American Depressions Series: The Dying of the Economic Dream

Posted on November 15, 2011 by

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Editorial Note: Socialist Agenda is running a week-long series. The series was originally published on tikkun.org in January 2010.

By Harriet Fraad

A second contributor to American passivity is the economic crisis from which we are suffering. Let us look at our history in order to understand what happened. From 1820-1970, the United States experienced a unique period of ever-increasing prosperity. For 150 years, U.S. salaries rose together with ever-increasing worker productivity. For 150 years, each generation was able to afford a better standard of living than the generation that preceded it. That was the American dream.

Unlike their European counterparts, Americans did not enjoy working-class solidarity with other workers whose families and social organizations, unions and political parties were inflected by a history of overt class struggle fought as proudly permanent members of the working class. Europeans organized their working unions along political lines. They fought for better conditions as part of the ideology of long-term communist and socialist struggles for ownership and control of their workplaces.

The U.S. labor movement is not informed by a struggle for worker ownership of the businesses that produce U.S. goods and services. Decisions about what to produce and the right to appropriate and distribute profits are left to corporate boards of directors. Americans accepted the capitalist system in which each generation had relatively prospered. American labor fought for an increasing amount of income that would permit workers to consume more goods and services, a system in which each generation could move to jobs considered more prestigious and lucrative within the capitalist hierarchy. Blue-collar workers’ children could become white-collar, and white-collar children could become professionals in the next generation (particularly if they were not just white-collar but white, period). U.S. growth permitted ever-increasing real wages and possibilities for consumption. Even in the Great Depression from 1929-1939, real wages, the amount that one could buy with one’s wages, were able to rise because prices fell even faster than wages.

That ever-increasing prosperity stopped in 1970. By 1970 the introduction of computers, better telecommunications, and more efficient transportation enabled jobs to be outsourced to lower-paid workers overseas. Competing factories in Europe and Japan, which had been decimated by World War II, were now vying for U.S. markets. Then China emerged as a manufacturing giant. Competition reduced the U.S. share of both domestic and global markets. The outsourcing of American jobs to cheaper labor markets was not stopped by militant unions, which were unable to achieve the powerful “runaway shop” laws that were won in other nations. Nor did militant unions force the creation of a tight safety net to catch workers in financial distress.

For a long time, there was a relative scarcity of white male workers available for the jobs reserved for white males in America’s racially and sexually segregated job markets. White male workers, who were accustomed to receiving increasing real wages and living a lifestyle of ever-greater consumption, could no longer support their families on their frozen wages. Americans’ sense of self worth was in large part dependent on their net worth. They became increasingly depressed. Their sense of personal value was cut with their salaries. This happened as the advertising industry burgeoned. Advertising continuously and relentlessly sells consumption as the path to happiness. Consumption was undermined and with it stability, prosperity, and a sense of personal success.

Editor’s Note: Harriet Fraad is a psychotherapist-hypnotherapist in practice in New York City. She is a founding member of the feminist movement and the journal Rethinking Marxism.  For forty years, she has been a radical committed to transforming U.S. personal and political life.

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Posted in: Freelance