Welcome, friends, to another edition of Economic
Update, a weekly program devoted to the economic dimensions of our livesâjobs, incomes, debtsâthose
of our children, our own, those looming down the road. Iâm your host, Richard Wolff. Iâve been a profess of economics all my
adult life, and I hope this prepares me wellâor did prepare me wellâto offer you these insights
into the economic conditions of our lives. Iâm going to have a different structure
of our program today, different from what we usually do. It wonât be a few updates at the beginning,
and then an interview or an extended discussion. Instead, I want to use the whole time I have
with you to investigate and explore something central to the last half century of American
economic life, and particularly important right now. This has to do with the interaction between
politics and economics. Itâs well-known that the economic situation
shapes our politics. Sometimes, itâs not as a well-understood
how, and how deeply, politics has and continues to shape our economic realities. So thatâs what I want to focus on. And I want to beginâas good stories of our
situation always doâgoing back, setting the historical context and I want to ask a
question. At the end of World War Two, late 1940s into
the â50s, something remarkable happened politically in the United States. And it was in many ways surprisingâletâs
review. Suddenly, a group of people in the United
States who had been celebrated, pretty much widespread celebrations of them as heroes,
became insteadâalmost overnightâdemons. From being leaders, they became traitors. It was really remarkable. Who am I talking about? Iâm talking about Communistsâmembers of
the American Communist Party; socialistsâmembers of the two socialist parties at that time;
and active leaders of the labor movement, the big organizing drives of the CIO in the
1930s and â40s had brought millions of Americans, who had never been in unions before, into
the unions. They joined the unions, because they thought
it would be a safe way to make it through the Great Depression of the 1930s, at least
safer than not being in a union. And together the Communists, the socialists
and the unionists really struggled to develop a good situation for the mass of the American
working peopleâthe lower two-thirds, at least, of our population. And in the depths of the Depression, when
those folks were really suffering, a kind of coalition emerged and thatâs what I want
to talk about, because thatâs what was being destroyed in the years after World War Two. The coalition of Communists, socialists and
unionists was strong enough to basically pressure the then-president, Franklin Roosevelt, during
the 1930s, to institute four basic programs that helped average Americans in a way no
previous administration had dared to do. Hereâs what they were. First, the creation of Social Security system
to give 65 years or older Americans a check, every month, for the rest of their lives. To help survivors, to help people injured
early in life and disabled, to take care of our friends and neighbors, our family members
who needed it. In the midst of a depression, when people
were suffering, the government stepped inânot only helping, of course, the older folks,
65 and over who got that monthly check, a life-saverâbut also helping their children,
who therefore didnât have to help their mother and father the way they otherwise would
have had to because the government was lending a hand. As soon as the Social Security system was
set, the government did another thing. It created the unemployment compensation system. We had never had that before, just like weâd
never had a Social Security before. You lose your job, through no fault of your
ownâsay, because your employer canât sell whatever it is you help to make, and so he
lays you off, no fault of yours. You can get an unemployment compensation check
up to a year, sometimes more, every week. And this was done in the depths of a depression,
when there were millions and millions of unemployed people who suddenly got a lifeline. Third, it passed the first minimum wage act
in American history, saying that we owe people who work a decent minimum and itâs unethical
and immoral and unnecessary to deny that to them. And finally, the biggest program, the decision
of Franklin Rooseveltâs government to say that they would hire millions of unemployed
people. Roosevelt said if the private sector, private
capitalists donât hire peopleâwe will. And the government did. And it used unemployed people to make many
of those national parks out west that Americans love, to do some of the first conservation
work in American history, to give artists of all kinds a job bringing artistic activity
to the mass of the American people in a way that had never been done before and, by the
way, has never been done since. Unemployed people got a good job, doing something
useful and they got paid properly, so they could make their mortgage payments. The mass of people were helped, because millions
had joined unions and had become interested in and listened to socialists and Communists,
who said people deserved that, and an economic system that didnât provide it may be wasnât
justified. Wow. And where did the money come from, in case
your wondering, in the 1930s in the depths of a depression when the government didnât
have moneyâhow could it pay for Social Security, unemployment compensation and hiring 15 million
unemployed people and paying them? And the answer was that Roosevelt taxed corporations
