ATC Turns 200 (issues)!

A Letter from the Editors

This marks the 200th issue since the announcement in January, 1986 that with our new series, “Against the Current inaugurates a new magazine of socialist theory and strategy.” It’s an occasion to look back at where matters stood then, and how they look now. One contrast stands out sharply: In the middle 1980s, the socialist left at least in the United States was going through one of its driest and most difficult times. To be sure there were dynamic movements, especially in solidarity with the Central American revolutions and the long, bitter struggle against the obscenity of South African apartheid, but the organizations of the 20th century U.S. socialist left were in severe decline.

Today, a very substantial (at least by U.S. standards!) recomposition of socialist activism and organization is underway, with enormous potential as well as many pitfalls lying ahead. The comparison is all the more interesting, given that both then and now mark reactionary and repressive moments in bourgeois politics.

Back then, the Reagan administration was knee-deep in bloody genocidal counterinsurgency wars in Central America, mired in scandal over secret arms sales to its official enemy Iran to finance illegal aid to counterrevolutionary Nicaraguan militias. Among the most vicious criminal operatives in that venture, Elliott Abrams, has now resurfaced in Washington’s drive to instigate a coup or civil war in Venezuela.

Also back then was an incipient crisis over the commander-in-chief’s diminishing cognitive capacities. (“What did the President know, and when did he forget it?” as the running gag of the day put it.) Today, thanks to the awesome technology of social media and particularly twitterworld, the mental imbalance of the occupant in the Oval Office is on open daily display, a staple of the incessant cable news cycle and fodder for long-distance diagnoses by learned as well as amateur specialists in the fields of narcissism, sociopathy and related disorders.

More important is the consequence of decades-long imperialist ravages in Central America, bringing tens of thousands of refugees and desperate asylum seekers today to the U.S.-Mexico border, where they’re subjected to world-class atrocities by U.S. border patrol and Immigration and Customs Enforcement.

In the 1980s, the United States covertly aided both Saddam Hussein in Iraq’s war against Iran, and Osama bin Laden’s Al-Qaeda in the Afghanistan anti-Soviet proxy war. Several imperial twists and turns later, the 2003 U.S. invasion and occupation of Iraq and now a potential war with Iran, as well as Trump’s open alignment with the brutal regimes in Egypt and Saudi Arabia and the extreme rightwing Israeli government, have produced today’s Middle East catastrophe.

Assaulting Labor

In the mid-1980s, following Reagan’s 1981 crushing of an inadequately prepared air traffic controllers’ strike and their union, U.S. labor was in severe retreat; what we now call “neoliberalism” was slashing at living standards and the social safety net. That attack has continued without interruption, although in different-looking forms, under the administrations of both capitalist parties, and in even more extreme measures enacted by reactionary gerrymandered state legislatures.

The 1980s witnessed an economic restructuring at labor’s expense, with “lean production” and just-in-time management systems, high-stress work environments, higher productivity and stagnant real wages, all chronicled – along with worker resistance – in the pages of Labor Notes and the books it’s published. In the 1990s and since has come the “two-tier” plague pioneered in the auto industry, slashing established wage norms by as much as half.

The decline of organized labor has also been largely continuous, with defeats vastly outnumbering victories. Yet just when things looked bleakest for working class America, a spreading strike wave by teachers has breathed new life into what looked like a dying labor movement. It’s a revolt triggered by the vicious attacks on public education — we’ve covered it in ATC’s recent issues as well as the current one – and by extension, the corporate drive to cripple practically the entire public sector. (The interview with Robert Brenner in these pages discusses the factors behind it.)

The teachers’ strike wave has been for higher wages, certainly, but even more about dignity and decent working conditions, supporting students and building alliances with communities. Here again, the processes that capital unleashed have led to today’s profound social crisis – but also to a popular reaction, and none too soon!

It was a distorted quasi-populist revolt against the misery and insecurity that corporate neoliberalism has imposed on working people, and on whole regions of the country, that produced the semi-accidental election of Donald Trump. Yet under two years of hard-right Republican control of Congress – something that didn’t exist in the Reagan era – the most extreme reactionary anti-worker as well as anti-women, anti-immigrant, anti-environment and racist politics have flourished.

That’s the less reported story underneath the sleaze and scandal and amazing corruption of Trump’s family, cronies and Cabinet and the filth that spreads to everything he touches. But it’s not the entire story: The 2016 election also saw the campaign of Bernie Sanders, which galvanized a huge layer of young people as well as working class voters, despite the fact that the Democratic Party establishment had no intention of letting him upset the Hillary Clinton coronation the way Trump “hijacked” the Republican machinery.

We know how that worked out in 2016 – but Sanders’ campaign played a large role in the U.S. socialist revival, including the explosive growth and sharply leftward evolution of the Democratic Socialists of America. As Tim Marshall’s account of the Oakland teachers’ strike in this issue makes clear, socialist activists and press were a dynamic and significant factor in supporting that struggle. It’s always true that socialist and class struggle ideas come alive in their intersection with living movements – then and now.

What might “Bernie 2020” mean for the next election and beyond? That’s a topic for much future discussion, but the central unresolved contradiction remains: the entrapment of progressive and left electoral activism inside the corporate capitalist Democratic Party, in the absence of a strong visible alternative political vehicle.

What’s Really New

These are some of the continuities between what we were living in 1986 and what confront us today. There are also some major differences, real historic turning points, from these intervening years that need to be taken into account.

First, back then as we know now but didn’t at the time, oil industry scientists were doing secret, excellent research on the climate impact of their corporations’ greenhouse gas emissions. The fossil fuel industry already understood – and made sure not to reveal – the implications of anthropogenic global warming.

Today the world is living through the devastating, escalating consequences of these crucial decades of neglect of the causes of climate change. As these lines are drafted, the overwhelming flooding of Mozambique, Malawi and eastern Zimbabwe – and of the U.S. upper Midwest — is the environmental catastrophe of the moment. Before this issue reaches our readers, there will probably be yet another. But whether or not its manifestations are in the headlines, the climate crisis that could become irreversible within the present century, creating hundreds of millions of refugees within decades and quite possibly bringing human civilization to an end, is a daily reality.

Second, in 1986 when this series of ATC was launched it was evident that the Soviet Union and the bureaucratic states of Eastern Europe were in sclerotic decay. What lay ahead and couldn’t be precisely foretold was the fall of the Berlin Wall in 1989, ending the East German regime and cracking bureaucratic rule in Eastern Europe.

Those of us on the anti-Stalinist left held hopes that this leap toward freedom would open up a powerful democratic and social transformation, but the reality has generally been more nationalistic, often reactionary especially in regard to women’s reproductive rights, and recently viciously anti-immigrant.

The Tiananmen massacre of the same year opened the era of China’s explosive rise as a capitalist power under the auspices of a brutal repressive state. The ultimate dissolution of the Soviet Union followed in 1991, with the ensuing crises and chaos that would produce today’s gangster-run, but economically fragile and oil-dependent, capitalist Russian state. On the other hand, China’s emergence, from semi-peripheral status to today’s brutally autocratic but leading economic rival to the United States, makes the opening of a new stage in imperialist competition for world domination.

Third came the world-shattering terrorist attacks on New York and Washington. These were blowback from the United States’ 1980s intervention in Afghanistan and the 1991 “liberation” of Kuwait from Saddam Hussein’s Iraqi occupation. September 11, 2001 set in motion “a whole new world of shit,” as one of our readers who was working as a flight attendant in Boston accurately foretold that night in a phone conversation.

What followed was George W . Bush’s “USA PATRIOT Act,” the U.S. invasion of Afghanistan (only Rep. Barbara Lee heroically voted against it in Congress) and then of Iraq. That crime of aggression under international law is now also recognized as the United States’ worst strategic miscalculation, with consequences of violence and destruction that the Middle East and the world will suffer for decades. Among the U.S. troops who returned from Iraq physically and mentally damaged, some eventually explode in domestic violence, suicide or mass shootings while many more suffer silently outside of public view.

Fourth, resulting from this cascading disaster, from the “birther” backlash against the Obama presidency and from the cesspool of the Trump presidency, there’s been a massive growth of white-nationalist organizing and violence, Islamophobia on both government policy and popular levels, and a general rise in racism.

Trump’s Muslim travel ban, like the murder of Heather Heyer in Charlottesville, Virginia, the massacres at the African American church in Charleston, South Carolina and the Tree of Life synagogue in Pittsburgh – these are symptoms and symbols of the times we live in now.

Against and with the “Current”

“Against the Current” implies, of course, swimming in the face of the ideological consensus that capitalism is the final, best and only conceivable system for producing prosperity and security. From the beginning, of course, this magazine – and our predecessor series from 1980-85 – have been against that current.

We are so thrilled that we’re now able to swim with an emerging, countervailing current that sees the horrors of actual, existing capitalism and looks toward the potential for a society of self-emancipation, of social justice, of what Karl Marx called “a free association of the producers” without classes of exploiters and exploited, of sustainable democratically determined production for human need – what we call, in short, ecosocialism.

The tasks are enormous, the time to avoid catastrophe is limited – but the possibilities are open. Wherever you are, however you can, join the fight for a socialist future and help swell that new current.

Making the Green New Deal Real

Dianne Feeley

THE GREEN NEW Deal resolution introduced into Congress by Representative Alexandria Ocasio-Cortez and Senator Ed Markey is a manifesto that has changed the terms of the debate over the country’s future. Cutting through the Trump administration’s denials about who is responsible for the extreme weather we already face, it unites the issues of climate change with that of eroding workers’ rights, racism and growing inequality. (At the end of March, the Senate voted against the GND in what has been called a ceremonial stunt.)

The resolution affirms the overwhelming scientific consensus that these are human caused. Further, since the United States is responsible for a disproportionate amount of greenhouse gas emissions, it demands that this society must take the lead in “reducing emissions through economic transformation.”

Noting that climate crisis is just one of many crises we face, it points to declining living standards, wage stagnation, a large racial divide and gender gap. It states that we now have the greatest income inequality since a century ago. It then proposes a 10-year national mobilization to tackle these issues comprehensively. But in offering a way forward, the details are nonetheless vague.

Corporate politicians ranging from centrist Democrats to the Republican establishment have commented that the proposal is too broad, too expensive, too utopian. Trump labelled it socialist and therefore “un-American.”

A video posted by Sunrise, the group pushing for passage of the Green New Deal resolution, shows an exchange between Senator Dianne Feinstein (D-CA) and a group of 14-17 year olds.

When told that scientists have given us a decade to drastically cut carbon emissions, she replied “Well, it’s not going to get turned around in ten years.”

Feinstein then lectured them about the art of the possible. They responded by pointing out they would be living with the consequences of a devastated planet. The video of their encounter was viewed 1.4 million times within its first few hours online. Most viewers saw a seasoned politician challenged by young people who know only a bold plan has a chance of averting disaster.

It’s clear that a broad political debate has opened. In fact, it is clear that politicians running for office in 2019 and 2020 will be forced to discuss what must be done to drastically reduce fossil fuels and at the same time reduce inequality.

This is a sea change from the 2016 election when Bernie Sanders raised climate change as the most important issue facing the country, the only “major party” candidate to do so.

A People’s GND

Since the introduction of the GND resolution, other manifestos and statements have emerged. The recently revived activist scientists’ network, Science for the People, calls for a “People’s Green New Deal” campaign, issuing a short statement of support but warning that there will be pressure to water down the heart of the resolution. It proposes five points in order to maintain and strengthen such a mobilization:

• “We promote solutions and struggles that educate, organize, mobilize and directly empower working class people, Indigenous Peoples, historically oppressed communities, and migrants displaced by climate disaster, in their everyday lives.

• “We aim to collaborate with all of those who have developed the core ideas of the Green New Deal over the years and decades, particularly to ensure we understand the role of militarism in the climate crisis, and to fight for globally just solutions.

• “We stand with frontline communities demanding equitable solutions to the climate crisis, so that no member of our society will be forgotten or unjustly bear the costs of climate change.

• “We stand with trade unions demanding a Just Transition and the creation of millions of green jobs, so that all people may be able to support their families with dignity.

• “We call for a transformation of the economy which redistributes resources from those who led us into this crisis in the first place.” (See

This statement introduces into the discussion several important issues. First, it emphasizes that change will come through working people and their communities rather than from on high. In fact, it is the corporate elite and their buddies in Congress who have caused this crisis. It is highly unlikely, in the words of the resolution, that businesses will be “working on the Green New Deal Mobilization.”

