Wednesday, April 20, 2016


Harry Targ

Indiana’s Political Economy

Low wage largely non-union workers in Indianapolis have been organizing against an economy that marginalizes them. Fran Quigley, Indiana University Law Professor describes the victimization and workers’ rising resistance-- union organizing and social movement activism-- in If We Can Win Here: The New Front Lines of the Labor Movement, Cornell Press, 2015.

The book is a case study of Indiana, a state in which local economic trends mirror the national economy: growing accumulation of wealth on one side matched by increased poverty on the other. Reports over the last several years published by the Indiana Institute for Working Families and the Indiana Association of United Ways suggest that Indiana is one of the worst states in terms of providing for its people. Almost 16 percent of the state’s population lives in poverty, including over 22 percent of its children, 17 percent of women, 33 percent of African Americans, 29 percent of Latinos, and 25 percent of Native Americans.

One-third of Indiana residents are low-income and for a decade have experienced a decline in median household income. Even with a recent slight decline in the rate of poverty, the number of low-income Hoosiers (earning less than 200% of the Federal Poverty Guideline (FPG) has risen since 2011. (Indiana Institute for Working Families, Status of Working Families in Indiana, 2012, 3).

In Marion County, where the state’s largest city, Indianapolis, is located, four of the five largest and growing industries pay wages at or below family sustainability ($798 per week for a family of three). In addition, in these industries individual and household wages declined significantly between 2008 and 2012 (Derek Thomas, “Inequality in Indy--A Rising Problem With Ready Solutions,” August 13, 2014, (

Derek Thomas argued that Indianapolis (and Indiana) should take these data seriously because in Marion County “poverty is still rising, the minimum wage is less than half of what it takes for a single-mother with an infant to be economically self-sufficient; 47 percent of workers do not have access to a paid sick day from work, and a full 32 percent are at or below 150 percent of the federal poverty guidelines ($29,685 for a family of three).” 

In November, 2014, the Indiana Association of United Ways issued a 250 page report on the state called the “Study of Financial Hardship.” The study, parallel to similar studies in four other states, was prepared by a research team at Rutgers University, who developed an index to examine economic status called Asset Limited, Income Constrained, Employed (ALICE). ALICE refers to households with incomes that are above the poverty rate but below “the basic cost of living.” The startling data revealed that a third of Hoosier households cannot afford adequate housing, food, health care, child care, and transportation. More precisely 14 percent of households are below the poverty line and 23 percent above poverty but below the threshold out of ALICE, or earning enough to provide for the basic cost of living.

 Workers’ Fight Back

Quigley, based on participant observation and interviews, presents a painful and lucid analysis of the concrete struggles of what might be called the “new working class” in Indianapolis. He suggests that the urban economy has been transformed from one based on well-paying manufacturing, largely unionized, jobs to one based upon tourism, health care, and food service. Workers in these growing sectors are marginalized and non-union. They experience low wages, changing work schedules, limited health and retirement benefits, and unsafe work places. They are multi-racial, men and women, and young and old. Despite their economic marginalization, the workers report that their most fundamental grievance is that they are treated with lack of respect by their employers virtually every day on the job. 

Much of the volume describes efforts of two unions, the Service Employees International Union (SEIU) and UNITE/HERE to organize workers in hotels, universities, fast food, and home care positions. Workers and young energetic union organizers face complications because work forces are often not in the same spaces (as was the case of factory workers). There has been no long-standing tradition of union organizing in new service sectors. And traditional divisions by race, ethnicity, language, and gender exist. Finally, and most importantly, workers struggle to organize against opponents that are among the largest multi-national corporations in the world and who exercise significant political influence over city and state government.

Quigley’s study illustrates how union organizing parallels grassroots efforts of the largest labor organizing campaign of the twenty-first century, the SEIU, UNITE-HERE “Fight for $15.” This campaign has connected workers with parallel movements:  Black Lives Matter, the Occupy Movement, Moral Mondays, Hoosiers for a Commonsense Health Plan, and supporters of Planned Parenthood and community control of police. 

In theoretical terms, the economic marginalization of the twenty-first century (“the 99 percent”) in the United States is bringing together workers from the public sector, home care, health care, hotels, teachers, college adjuncts, taxi drivers and others.  The economic ruling class strives to weaken labor, increase barriers to organizing, shift wealth from the vast majority to the super-rich, and reduce the political impact of efforts to mobilize the progressive majority. But yet resistance grows.