and the rich. Thatâs right, he taxed corporations and
the rich and thatâs how he paid for it and the resultâfor him, as a politician, Rooseveltâwas
that he was re-elected three times across the 1930s. He was the most popular president in the history
of the United States, because he was the one who went after corporations and the rich to
help average people. But he didnât do it because of him. If you look at his entire political history
before he became president, he was no radical. He was no left-winger. He was a conventional, rich kid. Went to school in the right universities,
of Harvard and Yale, etc., etc. He was pushed from below, and you know what
pushed him? The coalition of Communists, socialists and
unionists. So when World War Two was over, 1945, and
when in the same year President Roosevelt died, in his fourth termâwell, the business
community that was enraged that they had to pay those taxes to help average people, they
went to work and they understood the problem wasnât defeating a Democrat and bringing
in a Republican. They knew very well that Roosevelt didnât
do this because he thought it was a good idea. They understood he had been pressured from
below, by that coalitionâof unionists, socialists and Communistsâto do what he did. So they understood that to roll it back, to
break it down and to make sure that never happened again they had to destroy that coalition. And the way you do that, the way you destroy
any coalition, is you look for and focus first on the weakest link among the groups that
making up the coalition and they determined in 1945 that the weak link were the Communists,
the Communist Party. So overnight, the Communist Party and its
activistsâwho had been leaders of the unionization movement in many industries, who had been
leaders in the struggle against fascism in Germany, in Italy and Japanâbecame overnight
not leaders, not heroes but demons. They were converted into agents of a foreign
power, the Soviet Unionâkind of remarkable if you remember that in the previous five
years, from 1940 to 1945, the United States and the Soviet Union were allies in a war
against fascism in Germany, Italy and Japan that soldiers from Russia and America worked
together with the same objectives in a coordinated struggle. They were our friends, our allies, our supporters. Suddenly they had been turned into archenemies. And so in the aftermath of World War Two,
after the death of Roosevelt, we had in America a political purgeâreally, of the kind you
rarely see in the world and like nothing else in American history. The government, big business and conservatives
everywhere went on a tear to arrest Communistsâto deport many of them back to countries they
had left sometimes forty years earlierâto demonize them as evil agents of a foreign
power, not leaders of an effort that had succeeded in giving average Americans the benefit of
government programs, the likes of which had never happened before in American history,
and footnoteânever happened again since then either. The McCarthy period entered American history,
named after a senator from Wisconsin who took the lead, holding hearings in Washington,
finding a Communist in this bureau, a Communist in that officeâand remember, the Communists
that were there, some of them, had been heroes years earlier: army veterans, leader of union
efforts and so on. It made no difference; they are now evil. And when the Communist Party was destroyed
and demonized, they went after the two socialist parties, telling Americans basically that
socialism is the same as communism, they just spell it differently. And when they were done, they went after the
labor movement and they have done a good job. In 1945, labor unions represented a third
of American workers. Today, they represent a tenth of American
workers. Communist Party destroyed. Socialist parties destroyed. Labor movement reduced to a pale shadow of
what it once was. This chaotic destruction of the left in America
traumatized the American people, or at least hit half or more of it thatâs open to critical
thinking about capitalism. The kinds of people who face an uncertain
job, a job with no benefits, insufficient wages to lead a decent life and who say that
has to change and who are willing to support, vote for, work with, demonstrate with people
who want and demand change. Those people had gotten that change in the
1930s, but now they watched as all the leaders that they had followed and had been successful
with were demonized, jailed, denounced in public, deported, made to appear as though
they were the sum total of all evil. A lesson was drummed into the American people:
donât have anything to do with people who are critical of capitalism. Donât have anything to do with people that
are socialist in one way or another, or at least find those ideas worth thinking about
or maybe talking about, maybe learning aboutânot necessarily agreeing with, but as part of
the conversation, which is the case in virtually every other country on earth. No, it was bad, it was evil and we stopped
teaching it in the schools, and we stopped allowing newspapers and journals to have articles
about them; we didnât publish the books of people who were like that. It was shut down time and it lasted half a
century. Politics destroyed a whole part of the American
political spectrum and after the break in the middle of this program, weâre going
to come back and take a look at the economic consequences of that massive political purge
