Capital and labour in the 21st century – review of Kim Moody’s ‘On New Terrain’

Kim Moody, On New Terrain: how capital reshaped the battleground of class war, Chicago, Haymarket Press, 2017, US$18; reviewed by Guy Miller

On November 8, 1954, US (Republican Party) President Dwight Eisenhower wrote:

“Should any political party attempt to abolish Social Security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. . . their numbers are negligible, and they are stupid.”

On August 3, 2018, the headline on the New York Times front page blared: “The Downside of Apple’s $1 Trillion Valuation: Income Inequality May Grow as Mega-Firms Dominate Economy.”

How we got from November, 1954 to August, 2018 is the story Kim Moody’s book, On New Terrain, tells well, and in great detail.

The Old Terrain

After being discharged from the U.S. Army, I entered the blue-collar work force in late 1967.  My fellow workers and I started with the basic assumption that decent-paying jobs were our birthright.  We also believed that our standard of living would always be on an unending upward trajectory.

Jobs were plentiful. Quit your job during the lunch hour and there was a chance you would have a new one that afternoon. We were a mixed demographic of Vietnam era veterans, young black nationalists,  counter culture youth, and older workers with the victories of the rise of the CIO still  imprinted in our memory banks.

Fifteen-minute coffee breaks routinely stretched to 25 minutes, a half-hour lunch meant 45 minutes away from work.  Assembly line moving too fast?  Simple solution: stop it by any means necessary.  Two-day weekends often ballooned into three days, thanks to the “bridge”, that is, calling off work on Fridays or Mondays.  With or without a union, we called the shots, or at least many of them.  It was almost too good to last, and it didn’t.

Shifting Terrain

As the war in Vietnam began to wind down, the American capitalist class saw itself besieged on several fronts: social, economic, and political being the most pressing.  The all-important rate of profit began to fall and, at the same time, inflation began to eat away at actual quarterly earnings. The ruling class realised it was in trouble. The 1971 Powell Memorandum was, perhaps, its seminal call to arms.

Powell, a former attorney for big tobacco and a future Supreme Court Justice, wrote a blistering memo to the U.S. Chamber of Commerce outlining the steps needed for big business to turn the situation around.  He called on it to “circle the wagons” and mount a counter-offensive against the then resurgent working class.

The late 1960s and early 1970s were characterised by major strikes and other work actions. Kim Moody points out that time issues were often at the root of these disputes. Here is how he puts it:

“This was the era of rank and file rebellion in which blue collar workers, bent on the offensive against their bosses, and often their union leaders as well, in a fight against speed up, deteriorating working conditions, and real wages.”

The counter-offensive of management proceeded, at first ,by fits and starts, and later by full-blown assault.  The early introduction of Japanese production methods (kaizen and Six Sigma) first saw the era of “soft cop” tactics.  These tactics included “Quality Circles” or, as on my railroad job, “TQIS,” or the “Total Quality Improvement System”.  These were attempts to get workers to self-police, and often work as a “team” in completion with other “teams”.  However, by the early 1980s the velvet glove was off and the iron fist began to make its appearance in the workplace.

A New Continent in Formation

By 1973 right-wing lobbying firms and think tanks began to litter the Washington landscape.  In 1973 the Business Roundtable came into existence.  It was to become the spearhead of aggressive capitalism in Washington D.C. Also tracing its roots to 1973 were The Heritage Foundation and the Cato Institute, think tanks dedicated to waging class war in favour of the rich and powerful.  The Koch Brothers, Charles and David (1), began to pump big money into ALEC (the American Legislative Exchange Council) that same year. ALEC focused on the previously-neglected state governments in fostering a neo-liberal agenda. Going on the attack state-wide to institute pro-business reforms exposed the soft underbelly of rules and regulations .

By 1973 it was clear that Eisenhower’s “negligible” minority was on the ascendancy.

The Volcker Recession of 1979 was a game changer. Appointed Chairman of the powerful Federal Reserve Board by Democratic President Jimmy Carter, Paul Volcker had one goal: end inflation.  And he had one way to accomplish this goal: bring the American working class to heel(2). To that end he ratcheted up interest rates to record highs, and made the economy grind to a halt.  He kept a list of upcoming union contracts and made sure that workers did not get the raises they expected. He literally kept a list of these contracts in his suit pocket and checked them off one by one!

The second punch in a one-two combination was delivered shortly after by Republican President Ronald Reagan when he broke the PATCO (Air Traffic Controllers) strike of 1981. Now, the American working class was on the ropes, and ripe for big changes at the point of production.

The first phase of the new offensive by management was around the question of time. The old adage that time was money became the rallying cry of the bosses.

The amount of work per minute was redefined.  The old American standard, set in the Detroit-dominated automobile assembly plants, had been 45 to 52 seconds per minute of work on the assembly line.  The new standard, imported from Japan, was the Toyota based 57 seconds per minute.

