The current economic crisis has brought three decades of labor’s weaknesses to a head. What should have been a turning point in the Dominance of big business has, frustratingly, left the American working class even more on the defensive. The standard explanations unions give for this—from financial speculation and corporate greed to government betrayals, from American decline to the rise of China, from union leaders complaining about membership passivity to members complaining about union bureaucratization—point, at best, to partial and confused truths. What’s missing is a broader framework to make sense of the world. And there is also something else: as unions lament what is happening to them, there is disappointingly little discussion of another crisis, the crisis within labor. In the 1930s, the last time workers faced a crisis comparable to today, U.S. workers used the creativity of sit-down strikes to place industrial unionism firmly on the agenda. What might come out of the crisis this time? Enter Karl Marx. It may seem strange looking to someone who wrote before roads had cars, before California was a state, and when landless workers were just getting the vote.

But Marx and the body of work he inspired introduce three crucial elements to discussions of social change: a “ruthless criticism of all that exists,” including the labor movement itself; an explicit identification of capitalism as the system to be challenged; and the audacious claim that the potential for changing the world rests with the working class. It is not that Marx gives us answers to all the riddles we face but that there is a richness in Marxism, and a multitude of clues that help get us started.

Background to the Present

The foundational assumption of the U.S. labor movement in the early post-war years was that the aspirations of workers could be achieved within capitalism, so challenging capitalism itself was unnecessary. Industrial unionism—bringing together skilled and unskilled workers, and limiting wage competition across a sector—was the main vehicle for realizing the promises of the golden age. As bargaining was extended to include pensions and health care programs, what were essentially private welfare states emerged (supplemented by universal government programs like unemployment insurance, welfare, and old age security). Unions viewed American economic dominance as permanent and, in the event of restructuring, workers had a modest social safety net to look to and the ready availability of alternative jobs. In that context, unions supported free trade and tolerated corporations investing a growing share of their profits abroad.

This stance, albeit a bit frayed, remains largely in place today. The current self-identification of unionized workers as a downwardly mobile “middle class” reflects a continuing faith in resurrecting the American Dream and the absence of any alternative vision—never mind workers themselves making such an alternative possible. It also further separates unionized workers from those sections of the working class that cannot, by any stretch, be dubbed “middle class”: the poor, the unemployed, the precariously employed, the low-waged.

Marxism, in contrast, is largely defined by the understanding that capitalism itself is the main barrier to further human development. It’s not that Marxists denied capitalism’s remarkable productive achievements; no one praised these more than Marx himself: “It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and gothic cathedrals… created more massive and more colossal productive forces than have all preceding generations together.” The point, rather, was that the very conditions under which capitalism created that great wealth—based as it was on the subordination of workers’ lives to competition and profits—stood in the way of fulfilling the promises of material abundance.

The Cold War marginalization of the left was a factor in labor’s belief in capitalism, but that faith was especially sustained by the ability of post-war America to deliver the goods. What labor didn’t grasp was the temporary nature of the period and the broader dynamics of capitalist development. Within a generation, capitalism was losing some of its luster. High growth rates through the 1960s proved exceptional. They were based on the technological breakthroughs aborted by the Great Depression and encouraged by the war economy that followed as well as the mass consumer demand postponed during wartime. By the late ‘60s they had run their course. Meanwhile, the post-war revival of Europe and Japan intensified competition. The increased stresses on U.S. profitability were generating pressures on workers’ pay and conditions. But workers, bolstered by their relative material security at the time and influenced by the pervasive 1960s-era radical global culture, resisted the extension of managerial authority and the drive to lower expectations.

It was only after staggering through the 1970s that the American state managed to resolve the crisis. The solution entailed: breaking the back of worker militancy; financial liberalization; and the acceleration of globalization. Mass consumption was maintained in spite of stagnant wages by families working longer hours (and increasing their debt), enlarged participation of women in the labor market, and access to cheaper goods abroad. All this was at the center of what came to be called “neoliberalism,” and for a quarter century U.S. capital did very well—a resiliency many Marxists underestimated. Nevertheless, the very solutions to the earlier crisis—especially the interaction of highly leveraged finance with a credit-driven mass consumption, and expansion of home ownership among a workforce with a fragile income base—left American capitalism particularly vulnerable to the housing crash and a new, much deeper crisis.