Second, there is necessary humility about where the core ideas come from — they were not invented by politicians, but come from an environmental justice movement that drew the connections among environmental degradation, the workers who suffer severe health conditions as a result of their unsafe jobs and the communities in which these mines, factories and agricultural industries exist. (See

Third, the statement calls for deepening the GND resolution’s commitment to frontline communities and workers by calling for a serious discussion about the role of the military. It underscores the resolution’s introduction of the idea that there must be a “just transition” for workers and their communities. The economic transition cannot demand sacrifice from workers and communities.

The articulation of these principles broaden the GND resolution and point a way forward by emphasizing the need to deepen the political discussion. It takes us beyond the “art of the possible” to the values of solidarity, equality, justice and democracy. Although the “People’s Green New Deal” doesn’t raise specific demands around immigration or U.S. responsibility to the Global South, the ideas it raises challenge us to do so.

Likewise, it doesn’t specifically call for a drastic reduction or abolishing of the military budget and the militarization of neighborhoods and schools, but calls for a discussion. Many Americans believe the military is necessary, although they are not aware that it consumes the lion’s share of the discretionary federal budget, supports authoritarian rule around the globe and prevents the possibility of social programs.

This can’t afford to be a leisurely discussion because without dismantling the 700 U.S. bases around the world, along with junking nuclear weapons and the military machine, there is no possibility for a transformation. Just eliminating U.S. military production would reduce CO2 by 70-80 million tons a year.

Not only does the military budget hamper our ability to take on a Green New Deal campaign, but military production is where we can begin to whack carbon emissions.

The People’s Green New Deal Campaign notes the danger of watering down the resolution. Rather than pledging to “keep the coal in the hole and the oil in the soil,” the resolution fails to define specific energy sources. It refers merely to “clean, renewable and zero-emission” energy and seemingly suggests that efficiency by itself will bring us close to our goal. Further, the resolution qualifies the goal by stating “as much as is technologically feasible” four separate times.

Making It Real

In contrast, the Green Party’s plan, first developed nearly a decade ago, calls for 100% renewable energy by 2030, with renewables defined as wind, solar, tidal and geothermal, not gas, biomass or nuclear power. Given the United States’ responsibility as a leading industrialized society, eliminating greenhouse gas emission has to be a serious priority. It also means giving preference to the public sector.

Many cities and towns own their own water and lighting systems; these are the basis for moving to 100% renewable energy. In order to accomplish this task, profit-making utilities will have to be quickly phased out. Again, the Green Party plan is specific: a Renewable Energy Administration would treat energy not as a commodity to be purchased but as a public good. (See

Since the Congressional GND resolution is simply a statement, not a bill, watering down can occur by proposing technical fixes, whether through carbon fees or employing carbon-capture technology to solve the problem. But there is no quick fix to greenhouse gases and the broader issue of pollution.

As the Climate Justice Alliance points out, “to truly address the interlinked crises of a faltering democracy, growing wealth disparity and community devastation caused by climate change and industrial pollution, we must reduce emissions at their source.

“Allowing for neoliberal constructs such as Net Zero emissions, which equate carbon emission offsets and technology investments with real emissions reductions at source, would only exacerbate existing pollution burdens on frontline communities.

“Such loopholes for carbon markets and unproven techno-fixes only serve to line the coffers of the polluting corporations, while increasing (not reducing) harm to our communities. Our communities can no longer be used as sacrifice zones.” (See

This means saying “No” to the construction of new fossil fuel systems — pipelines, coal ports, etc. It means moving quickly to build public mass transit and ending production of gas guzzlers. It means prioritizing community and worker participation in redesigning and repurposing our manufacturing capacity.

Such a drastic reorganization of the economy requires a full-throttled campaign. It may involve not only retraining workers to new jobs, but the reduction of the work week to 30 hours for 40 hours pay.

AFL-CIO Labor Councils in Alameda, San Diego and Imperial Counties in California have called for support to the GND along with a few local unions. However, most unions are terrified that that in the transition, workers and their families will get the short end of the straw.

That’s how every other restructuring in U.S. history has occurred. There must be a commitment to compensate for job losses and to extensive retraining. “Just transition” must be a guarantee.

Another issue that is rarely discussed in U.S.-based statements is the reality that we must reject the mantra of “growth.” We do not need more things every year!

Hopefully, through this mobilization of our energy we discover happiness is in having control over our lives. This means not only democratic planning and a guarantee against displacement, but having quality public services — housing, health, transportation and education for starters — available to all.

The Democratic Socialists of America’s ecosocialist statement of guiding principles notes, “The future is a public good, not a private luxury.” (See

Some of these statements and manifestos raise the issue of a radical redistribution of the economy, but while this is certainly true, in fact we must go even further. Capitalism is built on profit, exploitation and growth for its own sake. To change this dynamic, it will be necessary to develop an economy based on new, fundamental ecosocialist principles.

“The capitalist destruction of the environment and the ecosocialist alternative,” a Fourth International statement which Solidarity members participated in writing, was adopted in April 2018. It is a wide-ranging summary of the issues we face: It ends by noting:

“These urgent ecological demands can favor a process of radicalization under the condition that we refuse to limit their objectives by obeying the capitalist market or accepting the ‘competitiveness’ argument.

“Each small victory, each partial advance can immediately bring us to a higher and more radical demand. These struggles on concrete problems are important, not only because partial victories in themselves are welcome, but also because they contribute to the growth of an ecological and socialist consciousness, and promote autonomy and self-organization from below.

This autonomy and this self-organization are the necessary and decisive preconditions for a radical transformation of the world. This means a revolutionary transformation is only possible through the self-emancipation of the oppressed and the exploited: workers and peasants, women, indigenous communities, and all stigmatized because of their race, religion or nationality.

“The leading elites of the system, retrenched behind their barricades, are incredibly powerful while the forces of radical opposition are small. Their development into a mass movement of unprecedented size, is the only hope to stop the catastrophic course of capitalist growth.

This will allow us to invent a desirable form of life, more rich in human qualities, a new society based on the values of human dignity, solidarity, freedom and respect for Mother Nature.”

May-June 2019, ATC 200

Sorting through the lies about Venezuela

Pete Dolack

Challenging United States hegemony is never an easy course. A county need not be socialist — it is enough to either voice aspirations toward socialism, or merely demonstrate a pattern of not doing as Washington dictates.

So here we go again, this time with Venezuela. Ironically for a country that the corporate media insistently claims has been ruled by two “dictators” (remember that Hugo Chávez was routinely denounced in the same ways that Nicolás Maduro is today) it would be difficult to find a country with more opportunities for grassroots democracy and for everyday people to participate in the decisions that affect their lives and neighborhoods. There has been backtracking on some of this, and there are legitimate complaints about the top-down manner in which the ruling United Socialist Party of Venezuela (PSUV) is run. The U.S. government is in no position to point fingers, however, given its history in Latin America and the widespread voter suppression that is a regular feature of U.S. elections.

Sorting through the lies about Venezuela

Supporters of the Venezuelan government demonstrate in 2017 (Rachael Boothroyd Rojas/Venezuelanalysis)

It is also preposterous to assert that “socialism has failed” in Venezuela, when 70 percent of the country’s economy is in private hands, the country is completely integrated into the world capitalist system and it is (overly) dependent on a commodity with a price that wildly fluctuates on capitalist markets. Venezuela is a capitalist country that does far more than most to ameliorate the conditions of capitalism and in which socialism remains an aspiration. If something has “failed,” it is capitalism. Leaving much of the economy in the hands of capitalists leaves them with the ability to sabotage an economy, a lesson learned in painful fashion during the 1980s in Sandinista Nicaragua.

Before delving into the significant problems of Venezuela, largely due to the economic war being waged against it by the U.S. government and the economic sabotage within by Venezuela’s industrialists and other business interests, it is worthwhile to briefly examine some of the democratic institutions that have been created since the Bolivarian Revolution took root in 1998.

Communal councils organize at neighborhood level

The base of the Venezuelan political system are the communal councils. Various political structures designed to organize people at the grassroots level have evolved into a system of communal councils, organized on a neighborhood level, which in turn build up to communes and communal cities. These are direct-democracy bodies that identify and solve the problems and deficiencies of their local areas with the direct support and funding of the national government. After decades of neglect by previous governments, there were no shortage of problems to tackle.

Like many institutions of the Bolivarian Revolution, these have roots in grassroots organizing that pre-date Hugo Chávez’s first election.

The Barrio Assembly of Caracas emerged in 1991 as something of a general assembly representing local groups, coming into being after demonstrations marking the first and second anniversaries of the “Caracazo” uprising were dispersed by soldiers firing on them from rooftops. (The “Caracazo” uprising was a massive revolt sparked by popular resistance to an austerity package dictated by the International Monetary Fund.) Later versions of these assemblies organized on the eve of the 2002 coup attempting to overthrow President Chávez; among these assemblies’ accomplishments were distributing 100,000 fliers calling for a march on the presidential palace to defend the government.

The communal councils are the base of an alternative government structure, one intended to bypass municipal and other local governments and to eventually replace them. This was an attempt to provide a concrete form to the concept of “constituent power,” the idea that people should be direct participants in the decisions to affect their lives and communities. Legislation passed in 2006 formally recognized the communal councils and the form quickly gained popularity — there were an estimated 30,000 in existence by 2009. These councils are formed in compact urban areas containing 200 to 400 households in cities and 20 or so in rural areas. All residents of the territory are eligible to participate. In turn, communal councils organize into larger communes, and communes into communal cities, to coordinate projects too large for a neighborhood or to organize projects necessarily on a larger scale, such as improving municipal services.

Communal councils are required to propose three projects that will contribute to development in the community; funding for approved projects will usually come from national-government bodies. An interesting development is that many (in the case of councils studied by researchers, a majority) who have taken active roles in the communal councils were not politically active before the 2002 failed coup. Generally, women outnumber men among the active participants, and it is often older women taking the lead. The culture of participation that the councils encourage and that the Bolivarian government is paying vastly more attention to solving social problems and the needs of the poor than prior governments has facilitated the organizing of women, and the new activity of women in turn is breaking down traditional macho attitudes. That pensions are now much stronger, proving material security, also enables participation. Health committees tackling problems of illness, access to contraception and motherhood are often where participation begins. Once involved, women sign up for training programs, with more women then men taking advantage of these.

Communes often organize enterprises to provide employment for local residents and to help supply needed basic goods. One example is the El Panal 2012 Commune in Caracas. El Panal operates several enterprises and a communal bank. One of the enterprises is a sugar-packaging plant, and there are also bakeries. El Panal activists are also creating links with neighboring communes in Caracas and in other parts of the country. Links are also being created with the countryside — a “Pueblo a Pueblo” initiative brings together urban communities and farmers to distribute food directly, eliminating intermediaries and speculators. El Panal also regularly organizes food fairs at which meats, vegetables and other basic foods can be bought at discounts, well below market prices.

Tackling social problems through missions

There are also the social programs known as “missions” that are based on the direct participation of the beneficiaries. Begun in 2003, there are more than two dozen missions that seek to solve a wide array of social problems. Given the corruption and inertia of the state bureaucracy, and the unwillingness of many professionals to provide services to poor neighborhoods, the missions were established to provide services directly while enabling participants to shape the programs. Much government money was poured into these programs, thanks to the then high price of oil, which in turn enabled the Chávez government to fund them.

Among the approximately two dozen missions are Alimentación, which incorporates the Mercal network that provides food at subsidized prices and a distribution system; Cultura, which seeks the decentralization and democratization of culture to ensure that all have access to it and stimulate community participation; Guaicaipuro, intended to guarantee the rights of Indigenous peoples as specified in the constitution; Madres del Barrio, designed to provide support to housewives in dire poverty and help their families overcome their poverty; Negra Hipólita, which assists children, adolescents and adults who are homeless; Piar, which seeks to help mining communities through dignifying living conditions and establishing environmental practices; and Zamora, intended to reorganize land, especially idle land that could be used for agriculture, in accordance with the constitution.

Venezuelan political scientist and historian Margarita López Maya summarized the breadth of the missions in a Socialist Register article:

“Missions (programs bypassing uncooperative or ineffective state agencies), such as Barrio Adentro (free 24 hours a day primary health care and disease prevention for low income groups), Mercal (state distribution of food at subsidized prices), Robinson 1 and 2 (literacy and primary education for adults), Ribas and Sucre (secondary and university education for those who had missed or not finished these), Vuelvan Caras (training for employment), and the Bolivarian schools, where a full day schedule has been restored, with two free meals and two snacks a day, plus free uniforms and textbooks: all these undoubtedly had a positive political impact. The government has also invested in the social economy, as in the “ruedas de negocios,” in which the creation of cooperatives is encouraged in order to supply goods and services to the state sector. The government has also created a system of micro-financing with the Women’s Bank, the Sovereign People’s Bank, and so on, which make small loans to lower income borrowers.”

