Monday, April 18, 2011

The American Dream As We Know It Is Obsolete

Image: American Dream” by Checho

Why progressives need to think beyond the mantra of creating a "middle class America."

We want a decent home to call our own, healthcare to heal us when we are sick or old, education to improve our minds and job prospects, healthy food and clean water to nourish us, income to provide for all our needs and even some affordable luxuries, a career to give us social status and a sense of self-worth, and a pension for our golden years.

These seemingly universal desires define the post-WWII American Dream, and are still the reference point for both left and right. The “Golden Age of American Capitalism” from the mid-1940s to the early 1970s is commonly seen as the triumph of the middle class, a time when the fruits of a robust capitalist economy extended to tens of millions.

But today we are trapped in the fault lines of a violent global economy, and these dreams seem as archaic as waking up at dawn with the grandparents, children and cousins to milk cows, bake pies and plow fields.

However outdated the American Dream, organized labor and liberals desperately cling to it as they retreat in the face of the Republican and corporate blitzkrieg. In this war, the battlefield is social spending and the public sector, and for the losing side the situation is dire. (The critique that follows is not of the rank and file or all unions, but rather the dominant tendencies among many labor leaders and large national unions.)

For Mother Jones, it’s an “Attack on the middle class. Jim Hightower describes it as “the corporate-GOP attack on the middle class.” AFL-CIO President Richard Trumka says, “It is our job to channel this Midwest uprising, this populist outcry into the large-scale creation of good jobs that can resuscitate America’s middle class, America’s people and our economy.”AFSCME President Gerald McEntee, referring to Ohio legislation that strips public workers of collective bargaining rights, called it “a reprehensible attack on the middle class.” According to 9to5, the National Association of Working Women, Gov. Scott Walker is trying to “deny the American Dream to the vast majority of Wisconsinites.”

Really? The contention that the middle class is suddenly under attack – and by implication should be defended – is thoroughly flawed. For one, this trend goes back more than 30 years to the savaging of private-sector unionism and the social welfare state combined with deregulation, reloaded militarism and tax breaks for the rich. The current attack on public-sector unions and the remnants of welfare is just the latest stage.

Additionally, the attack on the public sector is by not an attack on the middle class as a whole. After all, the Tea Party movement, the right’s shock troops, is solidly middle class.

In their mind, we live in a capitalist meritocracy where everyone should be subject to the same chaotic, contingent and uncertain market forces. Its ideals are captured in the saying “Equality of opportunity does not guarantee equality of outcome.” The right rejects public-sector jobs that guarantee incomes, benefits, tenure and pensions because they violate the market, the wellspring of freedom and liberty.

No doubt this right-wing ideology is warmed-over Social Darwinism, hypocritical and would lead right back to the savage boom-and-bust cycles of the Robber Baron era and Dickensian England. (The Tea Party is generally quiet on the subject of the mortgage-interest deduction for homeowners that will cost the government an estimated $131 billion in 2012.)

Nonetheless, the tens of millions of Americans embrace individualism are a very real force that is flexing its political muscle right now. Additionally, in terms of analyzing who is the middle class, it is much more those entrepreneurs, supervisors, managers, realtors, small-business owners and self-employed plumbers, carpenters, cooks, doctors, lawyers, accountants, financial planners and myriad other professions found in the Tea Party and the Republican Party than blue-collar workers and public-sector employees who lack control over their work.


The post-World War II ideal makes liberals like Paul Krugman mush-brained. He writes in The Conscience of a Liberal: “The political and economic environment of my youth stands revealed as a paradise lost, an exceptional episode in our nation’s history.” Krugman gets downright loopy when reminiscing about postwar America: “It was a society without extremes of wealth or poverty, a society of broadly shared prosperity.” Apparently there were no Rockefellers or Mississippi sharecroppers in his day.

It’s only time and a decayed vision that makes 1950s America seem like paradise. To be sure, the working class benefited from rising productivity with rising wages, incomes rose across the board, many African-Americans landed good-paying factory jobs and social welfare expanded under Lyndon Johnson’s Great Society.

Yet the 1960s youth and counterculture rebellions were precisely in reaction to the banality of the middle class. The New Left critiqued a society where basic material needs seem to have been satisfied by American capitalism, European social democracy and the Soviet’s “bureaucratic collectivism,” but work was alienating, racism institutionalized, community nonexistent, sexual mores repressive, and daily life atomizing, meaningless and suffocating.

Youth also revolted against the foundation of the middle-class lifestyle: the warfare state that spawned the terror of imminent nuclear war and U.S.-backed assassinations, coups, dictators and wars in the developing world that forced down the cost of commodities – copper from Chile, bananas from Guatemala, sugar from Cuba, oil from Iran, rubber from Indonesia and tin from Bolivia – so as to subsidize American businesses and the middle class. (Or to use a blunt term often employed in colonial studies, the United States was engaged in plunder.)