Quigley’s book describes in detail efforts in one city to resist the economic hegemony of the ruling class. Youthful union staffers prioritize personal contacts. They work to build grassroots leadership from among workers themselves. And organizers encourage workers to engage in all forms of activism from elections, to demonstrations, to working in alliance with other social movements. Union staffers are committed, energetic, and take a  long view of organizing in the face of losses and victories.     

Fran Quigley has provided activists with a concrete, readable analysis of how the twenty-first century global political economy has shaped the destiny of workers in one urban center and how a “new working class” is organizing to resist their increasing economic and political marginalization.

Saturday, April 16, 2016

Reposted: Also published as "The Two-headed Neoliberal Monster": The Rag blog August 3, 2011

Monday, August 1, 2011


Harry Targ

Common threads run throughout America’s history from the revolution to 2011. Class and race are particularly enduring features of the life of the nation. Perhaps we need to examine our history and contemporary plight using class analysis and the fundamental interconnections of class and race to better understand why American society is in crisis today and what can be done about it.

First, it is undeniable that America is a class society. The dominant class owns the factories, the businesses, the entertainment and information industries, and the financial institutions that control investment, trade, debt, and speculation. As the capitalist economy has changed, the ruling class has changed also. But in each historical period the ruling class has acted on the basis of its interests and ideology. Since the 1970s, the economic ruling class, while diverse, has been dominated by finance capital.

Second, it is important to remember that concentrated economic wealth is usually complemented by centralized political power. In our own day, for example, Wall Street financial interests dominate the political process. In the increasingly desperate pursuit of increased rates of profit since the 1970s, financiers have been pressuring political elites to institutionalize policies that cut government programs, deregulate the economy, reduce workers rights, and shift societal wealth from the poor and working people to the wealthy. The deal being brokered to “solve the deficit ceiling” problem is the most current of examples.

Third, set against the economic ruling class in every age is a broad array of sectors of the working class, some employed, some not, who have little wealth and power. During exceptional periods they rise up angry, challenge myths about what the economy needs, and demand policies to further the shift of wealth from the few to the many. Since the 1980s, with brief exceptional periods, wealth and income has shifted more to the few.

This model of an economic ruling class and a vast working class is largely an accurate framework for understanding American history, from the revolution of 1776 to the deficit crisis of 2011. But the model needs to be refined based upon the particular interests, organizations, economic activities and ideologies of the two basic classes, the ruling class and the working class.

For example, even within the two classes there are “fractions” or segments that do not share precisely the interests of other fractions within the class. For example, since the 1970s, more and more wealth has been invested in finance and less and less in manufacturing and agriculture, the traditional backbones of a capitalist economy. It became clear to the financiers that government regulations, social safety nets, and public institutions of all kinds had become impediments to the free flow of money capital. Thus we saw the dawn of the Reagan “revolution,” which consisted of policies designed to replace the New Deal policies of mixed government and the private sector that favored manufacturing and workers in industry.

Over the last thirty years, the United States economy, and more or less all of the wealthy capitalist economies, has shifted its priorities to making money via financial speculation. Government has helped by adopting free market, market fundamentalist, and what people around the world call neo-liberal economic policies. Introduced selectively during the presidency of Jimmy Carter and promoted full blown in the Reagan era, United States economic policy has been driven by the downsizing of government (except the military) and deregulation.

Today, most Democrats and Republicans are fighting over how to cut government spending and which people-oriented programs to eliminate. They are not fighting about whether to cut government, but rather in what ways it should be cut. In sum, if we label political actors, the neo-liberal monster has two heads, Democrats and Republicans.

The current context is made even more complicated by the so-called Tea Party. The Tea Party was created by a small fraction of the wealthy economic class and sectors of the monopoly controlled media. Its membership consists of a vast array of disenchanted, alienated increasingly marginalized business and professional elites who claim to be motivated by the need to challenge intrusive government. While it has its roots in fractions of the economic ruling class it has used its resources to appeal to a base of supporters from the working class.

