The Democratic primaries were barely over before Barack Obama began demonstratively to move his campaign to the right. Only a few hours after the last primary votes were counted, he addressed the American Israel Public Affairs Committee, the primary pro-Israel lobby in the United States. He asserted Jerusalem “should remain 100% undivided” under Israeli control, and he pledged to work to “isolate Hamas.” Calling Iran the biggest threat to peace in the region, he tried to explain away his earlier offer to meet the leaders of Iran, without any preconditions, saying instead, “I would be willing to lead tough and principled diplomacy with the appropriate Iranian leaders at a time and place of my choosing if, and only if, it can advance the interests of the United States.” Taking a page from George W. Bush’s book, he blustered, “I will always keep the threat of military action on the table to defend our security and our ally Israel.” Ironically, he put the emphasis on the military threat exactly at the point the Bush administration was moving to soften U.S. relations with Iran, hinting the U.S. might establish an embassy in Tehran for the first time in 28 years.

A few weeks later Obama threw out that calculated bombshell, saying “When I go to Iraq and have a chance to talk to some of the commanders on the ground, I’m sure I’ll have more information and will continue to revise my policies.” Even if he rushed to bend the stick the other way later in the same day, he had made the point: his position on Iraq and withdrawing troops was not nearly as firm as many people had taken it to be.

But it was on the domestic side that his move to the right was particularly glaring. Calling public financing a barrier to the influence of wealth over the elections, Obama had pledged to keep his campaign within its limits. Instead, he became the first presidential candidate since public financing was enacted in 1971 to turn his back on it.

Having once urged a moratorium on the death penalty on the grounds that its imposition was “flawed,” he now declared himself in agreement with the minority opinion presented by the two most reactionary justices on the Supreme Court – Clarence Thomas and Antonin Scalia – who argued for its expansion to cover crimes less than murder.

In mid-June, he met privately with extreme right-wing evangelical leaders – including several of the most vociferous opponents of abortion and public schools. Two weeks later, he announced that not only would he continue Bush’s program of handing over government money to religious institutions, he would expand it. And, in an interview with Relevant, a Christian fundamentalist magazine, Obama showed himself ready to chip away further at Roe v. Wade: “I have repeatedly said that I think it’s entirely appropriate for states to restrict or even prohibit late term abortions as long as there is a strict, well-defined exception for the health of the mother. Now, I don’t think that ‘mental distress’ qualifies as the health of the mother.” Like many other politicians who pretend to defend women’s right to choose, Obama was ready to erect still another limitation on that right in order to pander to the anti-abortion crowd. These limitations, taken together, have seriously reduced women’s legal access to abortion.

The clearest expression of how much Obama was trying to reposition himself was his vote for Bush’s bill, expanding the legal authority of the executive to spy electronically on American citizens, while guaranteeing that any company that had earlier broken the law helping the government to spy would not be prosecuted. For months, he had promised to help bottle up the bill in debate, which would have prevented the Republicans from easing it through while Bush was still in office. But when the vote came, he broke off his campaign to return for the vote, joining a minority of the Democratic Party to give Bush what he asked for – and what one of Bush’s advisers called “more than the President had hoped for.”

Certainly, Obama isn’t the only slippery character running for president. John McCain had already been moving to junk the image he had cultivated as a “maverick,” a different kind of Republican who, on a few high profile issues, had appeared to take more “liberal” positions, almost like a Democrat.

McCain had once voted against Bush’s tax cuts for the rich, saying: “I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us at the expense of middle-class Americans who most need tax relief.” Today, his good conscience seems to have deserted him – he says he would reinstate those tax cuts for the wealthy, which are scheduled to expire in a few years.

He once opposed off-shore drilling for oil and natural gas on environmental concerns, as well as on grounds that the oil companies benefit too cheaply from public lands. Not now. With the current high oil prices providing the pretext for additional hand-outs to these monstrously wealthy companies, McCain rushed to give them another chunk of public resources, announcing his support for these giants on the same day Bush did.

McCain once had said that, although morally opposed to abortion, he would not support repeal of Roe v. Wade because it would force innumerable women to go through “illegal and dangerous operations.” Today, not only does he say he favors overturning Roe v. Wade, he denounces abortion regularly, even when it’s not on the agenda, for example, in a recent forum on the economy. Having once called right-wing Christian fundamentalist leaders “agents of intolerance,” and “corrupting influences on religion and politics,” McCain embraced those same “agents of intolerance,” seeking their support.

On immigration, McCain had differentiated himself from most of the Republican Party with his proposal to offer legalization, even if very limited, to some of the immigrants without papers. But from the moment he started campaigning, McCain began to focus his comments on “closing the border.”

Both candidates had built up a certain aura of a “new politics” – McCain with his “maverick” stance, and Obama with his talk about “change.” But this “new politics” was clearly and always only a stance. McCain, a maverick? Not hardly. His own record shows it. In 2007, McCain voted with the Bush administration 95% of the time. So far in this election year, 2008, he has given his vote to Bush 100% of the time.

Obama’s idea of “change”? It’s a return to the same old Democratic Party apparatus and leftovers from previous Democratic administrations. Take one look at his closest advisers, starting with his key economic adviser, Jason Furman, who has close ties to Robert Rubin, Clinton’s Treasury secretary who moved on to head Citigroup. The AFL-CIO describes Furman’s views as “focusing too much on corporate America and not enough on workers.” Among other things, he applauded Wal-Mart – whose anti-labor policies are well-known – calling it a model for other businesses to follow. Or look at Obama’s foreign policy team. Most of the 300 and some “experts” come right out of the Clinton administration – which, according to the Wall Street Journal, committed troops to more parts of the globe than any other administration since World War II. It also laid the groundwork for the invasion of Iraq.

The media pretends that candidates must move to the right to get elected. Not true! Above all, not this year. Why has there been so much enthusiasm and attention during this year’s election campaign if not for the popular hope that this year’s candidates represented a change from politics as usual in Washington? Only one quarter of the population supports Bush and his policies – how could anyone pretend that it is necessary now to start embracing many of those same policies to get elected?

Perhaps McCain feels he must move to the right to reinvigorate that coalition of well-off petty bourgeois and right-wing religious fundamentalists who have been the base of the Republican party for years. But Obama’s move to the right can only harm his chances, since a Democrat depends on votes from the working class and poorer parts of the population to get elected.

In any case, both candidates are junking their earlier pose of a “new politics” in order to prepare for assuming the presidency, getting ready to carry out the policies that the bourgeoisie wants – and to do it without having to face a population in which they had cultivated too many illusions. This is especially true on the issues that matter most to the population today: the war, health care and the economy.

Both Agree: Extend the U.S. War on Iraq into Afghanistan

The 2006 mid-year elections were strongly marked by the population’s dismay over the war in Iraq, and it cost the Republican Party dearly. McCain and Obama both became more vocally critical of the Bush administration, even if they seemed to be staking out nearly opposite positions on the war.

McCain criticized the administration for how it was carrying out the war, and particularly for not sending as many troops as the military had asked for. Thus, when the Bush administration moved at the beginning of 2007 to increase the U.S. force in Iraq, McCain put himself forward as the strongest defender of this so-called “surge.” Today, claiming the “surge” has dramatically changed the situation, McCain claims the credit for pushing the administration to carry it out. In other words he was more of a “hawk” than Bush.

Obama, on the other hand, faced with the growing opposition to the war in 2005-2006, began to pose as an opponent of the war “from the beginning. ” In reality, his early opposition boils down to little more than one speech he made in 2002 in Chicago before the war started – a very timid speech, characterized by his insistence that he was not against all wars, or even most wars. He was against invading Iraq because it would be “a stupid war,” which interfered with the wars the U.S. should be waging! And by mid-2004, he was giving practical support to this “stupid” war. When running for the Senate, he was asked by the Chicago Tribune what differentiated Bush’s policy on Iraq and his own. Obama’s answer, July 24, 2004: “There’s not much difference between my position and George Bush’s position at this stage. The difference, in my mind, is who’s in a position to execute.” And, when he got to the Senate, he voted for the very first Iraq funding bill to come up and every subsequent one, right up to the point he officially started his presidential campaign – hardly the anti-war candidate he made himself out to be at the beginning of the primaries.

Today, both Obama and McCain effectively line up behind Bush, as they each prepare to take over as “commander in chief.” They may dispute with each other, but both pretend, as Bush does, that the situation in Iraq has “improved.” McCain regularly gives credit to the surge. Obama credits the “new tactics” devised by General Petraeus and the “brilliant performance” of U.S. troops.

You would think they were talking about a board game rather than a war that has already killed nearly a million Iraqis and displaced five million more, the majority of whom were driven out of their homes in ethnic cleansing campaigns that were the hallmark of the “surge” – or of the “new tactics” devised by General Petraeus. To say, as Bush, McCain and Obama all do, that the level of violence is “lower” today in Iraq is like saying that the graveyard is quieter.

The situation for the population of Iraq is catastrophic – and it is not over, no matter who wins the U.S. election. Nor is it over for U.S. troops. McCain quite openly calls for continuing the war on Iraq. Obama, while repeating his pledge to bring the troops out 16 months after coming into office, now hastens always to say that he would leave a “residual force” in Iraq. And lately his advisers have been informing the media that this “residual force” could amount to 50,000 troops!

And that’s only the half of it. McCain and Obama both would take whatever troops were spared from Iraq to expand the war in Afghanistan. Obama has said he would send at least two additional combat brigades, an unspecified number of troops needed for support, plus additional troops from other NATO countries, plus “more helicopters, more satellites, more Predator drones in the Afghan border region [with Pakistan].” McCain has said he would send three additional brigades, counting NATO troops, plus money to double the size of the Afghan army, plus pressure to unify the military command in Afghanistan. Obama goes so far as to say that if the Pakistani government doesn’t do what the U.S. requires in the tribal regions, he would send U.S. troops into Pakistan. In reality, McCain and Obama are simply proposing to do more of what Bush has already begun to do: in the last year, the number of U.S. forces in Afghanistan increased from 26,000 to 34,000, with more increases on the way, as the military continues to announce more extended tours for Marine units scheduled to leave Afghanistan.

Today, the U.S. government imposes the rule of U.S. corporations around the world, under the pretext of fighting terrorism, just as in earlier decades it did so under the pretext of fighting “communism.” Of course, neither the Democrat nor the Republican question that. They both, as Bush did, dredge up the “terrorist threat” to prepare the U.S. population to be both cannon fodder in more wars and executioner of other peoples throughout the Middle East.

As a Wall Street Journal opinion piece somewhat cynically commented, June 2, 2008: “Want more George W. Bush foreign policy? Elect John McCain – or Hillary Clinton or Barack Obama. Regardless of who wins in November, the current foreign policy will live on in the next White House. None of the main candidates has disavowed the war on terror. Each has called Mr. Bush tactically deficient. But the debate over the war on terror is over how, where and when. The candidates have all argued they would do a better job of fighting it.”

Reforming Health Care in the Interest of the Insurance Industry

“Our nation must make a promise, a solemn promise. We must pledge to help our citizens find affordable medical care.... These reforms are the act of a vibrant and compassionate government.”

Who said that? In fact, it was Bush when he was pushing the Medicare D “reform” through, but it just as easily could have been either McCain or Obama today, because they make the same kind of grandiose statements about reforming the medical care system in the interests of the population – even while using that system to provide more money to big business, just as Bush did with Medicare D.

