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Archive for the tag “Crisis of Overproduction”

Deconstructing Duluth’s Demographic Crisis

Deconstructing Duluth’s Demographic Crisis

H. Bradford

4/11/18

On February 24th, the Duluth News Tribune ran an article about Duluth’s impending demographic crisis.  I wanted to write a socialist feminist response to this, but never got around to it.  Not that I am the authority on socialist feminism, but I am a feminist and a socialist…and I do think about these things…so, why not break it down?  Now, whenever I hear the word “demographic crisis” I want to run for the hills, or burn something, or both.  Not really, but I think it is one of those sexist, ageist, racist, pro-capitalist concepts that begs to be dismembered.   Here is why…

Ageism:

Early into the Duluth News Tribune article, when describing the shifting population of the Duluth region, the aging population is described as problematic.


“If population levels were even across age groups, this wouldn’t be much of a problem. But, as you may have heard, the largest generation in the country’s history is marching into retirement, leaving many jobs vacant just as unemployment levels are bottoming out and productivity growth is stalling (Johnson, 2018).”


It is true that our population is aging, but, one must consider why this is a problem.  According to the article, it is a problem because there will not be enough workers to replace those who retire.  On the surface, this seems like a problem, as society needs workers to produce things.  However, this frames the post-retirement age population as the cause of a social problem.  Framing the older population as a “problem” is ageist.  It also ignores their labor, as labor does not end when wage labor ceases.  Their contributions to society do not cease when they reach the age of 65 (or higher ages for the many people who do not have retirement savings, pensions, or the ability to survive on social security alone).  Older adults do unpaid work such as volunteering, caring for grand children, gardening, baking, canning, sharing their knowledge, checking up on one another, and a plethora of other important economic activities that are dismissed because they are unpaid.  Just as the invisible, unpaid labor of women is ignored as a natural or unimportant, this invisible labor and its contribution to society is also ignored.


This connects to the socialist feminist concept of social reproduction.  Basically, in capitalist society, the labor force must reproduce itself.  This can literally mean that the work force must replace itself through biological reproduction, but also means that each worker must sustain themselves through sleep, eating food, washing clothes, maintaining their health, relieving stress, and all the many things that are required to survive and work another day.   Typically, women have played an important role in providing the invisible, unpaid labor that keeps the work force …working.  Caring for children, giving birth, caring for the elderly, washing clothes, cleaning a home, doing dishes, making meals, grocery shopping, etc. are all important unpaid activities that ensure that capitalism will continue.  Of course, older adults who leave the work force also provide some of these services as they are “free” to (my own grandparents made many meals for me, baby sat me, bought me school clothes, taught me information, etc.).  Thus, is it really a problem that people grow old?  Aging is a natural process.  It may happen that we have an aging population, but why is this a problem?  Some people might respond that it is a problem because this group requires more care and there are not enough young people to care for them.  The article itself argues that it is a problem that there is not enough workers to fill jobs and that productivity will decline.


I am not an expert on matters of aging, but I imagine that the “problem of aging” could be mitigated by providing quality, free health care to people of all ages, along with clean environments, living wages, robust pensions, housing, etc.  The aging population might very well “age better” if a high quality of life was ensured for people of all ages.  What does it mean to “age well” anyway?  I think to most people means the ability to care for one’s self, enjoy a high quality of life, and live independently for as long as possible.  If this is what this means, the locus of “aging well” is framed as an individual responsibility and the very human need for care is viewed as burdensome.   This concept is very individualistic and puts the rest of society off the hook for taking responsibility of providing and caring for the variable needs of older adults.  It is also ageist, as aging well is basically the ability to live as similarly to a young person for as long as possible.  Maybe it is okay to be wrinkly, sedentary, crabby, or anti-social.  Society is awful.  Living through decades of economic ups and downs, cuts to social programs, pointless wars, and the general nonsense of everything deemed meaningful by society might sour a person against living with youthful optimism and vibrancy.   After years of being alive, “aging well” might seem like a racket to sell beauty products, skin treatments, fitness memberships, etc.