Many Tea Party activists have used the historic and institutionalized racism in the United States as a tool to expand their support. Tea Party enthusiasts have made it clear that their real motivation is to destabilize and destroy the United States government which happens to be led by the first African- American president. Senator Mitch McConnell, in a desperate attempt to co-opt this political fraction, spoke frankly when he declared that the number one priority of the Republican Party is to insure that Barack Obama is a one-term president. This simple and frank declaration parallels the constant racist stereotypes of Obama that find their way into main stream media and are staples of Fox News, and the reactionary radio chorus. And to generalize, the Tea Party and much of the Republican Party express their racism against Islamic and Latino targets as well.

Furthermore, the racist ideology that is just below the surface of political discourse has escalated as the gaps in wealth and income between whites and people of color have expanded over the last thirty years. In fact, the assault on government programs, and the vast majority of workers, has been at the same time an assault on African Americans, Latinos, and all other so-called minorities, who by 2050 will be the new majority of Americans.

In short, the deficit struggle may be seen as a conflict between two fractions of the economic elite, represented by most of their Democratic and Republican allies, over the shape of the neo-liberal policies to be adopted as public policy AND the Tea Party political fraction, from the ruling and working class, who are driven as much by racism as by any idea of doing what is best for the economy. The ideology of racism used by some of those who promote the neo-liberal agenda is paralleled by the real mal-distribution of wealth and income that has been exacerbated in recent years and will be a center-piece of any deficit reduction deal in the future.

But as Marx said, all history is the history of class struggle. The working class, varied as it has been over time, continues to resist the efforts of the wealthy and powerful to appropriate more and more of society’s resources. In fact, what may be called the Progressive Majority is a coalition of workers, women, people of color, environmentalists, health care activists and others who will refuse to accept neo-liberal and Tea Party policies. For them the struggle is not over. It is just beginning.

In some ways, the impending deficit deal that leaders of the two political parties are consummating clarifies the task the progressive majority faces. The American Dilemma of 2011 requires mobilizing on two interconnected fronts. First, progressives must adopt a campaign to increase government support for the vast majority of Americans and to do so by taxing the rich. In other words, progressives must say “no” to neo-liberalism. Second, progressives must incorporate a 21st century anti-racism platform in their economic program. Demographically, people of color will constitute a majority of the voting age population by 2050, a disquieting realization for Tea Party supporters and their neo-liberal representatives who want to return to an era of Jim Crow economically and politically.

A useful guide for this progressive agenda is The People’s Budget proposed recently by the Congressional Progressive Caucus ( which calls for a massive jobs program, the construction of a fairer more equitable tax system, real health care reform, tax reforms to safeguard the social security trust fund, and dramatic cuts to military spending. The People’s Budget clearly would address issues of government spending by shifting to policies of fairness that benefit the vast majority of the country’s population.

So the task of the progressive majority is clear whatever final form the deficit compromise takes. Joe Hill is still right: “Don’t Mourn, Organize!”

Monday, April 4, 2016


Harry Targ

Writers have identified the onset of capitalism with slavery, land grabs, brutal violence, and globalization. Out of this came an industrial revolution that over two hundred years rearranged the processes of extraction of raw materials, manufacturing, the global distribution of goods and services, and the accumulation of incredible wealth by small global ruling classes and the expansion of human misery for the vast majority. In the twentieth century, banks assumed great power and control of national economies and political systems.

Changes in the global political economy gave rise to revolutionary ferment, socialist systems, and massive campaigns demanding economic justice including the right to form trade unions. In the twentieth century governments were forced to adjust the capital accumulation process to accommodate some worker demands. A small number of socialist states struggled to create new economic and political systems. From the 1930s to the 1970s the United States responded to massive social movements by carrying out modest political and economic reforms which combined substantial growth and ruling class wealth with policies to redistribute some of it to meet the needs of workers.

By the 1970s, because of declining profit rates, over-production and under-consumption, a state fiscal crisis, rising oil prices, and expanding worker power, the “golden age” of the welfare capitalist state was dismantled. Of particular significance was the shift from a manufacturing- based economy to financial speculation. To accommodate finance capital President Ronald Reagan in 1980 embraced a series of economic policies which transformed the system of welfare state capitalism, initiated in the period of the New Deal in the 1930s to a new economic program referred to as neoliberalism. 