McCain says he will simplify the system, making it possible for everyone to have insurance – then offers a $2500 “rebate” to every individual and $5000 to every family to pay for their own medical insurance, to be paid to the insurance companies. In fact, it’s clearly a way to make it easier for employers who currently offer medical insurance to get rid of it. All the more so, since workers who fight to keep their employer-based insurance would discover that they would be penalized, with their benefits counted like wages on their W-2 tax forms. Finally, McCain offers to let individuals put part of their rebates into “health savings accounts” if they buy “less expensive” insurance coverage. McCain’s “reform” is nothing but a way to put the responsibility on every individual to come up with the money to cover their own medical expenses – while leaving in place a system that prices medical care and medical coverage out of the reach of ordinary working people, and even of a great many middle class people. It’s obvious that the rebates don’t begin to cover the costs of medical insurance for a family, not to mention all the other medical expenses. They are simply another Trojan horse attacking existing social programs.

Yes, McCain, like Obama, promises to “control costs.” But many of their cuts of so-called “unnecessary” costs would harm the population: for example, reductions in Medicaid payments for long-term care. Another example: both would cap settlements that hospitals or doctors have to pay when their sloppy work harms someone – as though it were outrageous settlements, rather than outrageous medical errors, that are the problem. As for other high costs, both propose to encourage “competition” in the medical insurance industry, claiming this would make the industry itself lower its own costs. Bush made the same claim about competition controlling drug prices when he was pushing Medicare D – and we see how well that worked!

Obama’s major proposal is to legally require all parents to get medical coverage for their children. They could get coverage through an employer-based plan, if they still had it; they could buy private insurance if they have the money; they could register for medicaid or SCHIP if their income is so low they qualify. Everyone else would have to buy insurance from a new “public insurance plan,” to be administered, of course, by private insurance companies.

While leaving the current expensive system in place, Obama would require people who can’t find the money to buy medical insurance to find it anyway! Just like McCain, he puts the responsibility on the individual, without changing the circumstances that make it impossible for most working people to buy insurance today.

Of course, concrete details about McCain’s and Obama’s plans are missing – just as they were in 2003 when the Medicare D “reform” was passed. But, just as with Medicare D, McCain’s and Obama’s proposals both clearly offer more benefits to employers whose workers demand medical coverage, and they offer a bigger boondoggle to the medical insurance industry. Neither does anything to touch the existing market-based system. They just reinforce the provision of health care by profit-making entities – which is at the root of the enormous inefficiency and lack of access to medical care that exists today in the United States.

Economic Programs as a Way to Subsidize Big Business

Right after the end of the primaries, Obama announced he would focus his campaign on the economy. And McCain regularly makes speeches about it. Both campaigns feature “Economic Plans” prominently on their websites.

But which economy? Plans for which class?

Obama and McCain would both tinker once again with the tax code, giving tax credits or exemptions, which each claims would lower the total tax bill of working Americans. But these are the kind of promises that get made with every new tax bill, with what results we should all be familiar with by now. Every tax cut pushed through by the Bush administration was justified by a similar claim. No matter what was said about providing tax relief for the working population, every tax cut served to reduce the share of the overall tax burden paid by the corporations and the wealthy.

This time also, the largest share of the tax cuts would go to the corporations and the wealthy. With McCain, this is more obvious, since from the beginning he has said he would extend the Bush tax cuts set to expire in 2010 – tax cuts which provided 66% of the benefits to the wealthiest 20% of the population.

Obama, by contrast, began his campaign promising to tax the wealthy, while cutting taxes for those most in need. But he has already “refined” that position quite a bit – changing his definition of those most in need to include people making a quarter of a million dollars a year!

But the real benefit for the wealthy in Obama’s tax plans rests on the multitude of special tax cuts for various businesses – for example for businesses producing ethanol, “clean coal,” wind energy, or hybrid vehicles, or for big companies engaged in “advanced manufacturing,” or for “small businesses” – and that barely begins to scratch the list of all the various ways he proposes new tax breaks for business. Like other Democrats before him, Obama widely adds special tax breaks to specific businesses, making the tax code ever more complex so that no one has any idea of who is getting what – other than the wealthy who hire accountants to get it for them.

What about the real problems facing the working population – like prices and jobs, for example?

Bring up the high prices of food, energy and housing, and Obama and McCain both use them as the pretext for offering more government money, in the form of subsidies or tax breaks, to the big corporations. McCain spoke about high oil prices, then offered to open up off-shore drilling to the big oil companies. Obama denounced him for it, only to turn around and say he might “compromise” and do the same. McCain said he would impose a three-month gas-tax holiday – without requiring the oil companies to lower their prices at the pump! Obama offered another tax incentive package like Bush’s recent ones. Those incentives have already been more than eaten up by the increasing inflation of the last few months. Neither Obama nor McCain even talks about reining in the massive price increases.

What about jobs? Both candidates propose the same remedy: give more tax cuts to the corporations, under the pretext that this will encourage them to create jobs. That’s nothing but what Bush has been saying for the last seven years – and how many jobs did his tax cuts help create? Jobs, no. Those tax cuts simply lined the pockets of the biggest corporations and of the wealthy who benefit from their investments in these corporations.

No, McCain and Obama are not talking about creating jobs – and sometimes they even admit it, even if indirectly.

McCain, for example, said it might be necessary to offer GM a government sponsored bail-out based on the provisions of the Chrysler bail-out of 1980. That bail-out prominently featured the government’s demand that workers at Chrysler give up concessions in their wages and benefits. It was, in fact, the first open demand for concessions in the auto industry. And it laid out the path that the Big 3 would follow in the nearly three decades since: reducing wages and benefits through various schemes, while cutting jobs ferociously.

Obama, for his part, recently praised Ford for its newest “restructuring plan,” claiming as Ford did that it would create jobs in the U.S. If there is anything a Ford restructuring plan won’t create, it’s jobs. Every “restructuring” the big auto companies have carried out has focused on reorganizing work and the production process in order to eliminate jobs. The same is true in every other big industry – which can be seen by comparing today’s employment and production figures to those of a decade or so ago.

Obama and McCain’s “economic plans” are only more of the same that has made the population pay for the vast increase in wealth of this tiny minority that owns, runs and benefits from the biggest companies in the country.

Don’t Go Out of the Voting Booth with Illusions

It’s understandable that many workers, white and black, want to vote against the people who have held office during this disastrous last period, especially against the Republicans – if for no other reason than to express their anger.

And it should come as no surprise in a country as profoundly racist as the United States that a big majority of the black population would want to vote for Obama. His candidacy represents, at least symbolically, the falling of barriers standing in the way of the black population. There is an enthusiasm for the idea that there could finally be an African-American president. As many people said: “It’s time, it’s past time, it’s overdue.”

But Obama’s candidacy does not open the door for the large majority of the black population who are working class or poor.

In the first place, to say that is to read the pages of history backwards. Doors were not opened by Obama, but for him. His candidacy was paid for by the bitter and angry struggles of generations of black people in the streets of this country – struggles that radically uprooted the legalized system of Jim Crow.

Obama does not represent the interests of the black working class population. In fact, he reproaches the ordinary black population with the accusation that they themselves carry an important part of the responsibility for their situation – a situation marked by severe poverty, high unemployment and lack of educational opportunities.

He blames the victims of poverty and misery for the poverty and misery in which the society has mired them. It is his way of reassuring the bourgeoisie and the reactionary petty bourgeoisie, white and black, that he is not the “black” candidate held hostage by “black special interests.” It’s why, for example, he distances himself from even the social-democratic-style reformists, like Jesse Jackson, whom the bourgeoisie has always been a little wary of. By his very words, his very campaign, Obama makes it crystal clear ahead of time that the vast majority of the black population, especially its poorest layers, should expect nothing, absolutely nothing from him if he is elected.

Whether Obama or McCain is elected, the wars will continue – and grow wider. They both say it. The corporations and the wealthy who own them will continue to be given hand-outs by the government – and they both say that. Neither represents the interests of the working class.

The big bourgeoisie certainly has no fears about either of them. The bourgeoisie know they will be served by either one. That’s why they have been ready to finance both. If they have given significantly more to Obama up to this point than they have to McCain, it’s not because they distrust McCain. Perhaps they think Obama can do a better job of diverting the population. In any case, whichever one is elected will be their servant.

Workers must have their own policy and they must find the way to carry out their own policy, which means to organize their own struggles, no matter who is elected.

... Skyrocketing oil prices were on the agenda at the G8 summit of the eight major industrial countries, with China, India, and Korea in attendance this time. Representatives of the countries discussed how oil price increases were threatening the economy. “If we do not do something about the situation, it could bring on a global economic recession,” shouted one minister of energy. But officials did nothing but talk. The price of oil will continue to rise if that’s what is wanted by the small handful of oil companies dominating the worldwide distribution of oil. Under capitalism the real power is not in the White House – where a discredited Texas clown is at home – nor in France’s Elysée Palace nor in England’s #10 Downing Street. The real power lies in the board rooms of the big industrial or financial companies.

The Skyrocketing Price of Oil

After several years of progressively higher prices, the price of oil really skyrocketed this year. For ordinary people in the rich countries, especially wage earners, this price increase in oil came on top of other price increases, especially food. These factors raised the cost of living... and also hit many small businesses, like trucking.

Of course there are many big companies that are also hit by the increase in oil prices, such as the airlines and the U.S. auto industry.

The rise in oil prices is another contributing factor in the instability of the world economy, which is buffeted by financial and banking crises. As always in a period of crisis, those who are the strongest will find the way to make others pay for their higher costs. Companies that don’t have such possibilities will sink, bringing down with them their entire workforce.

Some already are talking about the “third oil shock,” referring to the 1973 oil crisis that shook the world economy. What the oil shocks of 1973 and 2008 have in common is that they are both an expression of the economic crisis. More precisely, they represent the oil companies’ strategy to anticipate the consequences of the crisis. Yet, at the same time, they are a major aggravating factor in the crisis.

During the first oil shock, crude oil prices tripled in a few months. This time, the huge price increases came after a long period of gradual increases.

Within a period of seventeen years, from 1986 to 2003, crude oil prices remained relatively stable at $20 to $25 a barrel. In 1998 oil prices even dropped to $10 a barrel.

But since 2003, prices have never stopped going up. In early June 2008, the price of a barrel of oil on the world market approached $140. Prices had gone up over 500% in five years, that is, they are five times higher in 2008 than they were in 2003! And these prices are fourteen times higher than they were ten years ago, at their lowest point in 1998....

As during previous oil price increases, the government and news media strive mightily to invent explanations. These range from the changing climate to the political problems of one or another oil producing country, to the unquenchable thirst for oil of China or India.

And each time, the media pulls out the old refrain about how limited oil resources are. Despite the lies, the truth spilled out of the mouth of Jean-Jacques Mosconi, a director of French oil giant, Total: “The high price of oil is not caused by a lack of oil reserves but by a lack of productive capacity.”

Those old enough to remember the oil crisis of 1973 may recall the experts saying at that time that there were only 30 years of oil reserves left in the earth. In other words, the gas pumps should have dried up five years ago.

If there is a limit to the oil reserves, it has not been reached. The directors of Total expect a continual increase in worldwide production until about 2020; then they expect production to level off. They estimate their own reserves will last 40 years. And that doesn’t take into account any new discoveries during that time period.

Oil company directors are quick to blame the oil producing countries for the lack of oil production. During the G8 meeting in June, they called on OPEC, the Organization of Petroleum Exporting Countries, to increase their production. History repeats itself. Thirty years ago, political leaders and the news media accused the “oil sheiks” of causing the first oil shock. Today, they explain that it is caused by instability in Iraq – which is real but whose fault is that? – or in Nigeria. Sometimes they blame Malthusian policies of oil producing states that want to conserve their oil reserves. But the last decades have proven that the oil producing states, with their differing situations and interests, have never been able to agree on a common strategy... except when it corresponded to the wishes of the major oil companies. The major oil companies may not always control the extraction of oil but they control all refining and distribution. They are able to influence the petroleum markets much more than can OPEC, since each OPEC member carries out its own policy. In addition, there are plenty of oil producing countries that do not belong to OPEC, notably Russia and Norway, both large exporters.

