Source: Fourth International, Vol.4 No.5, May 1943, pp.139-141.
(William F. Warde was a pseudonym of George Novack.)
Transcription/Editing/HTML Markup: 2006 by Einde O’Callaghan.
Public Domain: George Novack Internet Archive 2006; This work is completely free. In any reproduction, we ask that you cite this Internet address and the publishing information above.
“The executive order I have signed today is a hold-the-line order,” asserted Roosevelt in his April 8th decree freezing wages and jobs. But, we need to ask, what line is the President holding and for whom is he holding it?
Capitalist circles from the New York Times to the Southern coal operators applauded Roosevelt’s action. John L. Lewis, against whose miners’ union the order was immediately aimed, voiced the unpublished sentiments of the majority of the workers when he stated that the President’s edict made “the rich more affluent and the poor more despairing.”
These opposing class responses to Roosevelt’s decree testify to its true character. In freezing jobs and wages Roosevelt is “holding the line” for Big Business. The more conscious American workers are beginning to grasp this fact. The President’s edict has unmasked the capitalist bias of his administration and unsettled his coalition with organized labor. Obviously there must be extremely powerful forces at work imposing this course upon Roosevelt.
These forces arise out of the economics of the war. The Second World War is the costliest of all wars, the most gigantic undertaking of American capitalism. The United States will spend around a hundred billion dollars this year. Although Congress has just raised the national debt limit to 210 billions, it is an open secret that this is a provisional stopping point; nobody knows what the ultimate costs will be.
How will this war be paid for and who is going to pay? This financial problem confronts Washington every day. As the executive head of the government of American capitalism and commander-in-chief in its fight for world domination, Roosevelt’s administration has been signally successful in augmenting profits. Corporate earnings for 1941, 1942 and, 1943 in many cases exceed those of 1929. The monopolists are hijacking the Treasury. Representative Jones of Ohio declared in March that the shipowners, unless forestalled will soon “have a cool billion dollars of which the taxpayers will be defrauded.” And these profiteers constitute only a single detachment of the Looter’s Legion of Big Business now raiding the public funds.
Despite all his talk about “taking profits out of war” and “imposing reasonable limits upon profits,’’ Roosevelt does not freeze profits. While Big Business grabs billions in profits, new plants, machinery and subsidies, the American masses are called upon to pay for the war. Stripped of all pretenses, Roosevelt’s edict is designed to keep profits up and to drive down the living standards of the people. That is the real purpose of his action.
Elliot V. Bell, New York State Superintendent of Banks, explained in the January 3 New York Times:
“At bottom, the problem of a war economy is to reduce the standard of living of the civilian population; so that a greater proportion of the national production can be diverted to war.”
Without mentioning the profiteers, this financial writer does expose one of the main aims of Roosevelt’s economic program. The entire complex mechanism of taxation – enforced savings, war-loans, price-controls, rationing, checks on installment-buying, wage-and-job freezing, etc. – which his administration has devised or, more precisely, improvised, is directed toward “reducing the standard of living of the civilian population” in order to maintain profits and make the masses pay for the war.
How far are living standards to be depressed? Officials like the departed Henderson have spoken of a drop below 1932 conditions. However, specifications for a “bedrock war economy” have already been published which go below these levels. No one in Washington knows where the line can or will be drawn because that depends not upon them but upon the progress, length and outcome of the war. What is absolutely definite is the fact that standards will and must be slashed to ever-lower levels. This is the line Roosevelt is not only “holding” but driving for.
This policy is far too drastic to put into effect at one stroke. Roosevelt has so far tried to carry it through by successive measured steps in order to disguise his real intent, to soften the shocks and to reduce the political consequences to a minimum. But during the past year the economic problems of American capitalism have become so aggravated and the inflationary tide so strong and sweeping that there! is less room for gradual measures and maneuvers. And so, in the words of John L. Lewis, Roosevelt has driven his knife “into the hearts of the miners” and the rest of the laboring masses.
Roosevelt cannot invent any new methods of paring down the workers’ living standards. He can only resort to the traditional tested means used by capitalists for centuries to super-exploit their wage-slaves. These fall into four categories: 1. Prolong the working day; 2. Increase the intensity, and thereby the productivity of labor; 3. Cut wages; 4. Abolish social gains and reforms.
With patriotism as a pretext the executive head of the government is openly carrying out today Big Business’ program for beating down the working class. Thanks to the war and the submissiveness of labor’s official leadership, the dictates of the bosses have become clothed in federal authority and backed by increasingly centralized government coercion.
The public servants of the monopolists are trying to put over their anti-labor program by a lying campaign around the question of inflation. They say that wage freezing is necessary because wage increases are the main cause of price rises. Morgenthau, for instance, declares that it is imperative to “check inflation at its source: the wages and salaries of workers.”
This fake argument is invoked to cover up the profiteers and to disguise the real roots and actual operation of the current inflation. What are the real relations of wages, prices and profits? Wages are related most closely, not with prices of goods, but with profits. As a rule, if wages fall, profits will rise; if wages rise, profits will fall. The more profits the capitalists make, the less wages the workers get, and vice versa.
While a general rise in the rate of wages would immediately cause a fall in the rate of profits, it would not necessarily cause a commensurate rise in prices. The commodity price level is determined by a different set of economic factors than the prevailing proportional division of the national income between the capitalist and working classes. So far are wages from being the primary determinant of prices that high-priced labor, like that in the United States, is able to produce cheap commodities.