Reagan gutted government programs, reduced taxes for the rich, launched a frontal assault on trade unions, and increased military budgets. The official rationale for the new public policies was that “government was not the solution; government was the problem.” Inspired by Prime Minister Margaret Thatcher in England, and promoted by Western-dominated economic institutions such as the International Monetary Fund and World Bank, the so-called “Washington consensus” was imposed on the world: forcing virtually every country to cut government spending, privatize public institutions, and to produce for global rather than local markets.  U.S. capital outsourced manufacturing to countries with cheap labor and expanded its direct foreign investment.

In the United States political arena, pockets of resistance to neoliberalism, or austerity, grew.  The national Democratic Party, for the most part, embraced the Reagan Revolution but vibrant presidential campaigns of Reverend Jesse Jackson in 1984 and 1988 challenged the direction of change in the United States. Jackson launched a movement, the Rainbow Coalition, which was designed to mobilize workers, people of color, women, and youth to reverse the panoply of Reagan policies. Despite enormous popularity, the Jackson campaign could not break through the wall of collaboration of the Democratic Party.

On the Republican side, right-wing populist Pat Buchanan challenged the Reagan consensus, particularly on so-called free trade in 1992. Others, such as Ross Perot, ran for president primarily on the basis of opposition to the yet to be approved North America Free Trade Agreement (NAFTA). Both efforts were motivated by sectors of capital that were domestic in character, in contradistinction to the growing primacy of globalized financial capital. 1992 Democratic candidate Bill Clinton remained cautious on NAFTA as he promised American workers that he would represent their interests.

Upon election, Clinton proceeded to cajole recalcitrant Democrats in Congress to vote “yes” on NAFTA. Over the next twenty years NAFTA led to the loss of at least a million jobs in the United States and created a downward pressure on workers’ wages. Meanwhile the Mexican economy declined, relying on growing food imports and massive migration. Clinton continued the Reagan era programs by cutting modest but critical welfare programs, supporting efforts to increase the incarceration of masses of people of color who lost economic opportunity because of the neoliberal policy agenda, and worked to expand the so-called neoliberal-framed trade agenda by helping to create the World Trade Organization. While there was high tech job growth during the Clinton years (1992-2000), real wages for most workers began their steady decline, manufacturing jobs continued to go overseas, and economic migration from Latin American and Asia increased.

Reflecting on this historical overview from a political perspective several conclusions seem clear. First, the economic and political characteristics of the “golden age” of the United States, that is the growth and distribution of wealth benefiting workers between the late 1930s and the late 1960s, were anomalies.

Second, as a result of the economic crises of the 1970s, politics shifted from support of government programs for the many to austerity and wealth for the few. The Reagan Revolution of the 1980s constituted a qualitative shift from welfare to growth and from providing some benefits to the working class to extracting more from them to increase profits. The Reagan Revolution expanded the economic shift to financialization.  Ideologically, pluralities of Americans were convinced that the economic problems they faced were because of too much government.

By the 1990s, the pluralities drawn to Reaganomics increased to majorities as a result of the support given to it by the Clinton Administration. NAFTA, mass incarceration, and welfare reform supported by “third wave” Democrats like Clinton legitimized the Reagan Revolution.
Based on this extrapolation from economic and political history, the 2016 presidential election campaign on the Democratic Party side is critical. Candidate Hillary Clinton speaks for the interests of financial speculation, trade regimes, privatization of public institutions, and accommodations with Reagan descendants in the United States Congress. 

Candidate Bernie Sanders, however, represents a fundamentally different public policy agenda; one that begins with the most marginalized rather than the economic elite. It presumes that by bolstering the economic opportunities of workers, the poor, people of color, women, and youth, a buoyant economic recovery could occur that “trickles up” from the base. His program endorses some redistribution of wealth and the provision of health care, education, a job, and adequate housing as basic human rights. His vision also is of a “moral economy,” one in which every person is provided with the opportunity to achieve all of her or his human potential that is possible in the twenty-first century.

Questions remain about whether a “political” and “moral” revolution is fully achievable without fundamental structural change in the U.S. and the global political economy, but there is no question that the Sanders campaign represents an effort to reverse the policies established by Presidents Reagan and Bill Clinton during the late twentieth century.