Workers World, Vol. 17, No. 22, May 30, 1975
New York, May 24 – The ills of the large cities in America are so many and varied that it is often difficult to see the forest because of the trees.
It is impossible to understand the crisis of a city like New York unless one takes into account that it is a political-economic unit within the framework of the capitalist system and subject to the inexorable laws of the capitalist economy. New York City is merely a subdivision of the State of New York which, in turn, is of course, subject to federal jurisdiction.
There is a vital difference all too frequently forgotten or glossed over between a city, a state, and the federal government. The latter alone has the right to print currency, and make it legal tender. This alone, if we disregard all the other differences, is enough to subject the cities and the states to the federal government.
But it is precisely this difference that has made it historically easier for the banks, particularly the very large ones, to manipulate city politicians and to exert the most brutal and direct influence on city budgets. During periods of relative economic stability, the shadow of the bankers is scarcely visible. But in times of economic collapse, their brutality in dealing with the city officialdom is so outrageous that even some of the most pliable tools of the bankers are forced to cry out and rebel.
In considering the nature of the contemporary city, it should be noted that it is not without significance that a city is usually organized as a corporation, as is New York, with its chief legal officer called the corporation counsel. Like a corporation, it is organized on the fundamental premises of the capitalist economy. The bankers deal with it, not as a human entity, but strictly as an economic entity.
A city differs from the ordinary capitalist corporation in that, of course, it has authority to levy certain taxes and regulate some well-defined aspects of the economy. But most of all, it has the power to organize and maintain repressive forces, supplementing those of the state and federal governments in maintaining by force the rule of the capitalist class over the mass of the people.
A city’s rights, so called, are contained in its charter, which is enacted by the state and is supposed to contain the city’s legal rights both against the citizens and the state. But like the capitalist government itself, most cities have long outgrown the severe legal and political limitations of their charters. An acute contradiction exists between the vast size and complexity of a metropolitan center like New York and the legal limitations imposed upon it by the political content of its charter. This is one of the most aggravating contradictions and points up the capitalist nature of the city structures, which reflect the class relations of bourgeois society generally.
Just as the U.S. productive forces have vastly outstripped the U.S. national boundary, so, in a like manner, the metropolitan centers of the U.S., especially New York, have vastly outstripped the severe legal and political limitations of their charters.
The city charters, which are usually revised only as a result of a period of acute economic crisis, do little to change the fundamental nature of the flagrant contradictions. Economically, New York City, New Jersey, and parts of Connecticut and Pennsylvania constitute an economic unit which, if organized on a socialist, cooperative, and regional basis within the framework of a national plan – and not restricted by arbitrary, outmoded and artificially cultivated capitalist divisions – could supply a fantastic amount of production and general well-being to satisfy the entire region. This fabulously productive region could even supply a medium-sized foreign country with its excess production.
It would also have the beneficial effect of eradicating the artificially cultivated divisions between the city and the suburbs and would end the flight to the latter which is stimulated by racist pressures and social and class divisions.
As matters stand, however, the cities, being organized on a capitalist basis, act in accordance with the laws of capitalist economy. They are, as a result, even more prone to the economic chaos, dislocation, and disorganization of a capitalist crisis than an ordinary capitalist manufacturing corporation.
It is rarely though of but never left out of the calculations of capitalist politicians that a city must operate within the confines of capitalist competition. To cite a current example out of many, New York competes with Philadelphia, New Jersey, and cities within Connecticut on a variety of economic issues. To attract customers, not for the well-being of the people, but in the interest of special groupings of capitalists, New York may squander untold millions to construct a convention center, such as is being planned now. It matters little that Philadelphia or Atlantic City may decide to build a competing convention center.
If this results in a complete failure of the three competing centers, it is just one more example of capitalist overproduction.
The chaos that results arises purely from the lack of overall national planning and the inherent chaos built into the capitalist mode of production. In times of economic decline, cities compete desperately for plant installation, most frequently on the basis of giveaway tax incentives or low wages, and, in many cases, purely on the basis of racist policy.
As a purchaser, the City of New York is the victim of untold amounts of legalized extortion by highly privileged sectors of big industry and finance. No city administration can escape the wiles, the cunning, the maneuver, and last but not least the special laws that are enacted on behalf of these powerful capitalist interests by the city itself. Where local law fails to favor the big capitalist interests, the state legislature usually passes the necessary enabling legislation. Should the state legislature fail, which is a rare case indeed, federal law is sure to come to the rescue.