How this current crisis will be resolved is not yet clear. Aggressive steps have been taken to cut public sector expenditures, the acceleration of the contracting-out of public services has created new bases for private accumulation, and public sector unions are being attacked as the remaining bastions of unionization. Yet as significant as this is, it won’t solve the economic crisis, which confronts two profound contradictions. First, though the volatility of finance hurts the economy and makes some regulation essential, the state is wary of regulations that might undermine the important role that finance, wild as it is,  plays in today’s economy. So change occurs cautiously and the economy’s vulnerability remains. Second, with banks nervous that ever more government spending might later lead states to default or cause inflation and thereby devalue bank assets, governments sensitive to bank confidence have turned to austerity. But that only worsens the economic crisis. As the crisis unfolds, one of the most important unknowns today is if and how working classes will respond.

Class, Class, Class

Marx had emphasized the centrality of class in shaping history, and its significance in the post-war economic history of the U.S. is unmistakable. The golden age that allegedly diminished the salience of class (“a rising tide lifts all boats”) proved to be fool’s gold. But it was a costly myth for workers in that the particular institutions and capacities that unions developed through this period—so dependent on sectoral bargaining as opposed to class struggle; trading off workplace power for the power to consume; and a general reliance on legalism and on lobbying the state via the Democratic Party—subsequently left unions painfully unprepared when the context and rules changed. As the special circumstances of the era faded, capitalists and the state redefined the concessions earlier granted workers from being measures of progress under capitalism, to now being problems in need of correction: high wages were uncompetitive; workplace rights undermined productivity; and worker security was a hindrance to enforcing discipline and carrying out economic restructuring.

It’s true that the markets also disciplined corporations. The difference lay in the class asymmetry of the impact. As businesses were destroyed by competition, more powerful capitalists stepped in and capitalists as a class emerged stronger. On the other hand, since the power of workers lies not in their individual strength but in their solidarity, that same competition left them divided and weakened as a class force.

Moreover, neoliberalism’s success consisted not only of attacking workers but also influencing the formation of their class identity. The competitive pressures highlighted workers’ dependence on “their” corporations for jobs, and the available options (given the weakness of the left) favored individual effort rather than collective responses: working longer hours, going into debt, trying to share in the financial boom by looking to stock markets to improve their pensions and rising house prices to increase their wealth. With neoliberalism having its most devastating impact on those most vulnerable, inequality increased even within the working class, further dividing and fragmenting the class.

The State

It is vital to be clear about the alleged passivity of the neoliberal state because how we understand the state profoundly affects the politics of labor. The misunderstandings of the neoliberal state either create illusions that a “good” capitalist state will solve most of workers’ problems or generate cynicism that states are completely beholden to business and so cannot really be influenced by workers. Marx had no developed theory of the state though he famously summarized the state’s role as essentially being “the executive committee of the bourgeoisie.” Incomplete as this was, it was closer to the truth than naïve notions about a neutral state, or a state that had previously spoken for the working class but was now largely sidelined by neoliberalism.

The more complex story developed by Marxists is that, in acting on behalf of the system as a whole, states may bend to working class pressures, but they are not neutral arbiters. They are specifically capitalist states in that their history has led to the development of capacities and inclinations oriented to reproducing a capitalist system, and they depend on private capital and a functioning financial system to provide the growth and tax revenue crucial to their legitimation. Far from being inactive, the American state has been extremely active since the early 1980s, and not just abroad. It is true that certain parts of the state apparatus, such as those providing income and services to the poor, were reduced and infrastructure spending stagnated. But the state also increased its intervention in weakening or integrating labor through its policies of fighting inflation, easing access to consumer credit, and encouraging the spread of home ownership. After financial markets were liberalized, state regulation actually proved to be more essential than ever to the functioning of the now more volatile markets (financial rules and the number of regulatory bodies and regulators significantly increased). And globalization, far from implying that multinational companies now escaped states, meant that corporations now depended on many states.

Strategic Issues

The “reserve army of the unemployed”— the ever-present numbers of unemployed workers ready to accept any job—would, Marx argued, serve as a check on the demands of all workers. Two aspects of neoliberal globalization have dramatically increased the effective size of that reserve army: the domestic expansion of the number of workers in part-time, temporary, low-wage jobs with minimal benefits (the precariat); and the global explosion in the size of the industrial working class, especially in the developing countries (since 1980, the number of workers in direct competition with each other has tripled, from approximately one billion to some three billion).