Struggles for economic democracy

In the workplaces, there are experiments with co-management, cooperatives, socialist production units and workers’ councils. These forms have been contested — an ongoing multiple-sided struggle over what constitutes “workers’ control” of industry and what forms such control should take continues. Cooperative enterprises are enshrined in the constitution, and a 2001 law mandates that all members be included in decision-making and that an assembly of all members has final decision-making power over all topics. Temporary workers can be hired for a maximum of six months, after which they must be accepted as members. A state ministry was created to provide assistance to cooperatives and small businesses, including the facilitation of securing contracts from state companies.

There are difficulties here. One significant problem were instances of cooperatives being formed only in order to acquire the start-up capital provided by the government, or were small companies that converted to being cooperatives only on paper to take advantage of preferential priority for state contracts or to obtain subsidies. In response to these irregularities, the government began to require coops obtain a “certificate of fulfillment of responsibilities,” which includes financial audits and demonstration of work within their local community. Nonetheless, there are many examples of successful cooperative enterprises.

A continuing area of contestation are state-owned enterprises. Some argue for state ownership with employee participation, others argue for full autonomy of enterprises and the workers in them, and there are gradations in between. There are managements that don’t wish to cede decision-making authority to their workforce, and there are government officials, despite being part of the Bolivarian movement, who oppose workers’ control, sometimes because they believe in top-down control by the state. There are examples of state-owned companies in which management structures have changed multiple times as different factions temporarily gain control.

The push and pull of competing interests and tendencies is exemplified in the case of the state-owned aluminum smelter Alcasa, which had a well-functioning system of workers’ control under co-management that reversed its debt problems; then had a new director appointed who ignored the co-management structure, with an accompanying fall in productivity and return of corruption; and then a return to co-management when President Chávez named a new company president selected by the workers. Workers’ control was reinstated with new structures, and because of the precarious financial situation caused by the corruption of the middle period, workers began designing parts to be produced internally instead of buying them from suppliers as previously done. More difficulties arose when a dissident union aligned with the local state governor attempted to stop production, and although unsuccessful, caused a significant disruption. Yet another change in management by Chávez led to a renewed deterioration in co-management, and struggles at Alcasa continued.

Economic warfare at home and abroad

Shifting from a traditional capitalist economy toward a participatory economic democracy can’t be expected to be smooth sailing, especially when this attempt is being done in a country with subaltern status in the world capitalist system. President Chávez had to withstand three successive attempts to remove him — the 2002 coup, 2002-03 bosses’ lockout and the 2004 recall referendum. Five times he was elected president, never with less than 55 percent of the vote, and overall he won 16 of 17 elections and referendums in which his movement participated. The election system put in place by the Chávez government was declared by former U.S. President Jimmy Carter’s Carter Center to be “the best in the world.” None of this prevented the late president from being furiously denounced as a “dictator.”

Once he died, however, the attacks were stepped up by the revolution’s opponents, apparently believing that the loss of the leader would make the revolution vulnerable. In reality, the Bolivarian Revolution has always been a movement propelled by millions who will not readily give up the many gains they have achieved and which pushed the late president to go further. Venezuela has a long tradition of strong, organized movements, which predate the Bolivarian Revolution. Despite the difficulties of recent years and increasing popular disapproval of President Maduro, those movements do not want their gains to be reversed. During the Chávez years, unemployment and poverty were drastically reduced and people were able to participate in the political process for the first time.

So how much of Venezuela’s serious economic problems are the fault of the current president? Some of the blame can be laid at his doorstep, but mostly for his inability to act in timely fashion and allowing problems caused by outside forces to deepen. A serious mistake that has ran through the past 20 years is that no progress was made on reducing Venezuela’s heavy reliance on oil exports. When oil prices were high, the government was content to let the money flow and use it to fund social programs and finance a wide variety of projects. But the later crash in oil prices left the government vulnerable. By not diversifying the economy, much less is earned when the inevitable falls in price arrive and it becomes difficult to maintain consumption because so many consumer products must be imported.

The over-reliance on a single export commodity would be difficult to overcome by itself. But greatly compounding Venezuela’s problems are U.S. sanctions, a currency that became drastically overvalued, and an inflationary spiral resulting from that overvaluation that incentivized black markets and smuggling. Poor management on the part of the government of President Maduro has intensified the damage done by those factors. Although the Venezuelan government set an official exchange rate for its currency, the bolívar, the effective exchange rate was determined by international currency speculators and thus the value of the bolívar is not in the control of Caracas.

Speculators caused the value of the bolívar to be reduced by 97 percent in 2017, and further drastic reductions in the currency’s value continued well into 2018. The value or output of the Venezuelan economy hardly declined by anything remotely comparable, so there are other factors at work for such a drastic reduction in exchange value. But because the Maduro government did not adjust the official exchange rate when the bolívar came under attack, the spread between the official rate and the de facto rate widened to the point that vast opportunities for smuggling and black-market operations were created. That in turn caused shortages and hyperinflation.

These developments were a consequence of Venezuela’s integration into the world capitalist system and the country’s heavy reliance on imports. Food and consumer goods intended to be sold at discounts in state stores were diverted to the black market, where profiteers sold them at prices several times higher or smuggled them into Colombia for huge profits. Government officials have repeatedly discovered vast quantities of consumer goods hidden in warehouses by local capitalists who are artificially causing shortages.

Hardening financial sanctions

United States government sanctions on Venezuela prohibit any U.S. persons or banks from providing financing or purchasing any debt issued by the Venezuelan government or the state oil company PDVSA, the purpose of which is to make it more difficult for the government to raise funds internationally or to restructure debt.

These sanctions are effectively extra-territorial. A non-U.S. bank that seeks to handle a transaction in U.S. dollars (the currency most often used in international transactions) has to do so by clearing the transaction through a U.S. bank; a U.S. bank that cleared such a transaction would be in violation of the sanctions. The Obama administration intensified the U.S. financial war on Venezuela by absurdly declaring the latter a “national security threat” and the Trump administration has issued a succession of decrees tightening the screws.

The latest, issued on January 28, freezes all property and interests of PDVSA subject to U.S. jurisdiction — in other words, blocking Venezuela from any access to the profits generated by PDVSA’s U.S. subsidiary, Citgo, or any PDVSA activities in the United States. The Trump administration expects Venezuela to lose US$11 billion this year, The New York Times reports. That move is in addition to repeated calls by the Trump administration for an overthrow of the Venezuelan government, threats by President Trump to invade, and the Trump administration “recognizing” the opposition leader Juan Guaidó as president although Guaidó has never run for the position and is largely unknown to the Venezuelan public. An added insult is the appointment of death-squad cheerleader Elliot Abrams to “oversee” a “return to democracy,” an idea that would draw laughs if Abrams’ history in Latin America during the Reagan administration weren’t so deadly.

Successive U.S. administrations have subsidized opposition groups — an estimated US$100 million has been poured into Venezuela in an effort to subvert the elected government.

Alan MacLeod, a specialist in media studies, summarized the extra-territorial effect of U.S. sanctions:

The sanctions strongly discourage other countries from lending money to the country for fear of reprisal and also discourage any businesses from doing business there too. A study from the 2018 opposition Presidential candidate’s economics czar suggested the sanctions were responsible for a 50% drop in oil production. Furthermore, Trump’s sanctions prevent profits from Venezuela-owned CITGO from being sent back to Venezuela. Trump has also threatened banks with 30 years in jail if they co-operate with Caracas and has intimidated others into going along with them.”

President Maduro is repeatedly called a “dictator,” an epithet endless repeated across the corporate media. But when a portion of the opposition boycotts, can it be a surprise that the incumbent wins? The opposition actually asked the United Nations to not send observers, a sure sign that they expected to lose a fair election despite their claims that the election would be rigged. Nonetheless, a coalition of Canadian unions, church leaders and other officials declared the election to be “a transparent, secure, democratic and orderly electoral and voting process.”

Unfortunately, there is every reason to be concerned, given the hostility of U.S. governments and capitalists to any intent to become independent of the U.S. or to direct economic activity to benefit local people rather than maximizing the profits of U.S. multinational corporations. The United States has militarily invaded Latin American and Caribbean countries 96 times, including 48 times in the 20th century. That total constitutes only direct interventions and doesn’t include coups fomented by the U.S., such as Guatemala in 1954 and Chile in 1973. Guatemala was attempting nothing more “radical” than a land reform that would have forced United Fruit to sell idle land at United Fruit’s own under-valuation of the land (a self-assessment made by United Fruit to avoid paying a fair share of taxes). The U.S. overthrew the government and instituted what would become a 40-year nightmare of state-organized mass murder that ultimately cost 200,000 lives. The Chilean effort to build a humane economy was ended with the overthrow of Salvador Allende and the installation of Augusto Pinochet and his murderous regime that immiserated Chileans.

Dissimilar results can hardly be expected if the U.S. were to succeed in overthrowing the Venezuelan government and installing a right-wing government that would reverse the many gains of the past 20 years. Hands off Venezuela!

This article appeared on the Systemic Disorder website on January 30, 2019 here.

The UTLA Strike

Rob Bartlett

The United Teachers of Los Angeles (UTLA) has won a big, although limited victory. Fighting in a context of a school board controlled by corporate charter school advocates funded by Eli Broad and the Walton foundation in the second largest city in the United States in a state run by the Democratic Party they were able to dominate the discourse about education. The issues of class size and supports for students in the schools were widely accepted throughout the city and will reverberate across the country as teachers continue to fight the privatization of education and the lack of resources for public schools in all parts of the country.


The UTLA strike would not have been possible without the 2012 strike of the Chicago Teachers Union (CTU). Until that pivotal strike, teachers and their unions, the American Federation of Teachers (AFT) and the National Education Association (NEA), were stuck in a spiral of concessions as corporate privatizers supported by both Democrats like Barack Obama and Republicans expanded the growth of charter schools in major cities across the country to the point where cities have the following percentages of students in charter schools: New Orleans 92%, Detroit 53%, the District of Columbia 43%, Philadelphia 32%, and Los Angeles with 20% charter students, but the largest total in the US of 156,000 students. As the number of charter school students increased, the resources devoted to public schools decreased, and loss of students led to the loss of programs and in the two worst cases a closure of public schools: the 48 schools closed in Chicago a year after the 2012 strike and the total charterization of New Orleans’ public schools.

It is a depressing list of statistics to show the growth of publicly funded, but privately run charter schools and the decade-long litany of blame directed at public schools, more specifically at teachers as the “problem” in education. As resources fell a series of bureaucrats at the national level like Secretaries of Education William Bennett to Arne Duncan declared that the problem was not a lack of resources but the quality of teachers and the answer was to promote nonunion charter schools where teachers could be more easily fired without going through the messy due process specified in union contracts. Factors like class size, and the preparation of students (which is strongly tied to socio-economic status) were ignored to focus on just “firing bad teachers” as Newsweek magazine proclaimed on its cover in March 2010.

2010 is when the Caucus of Rank and File Educators (CORE) won control of the CTU. In the two years between winning union office in Chicago and going on strike in 2012, the CTU worked relentlessly to change the culture of the CTU from a service model of a union to an organizing model, where members and the public were brought together around the mantra of “The Schools Chicagos Students Deserve.” This focus on framing the problems in education squarely as the lack of resources and disinvestment in schools led to the stunning victory of the CTU in the 2012 strike, much to the surprise of Mayor Rahm Emanuel and union leaders like Randi Weingarten of the AFT. After that strike, teachers throughout the US realized that it was possible to fight the privatizers and garner public support. Local unions like the St. Paul Federation of Teachers and Portland Association of Teachers published their own versions of “The Schools Students Deserve” and opposition caucuses in major cities, like Los Angeles, learned from the CTU strike so that when they won control of the union, they were able to start the preparation necessary to unite their members and build ties with the community in order to win a struggle against formidable foes.