A rank-and-file newsletter, put out by workers at a GM-Toyota plant in California, called The Barking Dog, was quick to catch on to this gradually-implemented change, in “filling the pores of the working day”. The Barking Dog noted the introduction of a “pilot team in charge of figuring out how to add six seconds of work to our jobs. “ In other words, the 57-second minute was a goal to be achieved piece by piece.  The New Style management was nothing if not patient.

Also soon to be gone were my old friends: the extended break and the long lunch.  Here, technology intervened to keep time away from the job to a minimum.  Monitoring devices, surveillance cameras, and even – in some still rare cases – microchips imbedded into the skin of workers were all introduced to keep the worker tied to his or her station.

Moody notes that total “coffee” breaks went from 13% of the work day in the 1980s down to 8% in the 2000s.  For the bosses this was a bonanza.  Within the average 8-hour day, management gained 24 minutes in every 8 hour shift.  All this was surplus-value added at no extra cost in wages, benefits, or employment taxes.  This gave a real shot in the arm to productivity, and a real shot of bitter medicine to the workers.

At the heart of this new aggression of capitalist production is the emphasis on “Lean Production”. Think of Lean Production as the outer-most Russian nestling doll- in a triad of concepts.  The middle concept is the “Just-In-Time” method, and at the bottom of the threesome sits “Infrastructure.”  In tandem this new fast delivery system is at the heart of most of the gains in productivity since 1980.

Marx, put the phenomenon this way: “While capital. . . must strive to tear down every barrier. . . to exchange and conquer the whole  earth for its markets, it strives on the other side to annihilate this space with time.”

The Just-In-Time method falls under the umbrella of logistics. Over the last several decades the U.S. logistics network has been marked by consolidation.  For example, fifty years ago there were almost two dozen major railroads operating in the United States; today there are just five.  At the same time, thanks primarily to globalisation, the amount of tonne miles shipped by the remaining railroads is at an all-time high.

The point of the Just-In-Time method is to move component parts and materials from their point of origin to their final destination as quickly as possible.  Previously it was thought prudent to keep needed supplies stored to assure their availability in case of emergency; now that thinking is seen as obsolete.  Warehouses have morphed from a place of storage to a place of movement.

Achilles heel

The Achilles heel in the logistics of Just-In-Time is that it is largely dependent on infrastructure. The U.S. infrastructure is a done deal.  American railroad lines largely date from the period between the end of the Civil War and the beginning of the First World War, roughly 1865 to 1917.  The interstate highway system is mostly a product of the Eisenhower years, the 1950s.  Dictated by geography, there are only a limited number of deep water harbours suited for large container ships.  The transportation routes are fixed in place, and the extensive cost of their replacement precludes building new routes.  It is this already set layout that determines where the new mega-centres, or logistic nodes, must be situated

Thanks to globalization the long supply trail often begins in Korea, Japan, Europe or Latin America. Unlike labour, free trade deals have allowed capital and merchandise to move with little friction across oceans and borders.  Once goods, usually loaded into containers suitable for intermodal transport, arrive in the U.S. they enter the “Land Bridge”.  This land bridge leads to the mega-centres mentioned above.

Each mega-centre features dozens of intermodal railroad yards, access to airports and access to several interstate highways.  Usually near major cities, they also have access to another important commodity: workers – lots of workers.

One of the mega-centres is located in Chicago, my hometown, where I worked on the Union Pacific Railroad for 38 years. Here, more than 500 freight trains, pass through, originate, or terminate every day.  Roughly 200,000 warehouse workers, employed in five major job categories, are employed in over 250 warehouses, most of which resemble very large box stores.  Another 40,000 tractor-trailer drivers are part of the mix, as are tens of thousands of railroad workers.  This is a concentration of labour that matches the glory days of auto and big steel.

Moody describes this work force:

“A 2010 survey of warehouse workers in Will County, in the heart of the Chicago metro area conducted by Warehouse Workers for Justice found that 48% were African-American, 38% Latino. . .” and that fully “a quarter of them were women.”

He further points out that nearly two-thirds of them are paid below the official government low-wage level.  It isn’t hard to see that this mixture is a potential time bomb waiting to go off.

There are around a dozen or so major hubs similar to the Chicago mega-complex scattered across the United States.  Moody designates them as “choking points,” places vulnerable to work stoppages that have the potential to bring the economy to a screeching halt.  He speculates that  a “militant minority” (an old IWW concept) could play a crucial role in making this happen.  In what I see as an oversight, he fails to mention the essential role of a vanguard party in coordinating and leading such a process.

Lean Production is just one part of the overall capitalist project today.  Developing alongside it have been privatisation, deregulation, and diminished trade union power.  Moody also spends time discussing the role of capital concentration, brought about by a spate of mergers and acquisitions over the last twenty years.

(The first half of On New Terrain is awash with statistics.  Moody marshals statistics to show the changes brought about over time in every sector of American workers’ lives.  The result of his research is impressive, but it requires close attention to grasp its total impact.)