Production Capacity Deliberately Reduced by the Oil Companies

The oil companies today are following the same strategy as the one that brought about the first oil shock of 1973. Instead of massively investing in exploration, instead of building new refineries and transport, such as super-tankers, pipelines, etc., they prefer, in a period of economic instability, to raise their prices to increase their massive profits. As a monopoly, they are able to implement this strategy.

To gain the maximum profits from oil with a minimum of investment is the best way for the oil companies to force consumers to pay in advance for exploration and future investments in new forms of energy, which the big oil companies plan to control.

The tendency for prices to rise, coming from the oil companies’ strategy, fosters speculation because other industrial and financial groups gamble on raw materials, especially oil.

This scenario is well known and described regularly by economic commentators. After being driven out of real estate speculation, massive amounts of capital in search of profits descended on raw materials.

Oil, in particular. Such an indispensable product necessarily attracts capital searching for a place to make a bigger profit when the price of oil seems to be permanently on the rise.

Investors or speculators buy a piece of paper representing a certain quantity of oil and then sell it at a comfortable profit at a specified date. The pieces of paper that represent the buying and selling take on a life of their own, being bought and sold in their turn.

According to a recent investigation by the newspaper Le Monde, these fixed term contracts for oil represent 30 to 35 times the volume of real trading in oil. According to a researcher at French bank, Société Generale: “From 2000 to 2006, the amount of oil has increased 13% while the amount of derivatives, that is, the speculative pieces of paper representing the buyings and sellings at fixed terms, increased 260%”!

In other words, this increase in speculative demand pulls prices upward. This speculation causes a much greater increase than does real demand by China or India!

How much does speculation account for the actual increase in oil prices? Who can say? The question has no real meaning since the oil companies themselves speculate on the prices of what they produce.

On June 6^th, the price of a barrel of oil increased by $11 on the New York Mercantile Exchange in a single day, which has never happened in the entire history of the oil industry. Obviously it was not due to growing demand from China or India. Nor was it due to the hypothetical exhaustion of the oilfields in 40 years. It can be explained only by short term speculative maneuvers.

Speculative Boom in All Raw Materials

The same kind of thing is happening to most raw materials. We hear less about it because consumers are not directly affected by the rise in prices of copper, aluminum or nickel. But obviously they are indirectly affected because when these prices go up, the big companies pass on the price increases to consumers. Or at least the companies powerful enough to pass on price increases do so.

In any case, the prices of copper and aluminum have raced upward for three years. In 2003, a ton of copper traded for $1,544. By mid-February 2008, it peaked at $8,884 a ton.

Just as with oil, the big companies have decided not to invest and just as with oil, speculation has vastly increased the rise in prices.

Speculative funds don’t come from outside the industrial and banking universe, but rather emanate from that universe. These speculative funds may not know anything about copper, aluminum or nickel, but they know about financial instruments. That allows them to work with capital far beyond their own. They use the capital of the big capitalist groups that turn to them to make profits; they also mobilize credit from the banks. By speculating using largely borrowed money and by juggling a multitude of instruments that the world of finance has invented over the last 20 years, some groups have made 100% profit in just a year of buying and selling raw materials.

“The massive amounts of capital flooding into markets for raw materials, which have been turned into financial assets like any other, do not correspond to the amounts of these products actually traded,” sadly wrote a commentator in Le Monde. The article adds that all this kind of trading corrupts “the normal functioning of the market.”

But where does the normal functioning of the market end? And at what point does it become cancerous?

It is the same capital. One part is invested in production to extract surplus value through exploitation, while another important and growing part is used for financial operations. These financial operations dealing with credit and currency exchange and the raising of capital are indispensable for the functioning of companies. Even “derivatives,” which today make up the most dangerous forms of speculation, were invented to protect corporations from various risks. The line between speculative capital and the so-called normal workings of capital is thin and quite elastic.

Despite the fact that raw materials have been turned into “financial assets,” they remain indispensable for industrial activity. Speculation does not take place in a financial sphere that is disconnected from production. So it enlarges the convulsions of the capitalist economy.

Partisans of the capitalist economy think that the market economy cannot be surpassed. They say society has not found anything better than the law of supply and demand to match society’s ability to produce and fulfill its needs. But this so-called “law” takes into account only the demands of those with the money to pay and thus rejects the elementary needs of most of humanity. Furthermore, with the growing financialization of the economy, even the demand of those who can pay becomes more and more of a fiction since it mixes demands corresponding to real needs and demands that come from speculation.

Food Has Become a “Financial Asset”

The consequences are particularly drastic when the raw material turned into a “financial asset” is food. It’s nothing new to speculate on cereals and thus starve people to death. But modern capitalism invented financial instruments that take this speculation to an unprecedented level. In so doing, it multiplies the number of victims.

Certainly, speculation does not explain everything. It only amplifies things. Behind the inability of a growing number of poor countries to feed their population is an entire evolution, a history intertwined with the history of capitalism.

After numerous hunger riots in the poor countries, the Food and Agriculture Organization of the United Nation, the FAO, held a summit on “food security.” Those blabbermouths produced a lot of resolutions and declarations about the 800 million people who regularly suffer from hunger and malnutrition, those reduced to famine by the brutal increase in agricultural prices.

The FAO’s director confronted the states with their responsibilities: “These sad developments are merely the chronicle of a predicted catastrophe.” Yes, it is a catastrophe and the whole world sees it coming. But no one does anything about it!

During the FAO summit the French agricultural minister gave what amounts to a sort of self-criticism: “After decolonization we didn’t provide enough aid to these countries to help them develop their agriculture and feed their population.”

“Not enough aid”? How dare he say it? What about the responsibility of colonization? French colonialism used the whip to impose the cultivation of cotton in Chad and oil seed in Senegal, to profit French companies Boussac and Lesieur! Big import-export companies got rich from the international trade in rice that replaced local food staples driven out by the cultivation of oil seed or cotton. And the French used forced labor to build the few railroad lines and roads designed for transporting those products back to France.

Self-sufficiency in food did not disappear by chance, or even by some decision of the local population. It was deliberately destroyed, first and foremost, by the colonial powers and then by the capitalist market.

The workings of the capitalist economy are so marvelous that the capitalists no longer need whips or forced labor to impose market crops for the rich countries on the farmers of the poor countries and their venal governments. Included for this overseas market are fruits and vegetables out of season, products which the local population never sees. The latest “innovation” taking up more and more land once used to produce food is the production of biofuels. A vicious circle is complete. Because they systematically increased the price of oil, the oil companies made the production of biofuels profitable enough to attract capital. Ever more peasants are forced to abandon food production. Instead of producing food, they must buy it in the marketplace. On the world market the agricultural production of the industrial countries, which is mechanized and often subsidized, is more profitable.

A number of poor countries, especially in Africa, although once self-sufficient in food, have become dependent on the world market, on its fluctuations, its convulsions and, as a consequence, on its speculators and its speculation.

Humanity has paid dearly for the basic inability of its economic order to satisfy the elementary needs of society. Not only is it unable to deal with shortages, it creates them!

A Fundamentally Irrational Economy

Political leaders are completely unable to avert the catastrophes brought about by the functioning of the economy. That is not their role. Their role is to open wide the coffers of the state to the big companies. It is to implement the policy required by the big companies. And it is also to justify this social order to the population. And when they do not fulfill this role efficiently, they are meant to be used as a safety valve: they are kicked out by elections in imperialist countries or by armed violence in poor countries. So the system goes on, and nobody sees the economic powers that manipulate them behind these political puppets.

What is happening in the rich industrial countries and more disastrously in the poor countries shows that the laboring classes have to defend themselves even to prevent a catastrophic decline in their living conditions.

The price increases for oil and other raw materials have already revived inflation worldwide, adding to the banking crisis and the subsequent credit crisis. These prices have also increased the rivalry between corporations involved in successive stages of production because they want to make their clients or their contractors pay for the increasing costs. Obviously, all of them look for ways to make their wage earners pay. Each company will try to compensate for the increase in the cost of raw materials by squeezing labor costs.

In all the countries, the first oil shock was followed by an offensive against all wage earners. The same thing is happening today. Over and over, there are commentaries asserting that wages must not go up so that price increases for raw materials and food staples don’t lead to high inflation. This is part of the psychological warfare against the working class carried out by the politicians and the lackeys in the media in the interests of the bourgeoisie. In other words, one more time the capitalist class will try to make the wage earners pay for the disorders of its economy and the plunder by its big trusts.

It has become vital for the working class to defend itself against the two main diseases that hit the productive class of this society: unemployment and the plunge in purchasing power of their wages.

To defend themselves against unemployment means to impose a redivision of work among everyone without a loss in wages. To defend themselves against the loss of purchasing power means a general increase in wages and a sliding scale of wages, that is, an automatic indexing of wages to the rise in prices. In addition to these two main objectives, the governments must be forced to repeal all the measures they have taken to impoverish the laboring classes in order to enrich the wealthy (like cuts in public services and schools and health care, increases in the age at which Social Security can be obtained, etc.)....

All these struggles are necessary to prevent the laboring classes from plunging into poverty. But they are purely defensive. As long as capitalism remains the economic and social organization, it will continue to reinforce the grip of the big groups over the planet, with all its dire consequences. That means continued rivalries over profits, speculation, colossal waste on the one hand and famine on the other. It is not possible to regulate the basic problems of society within the framework of the capitalist economy.

There are many who recognize and denounce the threat for humanity represented by the growing control by a few hundred big financial groups on the planet, those which dominate the production of raw materials, energy and food. Less numerous, however, are those who understand that this domination is inseparable from the capitalist order and that, for a long time, it has caused humanity to go backward. Today’s crisis and its dramatic consequences are the expression of the impasse of the economy and the failure of the bourgeoisie, the social class that dominates and feeds off the society.

The problem is not simply to be conscious of these problems but to prevent humanity from rushing toward a precipice. There is no other alternative to the present evolution of society than the political overthrow of the bourgeoisie and the destruction of its economic domination.

But for this alternative to be realized, what is necessary are forces that defend a policy with this perspective. The multiple and often massive and violent responses against the price increases for oil, raw materials and food show that capitalist society is no more stable than it was when a powerful workers movement consciously aimed at overthrowing it. The only difference is the profound retreat and atomization of the workers movement itself.

The plundering by the big capitalist groups, their contempt for the basic interests of the vast majority of the population causes, as it did in the past and as it will in the future, reaction by the population, riots and revolts. Many of these could ignite a revolutionary process able not only to threaten capitalism but to overthrow it.

Globalization – about which there is endless talk concluding that nothing can be done – is not just globalized plunder by the big trusts. It has also reinforced the global proletariat by transforming tens of millions of peasants in China, India or Africa into proletarians. It has brought them together in immense slums where there are the same conditions that existed in the industrial cities of England during its industrial revolution. But today’s slums exist on an incomparably larger scale. And globalization, as it pulls down certain barriers between nations, mixing peoples, unifies their destinies.

Revolutions are the conscious expression of unconscious processes that develop in the depths of society. What is missing and missing drastically today is this conscious expression, with the will to push economic and social evolution to their ultimate transformation: the expropriation of the bourgeoisie, the overthrow of capitalism and the reorganization of the economy on the basis of collective property.