The specific conditions in Los Angeles were not too dissimilar to those in Chicago, a Democratic leadership in the city, with an elected school board in the case of Los Angeles, where $13 million was spent in the recent election to give it a pro-charter majority. Funding in Los Angeles is also quite low compared to other large urban centers like New York City. Roughly $10,000 a year is spent per pupil in Los Angeles public schools compared to almost $18,000 per pupil in NYC. The growth of charter schools along with a decline in the number of students in LA is parallel to the same trend in Chicago. The inadequate funding in LA was effectively highlighted by UTLA when they contrasted the fact that California as a state has the 5th largest economy in the world, while they are 43rd in the nation in school spending and is 48th in student to teacher class-size ratio. Overtesting, one of the means used to demonstrate the “failure” of public education, is also rampant in LA. Other demands that the union and its community partners raised included providing a nurse in every school, an end to random searches of students, a focus on wraparound services by establishing community schools and charter school oversight.

As one of a dozen or so members of the “UTLA Solidarity Squad,” organized by Labor Notes and the United Caucuses of Rank and File Educators (UCORE), who volunteered to do strike support, I was able to compare the level of organization in LA to that in Chicago in 2012 and I believe it was superior to Chicago in several respects. I would say that in the two cities the union members were equally united and energized by the strike, but Los Angeles suffers from a geographical sprawl that makes it harder to hold centralized training functions. The level of internal organizing appeared better in LA, but they had the advantage of almost 4 years of preparation compared to only 2 in Chicago. I think there were some technological innovations that allowed UTLA to have better communication with regions and individual members, but the main thing that stood out was the eye-popping level of public support for teachers of over 80% in LA compared to “only” 67% in the 2012 Chicago strike. UTLA clearly did their homework and built what must be the foundations of any successful strike in the future.


The issues in LA were many but boiled down to a focus on extreme class sizes that could be imposed under clause 1.5 in their old contract, which allowed the district to unilaterally impose class sizes into the 40’s due to financial needs of the district, the lack of support personnel in schools, which might have a nurse for only one day a week, caseloads of over 700 students per counselor, a similar lack of psychologists, the loss of $600 million a year from the Los Angeles Unified School District (LAUSD) to the charter schools, over-testing, lack of funding, and falling behind in wages in a very expensive city. It was impossible for the pro-charter LAUSD superintendent, Austin Beutner, and his allies on the school board and in the media to paint the teachers as “greedy.” The strategy of “bargaining for the common good” was utilized and was convincing for both teachers and parents. In the meantime, the LAUSD had built up an almost $2 billion surplus that they insisted they needed for future shortfalls.

In the face of this contrast the LA Times on January 27 wrote an assessment of the strike which included the following comments by UCLA education professor John Rogers:

What surprised Rogers was not just how strongly the union message came across, he said, but how ineffective the school district was in trying to persuade the public that it just doesn’t have the money to fix what ails L.A. Unified.

“The district leadership invested hugely in their public relations campaign,” Rogers said. “They brought in additional employees, they engaged with civic leaders, they had regular email chains.

“I didn’t see that from UTLA, but because their message had an underlying resonance, there’s been a connection that was sustained” throughout the strike with the public, he said. “It’s breathtaking how different this conversation is than a decade ago during the recession, when the conversations were so focused on bad teachers.”

Genesis of the UTLA leadership

The Union Power leadership of UTLA is the result of a decades-long effort of rank-and-file members of the UTLA to change the leadership of the union. In 2006 the Progressive Educators for Action (PEAC), a social justice caucus in UTLA, originally founded in the 1990’s, formed an alliance with A. J. Duffy and the unified slate won office in UTLA. As a leadership it wasn’t unified in its approach, and four years later it was defeated by another slate run by Warren Fletcher, who espoused “bread and butter” issues. Due to limits written within UTLA bylaws presidents are “termed out” after one 4-year term. The current Union Power leadership comes out of the PEAC current, and president Alex Caputo-Pearl has been part of the series of attempts to change the focus of the union to a social justice orientation. PEAC has a much longer history than CTU’s CORE, but both learned from previous attempts to change the union.

In UTLA the Warren Fletcher leadership sold itself to the membership as able to win gains by focusing on better bargaining and promised that hiring a “professional” bargainer would win a better salary. UTLA under Fletcher organized a “Rally for a Raise,” a single-issue rally, while PEAC organized a contingent that called for things like more nurses and a vision of what a quality school would look like. The attempt to reform the union partially with Duffy was then contrasted with a narrowly focused vision of bargaining for teachers, not the common good. I think that the current “all in” policy of Union Power on broader social justice ideas has allowed them to unite the union and also build alliances with parents and community members that other perhaps well-meaning leaders like Duffy were simply unable to conceive of, and allowed Union Power to change the union from top to bottom.

This is one of the dilemmas facing union activists in both the AFT and NEA. Both unions have very progressive social platforms, but both organize locals in the image of the national unions and focus on the service model, not an outreach to parents, the community, and especially not to internally organizing the membership and empowering them. Granted this is not an easy task, but if anything is to be learned from both strikes in Chicago and Los Angeles the lesson must be that the only path to victory is the marriage of social justice issues in the community with self-organization within the union. Both national unions give support to struggles like that in Los Angeles, but neither leadership is capable of actually carrying out such a strategy. The struggle is on how to build a political force within each union that understands this necessary amalgam of social justice issues and democratic internal organization.

Preparing for the strike

UTLA hit the ground running in 2014 when the Union Power slate won. They immediately began to aggressively organize within the union by hiring experienced organizers from other unions and putting them to work to build the infrastructure of UTLA by making sure that there was a chapter chair in each of the 900 schools. Some schools are quite small, with as few as 3-5 teachers in some alternative sites, and being a chapter chair requires work, so there is a constant turnover. Then a process of training these job-site leaders needed to be initiated and expanded beyond just the technical aspects of running a meeting, but also in to how to spread the message that the union needed to convey to its members and project to the parents and community. Ultimately their goal was to establish Contract Action Teams at every school with one CAT member per 10 rank-and-file members per job site. This is a very ambitious goal and was achieved in many, but not all schools.

The logistics of how you internally organize in a large district are interesting in terms of dividing the regions, establishing intermediary leadership structures, but ultimately without a political message that resonates with both members and the community the logistics would be irrelevant. That sort of organization most competent unions can manage and improve on.

An aspect deserving more study is how the UTLA built coalitions like Reclaim Our Schools Los Angeles (ROSLA), which over 250 community organizations signed onto. I can’t claim to have any great insights into how that process worked, but I know that such efforts are always uneven, with greater or lesser participation in different sectors of the union and neighborhoods in the city. I do know that UTLA devoted material resources toward fostering this group, but I leave it others with more knowledge to further elucidate the process.

As a result of over three years of organizing 98% of UTLA members voting on strike authorization voted in favor. That tells you how well the UTLA leadership made the case for the necessity of a strike. The public opinion poll carried out by Loyola Marymount during the strike that showed 81% public support for the UTLA also tells you the effectiveness in messaging and building alliances.

The strike itself

The strike was initially called for January 10th, but was delayed until the 14th due to a legal challenge by LAUSD. The union decided to postpone it until January 14th to forestall legal roadblocks.

The plan was for there to be picketing at every school site from 7am to 9 or 9:30 AM, and then on three days of the week all teachers were urged to join a massive rally in downtown LA. Following the rallies teachers would then return to schools for afternoon picketing. These rallies were indeed massive, and estimates of their size given by the police grew over the course of the 6 days from 45,000 to 60,000 people on the last Tuesday. There were difficulties in logistics in that teachers had to either drive to downtown LA or take a pretty inadequate mass transit system. It didn’t deter people from attending, nor did four days of rain in normally drought-stricken LA stop people. There are only about 33,000 LA teachers, so a considerable portion of the crowds were made up of parents and students.

The union had a system to keep track of how many members and parents participated in the picket lines, and it appears that over 90% of the teachers were on the line every day. I think that the size of the crowds overwhelmed the capacity of the UTLA infrastructure to do more than have a program, set a direction for a march, and just let the teachers and supporters carry it forward.

The most interesting days of the strike for me were Wednesday and Thursday, when local actions in the eight regions of the city were called. I was based in the West Valley, and for the Wednesday action we planned an 8:30 AM rally at a regional school board headquarters. By the time I got there at 9:30 hundreds of teachers had already arrived, and the police had blocked off the main street where we were planning to have a half-mile-long “billboard” of teachers with their signs. When the police closed both ends of the street there was no traffic and teachers spontaneously marched toward each end of the street where they waved their signs, banged drums, chanted and had a major presence on a major thoroughfare. There must have been 3,000 people, and more kept streaming into the site until we pulled everyone back to a central point prior to going back to afternoon pickets.

On Thursday in the West Valley there was a community meeting, which I didn’t attend, and another intersection rally, which I did. Once again, I got there before the official start time, but after hundreds had already assembled. I would estimate about 500 people were present and they had a novel (to me) tactic. There were about 100-150 people on each corner. About half of them waited to get the crossing light, marched to the other side, and waited for the light to change again. They continued to go in a clockwise pattern that allowed traffic to pass, while they were very visible with picket signs and loud with drums and chants. There was dancing on each corner to improvised sound systems and this went on for over two hours. The spirit and spontaneity demonstrated was inspiring and completely self-generated. The support shown by motorists through honking their horns was continuous and affirmed the righteousness of the strike. The West Valley is considered one of the more conservative areas of UTLA, but this shows how quickly teachers can take ownership and lead their own struggle.

During the strike if you wore your UTLA t-shirt anywhere, a restaurant, museum or on the street, it generated conversations with people, all positive, that reminded me of Chicago in 2012. It was a visceral expression of the public support for the strike. On Tuesday, the day the settlement was announced, there was a final rally in downtown LA which the police said 60,000 people attended. It was a victory celebration where the UTLA leadership was treated like rock stars. I was doing security around the stage and members would pass their phones to us to take pictures of Alex Caputo-Pearl, the union president, and eventually many insisted on taking selfies with him. A really memorable event, but it was then followed with a somewhat rushed ratification process that was forced on UTLA by LA mayor Eric Garcetti, who wanted students back in class the next day. The agreement was ratified by 81% voting in favor.

What was won?

It should be clear that the settlement was a victory, but it should also be noted that despite the unprecedented unity of teachers and support of the community it didn’t win enough for some members and many of the 19% voting against the agreement probably felt that they should have gotten more.

On the main issue of class size, the hated clause 1.5 was removed from the contract. The clause had allowed the district to unilaterally violate class size limits. Over the course of the contract class size would drop by 1 the first year, 1 more the second year, and 2 the last year. This is real movement in the right direction, but not sufficient. A number of teachers, especially in the k-3rd grade levels were bitter that “they didn’t win anything.” True, their class size wouldn’t be reduced, but elimination of 1.5 protects them from egregious overcrowding, and the addition of nurses to every elementary school 5 days a week is certainly in the interests of their students.

Further staffing wins involved a lower number of students per counselor, down to 500 from over 700. That too could be better. Librarians were guaranteed in all middle and high schools, also a clear win. Other things that are notable are the establishment of 20 community schools by June of 2019 and another 10 by June of 2020. These should be the models for all schools so they are in essence a pilot project. Of great importance to middle- and high-school students is the exempting of 28 schools from a “random” search policy. These are primarily done in schools that are overwhelmingly students of color. Once again, a step in the right direction, but not the elimination of such a racist policy entirely.

It should be also mentioned that teachers received a 6% pay raise, but that was something the district was willing to grant almost from the beginning. It is distinctly secondary to the gains mentioned above. On the issue of charter expansion and co-location language was put in the contract to begin to regulate co-location. The school board also passed a resolution on January 29th calling for a state study on charters and a moratorium on further charters until the study is completed. Since 2001 the number of charters has gone from 10 to 277 this year, and this has occurred in the context of the entire LAUSD system losing students. Student enrollment peaked in the 2002-3 school year at 747,000 students and was 573,000 students last year. These trends are unsustainable, and it is easy to predict that there will be a push to close and consolidate schools, something that Chicago and other cities have already experienced. The moratorium on charter expansion is good, but the conflict between these sectors and the lack of adequate funding is pitting them against each other, predictably. The struggle for more resources is crucial and will acquire further importance in the future.

Some lessons learned

It is sobering to see such a magnificent struggle, which so fully involved both teachers and parents, come up against the issue of Where’s the funding? LAUSD had been hoarding a growing pot of money that was almost $2 billion this year. It is unclear how much they will have to dip into that sum to fund this agreement, but parts of the agreement are delayed for a year or two, especially on class size, so the full cost of the agreement is put off. The LA Times estimates that the district will have to spend $400 million of the $2 billion over the course of the contract, but that might be a low-ball estimate. Since most funding comes from the state, real changes to the way schools are funded need to be made by changing laws like Prop 13, the 1978 constitutional amendment which gave property tax relief not only to individuals but also to commercial and industrial properties. Without another source of revenue schools in LA and across the state will continue to be woefully underfunded. This is a fight that teachers face all across the US.

