associated with dismissal, and made the balance of power more favourable for workers: ‘conservatives’, they noted, ‘propose to restore work intensity through intensified labor market discipline (and, we might add, assaults on unions) and to revive business innovation by unleashing private enterprise from the collar of government regulation’ (Weisskopf et al., ‘Hearts and Minds’, p. 438). Some mainstream economists have adopted this idea, but from the opposite angle, explicitly crediting the neo-Marxists: ‘In a provocative recent Brookings paper, Weisskopf, Bowles, and Gordon (1983) have used the presence of the unemployment benefit […] to explain the […] decline in productivity in the United States’ (George Akerlof and Janet Yellen, ‘Introduction’, in George Akerlof and Janet Yellen (eds.), Efficiency Wage Models of the Labor Market (Cambridge: Cambridge University Press, 1986), p. 5). At that time, Carl Shapiro and Joseph Stiglitz discussed ‘equilibrium unemployment as a worker discipline device’. Their argument was based on treating ‘the threat of firing a worker’ as a ‘method of discipline’ and concluding that much of the slowdown in productivity stemmed from a lowering of the costs of losing work (Carl Shapiro and Joseph E. Stiglitz, ‘Equilibrium Unemployment as a Worker Discipline Device’, The American Economic Review, vol. 74, no. 3, June 1984, pp. 433–44 (p. 434).25 25. George Gilder, Wealth and Poverty (New York: Basic Books, 1981), p. 69, and Phillips-Fein, Invisible Hands, p. 178.
26 26. Townsend, A Dissertation on the Poor Laws, p. 23.
27 27. In the formation of the living conditions of the ‘voluntary worker’, commented Polanyi, ‘the final stage was reached with the application of “nature’s penalty,” hunger. In order to release it, it was necessary to liquidate organic society, which refused to let the individual starve’. He added: ‘the white man’s initial contribution to the black man’s world mainly consisted in introducing him to the uses of the scourge of hunger. […] [W]hat the white man may still occasionally practice in remote regions today, namely, the smashing up of social structures in order to extract the element of labor from them, was done in the eighteenth century to white populations by white men for similar purposes’ (Karl Polanyi, The Great Transformation. The Political and Economic Origins of Our Time, 2nd edn (Boston, MA: Beacon Press, 2001), pp. 173 and 172).
28 28. John Kenneth Galbraith, The Affluent Society (Boston, MA: Houghton Mifflin, 1958), p. 65.
29 29. Ibid., p. 75.
30 30. Gilbert Burck, ‘Union Power and the New Inflation’, Fortune, February 1971, pp. 65–70 (p. 65).
31 31. Marglin, ‘Catching Flies with Honey’, pp. 284–5.
32 32. John Lippert, ‘Fleetwood Wildcat’, Radical America, vol. 11, no. 5, 1977, pp. 7–38 (p. 36). The unemployment rate in the United States was 3.5 per cent in 1969, and rose to 8.5 per cent in 1975.
33 33. It should be added that the complement to this economic and social insecurity was a policy of police insecurity and prison, a ‘discipline of the lash’ imposed upon the poorest. This represented a dual phenomenon: both a withdrawal from the charitable state and a deployment of the criminal state, which Loïc Wacquant described as a ‘state policy of criminalizing the poor’ (Loïc Wacquant, Punishing the Poor: The Neoliberal Government of Social Insecurity (Durham, NC: Duke University Press, 2009), p. 99). See also Frances Fox Piven and Richard A. Cloward, Regulating the Poor: The Functions of Public Welfare (New York: Vintage, 1993); Samuel Bowles, David M. Gordon and Thomas E. Weisskopf, After the Waste Land: Democratic Economics for the Year 2000 (New York: Routledge, 2015; first published in 1990); Geert Dhondt, ‘The Relationship between Mass Incarceration and Crime in the Neoliberal Period in the United States’, PhD dissertation, University of Massachusetts Amherst, 2012.
4 WAR ON THE UNIONS
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which could either be executed, or would be consistent with liberty and justice.
Adam Smith1
‘The U.S. can’t afford what labor wants’ was the headline in Business Week in April 1970: ‘new union militancy could skyrocket wages and trigger runaway inflation’.2 The magazine denounced the trade unions for, as it saw it, their virtual control of the economy: ‘a democratic society works on the assumption that no group within it can accumulate so much power that it can write its own ticket. […] is collective bargaining still bargaining, or has it become something close to blackmail by the unions?’3
‘The gravest economic problem facing the Western world in the early 1970s is cost-push inflation powered by excessive wage increases’, claimed Gilbert Burck in Fortune. ‘What is happening, throughout the Western world, is that organized labor is overreaching’.4
But the observation was paradoxical because, at the very same time that the abuse of union power was being denounced, there was also anxiety about their loss of authority. Union leaders, as Richard Armstrong pointed out in Fortune, no longer appeared able to control a base that was showing ‘an acquisitive and rebellious frame of mind’,5 whose members were more and more obviously getting carried away ‘by a tide of angry revolt, against management, against its own leadership, and in important ways against society itself’.6
Less and less able to control their troops, union leaders no longer seemed capable of fulfilling their role of social pacification. ‘Have the aging leaders of labor lost their grip?’7 They too, in short, seemed to be facing a crisis of governability. ‘Right now’, said one executive from the automobile industry, ‘our interlocutor is no longer the bureaucrat trade union’, but ‘the stubborn guy, the irresponsible local leader’, with ‘the power of the whole organization behind him’.8 This seizure of power by the faceless rank and file seemed to herald a new era in labour relations, possibly marked by strikes of an unprecedented magnitude.9
In the post-war period, as the Marxist sociologist Michael Burawoy suggested in 1979, American unions had become part of the company’s ‘internal state’: having fitted into the regulated system of collective bargaining while very broadly giving up on effective conflict, they did not so much help to question the order of domination as to reproduce it.10 By collaborating with a form of ‘private government in industry’,11 they not only maintained the productive order, but contributed to fabricating consent and ensuring the hegemony of the ruling system of production. However, at the very moment when Burawoy was setting out his ideas, demonstrating in plain and simple terms how robust this regime of domination was, the latter was starting to fall apart behind his back.12
From the employer’s point of view, the diagnosis was twofold: the unions were both too strong and, in a sense, too weak. They were too strong in that they were still in a position to extract wage rises, no longer strong enough in that the union bureaucracies were no longer able to discipline their troops.13 What was the point, they said to each other, of continuing to make concessions to the trade union leadership if this no longer meant they could buy social peace at the base?
People started to make preparations for a showdown, but only on one side of the bargaining table because trade union leaders had completely failed to foresee what was coming.14 When they finally realized, it was already too late, and they reacted with bitterness. In 1978, Douglas Fraser, a great figure of American trade unionism, slammed the door of the Labor Management Group and wrote an open letter that sounded like a political testament: ‘leaders of the business community, with few exceptions, have chosen to wage a one-sided class war today in this country – a war against working people, the unemployed, the poor, the minorities […] The