Image result for aging well

(This image leads me to believe that aging well has something to do with being white and wealthy.  Capitalism doesn’t have resources to spare on caring for the elderly, so make certain you stay healthy with fresh air and bike rides in the country.)


If indeed there is a shortage of workers, there are certainly plenty of people in the world and United States itself.  These people might be more inclined to move to this frigid region and provide elder care if this was not low paid, under appreciated service work but unionized with benefits (including retirement plans!), better wages, and better working conditions.   A true shortage of workers might require open borders to allow new workers to enter the country, but this would require a move away from our current racist, xenophobic, nationalist, and exploitative immigration policy.  The “aging population problem” is not a problem with age, but an ageless problem of capitalism to meet the basic needs of humanity.


Of course, the notion of declining productivity must also be challenged.  Why is it a problem when productivity declines?  Why must productivity always increase?  What does this mean for the environment?  When have we produced enough?!  Productivity is a problem in capitalism because of the tendency for profits to decline.  Because competition lends itself to increased investment in fixed capital and there are human thresholds of how much variable capital can be exploited from workers, profits decline over time.  Markets also become saturated as there is only so much people can buy (again because wages only allow so much consumption).  When too much is produced and too little is consumed, capitalism falls into a crisis, which Marx called the crisis of overproduction.  Therefore, productivity is not necessary good.  It is not good for the workers (who must work longer or harder).  It is not good for the environment (as it creates waste and overuse of resources).  And it is not even good for capitalism, since it lends itself to instability.  I think it is important to think against blind productivity and instead think about rational, careful production in the interest of human needs.

Image result for garbage dump gull

(Capitalism probably produces enough…  though I suppose the gulls don’t mind.)


Sexism:

Another reason why I dislike the concept of “demographic crisis” is that it is sexist.   Although the article only mentions it briefly, increasing birth rates is often suggested as a way in averting the crisis.  Even if it is not mentioned in detail in the article, it is implicit in the premise of the argument.  If the population is aging and this is a problem, that means that not enough new people are being born.  Thus, not only are older adults the problem, the bigger problem is that women are not gestating enough babies.  The bodies of women have long been treated as public property, inasmuch as their reproductive power is harnessed for state interests.  The fight for reproductive rights is a fight to liberate women from their role as the producer’s of the next generation of soldiers and workers.  The birth rate in the United States (according to 2018 CIA World Factbook Information) is 12.5 births per 1000 people.  Our birth rate is slightly higher than the UK, Sweden, France, and Australia which all have 12.x births per 1000.  The rate is higher than Finland, Canada, Switzerland, Netherlands, and Denmark, which have 10.x births per 1000 people.  Our birthrate is certainly greater than South Korea, Japan, and Germany, which range from 8.x to 9.x births per 1000 people.  Despite our higher birth rate, there is enormous pressure upon women to reproduce- to the point that the organized movement against abortion has made birth nearly compulsory in many parts of the country due to restricted access to abortion.  In many of these countries with lower birth rates, the issue of abortion is far less controversial.  Here, anti-choice activists bemoan the loss of millions of fetuses, which they argue contributes to our demographic crisis (fewer workers, fewer students, etc.)   At the core of demographic crisis is a demand to control reproduction- because if population is viewed as a resource, women’s bodies are responsible for producing this resource.


 In the context of capitalism (and unfortunately many economic systems), population is treated as a resource.  Workers need to reproduce so that there are more workers.  This leads to a precarious balance.  Capitalists do not provide for the reproduction of labor (this has often fallen upon women and families) as this requires an investment in workers.  At the same time, workers have to have a basic level of sustenance to continue working and to allow for a new generation.  For instance, if a woman works too hard or consumes too few calories, she may stop menstruating.  Therefore, workers generally have a basic threshold of exploitation which if reached these workers will no longer be able to survive and reproduce.   In the United States in particular, our status as a world power has an economic component and a military component.  The military domination of the world is an extension of the economic component, as military might ensures access to markets, thwarts competitors, offers access to capital (for instance natural resources and labor), etc.  For the United States to remain an economic and military power, babies must be born.  Babies are needed so that there will always be a supply of soldiers and workers.  Reproduction is a national interest.  I think this contributes to the controversy around abortion and the drive to limit it.
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(A piece of art that I created called Capitalism is Built on the Bodies of Women)