How should the labor movement respond to the intensified competition for “good” jobs? How can unions, whose role is structured around the price of labor, satisfy members whose main concern is with something unions have so little say in influencing—access to decent jobs? And another divisive issue is on the agenda: the public sector (of little significance in Marx’s time) has tried to rally support against attacks by emphasizing the importance of social services, but public sector workers face tensions over the relationship between their wage gains and tax increases for other workers as well as the contradiction that the basis of their militancy— strike action—denies those important services to the public. An even more daunting set of issues confronting working-class leadership also relates to the main criticism Marx made of capitalism. Converting labor into a commodity subservient to the employer’s profitability and intensifying the deadening division of labor narrows the perspective of the worker, undermines skills and talents and self-confidence, and distorts and constricts his or her cultural breadth of vision. How, then, can such a crippled and dependent working class possibly take on the making of a new society? What follows are some selective observations in dealing with these intimidating questions.

Controlling Capital

The threat of competition is the bane of the labor movement. Conventionally, the movement faces this issue of competition in debates over free trade. But for Marx, competition was primarily about the mobility of capital as it constantly moved to where it could get a higher return. And as we see in this crisis, it is mainly the free movement of both financial and industrial capital that is at the heart of capitalism, restructuring our lives and disrupting economies. Challenging competition therefore means taking on the basic prerogatives of capital to close plants, shift production elsewhere, and especially—because of its immediate threat to any alternatives—the right to shift finance abroad.

Organizing

The focus on free trade also obscures the fact that most of the competition workers face still occurs among workplaces within the U.S. (e.g., the auto industry), and this puts the onus back on unions to  spread unionization as a way of limiting competition based on lowering labor standards. Moreover, a large and growing portion of the workforce works in lowpaid service sectors and is relatively immune from international competition. The failure to organize here and take worker competition out of the equation reflects, in large part, the limits of a business union orientation: gaining more dues rather than mobilizing the energy, commitment, and creativity to renew the labor movement and build the working class. Only the latter approach might open the door to new forms of working-class organization. (For example, cooperation among unions rather than self-defeating competition for members, associate membership even if there is no union recognition, and cross-sectoral organizations of the precariat into urban worker assemblies.)

Turning Banking into a Democratic Public Utility

The ten-point political program that Marx and Engels put forth in The Communist Manifesto included nationalizing the banks. This contrasts with trying to “fix” the financial system so banks can return to a status quo that we earlier sharply criticized, or calling for “more regulation” when the experience to date has been that the banks come to regulate the regulators rather than the other way around. The point is that if banks are going to be treated as a public utility and bailed out when they are in trouble, they should be taken over and run like a democratic public utility.

The importance of taking on finance (what Marx elsewhere called “the Vatican of capitalism”) is that first, as the most mobile form of capital, finance is especially demanding in terms of imposing capitalist discipline. Second, nationalizing the banks means gaining indispensable control over where the savings and profits of society are channeled, and this is crucial to virtually any economic policy we’d want to implement. Third, it means weakening one of the most powerful sectors of the capitalist class and so shifting the balance of social power in a more democratic direction.

Jobs: Beyond Keynes

The traditional union response to access to jobs is Keynesian stimulus. While this is appropriate at this specific moment of crisis (and supported by most mainstream economists, a good portion of business, and the Obama administration), as a longer-term strategy it is limited and contradictory. It still leaves us dependent on corporations and does not lead to new jobs paying decent wages. A Marxist perspective, which looks to production as collective activity for collective use, would emphasize replacement of private control over investment with democratic economic planning.

This might involve two parallel initiatives. One track would involve workers in every sector developing sectoral plans around which to educate and mobilize. In industries like auto and steel, plants that have been closing in spite of their productive equipment and workers anxious to work should be converted to provide needed infrastructure and all the modified equipment we know will be necessary in our plants, offices, homes, and transportation systems to respond to the environmental needs over the rest of the century. The other track would involve locally elected job development

This might involve two parallel initiatives. One track would involve workers in every sector developing sectoral plans around which to educate and mobilize. In industries like auto and steel, plants that have been closing in spite of their productive equipment and workers anxious to work should be converted to provide needed infrastructure and all the modified equipment we know will be necessary in our plants, offices, homes, and transportation systems to respond to the environmental needs over the rest of the century. The other track would involve locally elected job development boards directed to guaranteeing jobs or training to all workers in the same way that we provide schooling as a right.

