The International Assault on Labor

By Noam Chomsky, Truthout

Wednesday 4 May 2011--May Day march in Lansing, Michigan on May 1, 2011, organized by the Lansing Workers' Center and the NorthStar Center.

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 health care -- 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 to the struggle of American workers for basic rights but in the U.S. 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 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 U.S. 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 U.S. 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.