[Peace-discuss] The international assault on labor

[C. G. Estabrook]

"President Obama's programs were 'a giveaway to Wall Street executives' and a 
blow in the solar plexus to their defenseless victims. The outcome should 
surprise only those who insist on hopeless naivete about the design and 
implementation of policy, particularly when economic power is highly 
concentrated and state capitalism has entered into a new stage of 'creative 
destruction,' to borrow Joseph Schumpeter's famous phrase, but with a twist: 
creative in ways to enrich and empower the rich and powerful, while the rest are 
free to survive as they may..."


*The 'Great Moderation' and the International Assault on Labor*
    By NOAM CHOMSKY

In most of the world, May Day is an international workers' holiday, bound up 
with the bitter 19th-century struggle of American workers for an eight-hour day. 
The May Day just past leads to somber reflection.

A decade ago, a useful word was coined in honor of May Day by radical Italian 
labor activists: "precarity." It referred at first to the increasingly 
precarious existence of working people "at the margins"---women, youth, 
migrants. Then it expanded to apply to the growing "precariat" of the core labor 
force, the "precarious proletariat" suffering from the programs of 
deunionization, flexibilization and deregulation that are part of the assault on 
labor throughout the world.

By that time, even in Europe there was mounting concern about what labor 
historian Ronaldo Munck, citing Ulrich Beck, calls the "Brazilianization of the 
West---the spread of temporary and insecure employment, discontinuity and loose 
informality into Western societies that have hitherto been the bastions of full 
employment."

The state-corporate war against unions has recently extended to the public 
sector, with legislation to ban collective bargaining and other elementary 
rights. Even in pro-labor Massachusetts, the House of Representatives voted 
right before May Day to sharply restrict the rights of police officers, 
teachers, and other municipal employees to bargain over healthcare---essential 
matters in the U.S., with its dysfunctional and highly inefficient privatized 
health-care system.

The rest of the world may associate May 1 with the struggle of American workers 
for basic rights, but in the United States that solidarity is suppressed in 
favor of a jingoist holiday. May 1 is "Loyalty Day," designated by Congress in 
1958 for "the reaffirmation of loyalty to the United States and for the 
recognition of the heritage of American freedom."

President Eisenhower proclaimed further that Loyalty Day is also Law Day, 
reaffirmed annually by displaying the flag and dedication to "Justice for All," 
"Foundations of Freedom" and "Struggle for Justice."

The U.S. calendar has a Labor Day, in September, celebrating the return to work 
after a vacation that is far briefer than in other industrial countries.

The ferocity of the assault against labor by the U.S. business class is 
illustrated by Washington's failure, for 60 years, to ratify the core principle 
of international labor law, which guarantees freedom of association. Legal 
analyst Steve Charnovitz calls it "the untouchable treaty in American politics" 
and observes that there has never even been any debate about the matter.

Washington's dismissal of some conventions supported by the International Labor 
Organization (ILO) contrasts sharply with its dedication to enforcement of 
monopoly-pricing rights for corporations, disguised under the mantle of "free 
trade" in one of the contemporary Orwellisms.

In 2004, the ILO reported that "economic and social insecurities were 
multiplying with globalization and the policies associated with it, as the 
global economic system has become more volatile and workers were increasingly 
shouldering the burden of risk, for instance, though pension and health care 
reforms."

This was what economists call the period of the Great Moderation, hailed as "one 
of the great transformations of modern history," led by the United States and 
based on "liberation of markets" and particularly "deregulation of financial 
markets."

This paean to the American way of free markets was delivered by Wall Street 
Journal editor Gerard Baker in January 2007, just months before the system 
crashed---and with it the entire edifice of the economic theology on which it 
was based---bringing the world economy to near disaster.

The crash left the United States with levels of real unemployment comparable to 
the Great Depression, and in many ways worse, because under the current policies 
of the masters those jobs are not coming back, as they did through massive 
government stimulus during World War II and the following decades of the "golden 
age" of state capitalism.

During the Great Moderation, American workers had become accustomed to a 
precarious existence. The rise of an American precariat was proudly hailed as a 
primary factor in the Great Moderation that brought slower economic growth, 
virtual stagnation of real income for the majority of the population, and wealth 
beyond the dreams of avarice for a tiny sector, a fraction of 1 percent, mostly 
CEOs, hedge fund managers and the like.

The high priest of this magnificent economy was Alan Greenspan, described by the 
business press as "saintly" for his brilliant stewardship. Glorying in his 
achievements, he testified before Congress that they relied in part on "atypical 
restraint on compensation increases (which) appears to be mainly the consequence 
of greater worker insecurity."

The disaster of the Great Moderation was salvaged by heroic government efforts 
to reward the perpetrators. Neil Barofsky, stepping down on March 30 as special 
inspector general of the bailout program, wrote a revelatory New York Times 
op-ed about how the bailout worked.

In theory, the legislative act that authorized the bailout was a bargain: The 
financial institutions would be saved by the taxpayer, and the victims of their 
misdeeds would be somewhat compensated by measures to protect home values and 
preserve homeownership.

Part of the bargain was kept: The financial institutions were rewarded lavishly 
for causing the crisis, and forgiven for outright crimes. But the rest of the 
program floundered.

As Barofsky writes: "Foreclosures continue to mount, with 8 million to 13 
million filings forecast over the program's lifetime" while "the biggest banks 
are 20 percent larger than they were before the crisis and control a larger part 
of our economy than ever. They reasonably assume that the government will rescue 
them again, if necessary. Indeed, credit rating agencies incorporate future 
government bailouts into their assessments of the largest banks, exaggerating 
market distortions that provide them with an unfair advantage over smaller 
institutions, which continue to struggle."

In short, President Obama's programs were "a giveaway to Wall Street executives" 
and a blow in the solar plexus to their defenseless victims.

The outcome should surprise only those who insist on hopeless naivete about the 
design and implementation of policy, particularly when economic power is highly 
concentrated and state capitalism has entered into a new stage of "creative 
destruction," to borrow Joseph Schumpeter's famous phrase, but with a twist: 
creative in ways to enrich and empower the rich and powerful, while the rest are 
free to survive as they may, while celebrating Loyalty and Law Day.

© The New York Times News Service/Syndicate

Noam Chomsky is Institute Professor & Professor of Linguistics (Emeritus) at the 
Massachusetts Institute of Technology, and the author of dozens of books on U.S. 
foreign policy. He writes a monthly column for The New York Times News 
Service/Syndicate.
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