U.S. Economic Planning in the Second World War and the Planetary Crisis

The February 2023 issue of Monthly Review includes an article of mine, “U.S. Economic Planning in the Second World War and the Planetary Crisis,” which is a revised version of a past blog post.  

The following is from the article’s introduction:

Not surprisingly, the consensus from those studying the wartime conversion experience is that a rapid and successful transformation requires aggressive state planning and direction of economic activity. This is indeed an important lesson for our movement to learn. But there is another lesson to be learned from that period, one that deserves more attention than it currently receives. It is that in a capitalist economy, capital’s ownership position greatly enhances its ability to mold state structures and their policies in ways favorable to its interests and to the detriment of workers. In other words, the planning process is a contested terrain, and one not usually favorable to working people.

I will show that, during the war years, corporate leaders were able to rebuff Congress of Industrial Organization (CIO) planning proposals and successfully marginalize the participation of unions in the mobilization agencies that were formed, ensuring that labor would be forced into a defensive and ever weaker position relative to capital as the war progressed. Thus, if our aim is not simply a transformation to a somewhat less carbon consuming economy, but a complete and just transformation, we must prepare ourselves, and the movement that we hope to build, for an ongoing and complex struggle to overcome capital’s structural advantages. It is my hope that this article, which focuses on the class dynamics shaping the Second World War mobilization process, can help that preparation. The history it describes offers a useful primer on how the other side conducts its class war.

In the US you can be fired for any or no reason—it doesn’t have to be this way

The United States is an employment “at-will” country.  That means, absent a union contract, a boss can fire a worker for almost any, or even no reason, and without advance notice.  Well—with the exception of Montana.  As the state’s employment division explains: “Montana is not an ‘at-will’ state. . . generally, once an employee has completed the established probationary period, the employer needs to have good cause for termination.”  

While Montana is the exception in the United States, the United States is the exception among developed capitalist economies.  In those other countries, most workers can only be dismissed for “just cause,” with just cause statutorily or judicially defined.  For example, German workers employed for more than six months by a company with more than ten workers cannot simply be dismissed.  The company must have a valid business or personal conduct reason.  Moreover, the company is also required to notify the employee in advance, and in writing, of their termination.  Many employees also receive severance pay proportional to their length of employment.

So, how big a deal is employment at-will in the United States? According to the results of a recent survey by the National Employment Law Project (NELP), carried out by YouGov, more than two out of three workers who have been discharged received no reason or an unfair reason for their termination. Almost three out of four received no warning before discharge.

System change, class war, and the WW2 economic conversion experience

The climate crisis has driven our planet into uncharted territory. We are close to breaching critical environmental thresholds, setting in motion destabilizing changes to our global climate system that could well make the earth unlivable for humans and countless other species.  We must decrease carbon emissions as rapidly as possible and there is no way to do that without significantly changing the operation and aims of our economy.  But not just any change will do.  It must be one that also promotes worker empowerment and solidarity, community well-being and security, and democracy.

Slip slidin’ away—the disappearing practice of overtime pay

Slip slidin’ away—that is what tends to happen to pro-worker reforms in our economic system.  Things are structured so that without constant vigilance and struggle on our part, gains are gradually undone.  A case in point: overtime pay.

It wasn’t that long ago that most workers in the US were eligible for time and half pay for every hour worked beyond a 40-hour work week.  Employers didn’t agree to overtime pay out of the goodness of their hearts.  They did it because worker organizing and activism pressured Congress to pass a labor law requiring, although with some important exceptions, the payment of overtime wages.  Now, a significant number of workers no longer have the right to overtime pay. For example, in 1975 more than 60 percent of salaried workers automatically qualified for time and half pay.  That share fell to a low of 4 percent in 2000 before slowly rising to 15 percent in 2020.

Labor law failings, workplace organizing challenges, and possibilities for union renewal

If you follow the news it must seem like joining a union is a step outside the norms of US law.  Afterall, the media is full of stories about how big companies like Starbucks and Amazon threaten their pro-union workers with dismissal, spy on their employees and deny them the right to meet and share information during legally mandated break and meal times, require their workers to participate in 1-on-1 and group meetings with managers where they are routinely told lies about what unions do and the consequences of unionization, find ways to delay promised union elections, and refuse to negotiate a contract even after workers have successfully voted for unionization. 

