Preis Archive   |   Trotskyist Writers Index  |   ETOL Main Page

Art Preis

No Classes in US?

Myth of “People’s Capitalism”

(May 1961)

From International Socialist Review, Vol.23 No.1, Winter 1962, pp.3-9.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

TODAY, American employers and trade union leaders alike insist there is no basis in this country for class struggle. They claim, in fact, that “class distinctions” and even classes themselves have disappeared from our society.

The founders of the American Federation of Labor in 1886 did not deny the fact of the class struggle. They said in the Preamble of the AFL Constitution:

“A struggle is going on in all nations of the civilized world between the oppressors and the oppressed of all countries, a struggle between the capitalist and the laborer ...”

It is true that Samuel Gompers, the AFL’s founding president, disavowed class struggle methods. He proclaimed in his 1910 Labor Day statement, for instance, that

“Labor Day stands for industrial peace ... Our labor movement has no system to crush ... It has nothing to overturn ...”

William Green, Gompers’ successor, announced in 1935, on the eve of the stormy rise of the Congress of Industrial Organizations (CIO) that we were at the dawn of class peace. He assured labor that “the majority of employers sincerely and honestly wish to maintain decent wage standards and humane conditions ...” He boasted of his “consistent refusal to commit our movement” to “tactics based upon belief that irreconcilable conflict exists between owners of capital and labor ...”

The modern union leaders have gone Green one better. They have banished economic classes altogether or reduced class differences to the vanishing point. Without classes or class differences, they ask, how can there be class struggle? The late Philip Murray, president of both the CIO and the United Steelworkers of America, thus wrote in July 1948:

“Today, progressive businessmen regard their workers ... as welcome partners ... We have no classes in this country; that’s why the Marxist theory of the class struggle has gained so few adherents. We’re all workers here.”

Walter Reuther, United Automobile Workers President and Murray’s successor in the CIO, spoke at the 1954 CIO Convention against a labor party here because he said this country does not have the same type of class structure as in Europe. Over there, he claimed,

“society developed along very classical economic lines, there you have rigid class groupings ... But America is a society in which social groups are in flux, in which we do not have this rigid class structure ...”

Reuther has never made clear whether we are becoming “all workers here,” as Murray said, all capitalists or some new hybrid class. But he is sure of one thing:

“We don’t believe in the class struggle. The labor movement in America has never believed in the class struggle.” (New York Times, March 28, 1958).

AFL-CIO President George Meany also abhors class struggle. But Meany, unlike Murray, has liquidated the working class. At the AFL-CIO merger in December 1955, Meany decreed:

“We must not think of ourselves as a group apart; there is no such thing as a proletariat in America.”

This echoes a note sounded since the end of World War II by ideologists and propagandists of big business, who spread the myth that in America we have achieved – or soon will – a “classless” society – and without abolishing the private profit system. This unique form of society they call “people’s capitalism.” Thus, the General Electric Corporation in a large advertising spread in the February 22, 1959, New York Times Magazine, explained that its shareowners “come from all walks of life” and “this trend has made American capitalism more and more a people’s capitalism.” (Original emphasis.)

Adolph A. Berle Jr., Roosevelt’s wartime Assistant Secretary of State and a luminary early in the Kennedy Administration, specializes in this type of myth-making. In the New York Times Magazine, November 1, 1959, Berle states that what Marxists describe as capitalism “perhaps did exist a century ago. But in America it stopped existing somewhere between 1920 and 1930.” He informs us: “This American system has not received a distinctive name. It has been called ‘people’s capitalism’.” This “people’s capitalism,” according to Berle, is a transformation from the “age of moguls” which existed seventy or eighty years ago. In

the last decades of the Nineteenth Century, Berle concedes, “individual owners of private capitalist enterprise were ... piling up fabulous fortunes from the profits of railroads and mines, steel, copper and oil ...” But today the corporations have “displaced the tycoons and moguls, substituting professional management.” In a subsequent New York Times article, Berle dissolved the working class as easily as he had eliminated the “tycoons and moguls.” He wrote on December 18, 1960, that “in America the ‘proletariat’ is hard to find.”

The New York Times editors also claim it is absurd to speak of class distinctions. In a Labor Day editorial, the September 5, 1960, Times instructs us:

“What we most need to remember is that such expressions as ‘labor’ and the ‘workingman’ have a diminished meaning today. We have no class distinctions to fit such words. Among the crowds on our Appian Ways it is difficult to tell employer and employee apart ...”