As I alluded to in the previous paragraph, capitalism has a contradiction.  On one hand, in seeks to increase profit by extracting more surplus value from workers.  Because profits decline over time, workers are pressured to work harder and longer.  This increased exploitation limits the ability to reproduce labor (to reproduce biologically, but also to maintain a certain level of health as workers).   In the United States, not a lot of profit is redistributed towards caring for our existing population (i.e. ensuring the reproduction of labor).   We do not offer paid parental leave.  We do not have free day cares.  There is a shortage of housing.  Health care is expensive.  The list goes on.  The conditions of capitalism are so extreme that 5.8 infants die out of 1000 born.  In Japan, two infants die per 1000 births.  In Iceland, Norway, Finland, and Sweden, there are slightly more than 2 infant deaths per 1000.  In the European Union as a whole, there are about 4 deaths per 1000 according to the CIA world Fact Book.  Once again, rather than a demographic crisis, our crisis is an inability to care for our population.  Certainly, anyone worried about our economic or military strength might begin by tackling the causes of infant mortality.  But, this would mean diverting profits towards human needs.  Re-thinking profits and capitalism itself would undermine the logic of militarism and nationalism.


Supposing that the United States provided free access to abortion, birth control, all health care, and social conditions favorable to reproduction (paid leave, free day care, adequate housing, etc.)  Even if these conditions were met, women have no obligation to reproduce the next generation.  They should not be scapegoated for demographic crisis.  In the end, it is up to society to creatively adapt to changing populations- not women.


Racism and Classism:

The article concluded that a key to averting Duluth’s demographic crisis is promoting immigration to the city.   Regarding this point, Mayor Larson said,  “Duluth needs to be a community that is welcoming and open to new experiences, new faces, new ethnicities, new races to solve workforce shortages (Johnson, 2018).”  I think that it is generally a positive, feel good conclusion, since well, who doesn’t want Duluth to be a more welcoming city?  The mayor suggests working with education and health care partners to attract more diversity to the city.  Hmm…alright.  What does really this mean?


In a subtle way, the statement hints at what kind of diversity is acceptable in Duluth.  I interpret working with education and health care partners to mean attracting diversity by attracting professionals of color.  The center of this argument is not “let’s build more low income housing so we can attract all of the African Americans in Chicago or Minneapolis who are on housing waiting lists and house those who already exist in our community!”  Duluth DOES have some racial diversity BUT, this diversity is segregated into poor neighborhoods, homeless shelters, and jail.  Yet, because they are poor and people of color, this population is not seen as a solution to the “demographic crisis” because they are an OTHER at best and problem at worse.  They are those people.  Those people who are blamed for crime or making things not like they used to be for white people.  This is another problem with the notion of “demographic crisis”- since demographic crisis always refers to the shortage of a desirable population.  We have a low income population that would probably be happy to invite friends and relatives and grow if Duluth was a more welcoming, less racist, expanded housing, housing and employers ceased discrimination against criminal backgrounds, day care was expanded, public transportation was more reliable, schools were not segregated and plainly racist, etc.


Truly making Duluth a city for everyone, as the Mayor suggested, would mean changing what Duluth is right now.  Right now, Duluth is focused on being a city for business.  In particular, it is a city for businesses that serve tourists.  Centering the city on the tourist industry makes Duluth a city not for everyone, but for middle class, mostly white people, who have the leisure and money to stay at a hotel or the outdoor gear to enjoy our nature.   Duluth can’t be a city for business and for everyone.  We CAN be a city that is for everyone that happens to attract tourists, but the reverse is not possible.  The reverse is what has made Earned Safe and Sick time so controversial, as segments of the business community that are most opposed to it are those sectors that serve tourists (restaurants and hotels).  The reverse has also been what has stalled the Homeless Bill of Rights- because homeless people are a “problem population” not one that should be accounted for in “demographic crisis” and certainly not one that deserves to be treated with basic dignity.  After all, they might just spook the customers!  If we want to be a city for everyone, then we should start by being a city for workers, for the homeless, for people of color, and all of the oppressed in our community.


