Louis Proyect: The Unrepentant Marxist

The old boss adopted fascist tactics in the Little Steel Strike. The new boss is from one of those “shit countries”.

Six days from now will mark the first year of Trump’s presidency. Given that we have had a year to evaluate his regime, there have been few attempts to grapple with its character. Since many Marxists have viewed Donald Trump as imposing neo-fascism on the USA, there have to be questions about how he has failed to impose any kind of serious repressive measures on the country. When I was first starting out as a radical in the 1960s, I was targeted as part of the Cointelpro program in an effort to either get me fired from my first programming job or perhaps so spooked that I would resign from the SWP. Can you imagine what would happen if the FBI pulled this kind of crap today? Of course, they don’t have time for that given the job they have investigating Trump’s Russian ties.

When I was a new member in 1968, one of the big questions I had to deal with was Nazism. Coming from a Jewish family that raised money for Israel through Hadassah, I was fairly close to the holocaust chronologically and psychologically. In my little village in upstate NY, it was not uncommon to see men and women come into my father’s fruit store with tattoos on the arm from their time in concentration camps. We used to call them the “refugees”.

Part of becoming a Marxist involved rejecting Zionism. But additionally, it involved trying to understand how and why Hitler came to power. Among the books that helped me to clarify my thinking was Daniel Guerin’s “Fascism and Big Business”, a Pathfinder book that can be read on Libcom apparently in defiance of the cult’s white-shoe attorneys. At the core of Guerin’s analysis was the argument that Nazism was backed by heavy industry against the class interests of the Fertigindustrie (finished goods industry), particularly the electrical goods and chemical industries. He writes:

After the war the antagonism was particularly violent between the two groups-Stinnes and Thyssen, magnates of heavy industry, versus Rathenau, president of the powerful AEG (the General Electric Association). The Fertigindustrie rose up against the overlordship of heavy industry, which forced it to pay cartel prices for the raw materials it needed. Rathenau publicly denounced the dictatorship of the great metal and mining industries: just as medieval nobles had scoffed at the German Emperor and divided Germany into Grand Duchies, the magnates of heavy industry were dividing Germany into economic duchies “where they think only of coal, iron, and steel, and neglect, or rather absorb, the other industries.”

During the 2016 primaries and throughout the first year of Trump’s presidency, I have read countless articles about how much of a “fascist” he is but virtually nothing along the lines of Guerin’s analysis. It would seem that ruling class opposition to Trump is mostly of an ideological character rather than anything so material as the forces at work in Weimar Germany. Has there been any serious investigation of what Silicon Valley, big pharma, the financial sector, real estate, the defense industries, et al hope to gain from Trump’s policies other than deregulation and tax cuts? The richest man in the USA owns a newspaper that has been eviscerating Trump for the past two years at least. Does Jeff Bezos have anything in common with the Thyssens?

Missing from the analysis today is the fundamental difference between the USA of 2018 and the Weimar Republic, namely the role of heavy industry. In the 20s and 30s, heavy industry was the lynchpin of capitalist economies and within this sector steel was particularly critical. Thyssen steel needed fascism to subdue the working class because the very survival of his firm was dictated by the law of value as Guerin explained:

The chiefs of steel and mining enterprises are noted for their authoritarian attitude, their “tough boss” psychology. Their will to power is explained by the vast scope of their enterprises and the dominant role they play in the economy and in the state. But the explanation must also be sought in what Marx calls “the organic composition” of the capital invested in their enterprises: the ratio of “fixed capital” (invested in plant, raw materials, etc.) to variable capital (i.e., wages)  Big business finances fascism is much higher in heavy than in light industry. The result is that the limits within which production is profitable are especially narrow in heavy industry. Whenever the steelmasters are unable to run their works at a sufficiently high percentage of capacity, the “fixed charges” (interest, depreciation) on their plants are distributed over an insufficiently large quantity of products, and profits are impaired. When a strike breaks out, the least stoppage of production means losses mounting into the millions. If the economic crisis sharpens they are unable to cut their fixed costs, and can only reduce their wage bill; brutal wage cuts are for them an imperious necessity.