Let the Times editors – and Berle and Meany, too – seek beyond “our Appian Ways” and go to the unemployment compensation offices or welfare relief agencies. Let them survey the vast and rotting slum areas of New York City and our other large population centers. They will find, by some odd chance, that such places and such areas, are frequented almost exclusively by workers.

Here we have one rule-of-thumb measure of class distinctions in America. Unemployment and the need for unemployment relief are almost exclusively conditions affecting wage workers. A study of unemployment, published in June, 1958, by the US Bureau of the Census, disclosed that 11,600,000 workers had suffered some period of unemployment in 1957, a “good” year. If we count as proletarians only those subject to unemployment and their dependents, we must conclude that, contrary to Berle’s claim, the proletariat in the United States is not at all “hard to find.”

CLASS divisions in America have been the subject of serious studies in recent years by outstanding sociologists and scholars – all non-Marxists. Their findings are contained in such widely heralded books as The Status Seekers by Vance Packard, The Power Elite by C. Wright Mills and Social Class and Mental Illness by August B. Hollingshead and Frederick C. Redlich. They all confirm, in their own way, that class lines exist and are hardening more than ever.

The Status Seekers, a best-seller in 1959 and 1960, marshals an impressive array of facts to answer the directly posed question: has the United States become a classless society or is it even approaching such a condition?

Packard concludes that class lines in this country are becoming more rigid and that even within the upper strata of society the straining for status and privileged position has intensified. Moreover, he dismisses the “widespread assumption” that the rise in available “spending money” in the late fifties is making everyone equal. He stresses that a working-class man does not move into a higher social class even if he should succeed in purchasing a “limousine” or some other material status symbol. And the worker knows it, says Packard. For, in terms of the worker’s productive role, class lines are becoming “more rigid, rather than withering away.”

Packard refutes the widely circulated propaganda that the working class is being absorbed into the middle class. In 1940, only about one-third of those gainfully employed were in so-called “white collar” occupations. By 1959, it was claimed, at least half were in the “white collar” group. This, says Packard, has been incorrectly interpreted to signify a great upthrust of working-class people into the middle class. Actually, a large percentage of those recruited into the new “white collar” jobs are women who did not previously work. Besides, many jobs classified as “white collar,” Packard points out, are really low-paid manual occupations that require little skill, such as that of office machine operators, gas station attendants, retail store clerks and many government employees.

Today, there are some 23,000,000 women workers, almost a third of the entire labor force. They provide a high percentage of the clerical and other “white collar” workers. The average full-time yearly pay of women workers in 1960 was $3,102, or two-thirds of men’s average earnings. Thus, the majority of working women get wages close to or below the poverty level, fixed by government experts at $2,500 a year. This hardly qualifies these new “white collar” workers as middle-class, even if one believes that a poorly paid typist or mimeograph machine operator has a status superior to a union-scale linotypist or pressman in the printing industry.

THE FACTS cited above confirm Packard’s contention that there has been a “revolutionary blurring” between so-called “white collar” and “blue collar” workers in the sense that every basis for the claim of “white collar” clerical workers to superior status over “blue collar” workers has been undermined. Furthermore, Packard divides the “white collar” classification into a “lower” and an “upper” group. The latter includes the managers and executive employees, as well as self-employed professionals like doctors and lawyers. He explains, however, that between the “lower” and “upper” “white collar” groups there is a “sharp and formidable” boundary line.

We are forced to conclude from Packard’s findings that the “blue collar” workers are not being uplifted into the middle class. Rather, there has been a massive “proletarianization” of the lower middle class. Our society has become polarized into two primary classes, the wage workers and the owners. The letter’s top richest circles are the dominant sector of the American ruling class.

There was a time, however, when the American people might have spoken of “people’s capitalism” with a large degree of truth. That was before the American Civil War. Packard has noted this significant historical fact. There has been a tremendous shrinkage in the relative number of small entrepreneurs and self-employed people – farm owners, small tradesmen and shopkeepers, and craftsmen with their own workshops. These independent enterprisers originally constituted a true middle class in this country. They owned their means of production; they did not sell their labor power for wages.

Thus, at the beginning of the nineteenth century, during Thomas Jefferson’s presidency, four out of five Americans were self-employed enterprisers, a majority of them being farmers, Packard points out. By 1940, these enterprisers were only about one-fifth of the income earners. In 1959, they were reduced to about 13% of the “gainfully employed.” (By April 1960, the farm population, including all “hired hands,” had fallen to only 8.7% of the national total.)