Conclusion:

Duluth is just one city.  It would be pie in the sky to try to think we can build socialism in a single city.  Many of my suggestions require a massive struggle on a national scale to accomplish.  I do believe that we have local activists with the talent and audience to contribute to such a national struggle.  I am not one of them, but am a small and marginal voice in that struggle.   Beyond the national, there are some things that can be done on a local level.  We can focus local priorities on meeting human needs and support things such as Earned Safe and Sick Time and the Homeless Bill of Rights.  We can challenge the policies of our schools and police to make the city less racist and classist.  We can also think against business interests and promote diverting profits towards social good.  Beyond these material things, I wrote this because I wanted to challenge the ideological logic of “demographic crisis.”  Like many crisis and panics, it is a social construct.  Inherent in this constructed crisis is ageism, racism, sexism, nationalism, and classism.  There are no population problems.   There are only failures of societies to address the needs of populations.  It is only through struggle that we will win the means to address these needs.


Johnson, B. (2018, February 25). ‘Stability’ not enough for Duluth jobs; aging population isn’t being replaced on pace. Retrieved April 11, 2018, from https://www.duluthnewstribune.com/business/workplace/4408874-stability-not-enough-duluth-jobs-aging-population-isnt-being-replaced

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2091rank.html

Jay Cooke, Labor Day, and Crazy Train Capitalism

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Jay Cooke, Labor Day, and Crazy Train Capitalism

H. Bradford

    Going to Jay Cooke State Park was a Memorial Day and Labor Day tradition in my family.  It was one of my grandmother’s favorite spots, as she grew up in the Cloquet area.  Growing up, I never considered who Jay Cooke was or what Labor Day meant.  Labor Day simply marked the end of summer and the beginning of the school year.  It was observed with a picnic and a walk in the park.  In researching the history of Labor Day and Jay Cooke, this park is certainly a symbolic place to observe this holiday.  Jay Cooke was a capitalist whose bank sent the global economy on a crazy train of capitalistic instability.  In part, Labor Day exists because the economy went off the rails in 1873.


To give a brief overview of Jay Cooke, he was born in Sandusky Ohio in 1821.  His father was a railroad investor, real estate speculator, and lawyer (“Jay Cooke, Banker and Railroad Financier,” 2012).   It is safe to say that he came from a well-established family, who had lived in the U.S. since 1638 with the arrival of Henry Cooke to Salem, Massachusetts.  In addition to his career in investment and law, Jay Cooke’s father, Eleutheros Cooke,  was elected to congress in 1830 and President William Harrison stayed at their home.  Due to his family’s connections and social position, Jay Cooke enjoyed several well paying jobs before the age of 18 (Lubetkin, 2014).  The most significant of these early jobs was in 1839, when Jay Cooke was hired by EW Clark and Company.  EW Clark and Company served as a bank and loan broker for railroad companies.  He was made a partner in the company after four years, though the company ended in bankruptcy in 1857 during the Panic of 1857 (“Jay Cooke, Banker and Railroad Financier,” 2012).  It is notable that Jay Cooke’s first job with a dry goods company also ended in the face of economic downturn during the Panic of 1837 (Lubetkin, 2014).  These incidents offer a clue about the nature capitalism during that time period.  During the 1800s, there was a transformation of capitalism.  Capitalism becomes increasingly financialized, that is, rather than relying on the sale of physical goods in the material world, it entered the realm of investment, debt, and “fictitious capital.”  At the same time, capitalism became more international, seeking out new markets and sources for raw materials.  Lenin called this dual process of the maturation of capitalism: imperialism.  The Panic of 1837 and the Panic of 1857 were only two of the 16 boom-bust cycles between 1854-1919 (Berberoglu, 2012).   Economically, the mid to late 1800s were a tumultuous time.  This could be understood as part of the growing pains of capitalism, the pains that drove capitalism towards internationalism and the financial sector.  These growing pains were not mitigated by modern methods of trying to stabilize capitalism, such as the Federal Reserve (established after the Panic of 1907) or the government spending policies of Keynesian economics.


