Lessons From Hard Times Past

Posted by Bulatlat

We’re all struggling with how to think – and what to do – in the face of the “great recession.” An initial progressive response was to advocate better regulation; then Keynesian economic stimulus; now nationalization; perhaps in the future some kind of socialism.
One theme that has reverberated through periods of “hard times” in the past is the idea of “production for use.” It has appeared in the form of public works job creation; worker-run enterprises; self-help mutual aid; and efforts to push the envelope on property rights that prevent people from using the resources that are available to meet their needs. Today production for use may find new applications – including working to save the planet from climate destruction.

What are recessions, depressions and economic “hard times”?

According to conventional economics, markets guide companies and investors to bring together labor and means of production to produce the goods and services that people need. Notwithstanding numerous “market failures,” something like that happens in capitalist economies during normal times.

But in times of economic crisis, recession and depression, it doesn’t work like that. Instead, people lose their livelihoods, homes and health care and slash their budgets for food and other necessities – even while workers who want to work are unemployed and underemployed and offices, factories and construction sites lie idle. As a result, people often begin thinking and doing things that they didn’t think and do before.

Since 1900, the US experienced depressions and recessions in 1903, 1907, 1911, 1914, 1921, the whole decade of the 1930s, 1949, 1954, 1957, 1961, 1970, 1982, 1990, and 2002.

We don’t know how severe the current “great recession” will be. One thing we know from hard times past, however, is that they are almost always declared over when they have barely begun. Prosperity is always just around the corner. True to form, as early as April, headlines like “Top U.S. officials offered reassurances that the worst of the economic downturn is likely over,” began appearing in media outlets around the country. Maybe so. But what should we do if it is not?

Production for Use

A reverberating theme that emerges in hard times is the idea of “production for use,” rather than production only if production is profitable in the market. This requires actions – whether by government or by ordinary community members – that attempt to meet needs directly, rather than through the failing process of production for the market.

Remarkably, President Obama laid out this precise this idea – rarely heard in public discourse in The United States since the 1930’s – in advocating his economic stimulus legislation.

His plan, he said, recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That’s why we’ll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century.

Such an approach has a long history.

In every major U.S. recession since 1808, unemployed people and allies have organized to demanded job creation through public works at local, state national and even international levels. (Franklin Folsom offers a history of these efforts in his book, “Impatient Armies of the Poor.”) And in an earlier post we described how the international labor movement proposed international public works as a way to overcome the mass unemployment of the Great Depression – and to combat the fascist movements it was engendering. This expressed an intuitive – and at times explicit – sense that if there are things that need to be done and people who need work, why shouldn’t those people be put to work doing what needs to be done?

New Deal public works programs like the Works Progress Administration (WPA) employed millions and substantially reduced unemployment until Roosevelt cut them back in the face of conservative hostility. The WPA was notable for its emphasis on putting people to work doing things that utilize their existing skills.
In 1973, in the midst of a deep recession, the Carter administration created the Comprehensive Employment and Training Act – CETA. It provided the unemployed, the poor and high school students full-time jobs for one to two years in public agencies or private not-for-profit organizations. CETA provided 750,000 jobs at its peak in 1978. It, too, became a bete noire for those who saw it as government interference with the private labor market. But the idea has come back with the Obama stimulus plan.

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