wing groups, most importantly the Communist Party.

With the American dream turning into an American nightmare, millions will begin to look around for other ethical ideals, political values, economic programs, and social strategies.

Some will turn to far right organizations that scapegoat blacks and Hispanics. Others will turn to the left looking for a humane organization of society, a system that will improve life for all.

What will be the possibilities of the U.S. labor unions and left in such a crisis?

The American Left and Politics Today

The election of Barack Obama or Hillary Clinton as president in the midst of the greatest economic crisis in 75 years will present the small socialist left of the United States today with an enormous challenge.

The left will have to find a way to build an independent labor, social, and political response to the crisis without becoming drawn into the Democratic Party.

Obama, with his charisma, creativity, and flexibility, may prove to be a Rooseveltian figure who will be able to lead the social forces that can cohere and consolidate a new life for American capitalism.

The responsibility of the left is to fight to prevent such a consolidation of a new social pact between capital and labor, government and the people, and to build an independent working class movement and political party that can fight for socialism in the coming decade.

The Challenges for the Left Today

The principal organizational problems for the revolutionary socialist left today are its numerical weakness, its division into too many small rival organizations, and its lack of dedicated cadres in the labor movement.

The political problems are equally serious: the left lacks an inspiring vision, lacks a political program, and perhaps most important at the moment, lacks a strategic plan for intervention in the working class and society more broadly.

The list of deficits more or less constitutes the list of tasks of the American left in this period, though logically the latter political deficits have to be addressed before the organizational weaknesses can be addressed.

First, we need a left that clearly defines itself as revolutionary socialist, that is, that sees change coming through the overthrow of capitalism and the state and the creation of a new social order.

That such a revolutionary socialist left fights for reforms goes without saying, but that it participates in struggle for reform with its eye on the revolutionary future must be stressed.

Socialism means the liberation of the full potential of the individual through the liberation of the working class from exploitation, of the oppressed from the weight of the state with its police, courts, and prisons, and of humanity from the mass murder of warfare.

The fulfillment of individual and collective potential comes from the democratic experience of creating a new economy, a new society, and a new form of human self-government.

Second, such a revolutionary left needs a program for American society, that is a broad statement of principles that addresses the fundamental problems faced by Americans today in our government, our economy, our society, and our foreign policy in a way that points to their solution through fundamental social change.

The problem of health care for the 50 million uninsured, for example, can be solved by taxing corporations and the wealthy to pay for a publicly funded health care system -- without insurance companies or private hospitals -- democratically administered by organizations of patients, workers, nurses, doctors.

Such a program of transitional demands should have the character of a set of proposals that address the problems of today and propose solution in ways that project fundamental structural changes in the system, the sum total of which would amount to another system, a democratic socialist system.

Third, the revolutionary left must have a strategy that connects with the American working class and the American people.

Such a strategy must be able to bring about a fusion between the left and the most critical and active sections of the population, of whom African Americans have historically been at the forefront.

Many of those that we will want to recruit will be found in the movement which at the moment is rallying to Barack Obama.

We have to offer the people attracted to his message of change the principles, program, and strategy of genuine change through the creation of a socialist movement.

The most important part of a strategy will be the development of strategy for labor.

The contemporary American working class is not that of the 1930s or even the 1970s. Industrial workers, while remaining quite significant, no longer have the economic power, social weight, or geographical compactness that they did 80 or even 40 years ago.

While the strike remains the classical working-class form of fighting, it was not then and is not now the only form of struggle.

Though unions are the fundamental working-class organizations, neither unions nor working-class communities have the same character they did in other decades.

The globalization of the economy, the international character of production, the dispersion of workers throughout industrial regions, and the revolutionary transformation of communication technology mean that while we have much to learn from the past, we have to find and to create the institutions and forms of struggle appropriate to our own era.

The creation of a contemporary working-class and socialist political movement will not be based on an attempt to recreate the American left of the mass Socialist Party of 1912, the Communists Party of the 1930s and 1940s.

Or by passing once again through Students for a Democratic Society (SDS) or the Student Nonviolent Coordinating Committee (SNCC).

What we once called internationalism and anti-racism, and which the universities today call multiculturalism and diversity, will form a more central part of the new working-class party.

The respect for the integrity and autonomy of every sector of society's exploited and oppressed form the basis for the unity and solidarity of the class.

We will have to discover, invent, and construct the right principles, political program, and strategy for the socialist party of our time. The depth of the crisis suggests that the task is an urgent one. Full Version