By Richard D. Wolff
By “class system” we mean the basic workplace organizations—the human relationships or “social relations”—that accomplish the production and distribution of goods and services. Some examples include the master/slave, communal village, and lord/serf organizations. Another example, the distinctive capitalist class system, entails the employer/employee organization. In the United States and in much of the world, it is now the dominant class system. Employers—a tiny minority of the population—direct and control the enterprises and employees that produce and distribute goods and services. Employers buy the labor power of employees—the population’s vast majority—and set it to work in their enterprises. Each enterprise’s output belongs to its employer who decides whether to sell it, sets the price, and receives and distributes the resulting revenue.
In the United States, the employee class is badly split ideologically and politically. Most employees have probably stayed connected—with declining enthusiasm or commitment—to the Democratic Party. A sizable and growing minority within the class has some hope in Trump. Many have lost interest and participated less in electoral politics. Perhaps the most splintered are various “progressive” or “left” employees: some in the progressive wing of the Democratic Party, some in various socialist, Green, independent, and related small parties, and some even drawn hesitatingly to Trump. Left-leaning employees were perhaps more likely to join and activate social movements (ecological, anti-racist, anti-sexist, and anti-war) rather than electoral campaigns.
The U.S. employee class broadly feels victimized by the last half-century’s neoliberal globalization. Waves of manufacturing (and also service) job exports, coupled with waves of automation (computers, robots, and now artificial intelligence), have mostly brought that class bad news. Loss of jobs, income, and job security, diminished future work prospects, and reduced social standing are chief among them. In contrast, the extraordinary profits that drove employers’ export and technology decisions accrued to them. Resulting redistributions of wealth and income likewise favored employers. Employees increasingly watched and felt a parallel social redistribution of political power and cultural riches moving beyond their reach.
Employees’ class feelings were well grounded in U.S. history. The post-1945 development of U.S. capitalism smashed the extraordinary employee class unity that had been formed during the Great Depression of the 1930s. After the 1929 economic crash and the 1932 election, a reform-minded “New Deal” coalition of labor union leaders and strong socialist and communist parties gathered supportively around the Franklin D. Roosevelt administration that governed until 1945. That coalition won huge, historically unprecedented gains for the employee class including Social Security, unemployment compensation, the first federal minimum wage, and a large public jobs program. It built an immense following for the Democratic Party in the employee class.
As World War II ended in 1945, every other major capitalist economy (the UK, Germany, Japan, France, and Russia) was badly damaged. In sharp contrast, the war had strengthened U.S. capitalism. It reconstructed global capitalism and centered it around U.S. exports, capital investments, and the dollar as world currency. A new, distinctly American empire emerged, stressing informal imperialism, or “neo-colonialism,” against the formal, older imperialisms of Europe and Japan. The United States secured its new empire with an unprecedented global military program and presence. Private investment plus government spending on both the military and popular public services marked a transition from the Depression and war (with its rationing of consumer goods) to a dramatically different relative prosperity from the later 1940s to the 1970s.
Cold War ideology clothed post-1945 policies at home and abroad. Thus the government’s mission globally was to spread democracy and defeat godless socialism. That mission justified both increasingly heavy military spending and McCarthyism’s effective destruction of socialist, communist, and labor organizations. The Cold War atmosphere facilitated undoing and then reversing the Great Depression’s leftward surge of U.S. politics. Purging the left within unions plus the relentless demonization of left parties and social movements as foreign-based communist projects split the New Deal coalition. It separated left organizations from social movements and both of them from the employee class as a whole.
Despite many employees staying loyal to the Democratic Party (even as they disconnected from the persecuted left components of the New Deal), the Cold War pushed all U.S. politics rightward. The Republican Party cashed in by being aggressively pro-Cold War and raising funds from employers determined to undo the New Deal. The Democratic Party leadership reduced its former reliance on weakening unions and the demoralized, deactivated remnants of the New Deal coalition. Instead that leadership sought funds from the same corporate rich that the Republicans tapped. The predictable results included the failure of the Democratic Party to reverse the rightward shift of U.S. politics. The Dems likewise abandoned most efforts to build on the achievements of the New Deal or move further toward social democracy. They increasingly failed even to protect what the New Deal had achieved. These developments deepened the alienation of many workers from the Democratic Party or political engagement altogether. A vicious downward cycle, with occasional temporary upsurge moments, took over “progressive” politics.