In the late fifties, Packard also notes, some 87% of the income-earning populace were employed by others, by a tiny minority of employers, usually in corporate guise. I add the very significant fact that less than 1% of the corporations employ nearly 60% of all paid workers. (US Department of Commerce report, September 22, 1959.) Packard himself, I must further add, fervently disapproves of the hardening of class lines and wishes something might be done about it for the sake of the private profit system itself. But at least he does not shrink from the facts.

The “free enterprise” system in its corporate monopoly phase is not dominated by faceless “professional managers.” The Commissioner of Internal Revenue revealed in 1957 that 201 individuals had reported personal incomes of a million dollars or more in 1954 compared to “only” 145 in 1953. A further rise was expected in 1955. Fortune magazine, in its November 1957 issue, noted the significance of this data. Its article, The Fifty-Million-Dollar Man by Richard Austin Smith, observed there had been a lot of “poor-mouthing” about the million-dollar income dying out. It is plain from the statistics, said the Fortune writer, that “America’s Very Rich” have not gone the way of the pre-historic dinosaurs and do not seem likely to. The evidence points rather to what Fortune called “the resurgent Very Rich,” defined as individuals with personal estates of not less than fifty million dollars. That is the minimum wealth, Fortune contended, to be rich enough never to escape “the aura of money” or to conceive of ever being broke. A Treasury official cited by Fortune estimated there are between 150 and 500 persons in the golden circle of the “fifty-millionaires.”

Fortune itself identified 155 “fifty-millionaires” and thought it likely there were another hundred. Under the heading, America’s Biggest Fortunes, the magazine printed the names and chief sources of wealth of the 76 richest people in the country, so far as Fortune was able to uncover them.

THE majority of these super-rich “tycoons and moguls” have inherited their fortunes; their family names, such as Rockefeller, Harriman, Mellon, duPont, Astor, Whitney and Ford, have been associated with fabulous wealth for three or more generations. The minority of “self-made” rich listed by Fortune “made their pile” mainly during World War I and the post-war boom. They include the General Motors quartet, Alfred P. Sloan Jr., Charles F. Kettering, John L. Pratt and Charles S. Mott. Joseph P. Kennedy, stock market and real estate speculator whose son John was then in the Senate, was listed in Fortune’s $200 million to $400 million bracket.

Of Fortune’s 76 richest Americans, 31 were in the $75 million to $100 million group; 29, in the $100 million to $200 million; eight, in the $200 million to $400 million; and seven, in the $400 million to $700 million sector. J. Paul Getty, a California oil “tycoon” domiciled in Paris, occupied the $700 million to $1 billion niche alone. Getty in 1959 stated that his fortune was probably greater than a billion. (New York Times, October 16, 1959.) Several billionaire families are on the list, including seven Rockefellers, four Mellons and four duPonts. Forty one of the 76 inherited their fortunes; of the remaining 35, thirteen got rich from oil. Fortune explained its estimates were “conservative.” I put the combined wealth of the 76 at between $17 billion and $20 billion. Several of the 76 have died since 1957. But the corporations and banks which they or their heirs control or directly influence reflect the spectrum of American industry and finance, with many scores of billions in assets.

The “moguls” dominate more than ever. But the individual or family ownership and operation of a single enterprise, which characterized the economy of the last century, has been transformed into vast industrial and financial complexes owned and controlled largely by single individuals, families or small inner groups who hire and fire professional managers at will.

When confronted with these facts proving that there are more and richer “moguls” than ever, the propagandists of “people’s capitalism” brush the whole matter aside. G. Keith Funston, President of the New York Stock Exchange, has erected the final and, presumably, most invulnerable line of defense of the “people’s capitalism” theory. This Maginot Line of “people’s capitalism” is “broadened ownership of corporation stock.” The New York Post, April 21, 1959, published an interview with Funston and explained:

“G. Keith Funston did not invent the phrase ‘peoples capitalism.’ But he’s done such a job popularizing it ... that people’s capitalism – broadened ownership of corporation stock – has become pretty much of a Funston hallmark.”

