krebscycle

What caused US manufacturing to off-shore and the white working class to abandon the Democrats? During the 1970s  a massive change in technology particularly communications and transport (like container shipping) made it easier to manage production at a distance and move goods by sea. More importantly,  economic advances in  India and China and elsewhere reduced the economic advantages of US labor. India, just 20 years after evicting the parastitical British Empire, created an industrial base and a spectacular engineering education system that produced skilled workers in vast number.  China’s revolution against Maoism unleashed  giant wave of factory construction, commercial activity, and a rapid move up the “value chain” in many sectors.  Those countries suddenly changed the game. CEOs of US large businesses who did not seriously consider moving manufacturing or off-shoring in some way found their companies in serious trouble with competitors who did.

“Leftist” anti-neoliberal theorists tell a different story. According to them, the wonderful social bargain of New Deal America –  high wages, unionization, white picket fences, white June Cleaver making meat loaf in the kitchen of her FHA home (and until 1962, 98% of all Federal housing money went to white people), etc. – was rudely interrupted by greedy corporate elites who decided to ruin everything in order to crush the (hard working white) working classes who were heartlessly betrayed by neoliberal Democrats. In this telling  there are no changes of technology or economic organization and China and India are without agency,: the technical and economic advance of those countries was called into being by Western Corporate Elites  who are the people who really make history. The civil rights movement and the violent reaction of white America also disappears. Here’s Marxist theorist David Harvey explaining how it all works in the pages of the nostalgia-left Jacobin magazine.

I’ve always treated neoliberalism as a political project carried out by the corporate capitalist class as they felt intensely threatened both politically and economically towards the end of the 1960s into the 1970s. They desperately wanted to launch a political project that would curb the power of labor. [Harvey]

For Harvey, “corporate capitalist class” means “US/European corporate capitalist class”.  Similarly, many leftist theorists mean “white male working class in the US/Europe” when they say “working class”.   Little Deng Xiaoping doesn’t appear in this narrative, let alone the Chinese peasants who organized hand labor shoe and button factories that then started making shoe making machinery or the founders of the Indian Institutes of Technology or the workers or managers of Tata. Even worse, the actions and reactions of working class Americans – the heroic long struggle of African-Americans, the violent reaction of white Americans to the civil rights struggle, the Feminist movement and gay rights  and their effect on economic organization and social values – none of that matters in Harvey’s tale in which all agency is located with western “corporate elites” and the internationalist solidarity of the old left is not even a memory. Civil rights, feminism, gay rights – these are just “identity politics” to the strange morass of nostalgia and bitterness that is the 21st century US left.

And the history is made up anyways. You don’t have to go the sad glorification of Jim Crow America to see that – you can just look at the story of corporate America breaking its supposed agreement with labor in the 1970s.

With respect to labor, the challenge was to make domestic labor competitive with global labor […] — to take capital to where the low-wage labor forces were. But for globalization to work you had to reduce tariffs and empower finance capital, because finance capital is the most mobile form of capital. So finance capital and things like floating currencies became critical to curbing labor. – Harvey

The search for low wage labor didn’t start in the late 1960s. In 1953, freshman US Senator John F Kennedy gave an impassioned speech about the relocation of manufacturing from the Northeast to lower wage non-unionized southern states:

But the final reason for migration, with which I am particularly concerned, is the cost differential resulting from practices or conditions permitted or provided by Federal law which are unfair or substandard by any criterion. Massachusetts manufacturing industries in May of 1953 paid an average hourly wage of $1.64; but because the Federal minimum is only an outdated 75 cents an hour, many industries migrating to the rural communities of Mississippi pay workers only that less-than-subsistence wage, and those employees under “learners permits” even less. Practically all New England woolen textile mills pay a wage of at least $1.20 an hour; but because of the recent Fulbright Amendment to the Walsh-Healey Act, which has held up the establishment of this wage as the new Federal minimum for that industry, the New England mills must bid for government contracts against southern mills paying only $1.05 an hour. Labor organizations in highly unionized New England have achieved not only better wages but pension and fringe benefits as well. In the South, however, unionization of competing plants has been virtually halted since enactment of the Taft-Hartley Law.