More than a century ago, Trotsky spoke about the crisis of leadership of the working class. Today that leadership crisis has spread to the entire workers movement and its organizations. It is precisely this retreat of the workers movement that leaves the door open to all sorts of organizations, which are virulently reactionary, nationalist, fundamentalist and ethnicist. But paradoxically the fact that these reactionary forces act today shows that society is pregnant with serious social calamities.

Lenin said that bourgeois society is always oozing a multitude of crimes that can ignite a revolution. The hunger riots in the poor countries and, in a certain way, even the waves of protest against the rise in prices show that his remarks have not lost any of their currency. But in order that a revolt not be stifled as soon as it begins or for it not to be taken advantage of by forces ready to channel social anger but not to transform society, the proletariat has to be able to intervene in events as a social force conscious of its own political interests.

The only question of our epoch is how and when a political force capable of embodying this perspective will arise and win, on this basis, the confidence of the only social class able to carry out such a transformation – that is, the proletariat of our times in all its diversity.

The wave of xenophobic attacks that took place in the poor ghettoes of South Africa’s urban areas in May came as a shock, due to the horrific pictures of the events shown by the media, particularly pictures of people who were burned alive. There was also some disbelief that the so-called “Rainbow Nation” founded by Nelson Mandela, born out of decades of struggle against the racial segregation of the apartheid system, should be shaken by xenophobia on such a scale.

What these attacks actually showed, however, is that not only are some of the wounds left by the apartheid days still open, but also that the post-apartheid regime’s policies have done little to heal them. This wave of xenophobia is the by-product of the regime’s ongoing anti-immigrant demagogy combined with its anti-worker policy that has become increasingly intolerable for the vast majority of the population over the years.

Alexandra Reaches Boiling Point

The attacks began in Alexandra, a mainly black township located within the municipal boundaries of Johannesburg (the economic capital, and center of gold mining). Alexandra is just two miles away from the wealthy town of Sandton, the glossy financial center of Gauteng province.

On May 11 – a Sunday night – what was described by the media as an “enraged mob” went on a rampage in the poorest streets, picking out mainly Zimbabwean immigrant residents and venting their fury on them. Apparently they accused them of stealing their jobs and houses and causing crime.

Over the next three nights door-to-door checks for “foreigners” took place. South Africans had to show their ID cards to be passed over. Immigrant families were told to just get out and leave their belongings, which were then looted. Dozens of immigrants were severely beaten, whipped and stoned. By the end of these first days, three men had been killed. Two of these men were not actually immigrants, but native South Africans, and it seems one of them was shot because he had refused to take part in the violence.

One Malawian, who had lived in Alexandra for 23 years, described how a gang of 10 men broke into his house, ransacked his possessions and beat him up. A Zimbabwean woman told how she was set upon and beaten until she fled, bleeding badly from the head, with her own neighbors shouting “Good riddance. Go away Makwerekwere” (dirty foreigner).

Hundreds had no option but to seek refuge in the local police station, even though the police have a terrible reputation among immigrants, because they regularly extort, beat up and arrest migrant workers, regardless of whether they have the correct papers or not. (Immigrant workers are obliged to have with them at all times papers certifying that they are allowed to work, have paid for their visa, etc.)

Five hundred extra police were deployed in an attempt to calm down the situation, resulting in running battles between the population and the police, many arrests and with rubber bullets injuring quite a few more people.

Xenophobic Attacks Spread

By May 15, the xenophobic attacks had begun to spread. In Tembisa, a township north- east of Alexandra, two more people were killed and more than a dozen shacks were torched. One of those killed was Walter Ntombela, who had been a Metal Workers’ Union shop steward for 10 years and was long-settled there, but happened to come from Mozambique originally.

The violence also spread to Diepsloot, north of Johannesburg, where mainly Somalis were targeted. In Kya Sands, also in the north, a mob set afire a barricade of wood, furniture and gas bottles to prevent police from getting through, while they went on a rampage, looting, burning and beating up anyone identified as “foreign,” whether they were indeed “foreign” or not.

Some of the worst attacks took place in townships and settlements in the urban sprawl which follows the gold reef, along which are the gold mines reaching to the southeast of Johannesburg. In Reiger Park’s so-called “Ramaphosa Informal Settlement,” further gruesome burnings, toy-toying (jump-dancing which symbolized the victory of the poor against apartheid) and attacks against Mozambicans and other migrant workers occurred. This was where burning blankets were thrown upon a man who had been beaten almost senseless, thus causing him to burn to death. It was this picture of a human fireball which was to symbolize the spate of horrific xenophobic violence.

In Thokoza, many shacks were burned. In Actonville, the black owner of a small business was killed when his house was burned with him inside it, after he was accused of hiring foreign workers. The men who killed him were said to have come from the local mine hostel and adjacent settlements. One immigrant was killed and two critically injured in the “Joe Slovo Settlement” in Boksburg.

Shopping streets in the center of Johannesburg were looted. By the end of the first week one of the main streets was crisscrossed with makeshift barricades of barbed wire, concrete and tires. Just south of the center, in Jeppestown, shops had their shutters ripped off and were stripped. Many of these were owned or rented by Nigerians or other immigrant traders. Gangs wielding machetes and clubs went door to door, slashing and beating up foreign nationals who had lived in the area for years.

One eyewitness reported what happened: “The pavements ... are thronged with knots of men, many of whom are drunk and carry sticks which they drop hurriedly when they see the cops approaching. The officers stand guard, rifles at the ready, as the family pack up their stock and household goods. The landlady is disgusted: ‘If they are forced to move out, no one else must try to come in here. I refuse to rent it to anyone else. Let it stand empty.’ Sylvia Khumalo (63) sits on a bench on the other side of the road, watching in disbelief. ‘This is terrible, we don’t understand what is going on.’ And the other old women murmur their agreement.... Not everyone shares their compassion. A group of young women passes by and they laugh scornfully; ‘Let them go. We will live in their rooms for free.’” Reports say that up to 12 people were killed in these particular attacks. As many as 2,000 Zimbabweans, Mozambicans and Angolans took refuge in Johannesburg’s Jeppestown police station.

The violence also hit the harbor city of Durban in the KwaZulu-Natal province. A report from its Cato Manor slum township described how Mozambicans were beaten. It mentions a “test” that was used to identify foreigners: they were asked by gestures to pronounce the word meaning “elbow” in the local Zulu language; if they gave the wrong answer, they were beaten and told to go home.

In Cape Town, the main targets of the attacks were Somalis and Zimbabweans, although in certain places, no migrant worker was really safe. Just as in Johannesburg, homes and shops were looted.

However, in fact, it was not just foreigners who were targeted. The rioters’ xenophobia also included anyone from elsewhere, that is, anyone considered an “outsider.” In Gauteng, South African nationals who came from the far north of the country, or the east, or even from the Eastern Cape province, were targeted because they spoke the Pedi, Shangaan or Venda languages used in the areas they came from. For instance, a man living in a shack in Johannesburg’s Jules Street was beaten for being an ethnic Pedi originating from Pretoria. He was robbed of all his money and had to leave behind his wife to an unknown fate.

By the time the wave of xenophobic riots ended (although possibly only temporarily), the official national death toll had reached 62. Over 740 people had been badly injured. It is thought that as many as 80,000 people may have been rendered homeless and displaced. Others (Zimbabweans and Malawians) fled to the borders in order to return home. Some even asked to be taken to deportation centers like the Lindela barracks, which is notorious for its ill-treatment of immigrants.

A “Third Force”?

The government’s first response to these events was typical of its disregard for the poor. Beyond moralistic remonstrations aimed at the rioters, it had nothing to offer to those who were at the receiving end of these attacks – except a blunt denial that its own policies could have played any role in bringing about this situation.

President Mbeki was at a meeting in Mozambique when he issued a statement condemning the “xenophobia” and urging the police to act “strongly” against the perpetrators. Then, he went on to Japan. On May 18, he announced that a “panel” was to be set up to investigate the attacks – as if such a “panel” could protect potential victims and bring them the aid they needed!

Ten days after the attacks began, following a request from the police who were not able to cope, Mbeki called in the army to intervene in Gauteng province. However, at the same time, rumors about a so-called “Third Force” being involved in the attacks in and around Johannesburg started to spread. This was clearly the point of view of National Intelligence Agency Director General, Manala Manzini, when he stated that the violence was being deliberately unleashed ahead of next year’s general election.

Intelligence Minister Ronnie Kasrils was only slightly more nuanced when he declared that while there were “pure criminal elements at work,” his agency was looking carefully at “other sources motivating this with their own political agendas.... I’m not pointing at any political party as such, I don’t believe that,” he said, “but at community level, at levels of organization, residents’ organizations, we have come across some elements there who have been talking in a very anarchistic way.”

Undoubtedly, some ministers were pointing a finger at the main opposition party, the Democratic Alliance, and its potential ally, the Inkatha Freedom Party, which champions a “Zulu identity” under Chief Buthelezi. At the same time, the government sought to pre-empt criticisms on its left. A cabinet statement was issued, saying that the attacks appeared to be instigated by elements bent on taking advantage of community concerns. It went on to stress that “...no amount of economic hardship and discontent can ever justify the criminal activity and bigotry that these attacks represent and any suggestion that poor service delivery and the rising cost of living are to blame for these attacks must be rejected with the contempt it deserves.”

On the other hand, some circles of the ruling ANC (African National Congress) issued statements which contradicted the official line. For instance ANC deputy president Mothlane pointed out that “it only takes one incident” to spark violence when people are living in squalid conditions. At the same time, a former cabinet minister, Asmal Kader, urged the government to grant a general amnesty for those migrants without legal documents (the vast majority) and said that “South Africans had remained collectively silent at the abuse of police power, the arrogance and cruelty of officials, the occasional heartlessness of our medical services and previous violence against migrants.”

It would have been necessary to provide immediate help to the migrant workers and their families who had been terrorized and rendered homeless by the attacks. Instead, the authorities tried to take what amounted to scandalous measures in some cases. For instance, in Johannesburg, a court order had to be taken out in order to stop officials from moving refugees who were sheltering in the police stations to a temporary shelter right next to a hostel from which gunshots had been fired during the violence and where it was suspected some of the perpetrators had emanated.

The Bloody Legacy of Apartheid

It is impossible not to draw a link between these recent events and the legacy of the apartheid days, which still weighs heavily on the fabric of South Africa’s society.

The apartheid system of institutional racial segregation was designed to divide the population into race and language groups, with white Afrikaners at the top and black foreign migrant workers at the very bottom. These multiple divisions were exploited in every possible way, not least because the regime strove to weaken the resistance of the black working class.

In 1986-89, when the mobilization of the black working class in the mines, factories and townships was at its highest, most of apartheid’s restrictions were finally removed. Up until that point, not only were blacks and whites segregated completely, but each section of black people was allocated to its own “homeland” or “bantustan” according to language/tribal group. It was illegal for them to move where they liked. They had to stay in their allocated “homeland” and could only live in an urban area if they had a special permit. Movement to cities for work was strictly monitored through the “passbook” system.

The mine companies recruited mainly among the Zulus for their core workforce and team leaders (they called them “bossboys”) and housed them in their own compounds, separate from the other workers. As a result Zulu workers were seen as having a status somewhat above the others, if only because jobs were reserved for them and because even living in the hostel compounds was a little less sordid than the haphazard slum housing conditions for the rest of the black working class.