I think it is clear that there are real limitations to what was won. It should also be clear that the power that UTLA mobilized, while it could scarcely be greater, was insufficient to force the redistribution of wealth towards public education. That is a struggle that no single union or strike can win. If we take a slightly longer view going back to 2012 in Chicago and then forward through the 2018 strikes in West Virginia, Oklahoma, and Arizona we can see similar strengths and weaknesses. All those strikes, whether they were carried out by a militant union leadership or by rank-and-file teachers organized outside the traditional and weak union structures in right to work states, have run up against the intransigence of corporate power, regardless of how internally organized they were, or how much support they received from the public. All these struggles have had public support, but only those that had a leadership with a radical vision, as in Chicago and Los Angeles, were able to push beyond the ability to win wage increases for extremely underpaid and exploited teachers.

Chicago had an equally magnificent strike in 2012, and a year later the mayor closed 48 public schools and continued to expand charters. The support that Chicago teachers won by championing the schools that students deserve is still there, but it is a continual struggle to keep the teachers united to be able to fight the next fight — and there will be another one. If teachers are unable to be as united and outward looking, they will be vulnerable to the continual pressure of corporate powers, which have refused to support public education. All movements are subject to a continual pressure that tries to deflate them by making very partial concessions with a view to taking them back in the future.

While I can’t dictate strategy to the teachers in the “red for ed” movements, I think that the Chicago and LA examples of utilizing both the organizational power of a union and the mobilization of rank-and-file teachers is more capable of carrying out the sustained struggle that is needed. Some of the energy of teachers in the “red states” should be focused on exerting their power on the existing union structures to transform them, as they continue to build their power.

What is different today is the confluence of a growing number of teachers and union locals willing to buck the conservative approach that has dominated the labor movement since the concessionary attacks on unions began 30-some years ago. All teacher unions should be aggressively trying to organize charter school teachers and defuse the threat that charter schools pose to public education. The 2018 strike of Acero charter school teachers in Chicago showed that they too are oppressed by a lack of resources and are capable of being just as fierce defenders of the rights of their students as public-school teachers. The effort will take time, but the struggles that have erupted and are continuing to grow should help it.

The struggle within the established AFT and NEA local unions to transform them into versions of “the unions our teachers deserve” is ongoing and a difficult one. What is needed is a vision that moves both teachers and the community. There are enough examples now, with Chicago, LA, St Paul, West Virginia, Oklahoma, Arizona and hopefully places like Oakland and Denver, to provide a template of what is needed: a union committed to social justice for its students and community; a union leadership, and better still a caucus that leadership comes from, which embodies those principles and organizes around them; a union mobilization which strives to involve members and bring them into struggles in their communities that build real alliances; and finally a union policy to trust the creativity of our members and use it to build our strength to take on the rampant inequality of our society.


Rob Bartlett was a teacher an IFT/AFT member for 25 years and an associate member of CORE who joined the “UTLA Solidarity Squad,” a volunteer strike-support group organized by Labor Notes and the United Caucuses of Rank and File Educators (UCORE).

L.A. Teachers Win Big and Beat Back Privatizers

Barbara Madeloni

January 28, 2019

In a joyful, rain-drenched strike, 34,000 Los Angeles teachers won things no union has ever won.

They forced Superintendent Austin Beutner, a former investment banker, to accept concessions even on topics he had previously refused even to bargain over.

Rather than retreat or get cautious in the face of corporate attacks, the union went on offense, demanded fully funded public schools, and did the organizing to back up its demands with action.

Photo: Joe Brusky

L.A. will reinstate limits on class size—and for most classes, reduce those limits by four students by 2022.

Despite a pro-charter school board majority, the nation’s second-largest school district agreed to move a board resolution to support a statewide moratorium on new charter schools

It will hire more nurses, librarians, and counselors; reduce standardized testing and random police searches of students; create an immigrant defense fund; and hand budget control of 30 schools over to local communities.

It’s a very different vision from what Beutner had in mind. In November the L.A. Times and Capital & Main had leaked his plan to carve up the district into clusters of schools run like competing stock portfolios. Any school judged to be an underperformer would be sold off like a weak stock.

Teachers were weeping at the mass rally outside City Hall January 22 as United Teachers Los Angeles Secretary and Bargaining Chair Arlene Inouye reviewed the high points of the tentative agreement.

President Alex Caputo-Pearl told the crowd that this strike was “one of the most magnificent demonstrations of collective action that the United States has seen in decades.

“We did not win because of a single leader,” he said. “We did not win because of a small group of leaders. We won because you—at 900 schools across the entire city, with parents, with students, with community organizations—you walked the line.”

Members returned to their school sites that the afternoon to review the tentative agreement—which was published online in full—discuss it with their co-workers, and vote on whether to accept the deal and return to work the next morning.

Some teachers around the city were frustrated at a process they felt was rushed. But members voted a resounding 81 percent yes on the agreement, and returned to their classrooms January 23.

In the face of the union’s demands, the district had cried poverty—it said it was running a deficit. But that didn’t appear to be true, since its reserves were growing each year.

The teachers set out to force the district to put its stockpiled cash into creating the “schools Los Angeles students deserve.”


From day one of the strike, huge majorities of teachers showed up at their schools every morning to hold the picket lines, together with parents and students. Then strikers and their supporters headed downtown for rallies that topped 50,000 the first day and kept growing.

The streets were full of joy. All week, everywhere we turned there was singing, dancing, spoken word, brass bands, mariachis. Teachers didn’t let the drenching rain daunt them; they suited up in ponchos, and laminated their song sheets and picket signs.

All across the city, people were talking about the strike and its demands—in coffee shops, on the bus, in stores, at the airport car rental.

In an effort to keep schools open for 600,000 L.A. students, the district brought in scab substitutes from private contractors. It offered current subs more than double their regular wage to work during the strike.

But in L.A., the subs are part of the union. Very few chose to cross the picket lines.

Read more about how L.A. teachers overhauled their union and got organized at every school as they built towards this strike.


L.A. is the biggest U.S. school district with an elected school board. (The biggest district, New York City, and third-biggest, Chicago, are both governed by mayoral appointees.)

Year after year, its school board elections have broken spending records. Corporate education reformers spent $13 million in the last election, most of it coming from the foundations of the Walton family (the owners of Walmart) and Eli Broad, two of the biggest spenders nationally in support of charter schools, vouchers, and privatization.

That money was enough to win them a majority of the seats on the school board. And after the previous superintendent resigned early last year for health reasons, that majority handpicked a superintendent, Beutner.

But as it turned out, a bought and paid for board and superintendent weren’t as powerful as a good old-fashioned strike.

Readers who work in education or the public sector will be familiar with the claim that “the money just isn’t there.” UTLA refused to buy into it, and named the privatization schemes behind it. Rather than retreat or get cautious in the face of corporate attacks, the union went on offense, demanded fully funded public schools, and did the organizing to back up its demands with action.

The teachers won big—and provided us all a model for how to fight back. The victory, said Caputo-Pearl, renewed “the strike not only as the last resort, but as something you do to build a social movement.”

This article was originally posted on Labor Notes on January 24, 2019.

A version of this article appeared in Labor Notes #479, February 2019.

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Against the Davos of the Rich
For a Davos of the Peoples!

Greetings from Solidarity

January 21, 2019

2018 protests against the World Economic Forum (Picture: AP)

The U.S. anti-racist, feminist, revolutionary socialist organization, Solidarity sends you our warmest internationalist greetings!

The World Economic Forum at Davos of capitalists, managers of capital, and rulers of the richest countries of the global north takes place at a time of accelerated attacks against mass standards of living, our unions, women’s rights, LGBT rights, and especially attacks against immigrants. It comes at a time when our planet is dangerously approaching the point where irreversible damage will threaten the earth and all human, animal and plant forms.

The capitalist governments meeting at Davos are both directly responsible for the continuing assaults on our planet, and the failure to take adequate measures to eliminate fossil fuel use, bring down carbon emissions, and slow global warming. The presence of former International Monetary Fund general secretary Christine Lagarde on the board of the WEF reminds us that the politics of austerity are part of a worldwide neo-liberal offensive to assure capitalist profits.

While all of these governments and international organizations bear responsibility for the deplorable state of the world, the United States and Donald Trump and Jair Bolsonaro in Brazil represent particularly dangerous and destructive forces. Although Trump has cancelled his personal attendance at the gathering, it is impossible to ignore the global destructiveness of the U.S. government he represents.

While Trump wants to build a wall on the U.S.-Mexican border as part of his racist, anti-immigrant policies, the damage of his racist, anti-immigration stance and callousness regarding the planet knows no borders.

In the U.S., Trumps economic nationalism and anti-immigrant words and policies have emboldened reactionary, fascist, racist, and anti-Semitic forces.

As in Switzerland and throughout Europe, public spending for education and health has been cut while the rich receive tax benefits.

Trump’s announcement that he plans to withdraw U.S. troops from Syria should not let us forget that his narrow nationalist agenda, his personal unpredictability, and control of an enormous military and nuclear arsenal continues to make the U.S. the greatest threat to the world’s peoples and international peace. We must therefore continue to oppose U.S. military intervention in the Middle East and throughout the world.

While all of Trump’s political instincts tend towards the reactionary, the new president of Brazil, Bolsonaro is a long time committed ultra reactionary ideologue. Bolsonaro presents a threat to Brazil’s most vulnerable social layers and with this openness to logging companies and other exploiters of the amazon, a threat to the earth itself. Yet, Bolsonaro and Trump both find their place at the table of the richest countries.

However, the Trumps, Bolsonaros and all neo-liberal governments can expect resistance.

In Switzerland, teachers were able to turn back government assaults on their standard of living.

In France, the gilets jaunes movement has forced the neo-liberal Macron government to withdraw a hated tax that hits workers and the popular classes hardest.

In the U.S., hundreds of thousands of teachers marched and struck successfully last year for better wages and teaching condition for their students.

The day after Trumps inauguration in January 2016, 500,000 marched in defense of women’s rights. On January 19, women and their allies will once again (or just did) renew their intention to oppose Trump’s reactionary social agenda.

Your protest today against Trump, Bolsanaro and the other governments represented at the Davos meeting serves notice to the “saigneurs”* of the world that they can expect vigorous resistance to their assault on the people of the world and our planet.

We the look forward to the day when the majority of the planet’s peoples have our own Davos with a democratic system that puts people and the planet first.

Stop the capitalist assault on the planet and its peoples!

Down with all reactionary governments!

No to U.S. military intervention!

Dismantle U.S. military bases!

For a Davos of the workers and oppressed!

Internationalist greetings,
Solidarity Steering Committee, January 16, 2019

Trump's “Withdrawal” — What Next?

David Finkel

December 21, 2018

Militarist hawks and liberal pundits alike are up in arms (figuratively speaking, of course) over Donald Trump’s “victory” proclamation and announcement of U.S. troops’ withdrawal from Syria. Howls of Republican outrage may signal a further deterioration of the big twit’s shrinking political support on the home front. The Trump gang’s crisis of legitimacy deepens by the day. But what does it actually mean for the cascading disasters in the Middle East?

The main point to understand is that imperialism creates problems that it cannot solve. The horrific so-called Islamic State (ISIS), which arose out of the catastrophic U.S. invasion of Iraq, has not been wiped out as Trump boasted. After being defeated in the Iraqi city of Mosul that ISIS had seized and occupied, captured ISIS fighters – real or alleged – and often their family members have been brutalized, tortured and executed, leaving behind relatives and clans bent on revenge. The next round in that cycle of violence and vengeance is all but inevitable.

In Syria, it’s entirely true that a couple thousand U.S. troops can’t resolve the civil war and destruction of that country, and that U.S imperialism has no legitimate business intervening there or anywhere else. This doesn’t mean that Trump’s plan to withdraw this force has any progressive significance, or anything to do with peace. It is not a step back from intervention, but a rather small move on a regional chess board — with no regard for human consequences.

If Trump’s announcement has any coherent significance, it appears to be a gesture to Turkey’s presidentialist-dictator Recep Tayyip Erdogan, and a cynical betrayal of the Syrian Kurdish forces who have been the most effective anti-ISIS fighters. In fact, it was those Kurdish fighters who saved the Yazidi population from ISIS genocide on Sinjar mountain, liberated hundreds of Yazidi women from sexual enslavement, and defended the town of Kobane against the ISIS siege. But Erdogan’s number one priority is crushing Kurdish national aspirations, along with all democratic opposition to his rule. The presence of U.S. troops in northeastern Syria restrains Turkey from launching a murderous assault on the Kurds there.