Liberals conveniently forget that the unions which gave birth to middle class were a full partner in the Cold War. The AFL-CIO worked with the CIA through the American Institute for Free Labor Development to destroy independent labor movements in the Third World.

Organized labor has mostly left behind this sordid past, though it did play a role in the 2002 coup against Hugo Chavez’s government in Venezuela. Plus, it remains reluctant to confront the military-security state that consumes about $1 trillion in public spending even as public sector unions scrap for a few more pennies.

Perhaps U.S. labor leaders realize the Pentagon, with its thousand-odd overseas bases, still serves a useful role in ordering the world. After all, today’s middle class benefits as much as ever from depressed wages and commodity prices in the developing world that keep low-cost consumer goods streaming from factory to port to big box to McMansion.

By the 1960s the promise of prosperity for all, which defenders of the middle class today harken back to, seemed within reach. Yet the consciousness of workers as workers was being sapped by consumption. No longer was the goal to transform social relations and bring forth the “New Man” (and Woman), it was to get a new Pontiac, an in-ground pool, a bigger house, a color television. When we identify as consumers, it leaves little space for workplace solidarity or worker identity. Today, it is almost impossible to find working-class culture or life beyond the market and corporate media.

Ultimately, the concept of the middle class is inherently anti-political. It is defined by consumption: a mortgage, multiple cars, stylish clothes, furniture and electronics, and affordable luxuries. We can’t have a yacht, but we can go on an annual cruise. We can’t buy a villa in Tuscany, but we can holiday in one. We can’t afford a private chef, but we can visit Le Bernadin on a special occasion. Many luxury goods makers – from Prada and LVMH to Mercedes Benz and Tiffany – have even aggressively expanded their businesses by creating lines of downscale luxuries for the middle class.

When we struggle for better wages and benefits and more social welfare, what is the goal?

The changed landscape – politically, economically, socially, ecologically – should be enough evidence that we can’t recreate a moment from 80 years in the past. If it’s for a growing middle class, we’ve been there, done that and failed miserably. What do we say to the more than 2 billion Chinese and Indians who want a middle-class lifestyle? In a time of runaway global warming, fighting for the middle class is like fighting for global ecocide.


When liberals, labor leaders and even some leftists issue a call to the barricades to defend the middle class, they romanticize the postwar boom in other ways.

The social compact between labor and capital was premised on McCarthyism: purging communists socialists and anarchists by the thousands from unions. Labor’s Faustian bargain increased wages and benefits, but it sowed the seeds of its destruction. Without a mass-based anti-capitalist left, labor became the junior partner to capital. Once the social compact outlived its usefulness by the 1970s, capital ditched it, but organized labor is still unable to construct a real alternative. Capital was then free to exploit the low wages and lack of regulation in the Third World that the AFL-CIO had helped maintain.

Starting with the New Deal, the prevailing political order was corporatist – government brought together major bodies such as labor and business to help them strike mutually beneficial agreements. After World War II, as long as the Bretton Woods financial order prevailed (which put some limits on the flow of finance capital), U.S. corporations were tied to the domestic market and other nation states could not compete with American business, organized labor had the power to extract concessions from corporations.

What changed since then is industrial and merchant capitalists (and foremost financial capital) have largely escaped geography. Sure they need factories, roads, electricity, docks, airports, warehouses and perhaps stores, but their ability to jump from one low-cost region to another means American unions, in their current form, have little leverage over capital.

Yet corporatism was uncritically, and unconsciously, embraced by gooey-eyed liberals and lefties who backed Obama in 2008. A “New” New Deal was based on the fallacy that we could re-create a national capitalism by spending trillions on green jobs and energy. Obama would bring together capital and labor to fund and build the factories that would manufacture electric cars, solar panels, green homes, wind farms, hi-speed rail and a nationwide smart electrical grid.

We would all drive a Prius into the sunrise of a new middle-class prosperity based on hi-tech manufacturing jobs, generous social welfare, skilled and educated workers, and strong unions.

The UAW fell into the corporatist trap after the government took over GM and Chrysler in 2009. With a White House proclaiming, “Fuck the UAW,” it hammered labor in the interest of capital. The result was a contract forced down the throat of autoworkers that cut wages by 50 percent for many new hires and even some existing workers, putting them on par with non-unionized workers in foreign auto plants in the United States. Meanwhile, Obama’s “pay czar,” whose job is to ensure that executives of bailed-out corporations are not excessively rewarded, approved GM CEO Dan Akerson’s $9 million compensation package for 2011.

