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Bert Cochran

The Silent Revolution

(October 1954)

From American Socialist, October 1954.
Copied from the American Socialist Archive created by Louis Proyect.
Marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

A basic undercurrent of change in US economy, showing itself in the trends of automation, mergers, runaway industries, threatens the union movement with a new situation, which it must learn to face.

There is a silent revolution going on in America today, inexorable, unremitting, pitiless, and it is twisting lives of the laboring people more harshly than many a battle fought on the field. Union after union, grown accustomed to a familiar routine, has suddenly found itself grabbed by the scruff of the neck, with all the complacency shaken out of its officers as they face the specter of loss as of members, and years of hard-won achievements in the way of contracts, seniority accumulations, health and pension funds get knocked from under them. Who is this implacable enemy that has appeared in our midst, and is spreading disaster in his wake?

The local newspapers of the auto union speak of ‘automation.’ The publication of the garment union is alarmed by the runaway shop. The textile union is worrying about mergers and the wiping out of small companies. As a matter of fact, the changing pattern of American industry combines all these manifestations, and confronts the unions with radical alterations now in process in the economic structure which imperiously demand a new approach and tactic on the part of the labor movement.

The outward signs of the shifting trend are a spree of mergers and ‘shaking out’ of smaller firms, the growth of the billionaire class of corporate aggregates, automation and increased mechanization, the building up of new industrial centers in the Southwest and elsewhere.

The trend toward concentration of industry in fewer and fewer hands is a long-term one of our economic system and has been documented in innumerable government studies and investigations. The most recent report of the Federal Trade Commission records that the process is still going on, that while in 1935 the largest 200 manufacturing concerns accounted for almost 38 percent of the total value of all manufactured products, in 1950 they accounted for almost 41 percent.

These government figures only go up to 1950. But 1953-54 has probably broken all previous records. The Institute for Business Planning refers to the recent period as one that ‘economic historians will call an era of merger and concentration,’ and estimates that the number is now running at over 1,000 a year. Last year alone, 20 companies with stocks listed on the NY Stock Exchange were consolidated into 10 larger units. Not only is the ‘merger and acquisition trend intensified,’ to use the wording of the Institute for Business Planning, but ‘the concentration movement in manufacturing and distribution will continue,’ according to Dr. Marcus Nadler, economist of the Hanover Bank.

Many companies that used to be considered ‘Big Business’ just a few years ago, can now barely stand the pace, and either have to merge, or sell out to the behemoths of the industry. When the US Steel Corporation was formed in 1901, it was the one and only billion dollar concern in the United States, and represented a milestone pointed towards concentration of wealth and monopoly growth. By 1919, at the end of the first World War, there were 6 corporations with assets of over one billion dollars. When the country entered the second World War, there were 31 billionaire corporations with assets of 66½ billion dollars. By the end of 1952, the ‘Billionaire Club’ had 66 members with assets of over 174 billion dollars. These 66 are only one-hundredth of one percent of all corporations, but they hold over 28 percent of total corporate assets.

The pyramiding of great wealth is an enduring trait of American capitalism, but in the second World War period it attained unprecedented dimensions. When this element was added to others, the resultant flux triggered the process of reshaping the economic structure. What happened at the end of the war was that the American plutocracy had accumulated this towering treasure of capital, but the world was too unsettled, with vast areas in the grip of revolutionary upheavals, for private industry and banking to invest abroad on a scale commensurate with its surplus funds. It was difficult to find outlets for super-profits abroad; but at home labor costs were high. Unions had become housebroken, and the plunderbund had begun nibbling away at wage standards, hut it was still afraid to go too far in provoking labor.

Writers describing the industrial revolution that occurred in England in the Eighteenth Century showed how time and again necessity was the mother of invention. Given the set of circumstances that confronted American capitalism after the second World War, it was inevitable that the continual trend toward mechanization of industry should take on a breathless pace, and what with American engineering genius, explode into a new revolutionary technology.

Everyone has heard of ‘automation’ by now and knows it is a new giant stride in the elimination of human labor in production by the use of automatic machinery, electronic computers and feedback controls. Few factories are as yet built on complete ‘automation’ lines, which in its strict scientific definition describes electronic or magnetic-tape control of complete sequence operations. Partial use of the new technology, however, is already becoming common. In continuous-flow-process industries, such as petrochemicals, many plants are on the verge of complete automation. Fortune magazine analysts believe even more startling changes may come in the white collar field with the introduction of high speed ‘memory’ and computing machines such as ‘Univac’ or IBM’s No.702.