Kurdish women fighters helped defeat ISIS forces in the 2014 battle of Kobani. Now they may have to help fight Turkish forces. (Matt Cetti-Roberts/

We’re learning how Michael Flynn on Trump’s transition team was conniving to arrange the extradition of Fethullah Gulen, a former Erdogan ally now living in Pennsylvania, whose return to Turkey is one of Erdogan’s demands. To Trump’s regret extradition can’t be done by presidential decree without legal procedures in U.S. courts, but removing U.S. troops and leaving the Kurdish fighters exposed is within his “commander in chief” prerogatives. That’s a move “toward restoring Washington’s frayed relations with our strategic ally Turkey,” as the suited diplomatic thugs would put it.

The imperial knife in the back of the Kurds and their desire for autonomy or independence is a recurring story. Some things never change. At the same time, the regional Middle East crisis deteriorates. Saudi Arabia’s murderous U.S.-coddled royal house is driving Yemen to genocidal famine. Israeli and U.S. threats against Iran are provoking Tehran’s buildup of its asymmetric deterrent, the supply of sophisticated guidance missiles to Hezbollah near the Lebanon-Israel border – posing the real threat of war breaking out that neither side actually wants.

The United States has had a great deal to do with creating the disasters afflicting people from Afghanistan to Palestine. The political uproar over whether a suddenly announced troop withdrawal from a corner of Syria is or is not “in our fundamental strategic interests” doesn’t even touch the reality that it’s precisely those “interests” that are the problem.

No Plant Closings! Plant Conversion to Save Workers and the Planet

Wendy Thompson

December 18, 2018

What would it take to keep these assembly and transmission plants open?

As autoworkers have begun to formulate demands for the opening of the 2019 contract negotiations, GM upped the ante by announcing the loss of 14,000 jobs with the closure of three assembly plants and two transmission plants to add to the two million manufacturing jobs already lost due to plant closures. Immediately the workers at the Oshawa, Ontario plant walked off their jobs, taking their fight to the city streets. Later in the day, they rallied at their local headquarters where UNIFOR president Jerry Dias vowed to fight to keep the plant open.

Chevrolet builds T-17 Staghound armored scout cars in Flint, Mich., during World War II. Chevy built 3,800 Staghounds, most with the 37 mm cannons shown here, between October 1942 and April 1944.
Chevrolet builds T-17 Staghound armored scout cars in Flint, Mich., during World War II. 

At the other end of the spectrum, some politicians are already telling GM they have only to ask workers what must be done to get their agreement, as if more concessions will save these jobs and despite GM’s $2.5 billion profit in the third quarter of 2018.
What would it take to keep these assembly and transmission plants open? GM’s CEO Mary Barra explained that the corporation can no longer be considered an auto company but one transformed by a technology based on electrification and autonomous driving with “a vision of a world with zero emissions. ”However no product currently matches that vision. By closing these plants GM can save $6 billion by the end of 2020. Ironically, one of the vehicles being eliminated is the Volt, an electric car crossover that is an actual contribution. In its place GM will continue to promote SUV’s and trucks, revealing their utter hypocrisy.
The arrogance and determination in Bara’s announcement shows the corporation’s strategy: First, they attempt to head off any notion that workers have the power to seek any better conditions of employment in the upcoming contract. Second, they place the corporation’s reorganization on the backs of the workers. Nothing could make it clearer what Wall Street considers important than to have GM’s stock to go up by six percent due to this announcement.

These closings are despite enormous tax breaks GM has received and will continue to receive. In Detroit there was the destruction of an entire community through the use of eminent domain when they built the now-to-be-closed plant. In its place is threatened acres of cement to complement the many acres of bare land and devastation that continue in Detroit from the many previous years of job loss thanks to the auto industry. Oshawa, Baltimore and Lordstown communities as well as others will be equally traumatized.

GM announced the plant closings to the public without forewarning the UAW or Canadian union leaders. These closings are a violation of negotiated contract language. Once again the joint approach adopted by both unions in its relations with the auto companies can be seen as utterly worthless.

While rank-and-file workers have been demanding the protections and necessities they need to lead fulfilling lives for themselves and their families, UAW leaders have been ready to cooperate in meeting the company’s needs and have been accepting personal benefits, ripping off so-called negotiated joint funds. In fact, past concessions even allowed the outsourcing of such plant departments as maintenance and material handling, reducing jobs.

A decade ago the U.S. and Canadian governments bailed out General Motors. Washington’s terms also demanded that autoworkers, who had no say in the corporation’s decisions, make a total wage and benefit package that was no greater than that of non-unionized workers. While union officials on both sides of the border supported the bailout, Autoworkers Caravan, a grouping of autoworkers and retirees, drove to DC and put forward an alternative plan. They opposed the provision for workers to sacrifice for the corporation and called for the establishment of a mass transportation system that could drastically reduce reliance on fossil fuels. Any idled plant could be converted into manufacturing buses, trains or products needed for converting to alternative energy sources such as wind turbines. They pointed to how quickly auto companies had converted to war production during the world wars to indicate this program could begin within months. Instead nothing was demanded from General Motors, and it made a swift recovery. Plants that could have been converted were torn down, eliminating thousands of potential jobs.

Over the decade GM, like Chrysler and Ford, imposed harsh conditions on its workforce. New hires earned half the wages and fewer benefits than those already employed, but more frequently were hired as “temporaries.” This process of building a two-tier workforce weakened the union, as one person working next to another might make significantly less, have a lesser health care package, little job security and face a future without a pension or health care in retirement.

When workers demanded an end to this practice in 2015 negotiations, the company and UAW officials worked out an eight-year bridge in wages for a four-year contract. The contract barely passed. Workers who voted no pointed out that the bridge didn’t bring up the benefits of the lower-waged worker, restore cost-of-living adjustments to the wage package, or provide healthcare for workers who would retire. The contract also didn’t curb the companies’ ability to keep workers on temporary status or hire workers through an outsourced company.

Given the reorganization of the Big Three, which Chrysler and Ford are already implementing, U.S. and Canadian auto workers must make a decision: to fight for their right to a decent job or submit to further layoffs and concessionary bargaining.

After the Oshawa workers announced their determination to oppose their impending layoffs in the streets, a quickly organized union meeting began to discuss strategy. Someone raised the idea of a possible plant takeover. A fight back committee is being organized. Jerry Dias has called for a united strategy with the UAW, and ties are being established between the affected locals to share ideas on how to build the struggle. Obviously any strategy needs to be tied to how the talents and experience of the workers can be used to build something useful for the 21st Century.

There is no better demand than the call for the development of a mass transportation system that autoworkers could build. Of course corporations like GM are just paying lip service to moving toward zero emissions. Yet, public and union support can be brought to bear due to the need to keep the plants open. If we are to deal with the already visible signs of extreme climate, filling these plants with the products necessary to save the planet offers a concrete way forward. We need to demand buses for mass transit — and if GM isn’t interested, then federal and state money (or in the case of Ontario, provincial money) can retool to build the mass transit system North America needs.

It will take the energy of autoworkers and their communities in all of North America — including Mexico — to accomplish a takeover and reorganization of these plants. Workers’ livelihood and our very planet depend on it!

Wendy Thompson, L. 22, UAW, Retired President, L. 235, UAW, American Axle, Detroit Gear & Axle. She worked for 33 years in a plant that was a GM plant for her first 22 years and then was sold in 1994 to American Axle. Now it is closed.

The 2008 Financial Crisis: Where it came from, what happened after, and what it says about the need for socialism

Luke Pretz

November 27, 2018

Ten years ago the global economy was thrust into the worst economic crisis since the Great Depression. In the ten years that have passed many working-class people are left asking “What recovery?” And “Whose recovery?” Those questions are asked despite the longest bull market in Wall Street history. With unemployment rate at pre-crisis levels wages are stagnant and barely keeping up with inflation.

In the worst moments of the crisis workers faced massive unemployment at a rate of 10%, but closer to 17% when we include workers who gave up their search for employment and workers who took on part-time work but desired full time employment. Many working-class people had their homes foreclosed on and taken from them by the same banks who profited off of subprime home mortgage and fraud.

St. Louis Federal Reserve

At the heart of the 2008 financial crisis were mortgage-backed securities, financial instruments that were collections of mortgages bought from lenders by investment banks and packaged together as securities for investors to buy. By the 2000s these securities increasingly contained subprime mortgages, loans made to people who would have difficulty maintaining the repayment schedule, meaning that these mortgages were risky for the lending institutions and those who would ultimately hold them in their securitized form. While the mortgage-backed securities had varying levels of complexity, a common thread ran through the vast majority: they were packaged and marketed in a way that masked the quality of the loans that they contained.

Economic crises like the one that happened in 2008 are hardly an anomaly in capitalist society. In the late 19th century the global economy was in a constant state of fluctuation between boom and bust. By 1929 the global economy experienced the devastation of the Great Fepression and faced the double horrors of economic crisis and fascism.

Despite the apparent successes of the post-war period of regulated capitalism and varying degrees of social-democracy, global capitalism came to a standstill and returned to a state of economic crisis in the mid-1970s, creating political space for the neoliberal policy of deregulation and fiscal austerity. Now, well into the neoliberal era of global capitalism, crisis is normalized and occurs with increased frequency. We only have to look back at the housing bubbles and tech bubbles bursting in the 2000s, the recessions of the early 1990s and the savings and loans crisis of the late 1980s to know this.

The sole goal and motivation for capitalism is the search for profits at all costs. To satisfy its existential need for profits the capitalist system must be in a constant state of expansion. The frequent moments of economic crisis are moments where the contradictions of profit=seeking behaviors reveal themselves. As capitalists invest in new more efficient labor-saving technologies to reduce costs, they run up against a dual problem. First, the reduction of profits due to the replacement of human labor, the source of surplus value, with machinery. As the labor time required for production is reduced, so are the potential profits. Moreover, as capitalist enterprises expand their productive capacities while compressing wages and laying off workers, the value embodied in the commodities produce goes increasingly unrealized in money form. This leaves capitalists in a pickle, they have an inventory that needs to be sold but can’t be, and so their capacity to reproduce themselves is slowed or stalled completely.

As socialists we know society can do better than recurring cycles of crisis for workers and expansions that fill the pockets of the owning class. A democratic society which directs its economy for the fulfillment of social needs, individual necessities and desires would remove the need for financial markets, the impulse towards speculative activity characteristic of those markets, and the overbuilding and overproduction necessary for expansion. While the struggle for socialism is a long-term project, we should also be advocating for transitional demands that take back power from the capitalist class and protect workers from the harmful effects of crisis.

This article is an attempt to understand the material roots of the economic crisis. By developing an understanding of the roots of the 2008 financial crisis we can better understand how to fight back and what we need to do to liberate ourselves from a systemic cycle of economic abuse.

Financial instruments

Financial instruments like stocks, bonds, mortgage-backed securities and the plethora of other financial instruments are strange objects. They appear to be commodities like any other, things that are bought and sold in a market, generating profits for financial institutions and their holders. But, when we look a little more closely we see that unlike most commodities there are no workers performing productive labor to make them. Because of that, these commodities do not embody the value-added of workers’ labor in the same way that sneakers, cars or cheeses do. Financial instruments are separated several degrees from the productive process. They are bundles of claims on interest from loans made by lending institutions.

The apparent separation of financial instruments, like mortgage-backed securities, from the productive process gives them an almost magical appearance. They produce profits for their owners without directly exploiting workers or producing a commodity. But when inspected from at the systemic level it’s clear that financial instruments are intimately connected to capitalist production and the circular flow of capital through the economy. Securitized financial assets like mortgage-backed securities act as a lubricant for the flow of capital through the economy in a way similar to loans. They help to ensure that capital, in its many forms, remains in motion. While loans help to ensure that firms have access to capital in the periods between the production of a commodity and the sale of those commodities, purchases of financial instruments like mortgage-backed securities help to smooth the flow of capital for loan making institutions. By purchasing loans from banks financial institutions and consumers take on risk of the loans and recapitalize lenders so that more loans can be made.

There is a fundamental difference between interest-bearing capital, like loans, and financial instruments, what Marx calls fictitious capital. While the interest earned on loans are paid directly out of the profits of a given capitalist, the profits in securities markets are disconnected from production and are claims on claims on future interest payments. What this means for the valuation of financial instruments is that their value is determined by the expected interest rates and, because of their apparent disconnect from the tangible world, are also subject to speculative activities and the pressures of supply and demand for financial assets.