Yet, the National Labor Relations Act, which is the foundational statute governing private sector labor law, boldly asserts that workers should be able to freely organize to improve the conditions of their employment.  As the National Labor Relations Board (NLRB) states:

The National Labor Relations Act forbids employers from interfering with, restraining, or coercing employees in the exercise of rights relating to organizing, forming, joining or assisting a labor organization for collective bargaining purposes, or from working together to improve terms and conditions of employment, or refraining from any such activity.

So, one might reasonably ask, how do businesses get away with the kind of behavior highlighted above?  One answer is that a series of Supreme Court decisions and NLRB rulings have reinterpreted the country’s labor laws in ways that have given employers a free pass to engage in a variety of anti-worker actions.  Another is that Congress has refused to adequately fund the NLRB, leaving the organization unable to hire sufficient staff to do the needed investigations of worker complaints and oversee elections even during the rare periods when the NLRB has actively sought to protect worker rights.

Making the Green New Deal real: lessons from the World War II conversion experience

The Green New Deal has become a rallying cry for activists seeking to build a mass movement capable of addressing our ever worsening, and increasingly interrelated, climate and social crises.  Building such a movement is no simple task, but I believe that our organizing efforts can greatly benefit from a careful study of the rapid transformation of the US economy from civilian to military production during World War II. 

In two recent publications, with links below, I describe and evaluate the planning process responsible for the wartime transformation and offer my thoughts on some of the key lessons to be learned. In what follows I highlight some of the reasons why I believe Green New Deal advocates would benefit from careful study of the wartime experience.

The dollar costs of inequality: They are greater than you think

Pretty much everyone accepts that inequality is a big problem in the US.  But it is doubtful that most people truly grasp how successfully US elites have captured the benefits of economic growth and, as a result, how much the resulting inequality has cost them.  Here is one estimate of that cost—according to Carter C. Price and Kathryn A. Edwards, authors of a Rand Education and Labor study on income trends:

[the] aggregate income for the population below the 90th percentile . . . would have been $2.5 trillion (67 percent) higher in 2018 had income growth since 1975 remained as equitable as it was in the first two post-War decades. From 1975 to 2018, the difference between the aggregate taxable income for those below the 90th percentile and the equitable growth counterfactual totals $47 trillion.

That $2.5 trillion was enough to give each and every worker in the bottom nine income deciles an additional $1144 a month, every month of the year. That is life changing money for tens of millions—and that is only a partial measure of the costs of inequality.

Economic inequality means retirement insecurity for most US households

This is far from a “hot take”: financial wealth in the United States is highly concentrated, with most households, especially Black and Hispanic households, owning few financial assets.  One consequence is that many Americans are likely to face a very challenging retirement.  Sadly, if economic and social conditions remain as they are, we can expect to see an ever-growing number turn to for-profit crowdfunding platforms, like GoFundMe, for help in meeting expenses. 

The study

A recently published study by the National Institute on Retirement Security, a non-profit research and education organization, using data from the Federal Reserve’s Survey of Consumer Finances, paints a disturbing picture of the distribution of financial assets by generation, net worth and race. 

Pandemic economic woes continue, but so do deep structural problems, especially the long-term growth in the share of low wage jobs

Many are understandably alarmed about what the September 4^th termination of several special federal pandemic unemployment insurance programs will mean for millions of workers.  Twenty-five states ended their programs months earlier, with government and business leaders claiming that their termination would spur employment and economic activity.  However, several studies have disproved their claims.

One study, based on the experience of 19 of these states, found that for every 8 workers that lost benefits, only one found a new job.  Consumer spending in those states fell by $2 billion, with every lost $1 of benefits leading to a fall in spending of 52 cents.   It is hard to see how anything good can come from the federal government’s willingness to allow these programs to expire nationwide. 

Learning from history: community-run child-care centers during World War II

We face many big challenges.  And we will need strong, bold policies to meaningfully address them.  Solving our child-care crisis is one of those challenges, and a study of World War II government efforts to ensure accessible and affordable high-quality child care points the way to the kind of bold action we need. 

The child care crisis

A number of studies have established that high-quality early childhood programs provide significant community and individual benefits.  One found that “per dollar invested, early childhood programs increase present value of state per capita earnings by $5 to $9.”  Universal preschool programs have also been shown to offer significant benefits to all children, even producing better outcomes for the most disadvantaged children than means-tested programs.  Yet, even before the pandemic, most families struggled with a lack of desirable child-care options.