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4
By Dr. Elwin H. Powell ...Continued
from Page 3 Between
1912 and 1914 the crisis of capitalism deepened. In the years between
1902 and 1906 the growth rate of the total economy was 7.6 per cent,
declining to 4.6 for the years between 1910 and 1913; in 1913 both the
production and consumption of goods dropped sharply. Unemployment and
crime increased, locally and nationally (see Table 14). Throughout the
country strikes flared in bitter violence (Paterson, Lawrence, Ludlow),
and took on an alarmingly political coloration. The problem was deeper
than a worsening of "existential conditions." Actually wages
increased slightly between 1911 and 1915 and unemployment was a customary
feature of working class life. It was the "definition of the situation"
rather than the objective reality which had changed. Years of reform
and revolutionary agitation had altered expectations. Men no longer
bore their lot as "fate," and what had once been endured as
sacrifice came to be seen as exploitation. In the 1890's economic collapse
was no real threat to established society because there was no formulated
alternative to capitalism. By 1912 there was not only a vigorous radical
movement international in scope with a new model for the organization
of society, but a significant defection of the intellectuals who were
rapidly losing faith in the ideology of capitalism. "The battle
does not lie against crusted prejudice" wrote Walter Lippman in
July 1914, "but against the chaos of the new freedom." Two
weeks later the outbreak of World War I put an end to the chaos. The
war in Europe brought an instant prosperity to America, creating an
immediate and inexhaustible market for agriculture and manufacturing.
For the upper class the war was not only an economic venture but an
opportunity to reassert its "rightful" leadership of the community.
The war opened up a sphere of action and power to compensate for the
paralysis of the upper class in the realm of politics and economics. For
the upper class the war was a holy crusade, but the general public was
for the most part indifferent to the lofty appeals to save civilization.
A sizable and organized minority actively opposed the war, and the high
1917 Socialist vote (25 per cent of the electorate in most cities) pointed
to a significant anti war sentiment . The popularity of the war sprang
from prosperity rather than patriotism; for the majority, it was more
a spectator sport than a historic mission. But the sense of drift was
ended, and progressives took solace in the belief that the war was "administering
the coup de grace to the old
capitalism." In actuality, the war restored the old capitalism.
Wilson's timid experimentations with social and economic planning were
scuttled early in 1919. Talk of a new freedom vanished in a concerted
onslaught on the old freedom. By
1919 the business class was in clear if insecure ascendancy after a
twenty year retreat. But its new position of dominance had yet
to be ratified by public consensus. Moreover, corporate capitalism was
threatened internationally by the spread of Bolshevism and the designs
of the League of Nations; domestically by the return of the pre war
chaos, unemployment, the high cost of living, the increased power of
labor (resulting from war gains), and the indefinable threat of radicalism. The
fear of radicalism had some objective basis, or so it seemed at the
time. The electoral strength of the Socialist party had grown, not declined,
during the war years and the Socialists had made headway in the labor
movement. (See also Table 13.) Even within the conservative AFL the
Socialists could muster 33 to 45 per cent of the votes and several times
came close to deposing Gompers. More ominous still was the 1919 steel
strike, masterminded by William Z. Foster and left wing Socialists
who came to constitute the Communist party. Significantly, Catholic
labor at least in Buffalo also took credit for the strike. But
the real source of the Red Scare of 1919-20 was the fear of an idea,
not a movement. As a local immigration official inadvertently put it:
"A man cannot have radical ideas and become the kind of citizen
we want in this country" (Buffalo Enquirer, Jan., 1920). The specter
of Bolshevism only provided the pretext for a campaign which had been
under way and underground for several years. As early as 1916-17 the
I. W. W.'s were "the victims of a determined conservative campaign
to stamp out radical social and economic ideas . . . a drive with all
the earmarks of class war." The liquidation of the I. W. W. was
accomplished by the simple expedient of the systematic removal of its
leadership by imprisonment. Next came the left wing Socialists, with
the imprisonment of Debs and the top leadership of the party for opposition
to World War I. Next came the right wing Social Democrats the expulsion
of five legally elected assemblymen from the New York legislature and
of Victor Berger from Congress. To contend that the Socialist party
would have been tolerated had it supported the war, or had it not, in
its enthusiasm for the Russian revolution, gone too far to the left,
is to misread the facts. Gompers's AFL supported the war and never missed
an occasion for patriotic proclamations, yet it was as badly mauled
as the Socialist party. According to Murray, the AFL lost one third
of its membership between 1920 and 1923 as a direct result of the Red
Scare, "a staggering loss not recouped until after the crash of
1929." After labor came the liberals, who were not imprisoned but
intimidated; writes Arthur Schlesinger, Jr., "If but few had actual
indictments hanging over them, all felt a sentence suspended over their