That vicious cycle entrapped especially older, white males. Among employees, they had gained the most from the 1945-1975 prosperity. However, after the 1970s, employers’ profit-driven automation and their decisions to relocate production abroad seriously undermined their employees’ jobs and incomes, especially in manufacturing. This part of the employee class eventually turned against “the system”—against the prevailing economic tide. They mourned a disappearing prosperity. At first, they turned right politically. The Cold War had isolated and undermined the left-wing institutions and culture that might otherwise have attracted anti-system employees. Left-leaning mobilizations against the system as a whole were rare (unlike more single-issue mobilizations around issues like gender, race, and ecology). Neither unions nor other organizations had the social support needed to organize them. Or they simply feared to try. Even more recently the rising labor and union militancy has so far only secondarily and marginally raised themes of systematic anti-capitalism.
Republican politicians and media personalities seized the opportunity to transform the disappearing post-1970s prosperity into an idealized American past. They carefully avoided blaming that disappearance on profit-driven capitalism. They blamed Democrats and “liberals” whose social welfare programs cost too much. Excessive taxes were wasted, they insisted, on ineffective social programs for “others” (the non-white and non-male). If only those others worked as hard and as productively as white males did, Republicans repeated, they would have enjoyed the same prosperity instead of seeking a “free ride from the government.” Portions of the employee class persuaded by such reasoning switched from Democrat to Republican and then often responded to Trump’s “Make America Great Again” (MAGA) mantra. Their switch stimulated Republican politicians to imagine a possible new mass base much broader than their existing mix of religious fundamentalists, gun lovers, and white supremacists. Leading Republicans glimpsed political possibilities unavailable since the Great Depression of the 1930s had turned U.S. politics leftward toward social democracy.
Emerging from within or around the Republican Party, the new 21st-century far Right revived classic U.S. isolationist patriotism around America First slogans. They combined that with a loosely libertarian blaming of all social ills on the inherent evil of government. By carefully directing neither criticism nor blame toward the capitalist economic system, Republicans secured the usual support (financial, political, journalistic) from the employer class. That included employers who had never prospered much from the neoliberal globalization turn, those who saw bigger, better opportunities from an economic nationalist/protectionist turn, and all those long focused on the employer-driven project of undoing the New Deal politically, culturally, and economically. These various elements increasingly gathered around Trump.
They opposed immigration, often via hysterical statements and mobilizations against “invasions” fantasized as threatening America. They defined government spending on immigrants (using native and “hard-working” Americans’ taxes) as wasted on unmeritorious “others.” Trump championed their views and reinforced parallel scapegoating of Black and Brown citizens and women as unworthy beneficiaries of government supports exchanged for their voting Democratic. Some Republicans increasingly embraced conspiracy theories (QAnon and others) to explain diverse plots aimed at dethroning white Christianity from dominating American society. MAGA and America First are slogans that articulate resentment, bitterness, and protest at perceived victimization. Repurposing Cold War imagery, Trumpers synonymously targeted liberals, Democrats, Marxists, socialists, labor unions, and others seen as close allies plotting to “replace” white Christians. Trump referred to them publicly as “vermin” that he would defeat/destroy once he became President again.
The larger part of the U.S. employee class has not (yet) been won over by the Republicans. It has stayed, so far, with the Democrats. Yet aggravated social divisiveness has settled everywhere into U.S. culture and politics. It frightens many who stay within the Democratic Party, seeing it as the lesser evil despite its “centrist” leaders and their corporate donors. The latter include especially the financial and hi-tech megacorporations that profitably led the post-1975 neoliberal globalization period. The centrist leadership studiously avoided offending its corporate patrons while using a modified Keynesian fiscal policy to achieve two objectives. The first was support for government programs that helped solidify an electoral base increasingly among women, and Black and brown citizens. The second was support for aggressively projecting U.S. military and political power around the world.
The U.S. empire protected by that policy proved especially profitable for the financial and hi-tech circles of the United States’ biggest businesses. At the same time, another part of the U.S. employee class also began to turn against the system, but it found the new Right unacceptable and “centrism” only slightly less so. The Democratic party has so far retained most of these people although many have increasingly moved toward “progressive” champions such as Bernie Sanders, Alexandra Ocasio-Cortez, and Cori Bush. Cornel West and Jill Stein carry similar banners into this year’s election but they insist on doing that from outside the Democratic Party.
Hostility has intensified between the two major parties as their opposition has become more extreme. This keeps happening because neither found nor implemented any solutions to the deepening problems besetting the United States. Ever more extreme wealth and income inequalities undermine what remains of a sense of community binding Americans. Politics ever more controlled by the employer class and especially the super-rich produce widespread debilitating anger, resignation, and rage. The relatively shrinking power of the United States abroad drives home a sense of impending doom. The rise of the first real economic superpower competitor (China) raises the specter of the U.S. global unipolar moment being replaced, and soon.