It was this wedge driven deliberately between sections of black workers that was exploited by the apartheid regime when the white bourgeoisie realized it was going to have to agree to power sharing with representatives of the black majority. In the second half of the 1980s, the white nationalists helped to fund and organize the Inkatha Zulu militias. These militias were used as a kind of “third force,” in order to divide and weaken the black working class as well as the anti-apartheid organizations – the ANC and SACP (South African Communist Party). This led to a near civil war in the Johannesburg and Natal townships, in which Inkatha used its armed militias to try to lead the Zulu workers into a fratricidal war against the majority of the black population, which in general supported the ANC or SACP. These violent attacks led to retaliation, causing thousands of victims and resulting in a bloody split between the two sides.

It should be added that such “black on black” violence was also given a certain legitimacy by the ANC-SACP alliance itself. In its efforts to gain total control over the townships in the run-up to the first post-apartheid election in 1994, the alliance resorted to using gangs of thugs who terrorized the population by killing opponents (including members of other political tendencies accused of being “workerists” or “Trotskyists”), on the grounds that they were collaborators, or spies for the regime. These gangs made the so-called “necklace” famous – a tire filled with gas, which was placed around the neck of the victim and then set alight.

In several respects, today’s attacks are a gruesome reminder of those days. Indeed there were a number of cases reported of “necklacing” of “foreigners,” even before this latest xenophobic wave. Likewise the role played by Zulu gangs in some of the May anti-immigrant attacks may well have something to do with the fact that a large part of the Zulu miners of the apartheid days have now been replaced with immigrant workers from Mozambique and Lesotho, who make up to 60% of the workforce in some cases – to the point that some mines had to close down temporarily because their workers were displaced or had fled.

The Poor’s Bitterness Against Social Apartheid

The smooth transition from apartheid led jointly by Nelson Mandela’s ANC and De Klerk’s National Party – the very same party which had introduced apartheid in the late 1940's – was designed to protect the interests of imperialist and South African capital against the aspirations of the black poor. Naturally, the poor expected that the end of apartheid would mean the end of poverty. But the advent of the post-apartheid regime in 1994 only heralded another form of apartheid, this time purely class-based.

The ANC had promised that everyone would be housed within a few years, that malnutrition and poverty would be tackled and that clean water and electricity would soon be available for all. But this could only have been achieved by expropriating domestic and foreign capital – in particular, companies like the mining houses of De Beers and Anglo American, and the big banks, like Sanlam and Standard Chartered. In reality, the only promise that the ANC intended to keep was the one it had made to its imperialist partners in London and Washington – that these giants of capital, which had made their billions on the backs of the black working class, would be left untouched.

Instead of measures aimed at alleviating the dire poverty of the majority of the population, steps were taken to develop a black capitalist class. Under the guise of “black empowerment,” a policy of positive discrimination was implemented to counteract the exclusion of black people from office in the state apparatus and in the business world during the decades of apartheid. As a result, a small but very rich black bourgeoisie began to emerge, with billionaires being created almost overnight. Among the most notorious are the former mineworkers’ union leader, Cyril Ramaphosa, and Tokyo Sexwale, a former member of the ANC’s armed wing who served 13 years in the Robben Island detention center with Mandela.

Meanwhile, the vast majority of the population has remained in abject poverty. Initially there was a pretense at addressing the problems of the poor resulting from the legacy of apartheid. But, in practice, little was done. And in the last decade, there has been a drastic social deterioration, thanks to the slavish adherence of the government to the diktats of the capitalist market. This has resulted in the slashing of public sector jobs and the opening up of what had been a very large state sector to private capital, with the privatization of utilities and yet more job losses.

Despite the lack of jobs, poverty has generated a constant flood of workers into urban areas and cities from the rural areas, both from South Africa itself and from outside its borders. Appallingly overcrowded shanty towns now exist all over the urban areas.

Hotly Contested Slum Dwellings

This general degradation of social conditions and growing inequalities has engendered a profound bitterness in the ranks of the black proletariat, which is expressed by, among other things, the decreasing turnout in elections since 1994. But this degradation in living conditions is unquestionably one of the factors behind the recent wave of xenophobia. Otherwise it would be hard to understand why this wave started in Alexandra which, in many respects, was the least likely place for it to happen, due to its particular traditions.

Indeed, the township had always been a hotbed of resistance against apartheid. Even in the dark days of the 1940's and 1950's, it fought against the implementation of apartheid, during the strikes and the famous bus boycott against segregated transport. Repeated attempts by the apartheid regime to remove its residents outside of Johannesburg failed, thanks to their steadfast resistance. In 1976, its youth played as important a part in the uprising as those in Soweto, and 19 were killed as a result. In the 1980s, Alexandra was at the forefront of the townships’ mobilization, with one of the most important “civic” committees in the country – and one of the very few which preserved its autonomy and its character as an organ of direct democracy, despite the attempt of the ANC-SACP alliance to control it.

A survey conducted in 2004 showed that Alexandra retained this political tradition. It was one of the most politicized places in the country, with over 70% of the population belonging to some political party and/or to a union or an organization – most of which are, even if only symbolically, opposed to xenophobia.

But Alexandra has always been very crowded, neglected and poorly supplied with services. The fact that, since 1994, it has been a natural destination for workers looking for jobs, due to its proximity to Sandton and the adjacent industrial zones, has only made matters worse, resulting in intolerable overcrowding. Today shanty shacks are everywhere. The roads are mostly unpaved gullies. 35% of houses have no access to piped water. 80% have no toilet. 35% have no refuse collection. Cholera was recently found in the local river which bisects the township.

In an area originally meant to house maybe 30,000, it was estimated in 2004 that there were around 700,000 people living there. In 2004, the average population density was already twice that of Paris, which is the most densely populated city in western Europe. Bearing in mind that there are only three “high rise” buildings in the township – the single workers’ hostels – and that all the rest are single story shacks and houses, this should give some idea of how bad it is. Especially by now, since the population may have reached one million.

Similar conditions, or worse, prevail across all the black working class areas in South Africa. “Informal settlements” outnumber the formal ones. These informal settlements are shanty towns built on government-allocated land, sometimes, but not always, with a tap for water, but nothing else. Homeless families are told they can set up their own shacks there at their own expense. This is the supposedly temporary measure to make up for the fact that the three million homes promised in 1994 have not materialized! There is a cynical irony in the fact that these slums are named after people like Joe Slovo, the SACP leader who promised the three million homes in the first place, or Cyril Ramaphosa, the black billionaire!

As for the workers’ hostels, like those where the violence this May is said to have started, these are remnants of the past. They date back to the height of apartheid, in the 1960s, when huge blocks of dormitories or single rooms were built to house workers for the mines. It was expected that the hostels – which are a potent reminder of apartheid oppression and exploitation – would have been pulled down by now, or at the very least converted into decent housing. But instead, they remain, just as crowded as before, but more dilapidated.

They are still organized with an “induna” – or chief – in charge, to whom the mainly Zulu migrant workers (who are still the main residents of these hostels) are meant to defer. At the Jeppe Hostel, many rooms are shared by two or more men, with curtains marking each man’s space. There are leaking pipes on every floor of the building and every room has broken windows. Yet each man pays $5 per month for his shared space. As one resident was quoted saying, “Not even a pig would live here. There was a time a few years ago, when we were taken to Zuurbekom and told we were going to move into RDP [the Reconstruction and Development Program] houses there, but that never happened.”

In Alexandra’s hostels, the pipes are broken and in one of the male hostels, raw sewage seeps out. The township authorities claim that the local “indunas” oppose the relocation of hostel dwellers and that residents have resisted the renovation of the buildings and their conversion into family units. But the truth is that the authorities were not offering decent alternative housing, before trying to evict the hostel tenants. What is more, some of the houses built under the Alexandra Renewal Project were rented or sold to the highest bidders with no respect for the waiting list, with a lot of bribery and corruption involved. This has undoubtedly added fuel to the fire of resentment among the population of the township.

Xenophobic Demagogy of the Politicians

It was against this backdrop of persistent, if not increasing social inequality and worsening conditions, that anti-immigrant violence became a recurrent feature of society – long before these latest attacks. From this point of view, the regime and its pro-business policies bear a heavy responsibility in this violence. But it also bears responsibility for another reason – because, right from the beginning, it has whipped up xenophobic prejudices, by resorting to an anti-immigrant demagogy aimed at diverting attention from its anti-worker policies.

The very first Home Minister was none other than the Inkatha Freedom Party’s leader, Buthelezi – the instigator of the violence by Zulus against the Shangaans, Vendas, Pedis and others in the 1980s. And in the very same year he took office, in 1994, the IFP was already marching against the admission of immigrants into the country, under the banner of “Buyelekhaya” (go back home). But it was not just Buthelezi who played the anti-immigrant card. That same year, SACP minister Ronnie Kasrils announced that a fence was to be erected on the border with Botswana to keep immigrants out.

Over the period from 1996 to 1998, 142,644 prisoners were held in the privately-run Lindela Repatriation Center prior to deportation. Many were held much longer than the legal limit of a 30-day detention. Twenty percent of those interviewed reported physical assault and violence from both the police and the security guards as well as extensive corruption among both. Deaths as a result of beatings have been documented by refugee groups. Indeed, the main perpetrators of physical violence and intimidation against migrant workers have been officials, the police and the prison officers at deportation centers like Lindela, under instruction from the ANC-led government.

In 1997, Defense Minister Joe Modise explicitly linked the issue of increased migration to increased crime in a newspaper interview. At the same time Home Affairs Minister Buthelezi was claiming that “illegal aliens” were costing South African taxpayers billions of rands every year – which was a way of blaming immigrants for the regime’s failure to improve the material conditions of the population.

In 2000, a ban was placed on asylum seekers working or studying in South Africa. Two years later this ban was declared unconstitutional. Nevertheless, a finger had been pointed at asylum seekers as “taking South Africans’ jobs,” and regardless of the court’s decision, this was bound to leave traces.

By 2001, an official “Proudly South African” campaign was launched. By then quite a few people were asking if South Africa was not, on the contrary, “proudly xenophobic.” It soon became a nationalistic “buy South African goods” campaign.

Ever since the Immigration Bill, originally drafted by Buthelezi’s department in 2002, there has been a tightening of anti-immigrant legislation with, among other things, the introduction of skills-based quotas determined by the government – which, once again, pointed at immigrants as taking local jobs.

South Africa has nevertheless continued to be a magnet for immigrant workers, since it has the biggest economy in Africa and far more to offer than all the impoverished sub-Saharan countries. So that, by 2001, an unofficial figure given for undocumented immigrants was already seven million, although five million is the usual number quoted these days.

A total of 678,697 “illegal” immigrants were officially deported from South Africa between 2002 and 2005. Since the “International Organization of Migration” opened its offices, in 2006, on the gateway between Zimbabwe and South Africa, 177,514 deported Zimbabweans passed through its reception center alone. In April this year, discussions took place within the government on reviewing the policy of deporting migrant workers, not on the basis of human rights, but because of the escalating cost involved in their deportation! This was after 4,000 Mozambicans living illegally in South Africa were repatriated in the single month of March 2008.

However, the ANC-SACP coalition in power isn’t the only one to play with anti-immigrant demagogy. The opposition parties – the Democratic Alliance and Inkatha Freedom Party – have long been trying to outbid the ANC-SACP alliance on the issue of immigration by demanding even more drastic measures against immigrants. The Democratic Alliance in particular chose to make immigration one of the axes of its campaign for the 2009 elections. So on April 29 this year, the Democratic Alliance presented a document titled “Sealing Our Borders” and demanded in parliament that something be done to stop the 28,000 Zimbabweans, Nigerians, Kenyans and Congolese flooding into the country weekly through borders which were “as porous as a sieve.” They wanted the army to be sent in and a specialized paramilitary unit to be created to patrol the borders. Each week, they claimed, gun smugglers, drug traffickers, stock and car thieves were streaming into the country. With such demagogy across the political spectrum widely spread by the media, it’s not astonishing that a xenophobic atmosphere weighs on the country. Its echo could be heard during the burning and killing in the townships when some of those interviewed said “they are criminals, they sell drugs, we can kill them....”