and by the way, it had very little to do with communism or ideology. It had to do with breaking a coalition that
had gotten rich people and corporations to pay taxes to help average Americans. Weâll be right back. Welcome back, friends, to the second half
of todayâs Economic Update. Before continuing the conversation from the
first half, I want to ask you please to remember to subscribe to our YouTube channel, to follow
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an invaluable aid to what we do, and we want you to understand how appreciate we are, enabling
us to bring these insights to a large audience every week. OK, weâre going to look now at the consequences,
the economic consequences, of the purge of the American left after World War Two. And they were profound. Letâs start with one of the earliest ones,
in 1947 a law was passed called the Taft-Hartley Bill, after Senator Taft and Congressperson
Hartley. And this was a remarkable piece of legislation. It went after the Communists, it went after
the socialists and it went after the labor unions. It basically told labor unions that they couldnât
anymore elect democratically their own leaders. For example, it forbade a Communist from running
for office, winning a majority of the votes and serving as the leader of a union, which
Communists had been doing for twenty or more years in the United States without an incidentâit
became illegal. Wow. But it went much further. It had a remarkable clause, which has remained
law to this day as Iâm speaking, and the clause goes like this: if at a workplaceâa
factory, an office, a storeâthereâs a union, and letâs say half the workers in
this place have voted for the union and joined the union and have a union there, and letâs
say that that union negotiates with the employer and gets a contractâletâs say a wage increase
of ten cents an hour. Under the Taft-Hartley law, then and to this
moment, that union must give anything it wins with the employer to all the workers there,
whether theyâre in the union or notâwhether the join the union or not, whether they pay
union dues or not, whether when the unionâif it thought it had toâcalled a strike and
had workers go out and tell the public about their situation to help pressure the employers
to meet them halfway and give them a wage increase, the workers who went to strike,
and therefore didnât get paid, had to give to all the other workers who didnât go on
strike, who didnât lose a dayâs pay, the same benefits they won. The Taft-Hartley law, in effect, created an
incentive for workers not to join a union, not to pay the union dues because they would
get whatever the union won whether they did so or not. Thatâs fundamentally unfair, and you know
it and I know it and the people then knew it. It was a hammer blow against the labor movement. Wow. This was an attempt to destroy the Communists
and the unions and the coalition between them, because of course if a Communist couldnât
be elected, that removed them from leadership of unions. And if more and more people decided not pay
union dues, not to be part of the union, it weakened whatever unions could do. So it was a crazy, but effective way to abuse
the law in the interests of a purge. But it had the effect of weakening the labor
movement. It was the opening gun, and there are many
more laws that came afterwards, to a direct assault on the labor movement, which has worked
very well reducing labor membership from about 35% of all workers at the end of World War
Two to about 10% todayâa staggering cutback. Anyone in America today, and there are a few,
who talks about an economy with big business on the one hand and big labor on the other
is either ignorant or lying in your face. Big business has gotten bigger and richer. Big labor, itâs gone. There is no big labor, hasnât been for years. We are an economy dominated by one side of
what used to be a rough balance and boy does it show. The next effect economically was to get rid
of socialists, Communists, left-wingers, liberals of all kinds teaching in American schoolsâpublic
schools, colleges, universities. They too were demonized. They were dupes, they were agentsâall the
words that some of you, the older ones among the audience, remember. And this had an interesting effect. It basically removed from the learning process
of most Americans critical ideas about the system you live in. Socialists raised questions about American
capitalism. Communists raised questionsâthey offered
alternatives. They made people able to see that capitalism
has flaws, and capitalism has weaknesses and that there are people who have struggled with
those and come up with better solutions to problems. You know, thatâs how human progress worksâalways
has. You identify something in the society that
needs fixing and then you fix it. You come up with a better way of doing it,
a better way of thinking about, a better way of approaching a problem. Thatâs why we donât rub sticks together
to make a fireâweâve learned something. And thatâs because people early on said
there must be a better way to start a fire then spending all this time rubbing these
two damn wet sticks together. Well, if you donât criticize capitalism
in school, youâll prevent people from learning to think critically about their system and
that undercuts progress. It makes you stay with the system you got
because youâre afraid to think critically. Youâre afraid to allow a teacher to raise
with students the questions of flaws and faults, things that could be done betterâways of
