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Organized Labor: Fascist Looters
We ended the week with the Chicago Memorial Day Massacres of 1937.
The utopian economist, David Ricardo, started a brick factory operated on "humanitarian" principles. America was home to dozens, if not hundreds, of utopian communities, beginning with the "Puritans" of Massachusetts Bay. One book I have is called California Utopian Communities. It is amusing to read about men sitting under trees, arguing theory, while the women did the real work of the community. Not surprisingly, it was the women who pulled up stakes and insisted that the men get honest jobs elsewhere. The point is that capitalism has always allowed -- even encouraged -- social experimentation. That fact is critical to understanding the events we studied in this class.
It is also important to put the so-called "Great Depression" in quotes for several reasons. For one thing, it is a fact that the crash of common stock prices on the NYSE was separated by THREE YEARS from the plant closings and bank failures. Murray N. Rothbard has documented the mismanagment by the federal government of its perrogatives in banking. (The government in Washington DC had seized banking in 1863, which of course did not prevent periodic booms and busts. Neither did the strictures of the federal treasury prevent periodic collapses caused by moral failures.) The economy worsened from 1928 to 1938. To be sure, bank failures were common in the years before 1929-1933 and so were bank openings. From 1884 to 1921, the number of banks had sextupled from 5000 to 30,000. Not only were these generally small banks some capitalized near the minimum $25,000 but after 1921, the new operations were often branches. The federal Comptroller of the Currency had opened the door to allow city banks to compete in towns and villages. From that point, bank failures increased, as is to be expected from increased competition. In January 1933, it seemed that the summer of 1931 had been the lowest point possible and that a recovery was unfolding. Speaking to a United Press reporter in Dearborn, on February 1, 1933, Henry Ford called the period 1923-1929 the real depression. In point of fact, the political economy of the Roosevelt administration would make things worse.
In the wake of this misery, labor unions became more active. In 1936 and 1937, the Congress of Industrial Organizations attempted to unionize the steel mills. The result was a series of pitched battles. One of these was the Chicago Memorial Day Massacre of 1937. In my class, we watched a PBS documentary about the unionization of steel mill workers. Even after U.S. Steel agreed to recognize the union as the sole bargaining agent for workers, Jones and Laughlin, and the other "small steel" companies held fast. According to PBS, via interviews with people who were there -- a secretary and a newspaper reporter -- on Memorial Day 1937, some people were having a picnic in a field across from a steel mill. After the picnic, they decided to walk over to the mills and set up a picket. They were met by a large squad of Chicago police and after some rocks came from the crowd, the police opened fire, killing six immediately (ten died) and wounding many.
Personally, as a private security professional, other people's property is not worth killing for dying for. My own property does not mean that much to me. The right to property, yes, that is an abstraction defining the essence of humanity. Title to property is more important than property itself. The stuff itself is metaphysically worthless: who steals my purse steals trash. So, I was sorry to see those people killed. The fact remains, though, that the newsreels clearly showed pre-printed -- not hand-lettered -- picket signs with several different messages, attached to wooden slats. This was not a spontaneous event. While most of the picnickers likely had no idea what was to come, other people in that crowd had a plan. And they executed it. You cannot miss a cordon of large men in blue uniforms with guns, rifles, and shotguns. Yet, the crowd approached. The newspaper reporter who was on the scene at that moment, later downplayed for PBS the few things that some people threw at the police. The fact remains that the crowd approached and attacked an armed squadron. The consequence was predictable -- and, I believe, predicted.
In point of fact, capitalism is, truthfully heartless. Henry Ford would buy steel from the Devil Himself if the price was right for a superior product. So, why did these labor organizers not just establish their own steel mills? Raising money was not a problem and by their claim they were the real producers of wealth. So, why not just build another steel mill, organize it right, and out-produce the robber barons? If the barrier to entrepreneurship was too high, then, for a few hours wages, they could have bought common stock in all the companies and exercised their rights as owners. One share would get them into meetings. With hundreds or thousands of people holding one share, they could have dominated the meetings, posting their own candidates, and arguing the superiority of their agenda. With a few million dollars at the depths of this economic downturn, they could have bought significant shares, especially of "small steel" such as Republic and J & L, to sit on -- if not control -- their boards. The reason why they did none of this is simple: they were looters. They wanted to take from others what they could not produce for themselves.
That they could was believed even by the capitalists. Collectivism was swallowing whole nations and it looked impressive. The parades, especially, were really neat. keen, and swell, with geometric arrays of torches rhythmically turning in the night to the pounding of hobnail boots. The newsreels showed freshly scrubbed workers collectively producing goods under central management that united labor, business, agriculture, and the military into a common cause. It was utopia. The American progressives who created the Pledge of Allegiance and the National Anthem also put the Fasces on the dime and then put Washington and Jefferson on the quarter and nickel. And then, there was the Soviet Union. "I have seen the future, and it works," said Lincoln Steffens in 1921. Walter and Victor Reuther spent 16 months in the USSR, in a Ford Motor Company plant, actually -- further evidence that capitalism is heartlessly tolerant of almost anything that seems to work.
So, when the laborers in America wanted to take over the manufacturies, the owners were opposed to this -- because they felt in their hearts that they were useless. Otherwise, the owners would have just walked away from the mere material of the factories and started new ones of their own. Let the workers demonstrate their ineptitude and this would all have been over in a few years --- or would it? What if labor democracy really worked? Lacking any philosophical foundation, even the capitalists believed that faith and force -- the Hegelian Ideal, the Marxist Dialectic, technocracy, syndicalism... there were no shortages in that market -- actually could work. But if that were the case, the unionizers would have started their own mines and mills, rather than stealing what they could not produce.
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