After the collapse of EW Clark and Company, Jay Cooke set up his own company, Jay Cooke and Company in 1861, on the eve of the Civil War.  It is during this time period that he made a name for himself by selling bonds during the Civil War.  More than any banker of the time, he became known as the financier of the Civil War for raising $3 billion in bonds supporting of the Union war efforts (“Jay Cooke, Banker and Railroad Financier” 2012).  However, he was no stranger to the business of war bonds, as prior to the Civil War, Jay Cooke’s Clark company was one of two companies awarded a  $50 million bid to raise money in support of the Mexican-American War of 1846 (Lubetkin, 2014).


To provide some historical context, the Civil War, like all wars, was expensive.  At the beginning of the war, the Union’s Treasury only had $1.7 million in reserve for war that cost about $1 million a day.  To raise money to fund the war, the North could have raised taxes or printed more money, but neither was sufficient for raising funds.  Thus, bonds were used to fund the war.  Jay Cooke, on his own volition, spearheaded the effort to raise bond money.  He was actually against slavery and initially invested his own money into bonds to demonstrate his belief that bonds were a sound investment.  He also targeted farmers, artisans, and merchants for bond sales, rather than only the wealthy.  His template for selling war bonds was used again during World War I and II.  Because of his success and enthusiasm regarding bond sales, on March 7th, 1862, he was appointed as Subscription Agent for National Loans, which put him in charge of the sales of all US bonds.  In 1863, he sold $511 million in bonds, oversaw 2,500 bond sellers, and sold about $3 million in bonds a day.  Interestingly, in 1864, the war costed about $3 million a day.  In all, Cooke is credited with raising a quarter of the Union’s $6.2 billion in war expenses.  Of course, he certainly profited from this venture.  His company netted $220,000 or about a 1/25 % of 1% the revenues.  At the end of the war, he was worth about $7-10 million dollars and rewarded himself by constructing of one of the nicer mansions of the era, complete with fifty three rooms.  It should also be noted, that while he was against slavery, he certainly wasn’t against racism.  During the war, Jay Cooke invested in a trolley car service between Capitol Hill and Georgetown.  However, he did not allow African Americans to ride the trolleys, even if they were serving in Union regiments.  When confronted about the policy, he avoided the issue by selling the company.  Another example of his less than moral behavior was that he also sold bonds to Quackers, telling them that the bonds would build hospitals, when in fact they money was not specifically earmarked (Lubetkin, 2014).


After the war, Jay Cooke turned his attention to railroad investment though he was a latecomer to this investment arena as there was already a transcontinental railroad when he agreed to help finance the Northern Pacific Railroad (“Bubbles, Panics, and Crashes” 2012 ).  Between 1865 and 1866, Cooke began purchasing large tracts of land in Minnesota and visited Superior and Duluth.  In 1868, he sold $4.5 million dollars in bonds to fund the Lake Superior and Mississippi Railroad.  (Lubetkin, 2014)  Later, Gregory Smith, the president of the Northern Pacific Railroad Company approached Jay Cooke and Co. for a $5 million loan.  Construction began at NP Junction in Carlton (“Brainerd Owes its Existence,” 1971).  His investment in that railroad is why we are here today in Jay Cooke State Park.  The Munger Trail was once a section of Northern Pacific Railroad that connected Duluth to Minneapolis.  To put his investment into a larger economic context, 1865-1873 was a booming time for the US economy (Barga, 2013).  Arguably, despite some downturns, this was part of a larger unprecedented economic boom between 1848 to 1873.  Once again, capitalism was becoming more international.  World trade actually increased 250% between 1850 and 1870.  This is even more astonishing when one considers that world trade had already increased 100% between 1800 and 1840 (Faulkner, 2012).  Owing to the industrialization of the U.S., Britain, and Western Europe, one area of rapid growth was railroads.  Between 1865 and 1875, $7.25 million dollars was invested in railroads in the United States.  During this time period, 30,000 miles of new track was laid, doubling the miles of railroad in the country (Barga, 2013). Of course, like funding the Civil War, constructing these railroads was tremendously expensive.  Prior to the Civil War, roads had been funded by local investors.  However, due to the scope of creating a transcontinental railroad system, the Federal Government once again sought bonds from banking houses to fund the railroads.  Thus, many of the bankers who had negotiated Civil War bonds, became involved in financing railroads (White, 2003).