Even in areas which apparently are far removed from capitalist competition, the lust for profit overrides all other considerations. Competition for funds between municipal and private hospitals works to the complete detriment of the vast majority of the city’s inhabitants. The best and most up-to-date hospital equipment is frequently in private hands where the equipment is underutilized and where there are many empty beds.
But even more important, the many health and hospital units, private and municipal, are not coordinated on a cooperative basis precisely because underlying it all is the system of private profit. What prevails is not efficient administration but a bureaucratic nightmare of competing and accumulating private interests to the detriment of the well-being of the people. The recent nursing home scandals proved that all too well.
New York was an example, many decades ago, of a city where the bankers and light industry formed a complex which aided the city’s growth and development. With the militarization of the U.S. this has undergone a radical change. The once automatic processes of capitalist development, where light industry kept pace with heavy industry in a somewhat stable ratio of growth, have been overcome by the growth of weapons systems and the development of sophisticated high-technology armaments. These are allocated by contract between the federal government and the giant defense contractors. The cities, particularly the larger and more progressive ones, have been bypassed in favor of the out-of-the-way suburban areas which can more easily be manipulated by conservative, racist, and right-wing forces.
An element of decay in the cities which parallels that of the federal government is the monstrous growth of the repressive forces. The budget of every city is obliged to allocate a major share towards “law-and-order” personnel and equipment.
In every industry, no matter how archaic, the growth of productivity due to technological development and innovation has resulted in a reduction in labor power and personnel generally. Nevertheless, the police forces today, which are equipped with the most modern technology, in some cases even outstripping private industry, have had a continuous, uninterrupted growth in manpower. In no city have the police forces been reduced. This is decidedly due to the parasitic character of capitalist society.
The inevitable alignment of the police with elements of organized crime and the inability of capitalist mayors to cope with the ever-growing independence of the “law-and-order” police forces reflect on a city-wide scale whet the military forces have risen to at the summits of the capitalist state, and the Pentagon diplomacy which prevails.
It is impossible to overcome the effects of the capitalist crisis by the mere efforts of a city’s population alone. No matter what kind of city administration prevails, its efforts to cope with a universal economic crisis encompassing all of bourgeois society are of course limited.
The realization of this fact has made it all too easy for capitalist politicians in the large cities to pass the buck, so to speak, to the state and to the federal governments. Nevertheless, it is a totally wrong conception of the class struggle that confines socialist propaganda to merely showing the impossibilities of overcoming the general effects of capitalist economic crisis without a socialist revolution. Were that the case, one might as well say that it is impossible to have a solution to the nationwide capitalist crisis unless one reckons with the global character of the capitalist crisis, which, incidentally, is what Treasury Secretary Simon and Rockefeller are saying.
Their viewpoint, however, is based on their class conception of the capitalist crisis. Viewed in the light of Marxist strategy and tactics, the analysis of the real dynamic of capitalist society offers an indispensable weapon in the struggle against all manifestations of capitalist crisis and decay. This entails an understanding that the struggle of the workers will, in the final analysis, determine the nature of the concessions that they will win.
The broad character of the economic crisis offers an opportunity to utilize the crisis to enhance the struggle of the workers – in contrast to the preachments of passivity by ruling class politicians which paralyze the initiative of the workers. Hand in hand with an understanding of this must go a formulation of concrete demands which operate as a stimulant to the workers’ struggle and raises their class consciousness.
Thus New York City, the citadel of American finance capital, must feel the full effects of the workers’ class struggle directly aimed at the bankers, who not only control this city but all the others as well. A tax on stock exchange operations, on insurance companies, on the billions upon billions of untaxed real estate in New York, a suspension of all debt interest to the banks, and a moratorium on all debts as well as mortgages by workers – these are some of the measures which can and must be fought for. Equally important must be a struggle to force the mayors of large cities to stop all layoffs and to compel the city councils to enact laws prohibiting layoffs and initiating recall schedules of laid-off employees.
All concessions, whether in stable capitalist periods or in periods of acute economic crisis, have resulted from working class struggles. These may be limited by the nature of the capitalist system and the consequent depressions and inflations which tend to dilute concessions and even wipe them out. But not fighting for them, which the bourgeois politicians intimate should be the attitude during economic crisis, and to wait until the crisis “bottoms out,” in their phraseology, makes the working class a passive object of capitalist exploitation.
The era of capitalist decline is ushering in a epochal struggle by the workers on an immense and national scale. Armed with a sound theoretical and political understanding of the situation, and in possession of a concrete program of action based upon immediate demands, such as outlined above, the working class will be able to throw back the challenge of the capitalist class and the ravages of the economic crisis which the capitalists are trying to shift onto their shoulders.
Last updated: 11 May 2026