Funston is quoted:

“I like the term because it’s expressive and because the Russians hate it so. They say, yes, there may be over 8,600,000 Americans owning stock but that only 1 per cent own more than 90 per cent of it – or some such figure. Well, we don’t know exactly how stock ownership is spread, but we estimate that two-thirds of those 8,600,000 shareowning Americans have incomes of $7,500 and under ... we know there’s been a significant increase of stockownership in recent years – about one-third more buyers than in 1951.”

FUNSTON infers that the question of the vast proportion of all stocks owned by the top one per cent of stockholders is just “Russian” propaganda. This “Russian” propaganda happens to be based on data published by such ardently pro-capitalist institutions as the US Senate and the National Bureau of Economic Research.

A 1946 Report on Monopolies by the Senate Small Business Committee disclosed that the top 1% of shareholders then owned 60% of the outstanding stock of the 200 largest corporations. “The rich are getting richer,” said the February 29, 1960, New York Times, in describing a survey by the National Bureau of Economic Research. This survey, said the Times, “showed that since 1949 there has been a trend toward more wealth in the hands of fewer people ...” This trend, the Times reported, “was clearly evident in 1953 ... when 1.6 per cent of the country’s population held 30 per cent of the nation’s personal wealth” including “at least 80 per cent of the corporate stock held in the personal sector, virtually all of the state and local government bonds and between 10 and 35 per cent of each type of property.”

What is true of the division of all shareholdings is also true for the shareholdings in individual corporations. The classic case is the American Telephone and Telegraph Company. For many years, AT&T has been cited as the outstanding example of “people’s capitalism” because it has more stockholders than any other corporation.

In 1951, AT&T celebrated the attainment of one million shareholders. Widely publicized ceremonies were held in the New York Stock Exchange. The publicity neglected to mention, however, that the vast majority of AT&T stockholders individually and collectively owned very little of AT&T. While just 30 top shareholders in 1950 owned 1,160,000 of AT&T’s 29 million outstanding shares, some 200,000 AT&T wage workers who had been induced to become “capitalists” by buying AT&T shares controlled less stock than the top 30 owners. These AT&T worker-shareowners, representing 20% of all the company’s shareholders, had to strike repeatedly just to win union recognition.

CIO Communications Workers President Joseph A. Beirne called the publicity about the one-millionth shareholder a “shallow and cheap device to fool the public.” He cited AT&T’s own figures to show that “7.5 per cent of stockholders own over one half of the outstanding shares.” He added: “Conversely, the remaining 92.5 per cent of the shareholders combined don’t even have majority control of the company ...” Today, AT&T boasts nearly two million stockholders. More than 90% of them possess insignificant holdings. All of the latter combined have less control over AT&T than a man with a paddle has over an ocean liner.

The head of the New York Stock Exchange, however, has declared that anyone who talks about how few own so much is practically an agent of the Kremlin. I will limit myself, therefore, to examining simon-pure “people’s capitalism” as defined by G. Keith Funston. In his New York Post interview, he saw this new and better economic order in the fact that about 8,600,000 Americans in the spring of 1959 owned at least one share of stock. That is, only 5% of the population owned stock.

THERE was more “people’s capitalism” during the great depression in 1936. That year there were 8,039,000 shareholders, or 6.3% of the population. (The Economic Almanac for 1946-47, Page 45.) By 1952, when Funston began unfolding his propaganda campaign, the number had dropped to 6,490,000, or only 4.2% of the population, according to the New York Stock Exchange’s own report. In 1956, the Exchange reported 8,630,000 shareholders, or 5.2% of the American people – still a smaller percentage than in 1936. Finally, in June 1959, Funston was able to come up with a figure on stock ownership representing a higher ratio to population than the 1936 depression figure. The New York Stock Exchange claimed there were 12,493,000 shareholders in June 1959, or about 7% of the population, compared to 6.3% in 1936.

Let us turn from the America of the 1.6% who own 80% of all privately held corporation shares to the proletarian America of the 87% who live primarily by the sale of their labor power for wages. If the “Very Rich” of Fortune’s 1957 survey are those who cannot conceive of ever becoming broke, the people of the wage-workers’ America never know what it’s like not to feel insecure, not to fear that a day will come when they will be broke or nearly so. Most of them at some time in their lives have been broke, or next to it, and many are broke right now.

Under the present private-profit order, the wage workers never escape the fear of pauperization. Insecurity nags the workers even in periods of relative “prosperity.” What if a prolonged illness strikes? What if the job folds up? What if a depression comes? These questions are never far from the surface of the minds of even the best-paid workers.