A History of Xenophobic Violence

The recent wave of xenophobia has not exactly been a storm breaking out in a bright blue sky. Undoubtedly, this is the most important wave of this type since 1994, but this follows a long series of gruesome attacks against immigrants, with only a small number of them being publicized by the media.

In 1998 a Senegalese mysteriously “slipped out of a balcony window” to his death in the presence of police officers. The same year, two Senegalese workers and a Mozambican were killed by being thrown from a train. These latter murders were apparently perpetrated by members of the Unemployed Movement, UMSA. UMSA did not condone this act at the time, although its policy of blaming foreigners for being responsible for job losses and poverty was indirectly responsible for the acts of its members. “They will work for wages that are lower than we can live on because we pay for services,” is what Godfrey Dibela, its president, claimed in June 2000.

Also in 1998, street vendors in downtown Johannesburg launched physical attacks on their immigrant counterparts, with the chair of the Inner Johannesburg vendors committee quoted as saying: “We are prepared to push them out of the city, come what may. My group is not prepared to let our government inherit a garbage city because of these leeches.”

In 2000, a Sudanese refugee was thrown from a train and a Kenyan shot in his home – both attacks being put down to xenophobia. But, at the same time, the state ordered a so-called “Operation Crackdown” in which the police and the army arrested 7,000 people on the grounds of being illegal – precisely the kind of operation which was most likely to encourage xenophobia!

In 2006, Cape Town’s Somali organizations reported that 40 Somali traders had been killed in targeted attacks between August and September. During that year, in Diepsloot, north of Johannesburg, a Somalian settlement was regularly torched.

In 2007, the UNHCR (U.N. High Commission on Refugees) stated its concern over the increase in the number of xenophobic attacks on Somalis. As many as 400 had been killed in South Africa since 1997. In May 2007, shops belonging to Somalis and other foreign nationals were torched during an anti-government demonstration in Khutsong, a small mining town 30 miles southwest of Johannesburg.

In January 2008, two Zimbabweans were killed in the “Shoba informal settlement” and many injured. This was after a rumor had begun to circulate that a man had been killed by a foreigner. In Johannesburg, during the same month, the police were called to help 1,500 Zimbabweans who had taken refuge in the Central Methodist Church. Instead of helping the refugees, the police beat up the pastor and arrested all the Zimbabweans.

In March 2008, another two immigrants were killed in Atteridgeville, near Pretoria, and a thousand were left homeless after they and their shacks were burned down. In April, shacks belonging to Zimbabweans were again set on fire in the same area.

So while this May’s xenophobic wave may have been the largest to date, no-one in South Africa could really claim to be surprised when it broke out.

The Price Hikes Fuel the Blind Attacks

Chris Rock, a comedian about to tour across South Africa, made a rather apt point by saying that the xenophobic attacks were not “black on black” violence, but “broke on broke.” This was formulated in another way by the audience at a public meeting held by Jacob Zuma, the new ANC president. When he moralized, “We cannot allow South Africa to be famous for xenophobia,” someone asked, “Tell us how we are to eat?”

In recent months, despite the wealth of the country’s mines and industries, South Africa’s population has been severely hit by the increase of food prices. It may not be as dramatic as in the poorest African countries, where people already were barely surviving long before these price increases began, but it is enough to push millions of South Africans to the brink of a social catastrophe.

According to official statistics, food prices have increased by 16% over the past year, while the poorest are said to spend half their incomes on food. But of course it is much more likely that those who are really poor spend every cent they have on food. Anyway, the price rise for basics is far more than the official 16% figure. Among products the poor consume the most, white bread has gone up by almost 20%, flour by 26%, spaghetti by 29%, and the staple, maize meal, from 22% to 28% and cooking oil by 66%! Meanwhile, gasoline has gone up by 66% just in the last two months.

And this is taking place in a context where unemployment is officially 39%, but really as high as 60% or more. Nearly 60% of the black population is living in “relative poverty” according to official figures.

The endemic poverty is aggravated a thousand-fold by the HIV crisis. As many as 1 in 20 of the population is infected, but the government only began last year to supply anti-retroviral drugs to those who most need them. Bearing in mind that Zimbabwe has the highest HIV infection rate in Africa at present (a life expectancy of 35 years), this means that many immigrants are also infected. But they are denied their anti-retroviral drugs, whenever they are detained by the police. And if they present themselves to a public hospital in need of treatment, they are told they do not qualify, since they are not South African citizens (even if this goes contrary to the country’s own constitution). Obviously this can only make a bad situation, with respect to the spread of HIV, worse.

This situation, especially the recent worsening of conditions resulting from the price hikes, has certainly played a role, if not in sparking the xenophobic wave, at least in giving some justification to the murderous logic of these xenophobic attacks in the eyes of those who took part in them. It is no coincidence that many of the attackers targeted food traders, whose stock vanished with the rioters.

A By-Product of the Nationalist Dead-End

For those who see South Africa’s black working class as an example of militancy and consciousness, it may be hard to understand what has been happening over the past months, due to its past success in overthrowing the apartheid regime.

But a lot of water has passed under the bridge since the struggles of the township committees and workers’ organizations brought down the apartheid regime. The widespread feeling among yesterday’s fighters that they have been deprived of their victory by the very people who had led them in the struggle against apartheid has resulted in a certain level of demoralization and wiped out some of the social consciousness which had been steeled by the fight against apartheid during the previous decades.

What the South African proletariat is paying for today, in many different ways, is the cost of the nationalist program of its ANC-SACP leadership. Beyond the radical rhetoric that some of the alliance leaders used in the apartheid days, including the references to communism and to the Russian Revolution made by the SACP, the only aim of the alliance was to come to political power in a South Africa which would be fully integrated into the world capitalist market and, therefore, gain the backing of the imperialist powers.

The alliance’s program involved total respect for the interests of domestic and imperialist capital. This meant that the exploitation of the black working class had to carry on generating the same profits as before, under the cover of the post-apartheid regime. It also meant that the resources of the new state would have to be devoted to lining pockets of the same old capitalists, plus those of a new emergent black bourgeoisie, instead of being used to meet the needs of the poor. Hence the on-going degradation of the proletariat’s material conditions due to this double burden.

Even in the years of the struggle against apartheid, the nationalism of the ANC-SACP alliance led it to display great respect for the existing regimes in the neighboring countries, even the worst dictatorships. There was never any question of the alliance seeking to unite the working classes and poor of the various countries surrounding South Africa behind the banner of their class interests, against the regional expansionism of the apartheid regime, as well as against the local capitalists and their imperialist masters. Just as there was never any question of the alliance by-passing the authority of the traditional African chiefs to address itself to their populations, and not just in the South African protectorates of Swaziland and Lesotho, but even in some of the “bantustans” of South Africa itself (like Transkei).

Quite the contrary, in fact, since the alliance sought the favors of these dictators and traditional chiefs. It sought their backing to achieve international respectability. And in the case of the neighboring dictatorships, it sought their support to secure political asylum for its members, a safe haven for its guerilla camps, or to receive supplies, funds, etc.... There was, therefore, no question of risking the wrath of these chiefs and dictators for the sake of giving a regional and social dimension to the struggle of the South African proletariat.

Had it been otherwise, strong links could have been built between the populations of the region and a common identity could have developed on the basis of these links, which would have made the artificial borders drawn by the European colonial powers largely irrelevant, just as much as the notion of a “black foreigner” in South Africa. But then, in that case, the ANC-SACP alliance would not have won the recognition it was hoping for from the imperialist powers. Overthrowing apartheid would have required the seizure of power by the black working class itself, instead of the alliance using the working class as foot soldiers in its march to power.

For the proletariat, such a nationalist program only leads straight into a dead-end. In South Africa, this dead end was reflected by the fact that the overthrow of racial apartheid did nothing to reduce a social apartheid, which may well generate just as much frustration and despair among the black proletariat as did racial apartheid. By the same token, the nationalist program made some of the working class lose all sense of its social interests. The recurrent waves of xenophobia are as much a product of the past narrow nationalism of the ANC-SACP alliance, as of the poverty, social dereliction and xenophobic atmosphere nurtured by the post-apartheid regime since 1994.

Fortunately there is some hope in the fact that not everyone accepts this situation.

In the townships and informal settlements, the resistance of the residents hasn’t weakened. Protests against the lack of housing, water, fuel, and against increased prices continue to grow. A variety of local organizations support themselves on the mobilizations of residents while assuring continuity. And many of them mobilized to demonstrate against xenophobia these past few weeks and to help those made homeless by the attacks.

Likewise, activists of the Communist Party’s youth (YCL) in parts of Gauteng took immediate local initiatives to organize solidarity action with those immigrants who fled the attacks. The weekend after the peak of the attacks, on May 24^th, several unions, and local anti-government campaigns (like the Anti-Privatization Forum, which has ongoing housing campaigns based in Alexandra,) organized a solidarity demonstration in the center of Johannesburg, and between 3-5,000 people attended. Placards ranged from “Mbeki, their blood is on your hands” to “we are all Zimbabweans.”

As to the working class, it may be disoriented by the policies of the ruling alliance, and especially by the support that the COSATU trade-union federation has given to these policies over the past 14 years, but its dynamism is still there. Last year the biggest strike wave ever seen in the public sector took place – for a decent wage increase and for jobs. Scarcely a week goes by without a section of workers out on strike. In fact, at the time of writing, firefighters are on strike against the long shifts they have to work without any overtime pay.

For political activists, among the young generation as well as among the generation which fought the apartheid regime, who do not accept the society which the ANC-SACP alliance has to offer, there is only one possible choice: Just as was already the case in the days of the struggle against apartheid, their only choice is to build a proletarian party which sets itself the task of changing society by uniting the ranks of the working classes and poor of the entire region – as part of the struggle of the world proletariat. The South African working class needs a revolutionary party which raises the banner of proletarian internationalism against the narrow nationalism of the old anti-apartheid organizations that are in power.

Making such a choice, as the recent events have shown, is not simply the only way of preserving the future for the South African working class. It is also a matter of life or death today, to rearm the working class against the rise of xenophobia.

In this election year 75 years later, with the economy in a state of free fall and the gap between rich and poor at pre-1929 levels, many might be tempted to look to what Roosevelt did during the Depression as a model of how government intervention can ride to the rescue of the economy and the “common man.”

Those that do so would be badly mistaken. The history of the Roosevelt New Deal shows something else entirely.

The Economic Plunge

When Roosevelt took office on March 4, 1933, he pronounced those now famous words: “The only thing we have to fear is fear itself.”

In fact, there was plenty to fear. The October 1929 stock market plunge had detonated an unprecedented economic crisis. In three years, stocks fell 83 per cent from their peak. Huge amounts of fictitious value, built up during the 1920s speculative boom, evaporated, bringing on a general liquidity crisis, that is, greatly reducing companies’ access to money. Companies couldn’t pay their bills or wages. Production dropped. Bankruptcies rose sharply. The whole financial system began to crumble, driving down production even further in a vicious, self-reinforcing cycle.

The depressive forces spread and reverberated throughout the U.S., as well as internationally, since the U.S. was already the center of the world economy.

The economic plunge was momentous. Between 1929 and 1933, the U.S. Gross National Product (GNP) declined by 33 per cent. Investment declined by 89 per cent. The value of residential construction fell 75 per cent. Iron and steel production fell 59 per cent. Auto production fell 65 per cent.