To fund the massive expansion of railroads, the railroad companies went into bonded debt.  Railroad debt accounted for $416 million in 1867, $2.23 billion in 1874, and $5.05 billion in 1890 (White, 2003).  The hope was that the construction of railroads would eventually lead to profits through shipment of goods, extraction of new resources, and construction of new communities.  In this region in particular, it would enable the transport of goods to be shipped over the Great Lakes.  However, construction was costly, as railroads has to be built through swamps, mountains, and Native American land.   In short, it was a risky investment.  Despite this, there was a “railroad mania” as investors purchased railroad bonds and securities.  This frenzy to invest spread into Europe, as about ⅓ of railroad securities and bonds were from England. The profits from new railroads did not match the expansion (Barga, 2013).  There was also significant investment from included significant from Great Britain, Germany, and the Netherlands (White, 2003).  As an interesting side note, Germany’s investment in railroads was fueled by indemnity payments from the Franco-Prussian War, a war which preceded the Paris Commune (“Bubbles, Panics, and Crashes” 2012).  Despite the risky investment, financiers and railroad companies carefully crafted a rosy narrative of profitability.  Jay Cooke’s banking banking house emerged from the Civil War with a trustworthy, moral, and a patriotic veneer, lending legitimacy to the bonds.  However, even this had limits, as in 1872, Cooke advised his brother to try to control the Associated Press from releasing unfavorable information about the Northern Pacific Railroad, as not to scare off investors.  As the railroad expenditures outgrew the investment, Jay Cooke advanced his bank’s money into the Northern Pacific.  But, this rendered bankers unable to withdraw funds from his banking house (White, 2003).


The railroad bubble burst in September of 1873.  Fear of overcapacity, high costs, and the Credit Mobilier scandal (wherein politicians were bribed with discounted railroad stock), made investors lose faith in railroads and depress the bond prices.  As a result, Jay Cooke’s bank closed its doors in September.  This resulted in a panic, run on banks, the stock market collapse, and a worldwide depression that lasted into the 1890s.  This economic downturn is known as the Long Depression (White, 2003).  Jay Cooke’s bank collapse resulted in the collapse of 98 banks, 89 railroad companies, 18,000 other businesses (Faulkner, 2012). By 1875, 65% of the American railroad bonds held by European investors had defaulted (White, 2003).  Nevertheless, The Long Depression was by no means as intense as the Great Depression.  In the US, the economic growth rate only declined from 6.2% to 4.7%.  Jay Cooke himself died a wealthy man due to his investments in Utah silver mines (“Jay Cooke, Banker and Railroad Financier”) and the fact that he may have hidden two million dollars (Bellesiles, 2010).  Nevertheless, he did have to sell his mansion and moved in with his daughter, where he lived until his death 31 years later (Bellesiles, 2010).  It is hard to sympathize with Jay Cooke’s plight as the impact of the Long Depression was far worse for millions of workers.  To quote an account from the the Brainerd Dispatch (1971):


“I was employed in the capacity of yard clerk in the lumber yard under the late J. C. Barber. One day in September, 1873, he brought me a copy of a telegram announcing the failure of Jay Cooke.  The significance did not impress me until a few days later, when I was discharged, along with two-thirds of the entire shop force. Then came several years of the hardest times Brainerd has ever seen; the population dwindled to less than half of what it was in 1872…..”


This worker’s experience was not unique, as one in seven Americans was out of work in 1876 (Faulkner, 2012).  Railroad construction halted, as railroads could not fund their projects or pay their workers.  Railroad workers were the first to be hit by the crisis and many became homeless as their housing was connected to their job.  Union membership declined during the Long Depression as there were fewer workers to join unions.  Prices rose on everyday goods, adding to the struggles of everyday life.  Previous gains of the labor movement were reversed.  During this time period, unemployment and child labor increased (Barga, 2013).


In Marxist terms, this kind of event in capitalism results from the crisis of overproduction.