Each major party blames the other for everything going wrong. Both also respond to the declining empire by moving rightward toward alternative versions of economic nationalism—“America First”—in place of the cheerleading for neoliberal globalization that both parties indulged in before. Republicans carefully refuse to blame capitalism or capitalists for anything. Instead, they blame bad government, the Democrats, the liberals, and China. Democrats likewise carefully refuse to blame capitalism or capitalists for anything (except the “progressives,” who do that moderately). Democrats mostly blame Republicans who have “gone crazy” and “threaten democracy.” They erect new versions of their old demons. Russia and Putin stand in for the USSR and Stalin as chief awful foreigners with Chinese “communists” a close second. Trying to hold on to the political middle, the Democrats denounce Republicans and especially the Trump/MAGA people for challenging the last 70 years of political consensus. In that Democratic Party version of the “good old days,” reasonable Republicans and Democrats then alternated in power dutifully. The result was that the U.S. empire and U.S. capitalism prospered first by helping to end the exhausted European empires and then by profiting from the United States’ unipolar global hegemony.
Biden’s plans pretend the U.S. empire is not in decline. In 2024, he offers more of the old establishment politics. Trump basically pretends the same about the U.S. empire but carefully selects problem areas (e.g., immigration, Chinese competition, and Ukraine) that he can represent as failures of Democratic leadership. Nothing fundamental is amiss with the U.S. empire and its prospects in his eyes. All that is necessary is to reject Biden and his politics as incapable of reviving it. Trump’s plans thus call for a much more extreme economic nationalism run by a leaner, meaner government.
Each side deepens the split between Republicans and Democrats. Neither dares admit the basic, long-term declining empire and the key problems (income and wealth inequality, politics corrupted by that inequality, worsening business cycles, and mammoth debts) accumulated by its capitalist foundation. The parties’ jousting turns on substitute issues that offer temporary electoral advantages. It also reinforces the public’s incapacity for systemic critique and change. Both parties endlessly appeal to a population whose alienation deepens as relentless systemic decline worms its way into everyone’s daily life and troubles. Both parties increasingly expose their growing irrelevance.
Neither party’s campaign offers solutions to systemic decline. Gross miscalculations of a changed world economy and shrinking U.S. political power abroad underlay both parties’ failed policies in relation to Afghanistan, Iraq, Ukraine, and Gaza. The turn toward economic nationalism and protectionism will not stop the decline. Something bigger and deeper than either Party dares consider is underway. Capitalism has moved its dynamic centers yet again over the last generation. This time the move went from western Europe, North America, and Japan to China, India, and beyond, from the G7 to BRICS. Wealth and power are correspondingly shifting.
The places capitalism leaves behind descend into mass depression, overdose deaths, and sharpening social divisions. These social crises keep worsening alongside deepening inequalities of wealth, income, and education. Steadily if also maddeningly slowly, the rightward shift of U.S. politics after 1945 has finally arrived at social exhaustion and ineffectuality. Perhaps thereby the United States prepares another possible New Deal with or without another 1929-style crash.
Hopefully, then, one crucial lesson of the New Deal will have been learned and applied. Leaving the capitalist class structure of production unchanged—a minority of employers dominating a majority of employees—enables that minority to undo whatever reforms any New Deal might achieve. That is what the U.S. employer class did after 1945. The solution now must include moving beyond the employer-employee organization of the workplace. Replacing that with a democratic community organization—what we elsewhere call worker cooperatives—is the missing element that can make progressive reforms stick. When employees and employers are the same people, no longer will a separate employer class have the incentive and resources to undo what the employee majority wants. Replacing employer/employee-organized workplaces with worker coops is the very different “great replacement” we need. On the basis of reforms secured in that way, we can build a future. We can avoid repeating the last half-century’s failure even to preserve the reforms imposed on a capitalism that crashed and burned in the 1930s.
Richard D. Wolff is professor of economics emeritus at the University of Massachusetts, Amherst, and a visiting professor in the Graduate Program in International Affairs of the New School University, in New York. Wolff’s weekly show, “Economic Update,” is syndicated by more than 100 radio stations and goes to 55 million TV receivers via Free Speech TV. His three recent books with Democracy at Work are The Sickness Is the System: When Capitalism Fails to Save Us From Pandemics or Itself, Understanding Socialism, and Understanding Marxism, the latter of which is now available in a newly released 2021 hardcover edition with a new introduction by the author.
This article was produced by Economy for All, a project of the Independent Media Institute. It was published on April 11, 2024 and may be found at braveneweurope.com.