Corporations had made close to 10 billion dollars in profits in1928. In 1932, they registered a net loss of over three billion dollars. Smaller companies were hit the hardest. The larger the company, the greater the chance that it was still able to make a profit, even though it was usually smaller than before the Depression.

Amidst this collapse, the capitalist class protected itself from the consequences of its own system’s crisis. In the first four years of the Depression, corporations paid out 17 billion dollars more in dividends than they made in profits after taxes. That is, they were draining their corporate assets and weakening the financial health of their companies. The capitalists used their control over the corporations to cannibalize them.

Poverty Amidst Plenty

The working class was not so lucky. Workers were thrown out on the street with no means to make a living. Historians estimate that unemployment rose from 9 per cent in 1929 to 25 per cent in 1933. Counting the families of the unemployed, this hit 30 million people out of a population of 122 million. Over half of all employed workers were working part-time. Those who worked suffered wage cuts – on top of the cuts in hours. The most hard-hit were those in agriculture, where it is estimated that wages declined about 50 per cent. Manufacturing workers had their wages cut by nine per cent between 1930 and 1931. Bituminous coal miners’ wages were cut by 16 per cent in the same period.

Between wage cuts and unemployment, the total income of the working class was slashed drastically. The total income earned by auto workers declined in 1932 to 38 per cent of 1929 earnings, with comparable declines in other industries. In an industrial city like Birmingham, Alabama, in one congressional district with 108,000 wage and salary workers, only 8,000 had their normal incomes.

As awful as it was, in many ways, the Depression was nothing new. Much of the U.S. population already suffered what some historians call the “old poverty.” At least one-third of the population, more than 40 million – the “ill-housed, ill-clad, ill-nourished” that Roosevelt referred to in a famous speech in 1937 – had already been destitute for years before the Depression hit. This included almost the entire black population, a large part of the Southern white population, and most of the aged. Throughout the 1920s, major sectors of the economy had already been in a depression, including agriculture and older industries such as mining and textiles.

What the Depression did was to amplify the already existing chronic, endemic poverty. In city slums and small mining and rural towns, malnutrition worsened, as well as tuberculosis, typhoid, diphtheria and pellagra. Millions were forced to live in tents or ersatz shacks, often called “Hoovervilles.”

What had broken down was not the ability to produce, but the economic system. While the jobless wore threadbare clothing, farmers could not market their cotton. While children trudged to school in shoes soled with cardboard, shoe factories in Lynn and Brockton, Massachusetts had to close down six months of the year. While people went without food, crops rotted in the fields. Western ranchers, unable to either market their sheep or feed them, slit the animals’ throats and hurled their carcasses into canyons. In the Plains states, breadlines marched under grain elevators heaped high with wheat.

Thus, misery and want grew exponentially amidst overflowing plenty.

Government Failure under Hoover

Contrary to popular belief, the Hoover administration did try to deal with the stock market crash and economic plunge. The Federal Reserve increased its emergency lending to banks through its discount window. Hoover tried to put together a government-business partnership to coordinate efforts to stop the slide. The Federal Farm Board tried to support prices for agricultural products by buying up crop surpluses. Hoover tried to come to the aid of the construction business by encouraging stepped up public works program on roads, bridges, public buildings. As the economic situation became more grave, the Hoover administration created the Reconstruction Finance Corporation (RFC), which made loans to the states for public works, as well as to private banks, railroads and agriculture credit organizations. Hoover also started the Federal Home Loan Bank system to assist the financing of homes.

Such measures didn’t begin to stem the crisis.

Moreover, protectionist measures to try to prevent the international economic crisis from reverberating in the U.S., most famously the Smoot-Hawley tariff measure that Hoover signed into law in 1930, only helped instigate retaliatory measures from other governments, drastically reducing world trade and investment, thereby considerably aggravating the Depression.

Even worse, the government did nothing to protect those hardest hit by the Depression. Relief for the poor had traditionally been the responsibility of state and local governments and local charities. While local, state and business leaders did increase these measures, their combined resources were negligible. In New York City, for example, relief increased from nine million dollars in 1930 to 58 million dollars in 1932 and charitable giving increased five times. But it all came to less than one month’s loss of wages for the 800,000 New Yorkers out of work. And it was much, much worse in other cities, not to speak of in smaller towns and rural areas, where there was almost no relief or charitable aid.

Hoover became the symbol of the Depression. There were “Hoovervilles” and the “Hoover salute,” empty pockets out. When Hoover campaigned for president, he and his entourage were often met by catcalls and pelted with rotten fruits and vegetables. He could not venture out of the White House without an extraordinary, beefed up escort by the Secret Service to protect him from an angry and desperate population.

The First New Deal: Rescuing Private Ownership

Upon taking office, Roosevelt appeared to attack big business. In his March 4 inaugural address, he lashed out at “the money changers [who] have fled from their high seats in the temple of our civilization.” Roosevelt then pledged: “We may now restore that temple to the ancient truths.” And he promised to “wage a war against this emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.”

Anyone who expected that his Biblical rhetoric meant Roosevelt would proceed to “drive the moneychangers from the temple” was badly mistaken.

The first law of the New Deal was aimed at the banking crisis. By the end of 1932, 5,200 commercial banks had failed, more than one out of five. Virtually every bank in the country had closed by the spring of 1933. In a sense, most of the financial institutions that remained open were failing. The banks’ loans were not being repaid. And they were not able to provide further credit. The entire banking system was almost frozen.

Roosevelt’s emergency banking legislation extended government assistance to private bankers to reopen their banks. The law enabled the RFC (set up under Hoover) to buy preferred shares of banks, expanded the capacity of the Federal Reserve Board to issue currency, and authorized the reopening of the banks under strict government regulation. It was a thoroughly conservative measure, which had been drafted largely by private bankers and former Hoover administration officials, including Arthur Ballantine, Hoover’s Under Secretary of the Treasury, who continued in the same post under Roosevelt. This government support allowed the banks to reopen, and the same bankers were back in business “subscribing” to Roosevelt’s “ancient truths” of making money.

Three months later, Congress passed the Home Owners Loan Act (HOLA), which bailed out the real estate and financial interests rather than the homeowners. Without having to scale down the debt that was owed, the banks could turn in defaulted mortgages for guaranteed government bonds. The HOLA gave no relief to homeowners who were unemployed and foreclosed more mortgages than did the villain of a thousand melodramas.

What followed were more laws to rescue the major branches of the economy, written by the big companies in those industries. An omnibus law to address the agriculture crisis, the Agricultural Adjustment Act (AAA), was aimed at lifting prices to farmers by restricting production and paying farmers not to grow crops. Since it was based on acreage, the biggest farmers reaped the lion’s share of the benefits from the bill. The small farmers got very little, and the tenant farmers and sharecroppers who owned no land got nothing. On top of that, the reduction of crop acreage dictated by the new legislation drove the tenant farmers and sharecroppers off the land.

To address the crisis of private industry, Roosevelt pushed through the NIRA, the National Industrial Recovery Act. This act was written under the influence of such business leaders as Gerard Swope of General Electric and Henry I. Harriman of the U.S. Chamber of Commerce. It codified the government-corporate partnership that Hoover had tried to champion, with the government overseeing a vast process of cartelization. The antitrust laws were suspended. The biggest companies divided up whole industries and markets among themselves. They fixed prices and wages. And they drove out the smaller companies.

The two laws, the AAA and the NIRA, were aimed at increasing the profits of the bourgeoisie, agricultural and industrial. The biggest companies in each industry were induced to negotiate a kind of non-aggression pact in which they all agreed not to undercut each other by lowering prices, while they all cut production and boosted prices together.

Thus, the government rode to the rescue of corporate profits... by encouraging an even greater reduction in production and construction. That could only worsen unemployment.

Roosevelt’s international financial policy was also set in the first hundred days. Under Roosevelt, the U.S. government tried to devalue the dollar, inflate the currency and take the dollar off the gold standard. Not only would the U.S. government pay off its debts in cheap dollars, but it also would allow U.S. exports to more easily undersell foreign competition. When the big European powers tried to set up a conference in London in June 1933 to decide how to stabilize the major currencies in order to boost foreign trade, Roosevelt refused to participate. This not only killed the London conference, but ratcheted up the global economic warfare that, in the end, was a prelude to World War II, five years later.

Public Works for the Capitalists

Finally, the government initiated massive public works projects, stepping in to do what the capitalists themselves had not done over the previous decades.

Much of the U.S. infrastructure was mired in the 19^th century: unpaved roads, rickety bridges, inadequate water and sewage treatment systems or none at all, national parks and forests damaged by deforestation and erosion, lack of flood control for entire regions of the country. And while the cities had electricity, most of the countryside remained in the dark, leaving 80 per cent of the rural population without electricity.

One of the first acts of the New Deal was the creation of the Tennessee Valley Authority (TVA). The Tennessee River cut through seven states of the impoverished and underdeveloped South. By 1933, more than 30 per cent of the population there was affected by malaria, and annual income was only $639 per year, with some families surviving on as little as $100 per year. Much of the land had been farmed too hard for too long, eroding and depleting the soil. Crop yields had fallen along with farm incomes. The best timber had been cut. In Mississippi, only one farm in 100 had access to electricity. The TVA would build multipurpose dams to serve as reservoirs to control floods and at the same time generate cheap hydroelectric power. The Authority, which became a public corporation, would manufacture fertilizer, dig a 650-mile navigation channel from Knoxville to Paducah, engage in soil conservation and reforestation. The TVA, with its cheap electricity, also drew new industries into the region.

The Army Corps of Engineers built the Grand Coulee dam along the Columbia River, which backed up water into a lake 150 miles long, generating power to allow the industrialization of the Pacific Northwest. The dam made possible the reclamation of more than a million acres for agriculture.

The Civilian Conservation Corps (CCC), using unemployed young workers mainly from the big cities, built parks and planted trees. Under the CCC an estimated three billion trees were planted from 1933 to 1942. This was crucial, especially in states affected by the Dust Bowl, where reforestation was necessary to break the wind, hold water in the soil, and hold the soil in place. The CCC was responsible for more than half the reforestation, public and private, accomplished in the nation's history.

The biggest public works program was the Works Progress Administration, which was responsible for building the Triborough Bridge and Lincoln Tunnel in New York, the San Francisco Bay Bridge, Hoover Dam and Washington’s National Airport (now named after Ronald Reagan). It gave Texas the port of Brownsville and San Antonio its River Walk. It linked Key West to the Florida mainland and spanned rivers for Oregon’s Coastal Highway. All told, the WPA built 78,000 bridges and viaducts and improved 46,000 more. It constructed 572,000 miles of rural roads and 67,000 miles of urban streets. It also built and improved 39,000 schools, 2,500 hospitals and 12,800 playgrounds.

In other words, the government was doing for the bourgeoisie what the bourgeoisie didn’t do for itself. The bourgeoisie did not use its vast wealth to invest in the infrastructure or industry. This lack of investment blocked its own development. So, the government stepped in, using taxpayer money to invest in the infrastructure.

Aggravated Working Conditions

Nonetheless, all of these public works projects didn’t begin to put a dent in the unemployment rate. Nor did it improve the situation of the working class. Government projects may have employed, at different times, millions of workers laid off by private industry. But even at its height, this constituted only a small fraction of the unemployed. Moreover, the projects were set up in such a way as to keep down wages in private industry. For example, any workers who refused a job in private industry was not eligible for a WPA job. Moreover, the wages these programs paid were minimal and much lower in the poorest regions of the country, thus leaving in place low wage bastions for the bourgeoisie. Hiring was carried out along the lines of Jim Crow racial segregation. And the conditions of work were often difficult, the hours long. The Nation magazine called them “federal work gangs.” Finally, the projects were controlled by local political bosses who ran them as a patronage machine to consolidate and extend their power. One of the worst examples of this patronage was New Jersey, where everyone working in the WPA had to kick back a three per cent “tithe” to the Democratic political machine of Frank Hague.