Moreover, in an age when finance circles the globe continuously seeking any comparative advantage, trying to return to an age of national capital is folly. Just look at GM; its top market is now China, having surpassed sales in the United States in 2010, and these vehicles tend to be built in union-free plants right in China. So much for saving jobs by accepting 50 percent pay cuts.

Similarly, proponents of green jobs say the Obama administration should have used the stimulus along with influence over bailed-out banks to retool defunct auto factories to manufacture windmills, solar arrays, electric batteries, hybrid cars, hi-speed trains and tracks, and electrical infrastructure. Except firms in Spain, Germany, South Korea and most of all China are far more advanced in manufacturing such goods.

Subsidizing U.S. firms that generally lack the technical, manufacturing and skill base to produce these goods would have probably sparked an international trade war because it would have meant blocking sales from foreign firms that are building better products at lower prices.


The free-market ideology is a cover for the Republican and corporate goal of destroying unions so as to destroy the infrastructure of dissent. That is, they want to eliminate organized labor’s ability to organize any sort of resistance or alternative. Yet labor leaders seem unable to grasp the implications of this.

For three decades, labor leaders have accepted market logic of givebacks: the pie is shrinking, we all have to share the pain, givebacks save jobs and help make American business more competitive. But concessions don’t save jobs they only increase profits. Unions have known this for decades, but are unable to formulate an alternative. In 1989 one labor leader told the New York Times, “The whole history of wage concessions since 1979 pretty much proves that they don't preserve jobs.” In a world with capital unbound, many regions have lower wages, fewer benefits, less regulation and higher profits, meaning one round of givebacks leads inexorably to the next.

The same logic is now being applied to the public sector. Wisconsin labor leaders capitulated on all wage and benefit cuts, begging only to save collective bargaining that was then eliminated in short order. If you accept market relations as the natural order and that the role of workers is to make firms more competitive or produce value for them – as we shall see some unions explicitly do – then there are no limits to givebacks.

Indeed, the whole war is based on a simple, brutal principle: capital wants to put the entire cost of social reproduction back on to workers. You should be entirely responsible for housing, food, healthcare, retirement, education, and don’t expect anything from the rest of society. It’s the ownership society, a matter of personal responsibility and if you end up homeless, jobless, penniless, sick, it’s because you were lazy, immoral and failed to take advantage of the opportunities afforded you. And while the plight of the poor may tug at our heartstrings, to redistribute the rightful earnings of disciplined hard-working Americans is to encourage sloth and sin (this is strikingly similar to Thomas Malthus’ argument against giving aid to the poor).

In agreeing to the next round of givebacks, labor accepts and reinforces this logic. Unless unions counter with a powerful idea – such as “labor creates all wealth” – they will remain stuck in a downward spiral. (Not that this idea, the labor theory of value, is unproblematic, but it does possess tremendous ideological, rhetorical and political force in the war with capital.)


The protests from Cairo to Madison have been inspiring, even beautiful. In a revolutionary moment, we realize our desires to be better people, for an ideal community and for a just world. Our utopian ideas take form in new social relations. In Tahrir Square, Egyptian women experienced themselves as human beings with full agency and free from sexual harassment. In Madison, protesters in the Capitol building occupation lauded the camaraderie, peacefulness and collective labor on display there.

In Madison, however, the intoxicating talk of “general strike” has been replaced by recall elections to oust eight Republican state senators. A general strike requires months of education, debate, organizing, community outreach, building internal solidarity, rallies, protests, smaller-scale job actions, producing art and media, forging links with other sectors. Organized labor has the resources in terms of money, staff and infrastructure. There is no guarantee of victory, but it would be a glorious display of the chaos and creativity of democracy, and it would build a larger and more militant labor movement.

A recall election, on the other hand, is authoritarian politics run by Democratic Party honchos, wealthy donors and liberal elite (such as with their hired guns: lawyers, consultants and pollsters, They need unions, but only as a cash machine and for battalions of obedient foot soldiers to gather signatures, attend campaign rallies, phone bank, get out the vote and spread messaging decreed from above.

Already the energy of a general strike has been overshadowed by a topsy-turvy race for the Wisconsin Supreme Court. Instead of spending months debating ideas and strategy, building consciousness and power, Wisconsin’s labor movement will be sidelined as opposing lawyers tangle over legal technicalities before robed judges. Even if all eight Republican State Senators are recalled next year, that only means labor’s fortunes rest once again on a Democratic Party that has betrayed labor more times than Charlie Sheen hits the crack pipe during a three-day orgy.