approaching questions and solving problems in a different way. All of that was gotten rid of across the board
in the United Statesânot a hundred percent, you never can do that, but overwhelmingly. And even those professors who were leftâwho
werenât left-wing but were left in their jobsâwere afraid to say anything because
they saw what happened to their colleagues, didnât want it to happen to them. But the purge went even deeper and further. There was that famous case of the Hollywood
Ten, the government got rid of with absolutely the cooperation of the big film studios involved
in Hollywood of all kinds of progressive, left-wing, socialist, Communist, liberal filmmakers,. Writers, artists, actors, actressesâdestroyed
their careers to get the message across that Hollywood was not to make movies that make
working people heroes. It was to make movies that said our industrial
leaders were captains of industry, kind of funny when you think that at the end of the
last century those same people were called robber barons. Wow. You change a culture. And so whether the movies and TV shows that
came in or the radio shows or the schools of universities or the colleges or the labor
movementâwherever the purge could go, it went. Hounding people for their ideas, hounding
people for the questions they asked. Silencing an entire generation. And, of course, the predictable happened and
I want to hammer at that. Killing off those leaderships, destroying
the education of people in critical ways of thinking, was very convenient, it made it
possible for the next decadesâthe â70s, the â60s already; â50s, â60s, â70s,
â80sâto be times of rolling back the New Deal, which we did. We let the minimum wage rotâas prices went
higher, the minimum wage wasnât adjusted, so a real effect was to reduce it. Government employment stopped dead in its
tracks. Even in the crisis of 2008, when we had millions
and millions of Americans losing their jobs, no leader of the Republican or Democratic
Party even brought up the idea of a government jobs program, even though it had worked so
well the last time we had this program. Thatâs how successful the purge wentâyou
donât bring up those ideas. They had become taboo, they had become unthinkable,
unspeakable, out of the norm. It meant that the people that were critical
of Americaâs adventures overseasâwhen to help big business, we went to war or abused
other countries or allowed âalliesâ to do unspeakable things, you know, like Saudi
Arabia did a few weeks ago⌠Where were the critics? It didnât happen. They were afraid to speak. When poverty went nuts in America, over the
last forty years, where were the critics? When the inequality of income in America exploded,
where were the critics? They were afraid. They kept their mouths shut. They were afraid to see what was going on
or certainly to speak about it for fear that they would be subject sooner or later to another
purge like that horrible one they had lived through or heard from their parents about
back in the late â40s, â50s. The impact was to weaken the labor movement,
to weaken social criticism, to convert for example the Congress of the United States,
the political sceneânot to a debate between the people who appreciate and like capitalism
on the one hand, and those who are critical on the other, thatâd be a healthy debate. No, no, no, no, no, no, noânone of that! We have people in Republican leadership and
Democratic leadership whose job it is to out-do one another in celebrating this system as
it is and demonizing critics. Theyâre still doing that because they havenât
learned the lesson. Itâs particular poignant with the Democrats,
who donât understand that by not keeping the other side of the political spectrum in
a balance, they were in effect ceding the territory to the other side. It was the part that could call itself âAmerican,â
having demonized the other part. For those of you who werenât alive then,
let me tell you in the 1930s it went the other way. It was the capitalists who had brought us
the Great Depression. It was their bad investments, their corruption,
their banking irregularities that had plunged us into this morass of eleven, twelve years
of depression. They werenât heroesâthey were crooks. They were exploiters. They were the robber barons. But the last forty years has converted them
into creative, job-creating, entrepreneursânice change of language that reflects the purge
of those who were critical. And, of course, the end result of that is
precisely the Trump administration, even thought there were many steps up to it. The costs of economic inequality, the costs
of political nightmareâthose are some of the prices weâre paying now in economic
reality, because of the politics of destroying the New Deal coalition at the end of World
War Two. It is a lesson, a testimony to the power of
politics to shape our economics. It is also a powerful lesson that when the
next crash came in 2008, there was no left left. The Communists gone, the socialists gone,
the labor movement a shadow. There was no pressureâBush, Obama, Trumpâbails
out the big corporations, all they want, and for the rest of us? Nothing! No Social Security or equivalent. No unemployment. No public jobs. Thatâs the cost for us of the defeat of
the left after World War Two.
Professor Wolff has an important job in teaching this history that has been erased, and he does a wonderful job. He does so in a way that will be easy for all to understand. Please share wherever you can!
Big Dick Wolff at it again!