Under present conditions of production American labor stands in an especially advantageous position to obtain higher wages. Labor is scarce; the demand exceeds the supply. The powerfully organized labor movement would soon have the industrialists by the throat and make them cough up part of their exorbitant profits. Big Business needs a strong arm to keep labor in line with capital’s need for self-expansion. Just as the police, armed with state power, enter a strike situation to help the bosses and suppress the strikers, so Roosevelt has intervened as a dictator between organized capital and organized labor. He has exercised the authority of his office to tip the balance of class forces back in the bosses’ favor. His wage and job freezing edict has been issued, not to keep prices down, but to keep organized labor down and to hold capitalist profits up!
This is not all. Real wages cannot even be permitted to remain at their former levels; they must be whittled down. Therefore, taxes, more taxes, and then a few more. Therefore, forced loans and contributions. Therefore, encourage the speed-up, break down the working conditions and erase the safeguards won over decades of struggle and sacrifice; restore the piecework sweatshop under the label of “incentive plans”; stretch out the work week. Every patriotic note has been sounded to impose this profiteers’ program upon a prostrate labor movement.
What if the workers balk against accepting such policies and practices? Then suppress their right to strike, terrorize and blacklist their more militant leaders. If individual workers by the droves start to leave their slave-shops to better themselves, then shackle them to their employers by freezing jobs. McNutt’s War Manpower Commission did this to 27 million workers on April 17. Thus the Roosevelt administration is trying to rob the workers of all means of preventing the bosses from treating them like serfs.
Alongside these direct methods of stripping the workers for the benefit of the bosses and their war, there is the insidious method of currency depreciation. The ever-growing volume of money in circulation diminishes the real value of the dollar. Although the worker seems to be getting as much or even more money in his pay-check, he is really receiving less and less as the purchasing power of the monetary unit decreases. The continuous rise in prices coupled with the drop in the real value of the dollar constitutes in effect a serious cut in the workers’ wages.
Alice-in-Wonderland had to run twice as fast to stay in the same place; so American workers today need twice their wages in order to maintain their accustomed living standards. Washington, however, is bent upon slashing those standards. The one commodity, above all others, that must be controlled in price and driven far below its real value is the only commodity the worker has to sell: his own labor power.
Murray, Green, Hillman and the Stalinists justify Roosevelt’s freezing of wages and jobs on the ground that he will stabilize prices. Ever since the war began the President has been promising to turn this trick. This edict marks his third effort in a year to hold the line on prices. On April 27, 1942 Roosevelt proclaimed his seven-point program with the assurance that it would “prevent any substantial rise in the cost of living.” OPA administrator Henderson asserted in his first quarterly report to Congress that “the President’s program will prevail and the battle against inflation will be won decisively.”
Now the White House admits that the battle is at the point of being lost. Prices have marched upward. Price-enforcement has broken down. Evasions and violations have become a popular jest and a national scandal. The entire nation is angered by the anarchy and inequality engendered by the price-regulators.
We can believe that Roosevelt would prefer to restrain price-rises. “He would if he could, but he can’t.” It is important to understand why.
The fundamental reason why Roosevelt can’t prevent the price level from rising lies in the fact that the underlying motive forces of inflation are beyond his control. They are rooted in the chaotic conditions of world capitalism and the economic consequences of the war. Prices control Roosevelt; he cannot control them.
Moreover, the government’s fiscal policy itself keeps generating inflation. This was pointed out in a study entitled: War-Time Control of Prices, undertaken by the Brookings Institute at the War Department’s request and published in 1940. The author of this semi-official report emphatically stated that price ceilings do
“... not touch one of the most important causes of price advance, namely, fiscal inflation. Since it does not prevent the operation of a primary inflationary force, nearly all prices may in due course be expected to go through the ceiling if sole reliance is place upon it. However elaborate the administration that is established, the price-control will be inadequate because it does not strike at a primary source of the difficulty.”
The best Roosevelt’s price regulations can do is slow down a bit here and there the rate of the rise in prices. He cannot fulfill his promise to stabilize the price level of commodities.
Roosevelt’s sole major success to date along the line of price fixing has been the fixing of the price of labor.
By operating through subordinates Roosevelt has hitherto contrived to avoid much direct personal responsibility for the anti-labor acts of his administration. The harsh measures he has now instituted by decree in his own name have served to clarify the reactionary pro-capitalist content of his domestic war policies and to disillusion many workers. This can lead to a breakup of Roosevelt’s long-standing coalition with organized labor, or to an alienation of a significant section of it.
Warnings to this effect have been issued to the President by his advisers in the labor and liberal press. These servile supporters ignore the fact that Roosevelt cannot conciliate the labor movement today in the fashion of yesteryear. His regime has entered the period of counter-reforms when it must try to take away those few concessions labor fought for and won in pre-war days.
What a pitiful role the CIO and AFL leadership has played in this situation! By surrendering the strike weapon, they delivered the workers to the bosses who have taken full advantage of the union’s impotence. They have led the unions into the traps and squirrel-cages of Federal Mediation and War Labor Boards. By backing the President’s seven-point program, they cleared a path for his freezing of wages and jobs. Now, alarmed at the consequences of their own actions and by the mounting revolt in their ranks, Murray, Green, et al are bleating against the “severity” of Roosevelt’s edict while continuing to conform to it.
The militant workers will have many grievances to settle with this perfidious leadership as soon as they regain their independent class action.
Last updated on: 5.2.2006