The Democratic Party never was a labor party

Political scientist Thomas Ferguson is the leading U.S. expert on money in politics.  In his book, Golden Rule: the Investment Theory of Party Competition and the Logic of Money-Driven Political Systems, he argued that national elections are always about conflicts between different economic interests, never about conflicts between working people and business in general.

There has never been a strong U.S. labor party along the lines of the British Labor Party or French Communist Party, which is explicitly anti-capitalist and pro-labor.

Political campaigning in the United State is expensive and, paradoxically, democratic reforms such as direct election of Senators and nomination of candidates through political primaries, have made it more expensive. 

Senator Bernie Sanders tried to create an alternative financing plan based on small donors.  It was remarkable that he got as far as he did, but he was crushed in the end.

This does not mean that issues on national elections are meaningless.  Rank-and-file voters have a stake in issues such as loose money vs. tight money, public works projects vs. budget austerity, free trade vs. protectionism, monopoly vs. anti-trust policy, etc.  It is just that none of these issues get traction unless there is a business interest behind it.

Even the Populist Party of the 1890s, which sought to unite farmers, wage-earners and small-business owners against corporate monopoly, got the support of silver mining interests, based on its plan to increase silver money, and it got its strongest support in mining states.

Franklin D. Roosevelt’s New Deal never was anti-business, Ferguson said.  Organized labor did have a seat at the table of power during FDR’s administration, which is more than it had before or since, but it was never the dominant power.

Roosevelt took power in 1933 when the U.S. economy was in a state of collapse.  Many Americans, including representatives of big business, were willing to grant him the powers of a dictator.

He pushed through the National Recovery Act, aka “the first New Deal,” which attempted to stabilize the economy by organizing it as government-regulated monopolies, which prices and wages fixed by government.  The NRA failed, and also was rejected as unconstitutional.

FDR also pushed legislation for public welfare and to empower labor unions, such as the new CIO (Committee for Industrial Organization, then Congress of Industrial Organizations).  Business interests were split on this program.  They didn’t want to give high wages to their employees, but they did want their customers to have high disposable incomes.

In general, Ferguson said, labor-intensive business interests opposed the New Deal and capital-intensive industries, including the domestic oil industry, supported it.

The business community also split over free trade and protectionism.  One of FDR’s first actions was to take the U.S. off the gold standard, which meant a fall in the exchange rate for the U.S. dollar against foreign currencies.  That was bad for banks and other lenders, but good for exporters, again including the oil industry.

Roosevelt got authority to negotiate reciprocal trade agreements with individual foreign countries.  The U.S. lowered its tariffs in exchange for foreign countries lowering theirs.  Ferguson said this was highly popular among businesses that sold abroad.

History never repeats, as the saying goes, but it sometimes rhymes.

Joe BIden will take office during an economic crisis as bad that which Roosevelt faced in 1933.  We in the USA are on the brink of an unemployment crisis, an eviction crisis and a bankruptcy crisis not only in small business, but local government—not to mention the pandemic and climate-related disasters.  In some ways, Biden faces as even worse crisis than Roosevelt did.

The United States in 1933 was still the world’s leading creditor nation, the world’s leading manufacturing nation and, strange as it may seem now, the world’s leading oil-exporting nation.  The U.S. had one of the smallest armies in the Western world and was free of expensive military entanglements. 

Now the U.S. is the world’s leading debtor nation, a nation in industrial decline and an oil-importing nation.  Our military is the most costly in the world, and it is tied down in wars, large and small, all over the world.

FDR had much more freedom of action than Biden will have, to put it mildly.

When Franklin Roosevelt was sworn in, corporate America was flat on its back and looked to the government for help.  But during the past year, corporate America has been bailed out.  It is now well-positioned to oppose New Deal-type reforms.

As Ferguson pointed out in his October interview, recorded in the video above, the New Deal, for all its shortcomings, produced reforms from which we still benefit today.  But today’s economic circumstances and political alignments are different from what they were then. 

The lesson of the 1930s for labor, he said in the interview, is workers should organize in their own interest, and not wait for favorable governmental policy.  The whole interview is worth watching.

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