The Roosevelt administration did almost nothing to expand the social safety net for the rest of the unemployed. The Federal Emergency Relief Administration, FERA, headed by Roosevelt’s lieutenant, Harry Hopkins, was an extension of unemployment-relief efforts of the Reconstruction Finance Corporation (RFC) set up by Herbert Hoover and the U.S. Congress in 1932. While it was supposed to provide states and local governments with some extra money to extend relief benefits to the unemployed, the money was negligible. In its first year, the FERA disbursed about half a billion dollars for the 15 million unemployed, which amounted to an average of $33 per person annually, less than a pittance.

And the government continued other attacks. One of the first acts of the New Deal was to grant Roosevelt sweeping powers to slice 500 million dollars from payments to veterans and the pay of federal employees, cutting them in half! This was done in the name of being “fiscally responsible.” In other words, working people were paying for the expensive New Deal programs that served the interests of Wall Street and the capitalist class.

In fact, Roosevelt’s New Deal was not doing anything different than private business. Both were using the Depression to push down the cost of labor. In no way did the New Deal end or suspend the bourgeoisie’s war on labor.

The Government Confronts a Social Explosion

In different ways, the working population and the poor responded to the attacks.

In the earliest periods of the Depression, the responses had been isolated and less organized, reflecting the worst desperation. These included hunger marches, collective efforts to stop foreclosures on homes and farms and take food and fuel from warehouses and businesses. In the South, tenant farmers and sharecroppers thrown off the land organized themselves into such groups as the Southern Tenant Farmers Union, which often defied Jim Crow by bringing together black and white farmers. Some of these fights were successful. More often, they were beaten back by the organized terror of the police and vigilantes – as during the Ford Hunger March in 1932, when 4,000 unemployed workers in the Detroit area marched from downtown to the Ford River Rouge plant demanding jobs. The Dearborn police and Henry Ford’s private army greeted the marchers with machine gun fire, killing five and wounding over two dozen more.

Perhaps one of the most famous of these early protests was the Bonus March of 1932 in which 20,000 veterans, along with their families, descended on Washington, D.C. In 1924, Congress had promised veterans of the First World War a bonus, but withheld payment until 1945! The veterans marched to demand immediate payment. The march was started by unemployed and penniless veterans in Portland, Oregon who trekked across the country. As word spread of their march, they were joined by thousands more. The veterans and their families camped out near the Capitol, awaiting Congress’s decision. When Congress gave them a cold shoulder, most of the veterans refused to leave. Hoover ordered U.S. troops led by Douglas MacArthur to drive them and their families out with bayonet point and tear gas, setting their encampments on fire.

The Democratic Roosevelt administration differentiated itself from the Republican Hoover administration by openly courting the cooperation of union officials, getting them to support the wage and price codes under the National Recovery Administration (NRA), pretending that the New Deal was a partnership between government, private corporations and unions. The NIRA made a token promise to all industrial workers to allow them“to organize and bargain collectively through representatives of their own choosing” in the famous Section 7A of the NRA. The NRA also set up a number of labor boards, supposedly to “help” the workers set up unions.

Many union officials declared that this marked a historic shift – that Roosevelt and the New Deal were on their side. In Roosevelt’s speeches, he seemed to confirm this:

“The workers of this country have rights under this law which cannot be taken from them, and nobody will be permitted to whittle them away,” said Roosevelt. But there was a catch, said Roosevelt: “No aggression is necessary now to attain these rights.... The principle that applies to the employer applies to the workers as well and I ask you workers to cooperate in the same spirit.”

It was all a lot of double talk, just like the NRA and its labor boards were little more than bureaucratic red tape meant to slow and divert union organizing. Very quickly many union organizers bitterly referred to the NRA as the “National Run Around.”

There was a sharp rise in strikes, which jumped from 841 in 1932 to 1,695 in 1933, the first year of Roosevelt’s term in office. Even more dramatically, the number of strikers almost quadrupled from 324,000 to 1,168,000. Many strikes were in protest of the new low wages that industries were trying to impose under Roosevelt’s NRA and the discriminatory “merit clauses” which employers used to fire workers and impose harsh working conditions and speed-up.

When workers went on strike, the companies and the government dropped all pretense and responded with furious violence. In reporting on six months of the “New Deal,” from July 1, 1933 to January 1, 1934, the American Civil Liberties Union charged that “At no time has there been such widespread violations of workers’ rights by injunctions, troops, private police, deputy sheriffs, labor spies and vigilantes. More than 15 strikers have been killed, 200 injured and hundreds arrested since July 1. More than 40 injunctions of sweeping character have been issued.... Troops have been called out in half a dozen strike districts. Criminal syndicalist charges are being used against active strike leaders....”

1934: The General Strikes

Nonetheless, the workers movement grew. The following year, 1934, marked a giant leap forward with four major strikes.

The largest was the Textile General Strike, called by the United Textile Workers (UTW). From February 1933 to June 1934, the UTW grew spectacularly, going from a membership of 25,000 to 250,000. In the months preceding the general strike, the workers had already carried out smaller, local strikes, dry runs that pushed the UTW national leadership to call the general strike. The general strike spread like wildfire, often with flying squadrons of pickets in trucks and on foot who went from mill to mill, calling the workers out. Within a week, the strike had grown to more than 400,000 workers in 20 states from New England to the southern Piedmont, in big cities and small company towns, shutting down the entire textile industry. In the South, it included black and white workers, thus taking on Jim Crow and the Klan. The workers confronted cops, tens of thousands of national guardsmen, and company goons, who carried out mass arrests of picketers and tried to drown the strike in blood. After 16 days, the strike was defeated. But it was still the biggest strike since 1877, and it shared many similarities to the insurrectional character of the 1877 strikes.

A general strike also shut down San Francisco. This strike began when 10,000 to 15,000 longshoremen tried to gain a union. Every day for weeks, the workers battled cops and company goons. The strike then spread to the other workers on the San Francisco waterfront, including seamen and warehousemen, and also to other ports on the West Coast. After the cops opened fire on a demonstration, killing two workers and wounding several hundred, martial law was declared and the national guard was brought in. The workers responded with a four-day general strike, involving over 150,000 workers not just in large workplaces, but also in barber shops, laundries, theaters and restaurants. Highways were blockaded and all incoming shipments were barred. The workers were militarily driven from the streets and the bourgeoisie at first stonewalled. But the enormous power of the strike eventually pushed the bourgeoisie to agree to major concessions, propelling the spread of unions to the rest of the ports on the West Coast, as well as the East Coast.

Some of 1934's strikes were out-and-out victories.

In Toledo\, Ohio, strikers at an auto parts company were joined by unemployed workers. They fought pitched battles for more than eight days against the cops and national guard armed with tanks and artillery. Eventually, the company and government ceded, forced to grant a union, giving an early toe-hold to mass organizing in the auto industry. And in Minneapolis, Minnesota, a strike by coal haulers spread to truck drivers and warehouse workers throughout the city. Over a period of seven months, these workers carried out four strikes that grew in size, organization and militancy. When company goons and cops murdered two strikers, the governor called in the national guard and declared martial law. But here too, the strikers did not back down, but forced the local bosses to grant union recognition, this time to the Teamsters. This victory opened up the northern Plains states to union organizers.

Throughout the country, strikes were growing more militant, workers were taking on the forces of order, including the national guard and tanks. In effect, there was a burgeoning civil war.

On the Labor Day weekend of 1934, a full-page New York Times article posed the problem for the bourgeoisie and government: “What can be done to stop strikes?... It is not a new issue, but in 1934, it is one which is raising, as it never has raised before....” In other words, how could the Roosevelt administration bring about “labor peace”?

The Second New Deal

The workers movement had changed the relationship of forces. The bosses and government could no longer impose their order on the workers as they wished. To try to buy time and slow the movement, the Roosevelt administration presented a new package of reforms in 1935, its Second New Deal.

The first was the Social Security Act, an omnibus set of provisions that included national old-age pensions, survivors benefits, unemployment benefits, and aid to families with dependent children (welfare).

The Social Security Act constituted an historic concession. For the first time, the government had been forced to offer social rights, or, as they say in this country, “entitlements.” It was promising to provide security, a social safety net, so that at least people wouldn’t starve to death.

Nonetheless, Social Security had severe limits. Domestic workers and farm laborers were not eligible for old-age pensions, nor was most of the black population. Besides that, Social Security pensions were not to be funded out of the general fund, but a special fund set apart, based on the principle of a kind of private insurance policy, in order to try to limit the growth of benefits. A very regressive flat tax was to be taken out of wages from the first dollar earned. And, the first old age pensions would not begin to pay benefits until half a decade after the act was passed, which meant that the government got to keep the taxes that it collected in those first years without paying anything out. Thus, it was a backdoor way of increasing the revenue that the government had at its disposal.

Other portions of the act were just as limited. The unemployment benefits, for example, were not set at standard national levels, but at the state level and were funded by the state and federal governments. In effect, this allowed the low-wage states to keep their unemployment benefits much lower than the national average. When the benefits were exhausted, usually after 15 weeks, the plans offered no other forms of relief – except perhaps a very low-paying job with the WPA.

And obviously the small benefits the government added were aimed at slowing down and disorienting the growing mobilization of the very working class that had won these concessions.

The second big piece of the Second New Deal was the National Labor Relations Act, sponsored by New York Senator Robert Wagner, Sr. In May 1935, the Supreme Court ruled unanimously to strike down the NRA, which had included Section 7A, the government’s token recognition of “collective bargaining” for unions. Almost immediately afterwards, Congress enacted Wagner’s National Labor Relations Act which restored the provisions of Section 7A, and proposed to set up a National Labor Relations Board with the power to determine whether workers who had organized a union would be allowed to have it recognized. And, it would also decide whether a company had committed an “unfair labor practice.” In other words, it was moving de facto, across the board, to block strikes.

Of course, these question are really decided by the relationship of forces. By telling workers that they had to look to the government for authorization of their unions, it was a way of saying that they couldn’t have a union unless government bureaucrats authorized it, instead of the workers deciding on their own how they organized themselves.

The Bourgeoisie’s Turn

Congressional support for the 1935 National Labor Relations Act was overwhelming, with the Senate voting 63-12 for it. But the new law was opposed by the National Association of Manufacturers, indicating that as late as 1935, an important part of the bourgeoisie did not support many of Roosevelt’s policies. They distrusted what they saw as the growing interference of government under Roosevelt. They wanted the government to crack down on labor with a much firmer hand in order to forestall the threatening unionization of their workforces. The Du Pont family, which controlled General Motors, and conservative leaders of the Democratic and Republican parties, which included Al Smith, one of Roosevelt’s old backers, formed the American Liberty League in open opposition to the Roosevelt administration, under the guise of “upholding the constitution” and “private property” and “opposing radicalism.”

However, in 1936 and 1937 the workers movement surged ahead with sitdown strikes and factory occupations, which began in rubber and culminated in auto. GM, controlled by the same DuPont family that had opposed Roosevelt’s policy, was hit by sitdown strikes. Unable to defeat the strikes, GM shifted gears and agreed to “grant” union recognition. But it refused to negotiate an agreement with the actual leaders of the massive strikes. Instead, it chose John L. Lewis, the long-time head of the United Mine Workers, with whom to strike a deal, behind the workers’ back.

Abandoning their position of opposing unions, an important part of the U.S. bourg