American politics

The second half of On New Terrain deals with the strange nature of American politics.  Unique in its non-parliamentary form, the U.S. Constitution is the result of compromises made between the slave owner class and the mostly merchant bourgeoisie in the late 18th Century. The one thing both ruling classes could agree on was the need to keep the demos out of democracy. Hence, the Constitution and the American system of government, from its inception, has had a profoundly conservative objective: giving the illusion of democracy, while keeping its substance at arm’s length from the masses.  Often called a system of checks and balances, you can forget about the balances, the checks have it, hands down.

For instance, there is the Electoral College, a device that has twice negated the popular vote in presidential elections in the last 16 years alone. Another check is the upper house of the Congress, the Senate, which mandates two senators for each state.  When the Constitution was signed the ratio between the largest and smallest state population was 7 to 1, now it ranges over 70 to 1.  Another stumbling block is the draconian state petition requirements needed to get a new candidate or party on the ballot. In fact, the last party to break through to the national scene was the Republican Party in the 1850s.

Unlike every other advanced industrial country, there is no social democratic option for the working class to choose from.  The Democratic Party has filled that vacuum despite its explicitly  outright capitalist origins and nature (indeed, it was originally the party of the slave owners).  During the New Deal of the 1930s the Democratic Party gave the illusion of being the party of the “little guy” (American-speak for the working class). For this illusion to seem real, the Democrats required social upheaval, but it also required the support and cooperation of a large section of the capitalist class.  Moody notes:

“Thomas Ferguson and Joel Rogers demonstrated ‘at the center of the New Deal Coalition were not just labor and poor farmers but something else – a new power bloc of capital – intensive industries, investment banks and internationally connected banks.’“

What this is saying was that, at a certain juncture, a marriage of convenience was formed with a section of the ruling class to implement the New Deal reforms.  The labour bureaucracy confused this short-term, shotgun wedding, for the start of a long-term relationship.

Especially since the Popular Front era of the late 1930s, many American leftists have been chasing the holy grail of a reformed Democratic Party, a party answerable to the needs of the working masses. Whether it’s been the “liberal-labour” alliance of the 1950s or the Rainbow Coalition of the 1980s, the quest has always, without exception, ended in disaster.  It is often said that the Democratic Party is the graveyard where mass movements are laid to rest.  History seems to bear this out.

The US working class and the 2016 presidential election

Moody’s analysis of the 2016 presidential election is essential reading in understanding American politics in this era of a New Terrain.  The most glaring fact of that election is that the most popular candidate, by far, was the “none of the above” category.  Nearly 100 million registered voters chose to stay home rather than pull a lever for either Hillary Clinton or Donald Trump.  Moody also does an excellent job in debunking the myth that angry blue-collar workers were responsible for Donald Trump being elected. (This a canard popular with the petty bourgeois, liberal media).

In explaining the actual demographics of the election a long quote from Moody’s book is warranted:

“Exit polls during the primaries, when the Trump rebellion began, showed that the whole election process was skewed toward the better-off sections of U.S. society, and that Trump did better among them did Clinton. While 55% of American households fall in the $50,000 or more income bracket, 59% of Clinton votes came from that group and a whopping 67% of Trump’s.  That could, of course, include some better off industrial workers, though not those who saw their jobs disappear.  So, looking at those voters in the general election, from the 26% of U.S. households earning more than $100,000, who are even less likely to be working class these days, we see that Clinton got 34% or her vote and Trump 35% of his from these well-to-do voters.”

Making it even harder to figure out the vote totals of the election is the lazy, non-precise, definition of “working class” used by the media, polling companies and the census bureau: working class equals those adults without a college degree, thereby making Bill Gates a fellow worker.  Gone is the Marxist category of petit-bourgeoisie, leaving 17 million small business owners part of the “working class.” Meanwhile, millions of unionized teachers are lumped into exactly what?  The useless designation: Middle Class?

Nearly a half century of brutal austerity and internalized neoliberalism have resulted in a polarized America, not seen since the Great Depression. On the one hand, Bernie Sanders, although calling himself a socialist as a result of a misunderstanding, performed the valuable service of removing the stigma attached to the word Socialist. This has resulted in a mushrooming of the Democratic Socialists of America organisation. On the other hand, the right wing demagogue Trump has set loose and legitimised the dragons of racism and xenophobia.

Indeed, we are now standing on New Terrain, a terrain where the question will soon be posed: Socialism or Barbarism. It will up to the American, and world, working class to make that choice.

(1) Democracy in Chains, the 2017 book by Nancy McLean, traces the conscious long-term plan of the Koch Brothers to restructure the American mindset. The architect of much of this plan was the Nobel Prize-winning economist James M. Buchanan.
(2) Volcker’s successor, Alan Greenspan, had the same goal in mind, when he talked about keeping the working class constantly insecure.