“In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. (Marx, 1848)”


In other words, there arises times in capitalism where there is too much production. The main reason why this results in a crisis is that profits decline over time as new technologies are capable of reducing production costs.  For instance, the first railroad in England, which connected Liverpool and Manchester, allowed rail travel at speeds little faster than a bicycle.  But, the railway was highly profitable, offering 9.5% annual dividends, a profitability that would never again be matched by a British railroad (Wolmar, 2007).  Technology quickly improved, resulting in faster trains and more capacity to move goods.  Technological innovation increases production, but also diminishes profits as more money must be invested in new technologies.  Because profits come from wages, there is pressure to decrease wages as profits decline.  This strategy has a long term impact of reducing the spending power of laborers.  Thus, this results in less consumption of goods, or a problem of too much production compared to consumption.  This kind of crisis results in the collapse of companies.  With fewer companies, there is more competition, which also results in less profit margin.  To increase profits, capitalists increase exploitation.  This is exactly what happened in the Long Depression as the few remaining railroad workers experienced a deterioration in wages and conditions.  In the bigger picture, as a result of the Long Depression, capitalism changed, becoming more closely connected to the state and more monopolistic.  During this period, countries also became more protectionist.  For instance, the U.S. had tariff rates of 30%.  Countries also became more colonial and invested more in arms expenditures.  Arguably, this increase in military spending set the stage for WWI (Faulkner, 2012).  Another outcome of the Long Depression was that it enabled the U.S. to emerge as a greater economic power as Britain faltered  (Sassoon, 2013).


Besides having an impact on global capitalism, the Long Depression had an impact on the labor movement.   For example, in 1877 wages were cut across various railroad companies.  In May of that year, the Pennsylvania Railroad Company cut wages 10%.  Wages were cut an additional 10% that June.  Pennsylvania Railroad Company also decided to double the length of eastbound trains without increasing the number of crew.  At the same time, The Baltimore and Ohio line reduced the workweek from three to two days and cut the wages of workers making over a dollar by 10%.  Each of these are examples of capitalists trying to extract more relative surplus value from the labor of the workers.  Relative surplus value is the profit gained from reducing wages or increasing the productivity of workers.  Because of these cuts, the workers went on strike.  The Great Railroad Strike was the first general strike in US history and first major railroad strike.  100,000 workers participated by walking off their jobs, destroying property, and halted business (Barga, 2013).  To break the strike, 60,000 militia members were mobilized throughout various states.  In Pittsburg, the local militia actually sided with the strikers so the National Guard was called upon to quell the strike.  Troops fired on a crowd, killing three children and in all, 100 people died in the strike.


The Long Depression also accounts for why, in the 1880s, George Pullman decided to reduce wages and lay off workers for the Pullman Palace Car Company.  Demand for railroad cars had simply evaporated (Delaney, 2014).  Beyond the reduced wages and layoffs, workers of the The Pullman Palace Car Company, a company which made sleeping cars, were required to live in Pullman City.  Clergy in the city had to pay rent to use the church and workers had to pay to use the library.  Wages fell 25% during the depression, but rents did not decrease.  Furthermore, workers who accumulated debt had it taken out from their paycheck.  Because of these conditions, 3,000 Pullman workers went on wildcat strike in May 11, 1894.  The strike was made national when, Eugene Debs, the founder of the American Railroad Union, spearheaded a boycott any Pullman cars, with the exception of mail cars.  In all, 50,000 railroad workers walked off of their jobs and there was no movement of rails west of Chicago (Brendel, 1994).  In July 1894, President Grover Cleveland sent 12,000 federal troops to crush the strike (Delaney, 2014).  During the confrontation in Chicago, the U.S. Army and Marshalls killed 30 striking workers (Warren, 2014).  The strike was declared over on August 3rd 1894.  In the end, Eugene Debs went to prison, the American Railroad Union was disbanded, and Pullman employees were made to pledge not to unionize again (Delaney, 2014).  Once the strike was ended, Cleveland signed legislation in support of the creation of Labor Day (Warren, 2014), but he did not win re-election that year (Warren, 2014).