Professor Norbert Weiner of the Massachusetts Institute of Technology, author of the book, Cybernetics, the pioneering work in this field, who probably knows more about the subject than any other one individual, sees America entering a distinctly new economic era. He writes:

‘This country is on the threshold of a catastrophic second industrial revolution brought about by the use of the automatic machine. Unless we prepare ourselves for it, our industrial cities face a vast decentralization process, and a shifting of population to rural districts brought about by unemployment ... The rapid development of the automatic machine in industry will, within the next decade, or sooner if hastened by another war, completely wipe out the assembly line and in its place substitute a complicated electronic machine which will do the same work faster and better. Whereas an assembly line contained a hundred workers, with the automaton, this same line will resemble the emptiness of a huge power plant, with only a skeleton maintenance crew to service the machine.’

When you consider the great savings per unit with the new automatic processes once you pass break-even point, and that capital goods costs are up only 85 percent from pre-war as against manufacturing labor costs which are up 130 percent, you get a pretty good clue as to why a wave of mergers is taking place in the automobile and other industries. The industrial giants are blazing away revamping their production plants; but these new machines and units are so expensive, they require such enormous capital outlays, that even companies that were considered big 10-20 years ago are unable to raise that kind of money today. Many will survive only by permitting themselves to get absorbed by the shrinking number of giants.

Even in industries such as textile where the new technology plays little role as yet, and mechanization or improved organization of the work-process takes place along classic lines, mergers or absorptions are proceeding apace, and the little fellows who came in during the lush years are getting bounced out in the contracting market. The September 4 issue of Textile Labor mourns that ‘A tide of corporate mergers has engulfed more than 150 textile companies employing more than 50,000 workers, since July 1953. Its continuing rise threatens many more with ‘a similar fate.’ Big mergers are also underway in coal, chemicals, armaments and munitions, and basic steel.

This economic transformation, which has still to reach its apogee, and the full consequences of which are still to be felt by the labor organizations, has already resulted in the wiping out of many local unions by the shift of plant operations to new unorganized areas. Textile Labor feels that the merger movement ‘forebodes a more concentrated attack on wage standards and working conditions, both through further runaways from unionized areas and more scientifically-stiffened resistance to organization.’

In the auto industry, probably 60 thousand work have been permanently eliminated, and the end is not sight. In coal, where there has been very heavy mechanization and a shrinking market, many old local unions have seen the mines under their jurisdiction closed down entirely. Other members are working only two or three days a week. Westinghouse has just opened a new $10 million plant in Raleigh, N.C., which will be operated, according to its plant manager, so that the workers ‘will not need a union.’ At the same time, half of the workers at the unionized Newark plant have lost their jobs. Other big plants that are moving south to new modern establishments and leaving the union members holding the bag include the Alexander Smith Carpet Works of Yonkers, N.Y.. American Safety Razor of Brooklyn, N.Y., Motor Products of Marion, Ohio, Du Pont in Yerkes, N.Y., and Westinghouse Meter of Newark, N.J.

How are unions meeting this threat? What is the program of the ‘labor statesmen’ to protect the workingman’s equity in his job, his seniority and pension rights? How do the officers who head the big labor federations visualize the union’s role in the changing economy, and what new strategy or tactics have they devised to safeguard labor’s position and sustain labor’s strength? If you are looking for an answer to these questions from the labor leaders, you have come to the wrong place. They have no answer. All their elaborate research and legal staffs and economic advisers notwithstanding, the union leaders are as bewildered as the man on the street. Their actions thus far have been a combination of panicky retreats and defensive strike improvisations.

Last year, the AFL executive council, in voting support to the strike against the Hat Corporation of America, which was moving most of its production from Norwalk, Conn. to the South, announced that its action was the opening gun of a national campaign against the runaway shop. That was the beginning and end of the ‘campaign.’ Nobody has heard of it since.

Walter Reuther, CIO President, who in the past was never at a loss at whipping out a plan, whether it was the subject of converting automobile plants to aircraft production, or feeding the natives of Patagonia, is now strangely reticent on problems far closer to home. The auto union leadership is still talking glibly about big schemes for the 1955 contracts, but in practice the union is in full retreat before the corporations, as a consequence of the acceptance of wage cuts in Willys, Studebaker and some of the parts plants. Local has been pitted against local, and one locality is vying with another to bid for the employers’ favor.