A US Department of Labor survey indicated that the average family of four needed an annual income of $6,120 in 1959 to maintain a “modest but adequate” standard of living. This did not allow for any prolonged illness or savings. This budget required a full year’s income of $118 every week. The average factory wage at the time was $90.78 a week before withholding taxes. I have before me a recent Labor Department report showing that in February 1961 the actual average weekly take-home pay of factory production workers in the metropolitan New York-Northeastern New Jersey area was $80.87 for a worker with three dependents and $73.31 for a single worker.

The US Census Bureau reported on January 5, 1961, that the median family income in 1959 – before the current recession – was $5,400 before taxes. That is, half the families in this country had incomes during the last “boom” year below $5,400, or at least $720 less than the government’s own “modest but adequate” family budget.

In the peak “prosperity” year, 1959, a large segment of the population lived close to or in dire poverty. Nearly 25% – one in four – families had to subsist on $3,000 a year or less, the equivalent in buying power of about $1,250 at pre-war 1939 price and tax levels. Fortune magazine, March 1961, cites the fact that today there are 32 million American people living in outright poverty – below the $2,500 a year level per family.

The impoverished in America are equal to nearly 75% of the population of France; about 60% of West Germany or 65% of Italy; nearly double the population of East Germany; and five times the population of Cuba. Many more than half the American people live well below what is officially considered the minimum “decency and comfort” standard for a country as rich and productive as the United States.

Remember, we are not speaking of a land newly emerged from age-long backwardness, like China. Our country, with 6.2% of the world’s population, owns 50% of its wealth. (Information Please Almanac – 1961, page 628.) Our governmental units (federal, state and local) together spent $153 billion in the fiscal year 1960. Since the end of World War II, we have spent more than $500 billion for direct military purposes – enough to have built fifty million modern $10,000 homes. In fact, we spend a million dollars a day just for storage of the “surplus” farm commodities bought by the government to prop up agricultural prices.

AMIDST these Himalayas of waste, great sectors of the American people live in permanent misery. Far from benefiting from the “social flux” that Reuther has conjured up, tens of millions of Americans are condemned by race, age and sex alone to suffer permanently in abysmal living conditions while abundance overflows all about them.

Take, for example, the more than 19,000,000 Negro Americans (or Afro-Americans as some of them now prefer to be called). Most of them exist in a permanent depression – economically deprived, physically segregated, socially degraded and politically disfranchised. The Negro workers earn little more than half the average wages of the white workers, although few of the latter attain the blessed estate of a “modest but adequate” family income. As of 1958, half of the nonwhite male workers earned $3,368 or less compared to a median income for whites of $5,186. Secretary of Labor Arthur J. Goldberg reported on February 17, 1961, that 13.8% of all Negroes in the labor force were out of work in January 1961, compared to 7% of white workers. At this point, it is well to remind ourselves that there is one vast area of this country, the former Southern slave states with more than twice the population of fascist Spain, that has maintained a one-party dictatorship since the end of Reconstruction and denies civil rights to more Negroes than the entire black population of South Africa.

It is miserable indeed to be a Negro worker in the United States; but, strange as it may seem, it is even worse to be an aged worker, whatever one’s color. Life magazine, July 13, 1959, gave a shocking account of the plight of persons 65 years of age or older. There were 15.4 million people over 65 in 1959. Three-fifths of them, some 9.2 million, had personal incomes of less than $1,000 a year. Another fifth, about 3,000,000, received less than a $2,000 annual income.

Our society prides itself on being based on the Ten Commandments, including one that says: “Honor thy father and thy mother ...” Yet, the United States has well over ten million pauperized aged (mostly white) who are “badgered by economic worries, harassed by failing health ... for the most part in dire need,” write Robert and Leone Train Rienow in the January 28, 1961, Saturday Review. Their article, The Desperate World of the Senior Citizen, tells how these 10 million impoverished aged Americans hidden away in our dingy back rooms “are, almost without exception, cruelly lonely, suffering from feelings of rejection and neglect.” This plight of America’s aged, I might add, is a sufficient commentary on the highly touted “social security” system in this richest country of all.