While the Pullman Strike played a pivotal role in Cleveland’s support of Labor Day, the holiday had been in the works for many years.  During the French Revolution, a special day was set aside in September to honor labor.  The first Labor Day was celebrated in Australia in 1956 and there were early Labor Days in Boston in 1878 and Toronto in 1872 (Ruyle, 2014).  During the 1880s as the economy began to recover from the initial shocks of the Long Depression, workers began once again to join unions and agitate.  In 1882, the Central Labour Union was formed in New York.  The CLU proposed a “monster labor festival” and developed plans for a parade and picnic on Sept 5th, 1882 (Freedman).  This idea was actually proposed by Maguire and Mcguire, two members of the Socialist Labor Party in New York (Ruyle, 2014).  10,000 men and women participated in a parade that was it was watched by over a quarter million people.  The marchers in the parade carried placards with slogans such as “Less Work, More Pay,” “Labor Built this Republic, Labor Shall Rule It” and “To the Workers Should Belong All Wealth.”  Two years later, the AFL called all workers to celebrate Labor Day on the first monday in September.  In 1886, 35,000 people participated in a Labor Day march in Chicago.  In 1887 Oregon made it a state holiday.  And, of course, after the Pullman strike, Grover Cleveland made it a federal holiday in 1894 as a consolation workers.  However, by this time, the radical slogans of the original Labor Day celebrations had become more subdued.  Because of increased state repression in the wake of Haymarket massacre in 1886, the AFL distanced itself from red flags, radical speakers, and internationalism at Labor Day.  Labor Day was promoted as less radical alternative to May Day, which granted it state sponsorship (Freedman, n.d.).  Because of this state sponsorship, Labor Day has generally been seen as more respectable and American.  It has even been denounced as a capitalist handout by the Socialist Labor Party, despite the fact that they were part of the founding of the holiday! (Ruyle, 2014). During the 1930s it became centered on organized labor again, though over the years with the decline of the labor movement, its celebration has waned (Freedman, n.d.).


This leads me back to the beginning.  At one time, I was a little girl having a picnic with my family at Jay Cooke State Park.  I didn’t even know who Jay Cooke was or what Labor Day meant.  This is probably representative of how most people in the U.S. spend Labor Day.  It is a holiday to celebrate the end of summer.  The holiday is divorced from its history.  This is because many of us are divorced from the labor movement.  That is, most of us are not union members or know about labor history.  Most of us don’t even consider ourselves working class.  We are part of the mushy, meaningless, amorphous “middle class,” a term that obscures our place in the economy.  We are surrounded by all kinds of histories and connections, but live in an isolated moment and in alienated relationships.  If we saw the history and connections, we might see ourselves and this moment as part of something bigger and something potentially more powerful than capitalism.  In this moment, I am writing a presentation which I will give at Jay Cooke State Park on Labor Day.  Jay Cooke was capitalist who played a major role in unleashing the Long Depression on the global economy.  The economic downturn impacted workers, especially railroad workers, who went on some major strikes during this period.  Labor Day came out of this era of struggle.  While it is often viewed as the less radical sibling of May Day, both holidays came out of the struggle of workers for better lives and a better world.  As such, Labor Day does not have to be consigned to family picnics in the park.  It can be reclaimed and revitalized.  Once I was a child, innocent and ignorant.  I grew into a radical and continue to grow as I engage in social movements.  With the help of social movements, places and holidays can grow and change too.


Sources:

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Berberoglu, B. (Ed.). (2012). Beyond the global capitalist crisis: The world economy in transition. Ashgate Publishing, Ltd..

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http://www.lib.niu.edu/1994/ihy941208.html

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Jay Cooke, Banker and Railroad Financier.  Retrieved September 03, 2016 from American Rails http://www.american-rails.com/cooke.html

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White, R. (2003). Information, Markets, and Corruption: Transcontinental Railroads in the Gilded Age. The Journal of American History, 90(1), 19-43. Retrieved from http://www.jstor.org.akin.css.edu/stable/3659790

Wolmar, C. (2007). Fire & Steam: a new history of the railways in Britain. London: Atlantic Books. ISBN 978-1-84354-630-6.

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