Speculative activities can drastically inflate the value of financial assets. As the price of a given type of security goes up speculative activity becomes, for a while, a positive feedback loop. Investment banks and others buy mortgage-backed securities, their market value goes up, and so they become a more desirable investment and more are purchased at a higher price, causing their market value to rise further, so on and so forth.

But this speculative activity, despite its appearance of being separate from the “real economy,” is nonetheless intimately connected to the material conditions of the economy at large. Financial instruments sit on companies’ balance sheets, in unions’ pension funds, and act as means of payment. Furthermore, since financial instruments are claims on future revenue streams, and in the case of mortgage-backed securities claims on revenue from home loans, their values, despite the speculative activities that surrounds them, are ultimately tied to the “real economy” and the productive activities those revenue streams are based on.

The 2008 financial crisis: material conditions at work

Financial instruments are connected to the flows of capital through our economy and, thus, connected to more tangible aspects of our economy. In the case of the 2008 financial crisis we can see how the development of the neoliberal era created the material conditions for the financial crisis.

The neoliberal arrangement of economic institutions that emerged in the early 1980s was a significant break from the post-war period. It was an attempted return to an unregulated capitalism like that of the early 20th century. This meant the privatization of state enterprises and functions, the erosion of the welfare state, austerity measures, increased intensity of private and public employers’ anti-union activity, the proliferation of “anti-big government” ideologies, the removal of barriers to the free-flow of capital and the large-scale deregulation of the economy. Simply put, the emergence of the neoliberal era under Reagan and Thatcher was a global frontal assault on the global working class that has continued to the present day.

St. Louis Federal Reserve

As a result of the attacks on unions, wages stagnated even as they became better educated and more productive. Compounding the stagnating wages were drastic restrictions and clawbacks of social welfare programs and the sharp increases in the costs of healthcare, education, child care, and housing. Over the entire period, increasing numbers of workers were forced into precarious employment. All of this against a backdrop of growing consumerist attitudes and a valorization of money-making as the be-all and end-all of individuals’ existence.

For most, those circumstances meant a significant increase in the out-of-pocket living costs compounded by the social pressure to “keep up with the Joneses.” For the productive segment of the capitalist class, the stagnating wages and increased cost of living are major problems. Without consumers able to purchase the commodities produced, capitalists will be unable to realize the value of those commodities, whether they be new cars, homes, food or education. Without realized profits, they cannot reinvest to expand production. Since, as Marx famously noted, under capitalism, “accumulation … is the Moses and the prophets,” this creates an existential crisis for productive capitalists.

In response, capitalists encouraged growing demand for consumer credit to supplement the purchasing power of consumers’ wages. Beginning in the 1970s, financial capitalists rapidly developed an infrastructure to increase access to credit and transform it into speculative commodities. This development was aided by the government through the deregulation of banking and finance starting in the 1980s.

With increased access to consumer debt and a deregulated financial market the U.S. and global economy became increasingly financialized, a process whereby finance takes on an increasingly important role. By 1989 financial profits made up more than 20% of corporate profits and continued to trend upward during and after the financial crisis of 2008. Driving this trend was the need by financial and lending institutions to move new risky assets off of their balance sheets to increase their access to flows of capital and allow them to lend even more money. This process, paired with the apparent value of financial assets inflated by the economic expansion and fueled by the cheap accessible credit, contributed to rapid growth and dominance of finance capital.

The combined results of financial “innovations” like credit cards, adjustable rate mortgages, and the expanding market for securitized debt was an apparent solution to the crisis of economic growth, stagflation, that took place in the 1970s. With the tools to finance the production of large and expensive commodities like luxury apartments, massive office buildings, or new tech companies and the realization of the value embodied in those commodities through sales and rentals, financial bubbles began to emerge and grow.

The financial bubbles become self-reinforcing, as their speculative value increases, the real economy they are based upon also seems to boom. Loans that seemed risky before appear less risky given the bull market. With the expansion of credit, more capital is deployed in sectors like real estate, where the credit is easily applied, increasing the stock of available housing for sale with no real basis other than debt-driven demand.

The problem with bubbles is that they are often not long for this world. In the case of the real estate-driven 2008 financial crisis the loans made by banks became increasingly risky. The increasing risk was driven by 1) the demand for debt to package and sell from the deregulated finance industry tied to banking and 2) the shrinking pool of low-risk borrowers as consumer debt grew rapidly through the 1990s and 2000s. The consumer debt that drove the economic growth that defined the neoliberal period would be the source of the economic crisis that would also define the neoliberal period. As workers’ credit was overextended against stagnant and increasingly precarious wages, borrowers began to default on the loans at unprecedented rates as home prices stagnated or fell under the pressure of speculative construction.

Traders work on the floor moments before the morning bell at the New York Stock Exchange, November 21, 2008 (Photo by Mario Tama/Getty Images)

What made this crisis extend beyond a collapse isolated in the subprime loan and construction industry was the very thing that made the economic expansion of the neoliberal period possible, the financialization of the global economy under the neoliberal economic regime. The large-scale securitization and sale of risky subprime loans transferred massive amounts of risk from the loan originators to investment banks, hedge funds, pensions, retirement investment portfolios, and corporate stock holdings. When the bottom fell out more than just the lenders were forced to deal with the consequences of magical thinking. The sudden evaporation of value that financial assets were believed to contain meant a sudden shock to corporate profits which led to a sudden contraction in production and increase in layoffs, further deepening the crisis

The response to the financial crisis: Capital was bailed out, while we were sold out

The response of the state to the financial crisis was hardly a radical break from neoliberal logic. There were no bank nationalizations, no massive public works programs, no significant expansion of the welfare state, and no overhaul of banking and finance regulations. Instead there was a concerted attempt to preserve the status quo and continue with business as usual.

In the initial aftermath of the bankruptcy of Lehman Brothers, the federal takeover of Fannie Mae and Freddie Mac and the emergency liquidity granted to financial institutions like AIG, the U.S. economy was still in freefall. By the end of September 2008, the U.S. Treasury Secretary Henry Paulson proposed a massive $700 billion bailout package. This proposal would eventually be passed in Oct 2008 as the Emergency Economic Stabilization Act (EESA) which created the Troubled Asset Recovery Program (TARP).

The goal of the EESA and TARP was to stabilize financial markets through a government intervention that would buy up the “troubled assets” like mortgage-backed securities held by major financial institutions. By buying up toxic assets, thereby exchanging virtually unsellable financial assets for useable capital, the federal government created the necessary liquidity for financial activity to resume as it had before.

This bailout took place against a regulatory atmosphere that remained unchanged until 2010 when the Dodd-Frank Act was passed. Dodd-Frank was a package of modest reforms, a far cry from the Glass-Steagall regulation enacted in the aftermath of the stock market collapse that precipitated the Great Depression. The goals of Dodd-Frank were to consolidate regulatory powers, increase transparency of financial markets, increase consumer protections, define tools for responding to financial crisis, improve international regulations, and introduce the Volker Rule, which sought to prevent banks from using deposits to trade on their own accounts.

The regulations contained in Dodd- Frank are already being rolled back through bipartisan efforts.

By 2018 these regulations would be rolled back by a coalition of Republicans and Democrats in the legislature, as they dropped from the focus of mainstream press and political debate. One could rightly wonder if the Democrats voting in favor of this policy were grateful for the daily barrage of outrages of the sitting president, creating a helpful diversion away from the bipartisan repeal of one of the very few substantive regulations enacted over the Obama era.

Notwithstanding the meager and temporary countercyclical policy of the Obama administration enacted in the immediate years following the Great Recession, such as the American Recovery and Reinvestment Act of 2009, what did not happen was a real bailout of working-class people. They instead saw their retirement funds ruined, homes repossessed as a result of predatory loans, and long-term unemployment and underemployment.

By 2011, the Obama administration and political-economic elite worldwide, pivoted away from modest Keynesian policy towards an acceleration in the neoliberal direction of fiscal austerity. The tightening of government budgets largely targeted social programs that insulate the working class from downturns and economic suffering. Rather than support those most harmed by the economic crisis, the state actively chose to ignore the suffering of millions in order to jumpstart the profitability of the finance industry, effectively hitting the reset button so that we could continue down the same neoliberal path.

Rather than a break from the economic arrangements of the neoliberal period to a new regime of capitalist management, as after the crises of the 1930s, we now see a deepening commitment to the neoliberal agenda and a recovery that has resulted in few gains for the working class.

Could the capitalist state have taken another course of action? Certainly they could have nationalized banks, deployed huge amounts of capital for WPA-style public works programs and expanded social programs. Both the Great Depression and the Great Recession were the result of the a credit-fueled financial bubble under a neoliberal and unregulated economy. What was different and created the conditions for a substantially different response was the social conditions.

In the 1930s there was a militant labor movement, a growing socialist and communist movement, and the recent history of the Russian Revolution. With growing militancy in the U.S. and globally, governments responded in one of two ways in order to preserve capitalism: the implementation of social-democratic programs or a turn towards fascism. In the U.S. a social-democratic turn manifested itself in the Roosevelt administration’s New Deal.

The conditions were drastically different in the aftermath of the 2008 financial crisis. Atrophy in the post-WWII period and three decades of neoliberalism had substantially weakened the labor movement. The disintegration and splintering of the U.S. socialist and communist organizations after the 70s meant radicals and revolutionaries were unable to mobilize and propagandize people in the ways they were able to during the Great Depression. While some heroic attempts were made during the explosion of Occupy Wall Street encampments across the U.S., it was far from sufficient to take the radical transformative action that was needed.

Occupy Wall Street rally 2011 (Alex Brandon/AP)

What will it take to overcome the boom and bust cycle that capitalism is predicated on? Looking back one thing is clear, sustained mass struggle led to the gains won by the working class like social welfare programs, protections against discrimination and other civil rights. But also revealed by history is that as long as capitalism has been the dominant economic arrangement the power of the capitalist class remains and is used to claw back many of the gains made by workers.

What is necessary to permanently escape the devastating cycle of boom and bust is a commitment to build a movement to totally transform the way we relate to one another in the economy. A transformation from a capitalist society based on profit and accumulation to a socialist society based on the fulfilment of human needs and the democratic management of the economy by all.

The Socialist solution, why it’s necessary

What the 2008 crisis revealed, as crises always do, is the fundamental instability of capitalism as a whole. It demonstrated the lengths that capital will go to to ensure steadily expanding production, even at its own peril. Similarly, the response to economic crisis reveals the commitment of the state to the preservation of capital, whether it be the implementation of a package of reforms for workers to stave off revolutionary pressures and the support of productive industry through public-works programs and war or through the deregulation of finance and banking to insure the steady flow of capital through the economy.

The fundamental instability and the tendency of capitalism towards crisis and the state’s role in supporting and maintaining capitalist accumulation should come as no surprise. Capitalism is a system that requires ever-expanding productive capacity, capital, resources and markets for those goods. Capitalists are compelled to produce at ever-expanding rates with an emphasis on cutting labor cost, much as we saw in the neoliberal period and the buildup to the 2008 housing bubble.

At its core capitalism is driven towards crisis, even the so-called Golden Age of the 1950-70’s capitalism was punctuated by stagnation and crisis. As socialists we know society can do better than a system predicated on profit, rather than meeting human needs, and characterized by regularly occurring crisis as a result of the sole focus on profit.

As socialists we think that a society democratically organized around production for human need and human development, not for profit, would be able to overcome the frequent crises which are a feature of capitalism. By producing for social need in an intentional, deliberate and planned manner we would bypass speculative short-run profit-seeking which gives rise to bubbles.

As revolutionary socialists we understand that this would be a radical break from a society based on private ownership of the means and tools of production to one organized around social ownership. We also believe that this radical break, to be successful, must be from below through a massive movement for socialism led by the broad working class, not imposed from above by the state or a small cadre of revolutionaries.

That sort of movement-building is a long and difficult process and will not happen overnight. As a result there is a need for both reform and revolution. The reforms we should work for in the period leading up to the ultimate break from capitalism should go beyond liberal attempts to build a kinder, gentler capitalism.

Instead, we should fight for transitional demands or non-reformist reforms, reforms that not only give relief to working-class people but also challenge and take back power from the capitalist class, while simultaneously helping the working class gain the experience and knowledge necessary to self-manage. These sort of demands not only challenge and take back power from the capitalist class but also give us concrete demands to organize around as socialists build power and gain confidence.