enthusiasms, their beliefs, their innermost thoughts." The Red Scare was both a source and a symbol of the restoration of capitalist power; it marked the end of the organized opposition to the corporate order. The reform movement was bankrupt before the 1919 hysteria, its social basis eroded by the decline of the "old" middle class. Progressivism was a rebellion of the local merchant class against the translocal corporation. But by 1920 even retailing was coming under corporate control (the chain store), and manufacturing was concentrated in a few giant cartels. In Buffalo between 1913 and 1919 the value of manufactured products declined (see Table 15). The old middle class was consigned to a second seat in the power structure. Although the number of wage workers increased sharply during the war, the trade union movement was no match for organized capital. The AFL had never been an opponent of capitalism and in fact prided itself on being the main bulwark against socialism. But in 1919 big business was in no mood for accommodation and launched its aggressive open shop campaign "the American Plan" which nullified labor's wartime gains. While the forces of reform were on the wane, the revolutionary movement was simply obliterated in the 1920's. The Socialist vote in 1920 for Debs was 902,000, but in 1928 Norman Thomas polled only 268,000, and the Communist vote for Foster amounted to only 48,000. The decline of the Socialist movement was due to a variety of factors: direct suppression, dissension and distrust over the issue of patriotism, and the business prosperity of the 1920's. While the unemployment remained high (10 to 15 per cent of the labor force) and agriculture was depressed, the dominant minority prospered and was able to suffuse the 1920's with a mood of optimism, contrasting sharply with the discontentment of the progressive era. Alan Valentine speaks of the year 1913 as "a preface to the Age of Anxiety as well as a postlude to the Age of Complacency." The sequence could almost be reversed. The 1920's was the most complacent decade on record. Both major parties regressed to the ideological infantilism of pure laissez faire. Between 1900 and 1920 progressive republicans and liberal democrats alike advocated some form of governmental regulation of the economic process. In the 1920's political leaders simply closed their eyes to the contradictions of industrial capitalism, sowing seeds of the disastrous results to be reaped in the '30's. In
1920 corporate capitalism was unopposed but still unsupported; it had
power but needed a principle to make legitimate its rule. "Power
is a fact," writes A. A. Berle, "but it is also a fact that
the human mind apparently cannot be wholly or permanently inhibited
from asking certain questions . . . . There is . . .no instance in history
in which any group, great or small, has not set up some theory of the
right to power." In an earlier period private property was the
legitimizing principle of capitalism, but with the dominance of the
corporation, property recedes into the background, and the "public
consensus . . . indefinite, completely unorganized, without traceable
form . . . becomes the final arbiter of legitimacy." The essence
of the new consensus was Americanism, which was manufactured during
the war and extended to legitimatize the corporate order. In the late
'teens an Americanization crusade was launched as a "constructive"
anti-radical measure, designed primarily to assimilate the immigrant.
But Americanism came to mean more than assimilation; it meant above
all else a belief in the sanctity of the prevailing order of society.
As an Americanism speaker told an immigrant audience in Buffalo: "If
you have not found your share of happiness here [in America] something
is wrong. Our history proves that there is nothing wrong with our institutions,
so the individual must be wrong" (Buffalo
Express, Jan., 1920). The statement is an exaggeration of the basic
thesis of Americanism: the social system is sound; any defects must
therefore be attributed to the person. The whole historical tendency
toward secularization was beginning to be reversed in the 1920's. To
describe the antithesis of secularization, Howard Becker coined the
term "sacralization," "the process by which societies
are tightened, hardened, reintegrated and restored." The idea of
Americanism was the sacralizing principle of the system of corporate
capitalism which has dominated American society since the 1920's. As
a social system or institution capitalism has been characterized by
a drive for limitless expansion. Yet by 1913 American capitalism was
immobilized: the growth rate was declining, and unemployment, business
failures, and labor discontents were rising. The capitalist class constituted
a powerless elite, unable to operate the institutional machinery it
theoretically commanded. As the system faltered, conflict increased.
Opposition to the old order mounted and became organized as a political
force. Many and diverse elements clamored for reform; even revolution
was a distinct possibility. But the vast infusion of state capital (i.e.
defense spending and war loans) in World War I restored the capitalist
elite to its traditional leadership of the community. However, opposition
to capitalism grew even during the war years, and after the war, chaos
returned. The patriotic hysteria generated by the war provided the pretext
for the liquidation of radicalism, although the campaign had been under
way long before. The war itself undermined the forces of reform the
"old" middle class was relegated to a subordinate role in
the social structure and trade unionism was unable to withstand the
opposition of organized capital. The Red Scare of 1919-20 not only neutralized
the opposition to corporate capitalism but continued as a kind of permanent
counter revolution. In 1920 corporate capitalism was unopposed but still
unsupported by public consensus. The new order was "sacralized"
or sanctified by the mystique of Americanism, which replaced the older
Protestant ethic as the ideological foundation of corporate capitalism.
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