The ladies garment union, led by statesmen from away back, is resorting to the meanest and most unsubstantial palliatives. After getting soundly trounced trying to organize a runaway plant, with all of the striking workers out on the street, the union proceeded to buy a plant in Appomatox, Virginia, leased it on very favorable terms to another boss, who in return agreed to hire all the strikers. Dubinsky can practice this kind of statesmanship in one or two cases, but as an answer to the runaway shop problem, it’s worse than useless. The AFL hat workers union pulled a similar stunt when it had its workers make a loan to a boss who was facing bankruptcy. As for the textile unions, both the AFL and CIO organizations are so overwhelmed by the proportions of the problem, they are simply hoping, like Micawber, that something will turn up.

On the wage front the picture is a dismal one. ‘If any single generalization emerges at mid-year from 1954 wage negotiations,’ Fortune magazine gloats, ‘it is this: labor lacked aggressiveness and management was firm.’ According to the Bureau of National Affairs, the wage rise was between 4 and 9 cents per hour in 60 percent of new wage contracts. The steel union settled for a nickel an hour and fringe benefits. The CIO electrical union settled with GE for a wage increase of 2.68 percent, also approximately a nickel an hour, and no fringe benefits. The CIO maritime union signed a contract with no wage increase, simply a few minor concessions. In textile, the CIO union permitted American Woolen, the pace-setter of the industry, to cut wages 9½ cents per hour, and reduce fringe benefits by another 6½ cents per hour.

Many unions have been forced out on long strikes, in order to finally get settlements of 5 to 7 cents. The rubber union signed for an average 6½ cent increase with Goodyear after a hard-fought 7-week strike. AFL and CIO lumber and sawmill workers have been striking since June 21 for a 12½ cent increase, with a number of locals going back in the past two weeks with no increase at all, and the CIO settling with the biggest one, Weyerhaeuser Lumber Co., for a 2½ cent increase. (Some locals won the full demand from the smaller companies.)

The workers are so demoralized by the job uncertainty, unemployment, moving of plants, and apparent weakness of the unions, that they breathe a sigh of relief when their leaders get them a nickel increase without their having to strike for it. Labor sights and goals arc getting cut down drastically in this period of reaction and retreat.

But giving up rights won after years of hard struggles is no solution to anything. Labor cannot even hope by these methods to stabilize itself on a lower level. Wage cuts and more speed-up are not a prelude to happier labor-management relationships, but to new demands for more wage cuts and still more speed-up. Obviously, the labor movement has hit a blind alley; it is badly in need of a thorough-going reappraisal of its policy, and of a ‘new look’ in its strategy. The business of letting each local union fend for itself in time of trouble, the tactic of taking wage cuts in order to make companies ‘more competitive,’ the complacency in the face of unemployment, the constant retreat before reaction on the political front – all this has to be stopped in a hurry. Else, it will not be too many years before labor will know catastrophe.

Labor cannot afford to mark time and just hope for a turn of the wheel for the better. What is required is a new program of action that will fuse the membership into an embattled army fighting to advance, not reconciled to retreat. As our Detroit correspondent suggests, the securing of industry-wide agreements and the campaign for a shorter work week are trade union musts today. To this should be added the plank for a major organization campaign in the South, to cut across the runaway shop problem and frustrate the attempt to play one section of labor against another.

It may be asked: How are you going to win these far-reaching objectives when labor has to wage long bitter strikes today just for a couple of pennies? How are you going to organize the South in the face of Taft-Hartley and the reactionary climate that prevails? The answer to these questions is that none of these tasks are primarily administrative ones. On the basis of the present outlook, methods and organization, not one of these objectives will be attained. Remember, it took a new type of organization, spirit, outlook, program to organize the mass production industries twenty years ago. The AFL, with its craft psychology and methods, could not do it. Similarly, the philosophy and methods of the present leaders of the big labor federations are inadequate for the job at hand. They cannot inspire the ranks, they cannot weld them together into an army with banners. They breathe the spirit of bureaucracy, not labor militancy. They inspire complacency and conservatism, not sacrifice and struggle.

The long retreat was halted and labor started going places two decades ago when the CIO was first set up. Now, labor is in a pocket again, and needs a new militant unionism integrated with a political labor organization to tackle the job.

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Last updated: 13.12.2005