Without adequate Federal standards for social security or unemployment compensation, many employers who move south support a level of benefits far below those paid by New England industry. Federal tax amortization benefits have not only been disproportionately granted to southern plants, but have also been granted to promote expansion in the South without regard to available facilities and manpower in New England. Federally regulated shipping rates by rail, truck, or sea discriminate unduly against New England and are a confused, shapeless mass of regulation. One of the most obviously unfair inducements offered to those considering migration is the tax-free plant built by a southern community with the proceeds of Federally tax-exempt municipal bonds. -JFK

That’s in 1953, back in the Glory Days of the New Deal according to our Leftist Anti-Neoliberal Savants ( and a “left” nostalgic for Harry Truman pretty much says it all).  JFK says in the speech that the deindustrialization of New England has been going on for 25 years. As  David Nobel’s book, Forces of Production, documents, many corporations sacrificed profits and de-optimized production to weaken the bargaining position of skilled labor in the 1950s and 1960s. Capitalism is an evolving system – something Marx influenced analysts used to take for granted. And the New Deal didn’t abolish capitalism – at one point only far right ideologues thought otherwise.

Both nostalgia and conspiracy are hallmarks of reactionary ideologies.  Anti-neoliberalism has become the reactionary ideology of the nostalgia left – mostly white guys who miss the Imaginary 1970s and have a fable about how the perfidious Democrats decided to dump the working class in service of their neoliberal heresy (or see  Piketty’s silly powerpoints).  The unfortunate fact that Democrats have not won a majority of the white vote since the civil rights act passed doesn’t fit with this story.

Neoliberalism doesn’t explain much, but anti-neoliberalism is something else. It is an effort by certain parts of the old left to deal with the collapse of socialism as a movement by re-imagining the New Deal and 1950s America as leftism and denying the centrality of “social” issues like civil rights and feminism.

For some, there is also nostalgia for a time when white liberal men like Tom Frank were heroes, before they were robbed of the spotlight by blacks, women and gays, forced to confront private conflicts as public issues, and ultimately pushed aside by the right. There is something poignant about this, given the political bleakness of the day, but it’s an indulgence the American left cannot afford. We need to look not to the New Deal but to a new politics, one that recognizes equality and freedom, class and culture, as ineluctably linked. That we’re so far from this recognition makes Kansas the least of our problem  –Ellen Willis, 2005

Anti-neoliberalism recasts “neoliberal” as an invective to be used during the Obama administration against that black guy in the White House and under Trump to attack Democrats for not being “socialists” (a term that apparently now means support for a mixed economy plus a bunch of shouting).  It reinforces the common current “left”  nostalgia for the Jim Crow era.

At some point shortly after the end of the Second World War, democracy reached its apex in countries such as Britain and the US. –  Henry Farrell.

Amazing to read something like that from a supposed leftist, nostalgic for the good old days of poll taxes and KKK terrorism, but that’s not unusual for post Obama “leftism”.

And yet 1.2 million black men enlisted during the Second World War—a display of commitment to, and faith in, America that is as moving as it is mind-boggling. Initially, these men were barred from combat, and instead assigned to service duties such as cleaning white officers’ quarters and latrines. Just as in the Civil War, only mounting casualties convinced the generals to allow black soldiers the privilege of risking their lives on the front line. And just as in the First World War, a vast chasm quickly sprang up between wartime rhetoric and wartime reality. Black soldiers stationed at military bases in the segregated South were forbidden from eating in restaurants that opened their doors to German prisoners of war.

After the war, multiple veterans were attacked almost immediately, often by drivers or fellow-passengers on the buses and trains transporting them back to their homes. Many more soon realized that the G.I. Bill had been constructed in such a way that most of its benefits—including mortgage support, college tuition, and business loans—could be denied to them. Racial violence spiked. (New Yorker)

[originally published Aug 3, 2016 @ 11:5.  Revised May 2018, Slight edits October 2019, May 2020, March, July 2023]