Public Services: Union Leadership

Bargaining in the public sector has never been about facing an “employer,” but about confronting the state, and this is clearer and more pressing today than ever. It demands a response that goes beyond allowing the state to take on groups of workers one by one, and which emphasizes the role of workers in providing vital services to the public. Such a strategic shift toward focusing on what public sector workers do, over and above the pay they get, would mean a complete revolution in everything about public sector unions—from how they allocate resources, to how they train their staff and relate to their members, other unions, and the community, to (above all) making the level, quality, and administration of services a prime bargaining issue.

To carry out such a reorientation, public sector workers would also have to reconcile defending public services with using their power to deny them. This doesn’t mean setting aside the possibility of strike action, but locating such disruptions within a larger creative repertoire of actions: bus drivers not collecting fares; postal workers continuing to deliver pension and welfare checks during a strike; stopping garbage collection only in the 1 percent neighborhoods; work-ins at long-term care facilities with additional workers to demonstrate the potential for improving services; engaging in selective rotating strikes while limiting the impact on the community.

International Solidarity

Solidarity can’t be parochial; it demands an internationalist sensibility. Yet well-meaning calls for international solidarity are often naive and sometimes counterproductive. Marx insightfully grasped this by arguing that though labor struggles are international in substance (struggles in one place always have international implications), they are national in form (we organize and fight primarily at home). In part, this reflects practical limits in acting across borders. If we can’t even organize those foreign workers that have come here (or, for that matter, even effectively defend unionized workers in the U.S.), how much can we contribute to struggles abroad? But it is also a matter of approaching international struggles in class terms. Trying to link up with Ford workers in Mexico to raise their wages to our levels risks reproducing business unionism—we shouldn’t be encouraging an increase in the gap between Mexican auto workers and the rest of the Mexican working class, but supporting the strengthening of their whole class. Similarly, for all the publicity garnered by union mergers across borders, these are generally bureaucratic responses that avoid the more complex issues of transforming the content of union structures at home.

There are moderate, but valuable, things that can be done internationally: sharing information, learning from each other’s struggles and experiments, the occasional support of a specific high-profile struggle, campaigns to raise the floors on wages in each country. But the most important and concrete thing we can do in regard to international solidarity is to make the struggle at home and thereby create greater space for advances by workers in struggle in other countries (in contrast to making concessions which undercut those struggles).

The Polarization of Options

Marxism is so relevant to the American working class of today because the assumption of steady gains within capitalism—the founding illusion of postwar American labor—has so clearly run its course and it needs to be buried. With this comes a polarization of options. When the business press tells us there is no alternative, what they are really saying is that there is no option within the traditional set of policy options—we must either surrender or become more radical in our perspectives and goals. And with this as well comes the end of business as usual for unions and their private welfare states. It is not just a matter of increasing militancy (though that is necessary)—it’s a matter of moving beyond a unionism geared to the narrow interests of its own members and moving toward class responses embedded in new organizational forms and renewed unions.

Workers cannot act as a class, Marx had emphasized, unless they are organized into an independent political party. But such parties cannot just be “announced” without at least some social base in motion. The main political task, for now, lies in how to organize ourselves during this “intermediate” phase in a way that is not fixated on the election cycle but on building the independent understandings, confidence, and individual and institutional capacities for eventually placing a working-class party on the agenda. How can we establish networks of activists across unions or build urban assemblies across all sections of the class, and across the variety of issues the class faces, so we can renew unions to at least function as effective reformist organizations, while also developing socialists and getting socialist ideas onto the public agenda?

Finally, we need to revisit the issue of time. In his inaugural address to the First International Working Men’s Association, Marx especially praised the achievement of the ten-hour workday as a victory for the “political economy of the working class.” Getting their time back was not just a matter of regaining some leisure or even a solidaristic sharing of existing jobs, but of workers having the time to read, think, learn, participate, strategize, and act—the time to transform themselves while transforming society.