Examples of such demands include:

  • Guaranteed employment, a living wage for all and the nationalization of key industries fit the non-reformist reforms bill by eliminating the potential harms of being fired and ensuring a high standard of living for all.
  • A full employment and nationalization program could be paired with a demand to mobilize workers and productive capacities to combat climate change and rebuild our crumbling and inefficient infrastructure.
  • The decommodification of human necessities like health care, housing, food, water and electricity and ensuring universal access for all. Achieving any of those demands would increase our abilities to intentionally act in conflict with the capitalist class with less fear of the consequences of job loss.

Finance and banking is an often overlooked area for the development of transitional demands. While on its surface capitalism appears as though it operates without a planning mechanism, finance plays an important planning and coordinating role in the capitalist production process. Economist J.W. Mason provides an excellent overview of why this is the case and provides a list of reforms, some reformist, some non-reformist, that socialists ought to be demanding, including:

  • Public provision of basic banking and finance services through the development of postal banking, free public payments services (e.g., Venmo and Paypal), and greatly expanded public retirement insurance for all. Such reforms decommodify the financial transactions all of us perform on a day-to-day basis.
  • A drastic narrowing of the scope of what finance can and cannot do by strictly limiting the types of activities and assets that finance can hold and sell. In moments of crisis the state should protect functions essential to the lives of working people, like the withdrawal of money and the other bookkeeping functions of finance, rather than protecting firms. Further, the state should require private finance and banking institutions to hold substantial portions of public debt, federal, state and municipal. Finally, we should disempower shareholders from controlling firms to decrease the pressure on management to prioritize short-run profits over the long-run health of the firm, its employees and the consumers it serves.
  • The democratizing and politicization of central banking. In concrete terms this means doing things like directing the Federal Reserve to use its powers to buy up privately held municipal debt to protect cities like Detroit from financial vultures. Such actions could liberate municipalities to implement development for the people rather than finance and profits. But, ultimately we should be demanding the nationalization of banking and finance and the delivery of democratic control of banking over to the working class and thus the capacity to direct investment.

For socialists reforms of any sort should not be the end goal we should see such reforms as part of the process of building a movement to transform our society. The revolutionary break from a society based on private property, commodity production and profit-seeking to one based on production for social need, the total decommodification of society and ultimately a society where production is intentionally and democratically directed. The democratic planning of the economy removes the basis for the speculation that gives rise to overproduction that gives rise to regularly occurring crisis under capitalism.

Luke is a Marxist economist and Ph.D. candidate at the University of Massachusetts, Amherst, and is a member of Solidarity and the Democratic Socialists of America. He lives, works and organizes in Kansas City, Missouri.

Supreme Toxicity—Confirmed

The Editors

October 8, 2018

A Letter from the Editors of Against the Current

Protesters occupy the Senate Hart building during a rally against Supreme Court nominee Brett Kavanaugh on Capitol Hill in Washington, DC. – Photo: AFP

HE’S CONFIRMED, ALL right: A confirmed liar, confirmed nasty-drunk sexual predator and hardcore reactionary hand-picked for his confirmed anti-worker judicial record, Brett Kavanaugh is now a confirmed Justice of the United States Supreme Court. The whole spectacle became one of those moments that brought the country face to face with the real condition of its political system—and  the rage it’s generated is the hope for the future.

While this was going on, much else was pushed to the outer fringes of the news cycle. North and South Carolina still wading hip-deep in polluted and hog waste-infested floodwaters of the latest climate change-driven hurricane.  Refugee families seeking asylum in the United States piling up in detention centers, with some launching a hunger strike, and children shipped to desert concentration camps. The United States preparing new “crippling sanctions” on Iran, including attempting to reduce its oil sales to zero – a step going right up to the line of an act of war that could consume much of the Middle East. American bombs supplied to Saudi Arabia incinerating the nation of Yemen—and U.S. action deliberately setting out to reduce Gaza and Palestinian refugees to the point of starvation.

On the positive side, world leaders assembled at the United Nations broke out laughing at Donald Trump as he boasted of “my administration’s” brilliant accomplishments. But all this and more was blacked out as the Senate Judiciary Committee moved to complete the longterm Republican agenda of stacking the Supreme Court with a far-right majority.

There is much handwringing in the media and cable TV punditocracy over the “toxic” condition of American politics revealed by the Kavanaugh confirmation process. “Toxic”? You really think? Behold the least popular Supreme Court nominee in memory, appointed by the most unpopular and corrupt U.S. president in modern history, finally confirmed by a Senate that’s one of the least representative bodies in any more-or-less democratic country in the world.  And ponder the sick joke of the five-day “investigation,” crafted to give some cover to Senator Jeff Flake and tailored by Donald Trump’s instructions to the FBI to make sure it would find nothing.

It’s important to say something here about Dr. Christine Blasey Ford. Not only a survivor of sexual assault, she stands out most as an example of the kind of people who never intended, but at the critical social moment step forward, to become the heroes they had never imagined – people like Anita Hill, Chelsea Manning or Edward Snowden, or Daniel Ellsberg in an earlier generation.  Dr. Ford needs to be honored and above all, protected against the vilification and threatened violence that will come her way.

Donald Trump for his part got it right: Kavanaugh “showed America exactly why I nominated him.” That hits the nail on the head.  Kavanaugh embodies those qualities of male entitlement, affluent privilege, snarling denial of responsibility—and above all, willingness to trample on the rights of those without power – that Trump most admires and the right wing treasures. And the molester-in-chief’s accidental presidency, along with razor-thin Republican control of the Senate that may vanish in 2018 or 2020, made this their moment that might not come again.

They’re dreaming not only of further  crippling, if not overturning, the 46-year-old Roe v. Wade decision but maybe marriage equality too, even at the risk that it might destroy the legitimacy of the Supreme Court (not an altogether bad thing in the circumstances) – and killing the Affordable Care Act as well. As a lower court judge, his most obscene rulings like denying a 17-year-old detained asylum seeker an abortion could be overruled. As a Supreme Court Justice, his opinions won’t be subject to appeal.

What did the grotesque September 27 hearing actually show Kavanaugh to be? A youthful sloppy drunk, jock and pretty clearly an entitled abuser of young women, by his mid-thirties or so he had dried out, cleaned up and pursued his legal career with all the elite connections to get on a powerful circuit court and pursue the ultimate Supreme Court appointment he always dreamed would be his.

Nothing was going to get in the way of that destiny – not his lurid obsessions with Bill Clinton’s sexual conduct while he worked in Kenneth Starr’s investigation; not the massive trove of his emails under the George W. Bush administration helpfully concealed by “executive privilege” and most certainly, not some long-ago recreational sexual attempt so unimportant that it wasn’t worth remembering. The decades-long traumatic impact on the survivor, who could never forget, was no concern of his. No wonder he was righteously outraged that it would come up on the eve of his crowning glory.

Polarization is Necessary!

In the wake of this outrage, many people may feel that all the mobilizations and outpouring of the #MeToo movement and its allies are ultimately of no use. If the Kavanaugh confirmation couldn’t be blocked by the heroism of Dr. Ford, the evidence of Kavanaugh’s lies, and the huge show of opposition, is there any point of being in the streets when the rich and powerful pay no attention?

We disagree. That resistance has ensured that Christine Blasey Ford and the other brave women coming forward don’t feel alone. There will be more exposures and, regardless of Senators’ indifference to facts, more inquiries, more reporting and revelations. It matters that Brett Kavanaugh showed exactly who he is.

What matters most is how the powerful rage shown by so many women, and by decent people in general, remain focused. It’s not really about Democrats’ rhetoric about impeaching Kavanaugh or Trump if they take over Congress. That’s a hail-Mary diversion. The main thing for today’s struggle is not to “preserve the legitimacy” of the Supreme Court, but precisely to discredit this institution as it returns in its majority to what it’s largely been historically, a safeguard of the privileges of the rich, the powerful and the oppressors, from 19th Century slave owners to today’s corporate brigands.

Where the Court has departed from that posture, it’s mainly been a response to pressure from popular. movements —notably insurgent labor, civil rights, women. That holds true now. It’s been the numbers and the passion shown by the movement that put some spine into the Democrats, pushed the American Bar Association to reverse its endorsement, and above all forced the exposure of Kavanaugh’s record that he correctly stated will permanently follow him, and the Court.

That’s no trivial matter – it will put some constraints on how far Chief Justice Roberts and the reactionary majority feel they can go.  When and if this Court majority does abolish abortion rights, wipe out DACA or Temporary Protected Status and enable mass voter suppression, these and other atrocities must be met with contempt, defiance and the threat of direct resistance.

It’s true that following the knife war over the Supreme Court, attention is focusing on the midterm elections, which will take place after this issue of Against the Current is published but around the time it reaches our subscribers. At this writing, we don’t know the outcome of the possible Democratic “blue wave” in Congressional, Senate and various state races. One thing we do know is that if Hillary Clinton had won in 2016, we’d now be talking about two years of a stagnant neoliberal presidency and prospects for a Republican “red wave” taking a stranglehold on both houses of Congress.

Be that as it may, while the Republican Party has become a far-right coalition dominated by billionaire interests, racism and Christian fundamentalism, an important development has emerged — as an outgrowth of the Bernie Sanders campaign and an expression of the anti-Trump resistance – in and around the Democratic Party.

A layer of progressive and democratic socialist candidates, including a growing number of women and people of color, is coming forward to contest the entrenched corporate-neoliberal party establishment. The New York City primary victories of Julia Salazar and Alexandria Ocasio-Cortez, both members of Democratic Socialists of America (DSA), are examples.

Insofar as such matters are predictable, it seems likely that there will be a double polarization of politics – between the Trump gangster regime with his Republican enablers and the broad social “resistance,” and at the same time between the corporate Democratic establishment and the progressive and democratic socialist wing that’s gaining credibility and showing increased dynamism.

We have no way of knowing now what might be the result of the swirling scandals around Trump and his extended  racketeering crime family – or what kind of Republican free-for-all might ensue in case he goes down. On the Democratic side, there’s a desire within the U.S. capitalist class for a “moderate” and above all safely corporate alternative to both Trump and the “dangerous” progressive left (even, if the Democratic leadership itself can’t generate such an establishment candidate, potentially someone like billionaire Michael Bloomberg).

Surrender, Accommodation or Rupture?

Whether a polarization in the Democratic Party might result in a progressive surrender to the establishment wing in the name of “party unity,” an accommodation that might be brokered around a figure like Elizabeth Warren who straddles both wings, or a serious rupture, can’t be known at this point. We know for sure that the neoliberal forces of the Democratic “center” have no intention of giving up their control.

The inevitable strains became visible when, for example, Ocasio-Cortez announced her support for the far-from-progressive Governor Andrew Cuomo’s reelection and for all Democrats of any political stripe. That’s entirely consistent with her party affiliation, but not with the stance of New York City DSA which issued a statement differentiating their position from hers. That kind of contradiction will not be an isolated case.

Indeed there will be a growing cohort of progressive and some open “democratic socialist” representatives in Congress. There can be a niche for them inside the Democratic Party. They may be given a role in writing that most meaningless of documents, the Democratic party platform. None of that will change the core of the Democratic Party’s agenda, going back to the Bill Clinton era – with its record of banking deregulation, destruction of welfare, “tough-on-crime” legislation that brought on the current era of mass incarceration – and its support of numerous imperialist wars and interventions.

The pathway to independent progressive or working class politics in the United States has proven to be torturous, long and among the thorniest problems that the left has confronted. There are multiple well-documented factors behind this – the massive power of the winner-take-all presidency in the absence of a parliamentary system, the obstacles to voting that keep participation low in comparison to most countries, the sheer weight of corporate power and money in politics, the low level of unionization and the dependence of public sector workers on state policies—and the crippling role of white racism that keeps the working class from acting in unity.

These problems, and many more, persist. One very positive change today, as we noted in our previous editorial statement, is that the discussion today involves a vital new layer of thousands or even tens of thousands of socialist activists.

We don’t pretend that today’s still-small socialist movement alone can solve the problem of independent politics, especially in the absence of a powerful labor upsurge. But the discussion itself is important both for the openings that exist for electoral campaigns today and to prepare for bigger events to come in a growing social and political crisis. A less reactionary Congress, real  voting rights reform, a $15 minimum wage are all good things – but the essential goal must be a radically democratic, egalitarian, feminist and ecosocialist alternative to capitalist madness.

Above all, it’s critical right now to learn from what #MeToo, Black Lives Matter, Sanctuary cities and congregations, the teachers’ strike movement and others have taught us. Resistance matters. It inspires the best instincts in society. It enables decent people like Dr. Christine Blasey Ford to become real heroes standing up to the cynical arrogance of power. It’s the first step in making progress possible in the present poisonous atmosphere of confirmed Supreme toxicity.