This is symptomatic of labor’s deeper malaise in which it can’t see beyond the market, the middle class and electoral politics. By some estimates, in the last two election cycles, organized labor poured more than half-a-billion dollars into the Democratic Party with disastrous results.

What if organized labor had poured one or two hundred million dollars into organizing the unemployed? This could have created a mass popular force on the left, but its politics might have been more radical than middle-class conformism. That’s because we have entered the jobless future. The market cannot provide for the 25-30 million Americans who are unemployed or underemployed. The high level of unemployment is not an effect of the crisis, but a goal because it allows capital to force down wages and slash any and all benefits.

And that has been the goal for decades. Alan Budd, an economic advisor to Margaret Thatcher, once explained that “in Marxist terms” higher unemployment was “an extremely desirable way of reducing the strength of the working classes … which re-created a reserve army of labor and has allowed the capitalists to make high profits ever since.”

This crisis of capitalism requires a radically different solution than labor serving as an abused underling to capital. For labor leaders, perhaps the real stumbling block to organizing the unemployed is they don’t pay dues, which provides the leaders with their salaries and power.

The exchange of dues for services raises a profound contradiction at the heart of organized labor. It is perhaps no surprise that a movement which tries to accommodate itself to capital – by serving as a compliant junior partner, by adopting a middle-class mentality, by subsuming its interests to those of a party ruled by Wall Street – has taken on the shape and relations of a capitalist enterprise.

In a thought-provoking paper from 1990, labor educator Frank Annunziato argues that the problem is unions are like corporations insofar as they produce commodities, which he terms “commodity unionism”:

“Contemporary American unions … have evolved into producers and distributors of a peculiar commodity which is called “union representation.” This commodity is produced by paid staff members and elected or appointed union officials. The use-value of the commodity “union representation” is marketed and sold to potential and actual union members. If workers decide to purchase, they do so in the form of union dues, fees, and assessments, which represent the commodity’s exchange-value. Through the act of becoming union members, workers, at the same time, continue their societal roles as consumers of commodities produced by others.”

The “commodity” of union representation is made up of services like negotiating for better wages, healthcare, retirement plans and grievances. Because the legal and economic structure of unions is to deliver services in exchange for dues, workers expect the best possible commodity for their money, contends Annunziato. In this way, workers become consumers not just in society but within the union. Consciousness as a social agent in opposition to capital is considered superfluous or even counter-productive by union leaders and staff who appropriate the dues.

One result is that over decades, many unions have shrank or eliminated internal education and downsized the number and role of shop stewards, who are on the front line fighting against arbitrary management practices, conducting political education among the rank and file, and mobilizing them for various campaigns from elections to strikes.

One union that critics say has adopted the form and function of a corporate enterprise is the 2.2-million-member Service Employees International Union, for which the notion of a working class appears passé. In 2007, then SEIU President Andy Stern told the Wall Street Journal “we try to be partners with our employers … and understand their competitive issues and try to add value, not create problems.”And, “We want to find a 21st century new model … that is less focused on individual grievances, more focused on industry needs.

A few years ago, SEIU embarked on an expensive and so far disastrous effort to use call centers where “grievance representatives” replaced much of the work of stewards. It is part of SEIU’s strategy of creating huge centralized locals that can pool resources and cut costs, but which is also aimed at suppressing rank-and-file democracy. Combined with its tendency to cooperate with employers, SEIU has become hard to distinguish from a corporation. (An excellent account of the SEIU strategy, turmoil within the labor movement and other paths for organizing is Steve Early’s book, The Civil Wars in U.S. Labor.)

One final note. Labor long ago abandoned the poor. In today’s political discourse the poor are largely invisible. If labor is not acting out of real solidarity by fighting vigorously for everyone who is dispossessed, then different social groups will be demonized and pushed into low-wage work that can supplant union jobs. This happened with “welfare reform” under President Bill Clinton, with thousands of welfare recipients forced to take low-wage jobs that were previously decent-paying union jobs with benefits. And this is a major factor behind the vanishing private and now public sector unionism, particularly the betrayal of international solidarity starting with the Cold War.

In Wisconsin, many labor leaders framed the struggle as about collective bargaining for public servants – the path to the middle class – rather than trying to build an alliance of single mothers, the poor, immigrants, the elderly and the wide range of groups on the chopping block.

After decades of being battered, it’s tempting to say our options are limited by historical forces. Except the electrifying revolutions and uprisings in the Middle East, North Africa, Wisconsin and elsewhere shows that we have historical agency. That means making carefully thought-out political choices, and a good place to start is by rejecting the middle-class opiate of consumption for the human ideal of liberation.

Arun Gupta is a founding editor of The Indypendent newspaper
He is writing a book on the decline of American Empire for Haymarket Books.

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