Our dependent and orphaned young also subsist on mere dregs. Payments in many states for dependent children as well as for old-age assistance, “often represent little more than slow starvation,” admitted William L. Mitchell, US Commissioner of Social Security, in an address on September 10, 1959. More than three million youngsters are trying to survive on this aid to dependent children under the Social Security Act. Life magazine recently ran pictures of children in parts of the former Belgian Congo starving as a result of civil war and foreign intervention. But just as horrible sights were to be seen down in our own Louisiana. In August 1960, the Louisiana legislature struck 23,500 children off the state-administered aid-to-dependent-children rolls. They were deemed to be living in “unsuitable” homes – the mothers of many of them were unmarried. State Senator Jack Fruge of Ville Platte on November 8, 1960, pleaded unsuccessfully for repeal of the Louisiana law, saying that he knew many instances in his own parish (county) of Evangeline where “children are so hungry they go to garbage cans for food.”

BUT nothing quite equals the vile conditions of the two million hired farm workers. Their average income in 1960 fell below $900. The majority are Negroes, Mexicans and Puerto Ricans. They are denied even the meager protection of the minimum wage and collective bargaining laws.

As previously noted, average wages of our 23 million women workers are only two-thirds of men’s and provide only half the income necessary for a “modest but adequate” standard of family living. Many women are the sole support of their families.

No proletariat in America? I have just described scores of millions of proletarians – the impoverished aged and the dependent children, the racial and national minorities, the women workers and the farm hands. And I have not yet touched on the main body of proletarians – the white male wage-earners.

Two-thirds of all the gainfully employed are males – 90% of them white. An outright majority – 58.4% – of all employed males are in the manual, service and farm laborer classifications, according to BLS data for July 10-16, 1960. Factory operatives and kindred workers form the largest single group of male employees, 19.2%. Then come craftsmen, 18.7%; non-agricultural laborers, 9%; service workers (a wide category including domestic servants, repairmen, laundry workers, elevator operators, janitors, clothes pressers, garbage collectors, barbers, hotel, restaurant and bar workers, etc.) 6.5%; and hired farm laborers, 4.9%.

All income earners of both sexes totaled 68,689,000 in the above-cited BLS report. Of these, 37,449,000 – or a 54% majority – are in physical labor categories, including operatives, craftsmen, laborers, service workers and hired farm hands. Clerical workers number 9,907,000 and sales workers, 4,405,000. The latter two “white collar” groups total 14,312,000. They formed 20.8% of the employed working force in July 1960. Even if we add to them a mixed category listed as “professional, technical and kindred workers,” numbering 7,042,000, or 10.3% of the total, we cannot stretch the “white collar” workers to more than 31.1% of the gainfully employed. However, the “professional, technical and kindred workers” label is deceptive. In January 1960 an AFL-CIO Industrial Union Department seminar on the space-age industries heard a warning that many employers are trying to “bleed” the unions by labeling as “technicians” workers who do about the same tasks as other production employees.

The remaining classifications are “managers, officials and proprietors” and “farm owners and farm managers.” Together, they represent 14.4% of the total.

THERE is extensive manipulation of statistical data to exaggerate the number and social status of the so-called “white collar class.” Thus, the Census Bureau’s occupational classification system puts file clerks, typists, office boys, grocery wrappers and cashiers, variety-store sales girls and similar low-paid workers in the same general “white collar” occupational division as “managers, officials and proprietors.” Recently, the classification of “service workers,” who include many in the most menial physical labor jobs, has been shifted from the “Manual and Services” general category to the broad “White Collar Occupations” listing.

The great increase in clerical and “technical” workers in the past 20 years, due mainly to doubling of government civilian employment and expansion of the war industries, is being used to “prove” that “blue collar” workers are in swift decline, that the proletariat is vanishing and that the unions are disintegrating.

Under the headline, Union Membership Declines, a New York Times editorial on February 7, 1960, takes special note of a 300,000 loss in total union membership from the 18,400,000 peak in 1956. The Times attributes this 1.7% decline in part to the fact that “white collar workers now account for more than half of the labor force but only 12 per cent of American unionists were white collar workers in 1958 ...” The Times’ figure on the predominance of the “white collar” workers, as the Census data I have cited show, is false. There were almost three times as many wage workers employed in physical labor categories as in “white collar” in 1960, although mass unemployment has since cut down paid union memberships by as much as 1½ million.

It is true that union leaders themselves blame the over-all decline of union membership since 1956 in part on the “changing composition” of the nation’s work force. Yet some 20 million workers in the physical labor category – many in the South – remain unorganized. Every time there has been a slackening of union growth we have heard the plaint about the “white collar” workers. The fault lies, however, in the class-collaborationist policies, methods and outlook of the union leaders.

