November
29, 2005
Labor's Lost Story
By E.
J. Dionne Jr.
WASHINGTON -- Decades
ago, Walter Reuther, the storied head of the United Auto Workers
union, was taken on a tour of an automated factory by a Ford Motor
Company executive.
Somewhat gleefully,
the Ford honcho told the legendary union leader: ``You know, not
one of these machines pays dues to the UAW.''
To which Reuther
snapped: ``And not one of them buys new Ford cars, either.''
The historian William
L. O'Neill tells this story in ``American High," his fine
and appropriately titled book about the 1950s, a time when ``autoworkers
were the best-paid production line operatives in the world.''
It helps explain why General Motors' layoffs of 30,000 workers,
announced last week, have become a new litmus test in American
politics.
Almost everybody
right of center sees the job losses as inevitable, the result
of the American auto industry's failure to meet foreign competition
and the ``excessively'' generous wages, health benefits and, especially,
retirement programs negotiated by Reuther's union.
The believers in
inevitability inevitably cite the economist Joseph Schumpeter
to the effect that capitalism ``is by nature a form or method
of economic change and not only never is, but never can be, stationary.''
It is capitalism's gift for ``creative destruction,'' Schumpeter
argued -- coining a phrase invoked more often these days than,
say, ``workers of the world unite'' -- that guaranteed new consumer
goods, new methods of production and new forms of organization.
A different story
is told left of center, though it will come as no shock that progressives
can't quite agree on a single narrative. The left is united in
talking about rising health care costs and the fact that most
of our foreign competitors have government-run health insurance
systems that take the burden of health care off employers. The
iconic number: providing health care for workers and retirees
accounts for $1,500 in the cost of each American-made car.
Critics of globalization
tell an additional story of how free trade is sending many of
our best-paying blue-collar jobs offshore. There is also the decline
of union membership, a chicken-and-egg tale since private-sector
unions historically were strongest in the older manufacturing
industries such as steel and cars. The UAW's numbers tell the
story: 1,619,000 members in 1970, 1,446,000 in 1980, 952,000 in
1990, 623,000 in 2004. Where have you gone, Walter Reuther?
The contrast between
these two accounts explains why economic conservatives currently
hold the upper hand in America's political debate. The conservatives
have a single, coherent story and stick to it: economic change
is good for everyone, especially for consumers who get better
stuff at lower prices. The fact that ``producer groups'' (such
as those unions) are losing their ``monopolies'' and their capacity
for ``rent seeking'' is cheered as progress. If you don't like
creative destruction, they say, move to North Korea where there
is plenty of destruction of the uncreative sort.
The left's narrative
is less compelling not only because there is no single story,
but also because few on the left attack the current system with
the same gusto the right brings to defending it. Gone, for good
reason, is the time when significant parts of the left called
for ``government ownership of the means of production.'' Much
of the left accepts a certain amount of creative destruction because,
in Margaret Thatcher's famous phrase, there is no alternative.
But this muddle reflects
a default on parts of the left and, especially, within the Democratic
Party. Because so many Democrats fear that they might sound like
-- God forbid! -- socialists, they are unwilling to challenge
the right's core story. Capitalism, all by itself, would never
have achieved the rising living standards that were the pride
of the United States in O'Neill's 1950s and still are today. The
rules enforced by the National Labor Relations Board made it possible
for Reuther's union to organize by protecting workers' rights.
Cheap 30-year mortgages, which became the norm because of Federal
Housing Administration guarantees, created a nation of homeowners.
As medical costs
rise, more Americans will need government help. More employers
will need to offload the costs of medical insurance to avoid bankruptcy.
Yes, that's ``socialized medicine,'' just like Medicare. But don't
tell anyone. The phrase plays terribly in focus groups.
For 60 years, New
Dealers and social democrats, liberals and progressives turned
Schumpeter on his head. They insisted that few would embrace capitalism's
innovations if the system's tendency toward creative destruction
were not balanced by public innovations to spread the bounty and
protect millions from being injured by change. It's a compelling
story. Walter Reuther knew it well. Too bad it isn't told very
often anymore.
©
2005, Washington Post Writers Group