In the 1930s, American steel companies were very much in the same mold as evident from their violent attacks on the attempts to organize workers during the Little Steel strike. In an article in the July 2012 edition of Labor History titled “Chicago and the Little Steel strike”, Michael Dennis described the fascist-like conditions in Weirton, Ohio—a big steel-producing city:

According to journalist Benjamin Stolberg, the steeltown of Weirton, Ohio constituted ‘a little fascist principality’ untouched by federal law, a company town ‘patrolled by notorious killers who keep the plants in a state of terror’. Eugene Grace, the president of Bethlehem Steel, was a ‘black reactionary’. He was a perfect complement to Republic Steel president Tom Girdler, since he ‘combine[d] the big industrialist and the congenital small-time vigilante’. In the isolated, predominantly immigrant, working-class communities of the steel district, Grace and his counterparts exercised nearly implacable authority. Invoking the imagery of the Spanish Civil War, Stolberg described Grace as ‘the General Franco of Little Steel, busily engaged in whipping up big industry to support a national vigilante movement’. As for Republic Steel’s notoriously anti-union Tom Girdler, he was ‘an open fascist, to whom Roosevelt, Miss Perkins, John Lewis are “Communists”’.

So what ever happened to Republic Steel? It is now owned by Grupo Simec, based in Guadalajara, Mexico. It still maintains plants in the USA but with a total work force of only 2,000 workers.

The steel industry ain’t what it used to be. China is now the top steel producer in the world, followed by Japan and India. Of the top ten steel companies in the world, only one American company–U.S. Steel–makes the grade and it comes in number 8 and employs only half the number of workers as India’s Tata Steel, ranked number 7.

Furthermore, we have been a major importer of steel and steel mill products since the 1960s according to Wikipedia. It states: “In 2014, the US exported 11 million tons of steel products, and imported 39 million tons. Net imports were 17 percent of consumption. As of 2012, the largest sources of net steel imports to the US were, in descending order, the European Union, Brazil, South Korea, Japan, and Russia.”

One of the signs that Trump would adopt a nationalistic trade policy based on protectionism was the appointment of Wilbur Ross to Secretary of Commerce. Ross would seem to be a perfect fit for Trump’s “America First” outlook since he is credited with saving thousands of jobs in the Rust Belt, particularly in steel. His approach is to buy distressed companies and make them profitable again, saving jobs in the process. Part of his strategy is to lobby for tariffs that would protect companies like LTV (Ling-Temco-Vought) that he bought at fire sale prices in 2002 and that had carried out a merger with Republic Steel in 1984.

Leo Gerard, the USW president, was pleased with the appointment: “With Wilbur it’s been almost 15 years now, and those mills are [still] running and some of them are the most productive in North America.”

Somehow it escaped Gerard’s attention that after taking over LTV, Ross fired half the workers. His “rescue” was the same kind as Trump’s of Carrier, which also sustained a heavy loss of jobs to stay in the USA. Since Ross bought LTV in bankruptcy court, he was able to shed $7.5 billion in pension funds to the government.

The story of LTV and Wilbur Ross is a microcosm of the American class struggle—or the lack thereof. You have labor bureaucrats like Leo Gerard making common cause with a scumbag like Ross in the same way that UAW president Dennis Williams has gone along with deals that led to a two-tiered pay system and reduced benefits so as to “save jobs”. If there was a labor movement instead of what we have now, both Obama and Trump would have been put on the defensive.

The problem, of course, is that the bosses can exercise leverage on the workers by threatening to pick up and move to another country. The threat of runaway shops is what helped Trump get elected even if his solution a la Ross is to make an offer that workers can’t refuse.

Global competition puts pressures on workers everywhere to accept less. This is what “globalization” has accomplished. It cheapens the price of labor and commodities simultaneously. Indian steel mills supply commodities at a price far below those of their competitors in more advanced capitalist countries. Ross cashed in on globalization in 2005 himself: He sold his steel company to an Indian company Lakshmi Mittal for $4.5 billion in 2005, making 12 ½ times on his initial investment.

What is happening now is a race to the bottom. Trump is incapable of reversing this trend since it is not susceptible to policy solutions. It is tantamount to King Canute commanding the tide to stop. We are in the throes of capitalism’s decay. I think Trotsky was misguided in the way he went about building a Fourth International but each time I return to his writings, I remained impressed by his ability to size up the political conditions of his epoch in a work like the Transitional Program.

The Thyssens and the Krupps backed Hitler because in the 1920s the steel industry was constrained by national boundaries. They competed with the USA and Great Britain, who faced the same constraints. Today’s world is much different. The danger we face is not a fascist strong state that puts both the bosses and the workers into a straight-jacket but the utter freedom of neoliberalism that allows the steel, auto, and chemical industries, et al to pick up and move overseas as well as the freedom of the Washington Post to excoriate Donald Trump for being a racist. But as long as Jeff Bezos can sell Chinese manufactured goods in the USA, why would he go so far as to rock the underlying economic boat that contains both the Koch Brothers and the liberal-leaning bourgeoisie, the modern-day equivalent of the Fertigindustrie. That is the world we are living in now and we’d better get used to it, as long as we don’t lose sight of the need to transform that world.