But before anyone hangs a wreath on the American labor movement to mourn the simultaneous demise of the American proletariat and its unions, let us review certain basic facts. Twenty-eight years ago – in 1933 – there were only 2,782,296 union members, or 7.8% of the organizable workers, after 47 years of AFL activity. In 1935, the year the CIO was formed, organized workers numbered 3,616,847, or 10.6% of potential unionists. By 1937, after the CIO went into action, union membership more than doubled, numbering 7,687,087, or 21.9% of organizable workers.

MOREOVER, during the first two years of the CIO’s aggressive drive to organize industrial workers, scores of thousands of “white collar” workers were swept into the CIO’s fold – a combined total of 90,000 in the State, County and Municipal Employees, the United Retail Employees and the United Office and Professional Workers unions. Some 15,000 editorial employees joined the new American Newspaper Guild. (Edward Levinson, Labor on the March, 1938, Page 309-315.)

Today, despite recent losses, organized labor represents between 16 million and 17 million members, almost five times as many as in the founding year of the CIO and two and a third times more than in 1937, when the almost-broke CIO unions, amidst a depression, crashed through for their first great victories.

In examining the contention that “there is no proletariat” in the United States, I have touched only in passing on the crucial point of mass unemployment. Despite more than a trillion dollars (1,000,000,000,000) of direct military expenditures in the past twenty years, we have experienced a series of recessions – 1945-46, 1949-50, 1953-54, 1957-58 and 1960-61. The unemployment peak in July 1958 reached 5,294,000. Eight million workers drew unemployment compensation at some time during 1958. In February 1961, a new post-war record of 5,705,000 full-time jobless was reached. Another 3,000,000 were on reduced work-weeks with corresponding loss of pay. Nearly nine million wage earners were suffering directly the consequences of falling production at the low point of the latest recession. About 45% of the unemployed are not covered by unemployment compensation. It is estimated that in 1960 not less than fifteen to sixteen million workers suffered some period of full unemployment.

In February 1961, one in every ten factory workers was unemployed – an outright depression ratio. Most heavily hit were steel, auto and textile workers. Coal miners have lost two-thirds of their jobs since World War II. Detroit unemployment in February 1961 reached a depression level of 11.8% of the city’s work force. The Michigan jobless rate was 10.8%. Mass layoffs accompanied sharp drops in production. Auto factories in February 1961 worked at only 44% of the February 1960 rate. The steel industry, from June 1960 through March 1961, operated at between 45% and 55% of capacity.

BECAUSE of their relatively high wage rates, coal, steel and automobile workers have frequently been cited as wage-earners who have been lifted above the proletariat. Compared to the $2.30 average hourly wage rates for all manufacturing workers in February 1961, the soft coal miners received $3.27; steel workers, $3.02; and auto workers, $2.87. But frequency of layoffs and short work-weeks in these basic industries have meant deep slashes in annual earnings. Moreover, welfare funds and “fringe” benefits are proving insufficient to meet the need during the current depressed conditions of these industries.

The independent United Mine Workers was forced in December 1960 to cut pensions of 65,000 retired soft-coal miners from $100 down to $75 a month because of “economic conditions that have caused a large decline in the revenues of the trust fund.” A supplementary unemployed benefit (SUB), combined with state unemployment compensation, was supposed to provide laid-off AFL-CIO steel workers with 65% of their normal weekly take-home pay for as long as a year. By February 1961, the US Steel Corporation had reduced its individual SUB payments 40% because of the heavy drain on its fund. AFL-CIO United Automobile Workers officials have reported an unspecified number of laid-off UAW members have lost their SUB payments. These are discontinued when state unemployment benefits end. American society is indeed “in flux” – but not in Reuther’s sense. It is “in flux” between employment and unemployment; between inadequate unemployment payments and none at all.

I have cited the statistics to prove beyond doubt the class divisions in the United States, the decisive numbers of the proletariat and the tremendous size of organized labor compared to earlier periods. These facts demonstrate that the widely advertised “people’s capitalism” is a myth based upon massive falsifications about the conditions of the working people and their struggles for existence in this richest and most favored of capitalist countries. The economy of the United States is neither owned by the people nor operated for their benefit. Our capitalism remains essentially what it has been from birth: a system of exploitation of the many for the enrichment and aggrandizement of the few.

May 1, 1961

Preis Archive   |   Trotskyist Writers Index  |   ETOL Main Page

Last updated: 21.12.2005