Selections from a longer text in Sergio Bologna and Antonio Negri, eds., Operai e stato: Lotte operaie e riforma dello Stato capitalistico tra rivoluzione d’ottobre e New Deal (Milan: Feltrinelli, 1972).
To speak of the New Deal as a huge qualitative leap in the development of capitalist institutions – a leap that, precisely because it functions at a crucial point in the plot1 of capitalist society at a global level, has itself a special historical importance – seems to be a statement by now generally taken to be wholly correct. The matter was already settled in the mind of its greatest protagonist [Franklin Delano Roosevelt] and in the ideology created around him that enthusiastically founded the “myth” of the New Deal’s “revolution”; and, if every myth must have a real justification, this one lay in the effective dismantling of the system in the rapid course of a decade. No less significant, at this level, is the bitter opposition from various positions that the New Deal came to provoke; these were attitudes that then, and not accidentally, flowed back against it in a wide underlying consensus. Even the opposition was to become New Dealistic2 in a “me-too” fashion. In any case, one can recognize in the facts the irreversibility of the new order imposed or acquired by the New Deal. But how was this tremendous leap of the entire capitalist order reflected internally? On what points did it hinge and along which lines did its upheaval unfold, even while it is still taken in general shape as a given fact, or, at the least, as a more than legitimate working hypothesis?
It’s clear that passing to analysis, which alone might give us a definitive answer, our research would be strengthened and supported by an accomplished articulation of the hypotheses. But it’s precisely on this point that the usefulness of what we might call traditional elaboration is attenuated: instead of responses in terms of a global political-institutional system, we get either ideological generalizations or sectarian responses, more solid yet limited. The most incisive recent effort to offer a synthetic interpretation of the period, even if still within the limits of an analysis conducted in terms of ideological constellation, is that of Hofstadter. Therefore, it’s from there that we can proceed.
It seems difficult to contest Hofstadter’s theses in their negative part, so to speak: for Hofstadter, the New Deal was essentially a “fresh start,” and, above all, a radical rupture with the entire populist and progressive tradition which, on first glance, it might appear close to. We shouldn’t marvel at the way that it manages to yoke together the whole multicolored world of that tradition – from bimetallism to the KKK, from “muckrakers” to the campaign for competition, from the struggle for social welfare to that for prohibition, and, above all, in their most conscious, historically and politically significant forms, from the “neonationalism” of Theodore Roosevelt to the “new liberty” of Woodrow Wilson. That’s to say, it connects the social and political climate of which it is an expression, however mediated. That is a climate dominated, according to Hofstadter, by the already massive presence of social-economic forces, which can be read through small urban entrepreneurship and the figure of the farmer, who became more active on the political scene the more dramatically they struggled with continuous social upheavals brought about by the expansion of capitalist production relations. From this perspective, it’s no great leap to see how the true lineage of populism could gather, in the ’30s, the unequivocal figure of Huey Long, the “lord” of Louisiana, or a variety of Father Coughlins, Reverend Smiths, and Doctor Townsends; and, as Hofstadter notes, that progressivism, so strong in the moralizing campaigns and protests in defense of competition and balancing the books, truly came out of the Republican “opposition” to the New Deal.
Naturally, all of this is of little direct interest to us. But it remains important insofar as it lets us understand, or at least intuit, just how much the old stratification of society was revolutionized in the span of years from the First World War to the “second” Roosevelt. To discern it in its particulars would require extended research, but the lines are clear all the same: it is the polarization of an entire society toward a “pure” capitalist form. Concentration of capital on one side, and concentration, enlargement, and flattening of labor-power on the other.3
This sweeping process took off in ’29 with an intensity proportional to the liberty with which it was performed. No one could see the point from which it might have started: not the workers who, having struck down in ’20 the prospect of a direct assault on the state, now found themselves without even the minimal practical instruments of organization available for immediate use. Not capital, which was totally disorientated, incapable of fully explaining the reasons for the crash, searching, through Hoover, for “international” causes that convinced no one, and precisely because of this, fearful of restarting accumulation along paths already taken. The years from the crash to Roosevelt were years of stalling: a paradoxical situation, where everything was in movement and everything remained still. In other words: the situation couldn’t last indefinitely. But public consciousness itself couldn’t imagine [a way out], either a directly capitalist initiative of exiting the impasse differently from what was happening that very same moment in Germany [i.e. the Nazis], or a workers’ initiative different from that of 15 years prior and the situation of general societal breakdown that brought the Bolsheviks to power.
From this emerged the New Deal. We have to acknowledge this, because there is an element of historical truth contained in all these ideological theorizations about the New Deal’s third way, or, if one prefers, about American “exceptionalism,” – provided, that is, that we remember that this exception had the same logic as every exception in the capitalist mode of production: it will be suppressed, or it will be imposed as a general rule, with all the force of a natural law.
The New Deal’s initiative meant a political initiative that moves and develops entirely from institutions, from the state, from collective capital. When we see big finance, the Morgans and Mellons, Wall Street, the Chamber of Commerce, and the National Association of Manufactures all put themselves entirely at the disposition of Roosevelt, who leads the charge, we are not witnessing a picture whatsoever similar to old representations of investment. Behind the resigned attitude of a Morgan in ’33, there is the awareness that the single capitalist, big as he may well be, does not succeed – does not because he cannot – in seeing with his own eyes anything beyond the possibilities and needs of his own profit, his own market. He can’t see the average rise of profit or the market as a whole, which, at this level of development, signifies society as a whole. In order to see this and to govern society, collective eyes and arms are needed: and in this historical moment, these are Roosevelt’s eyes and the New Deal’s “arsenal.” In this moment, the crucial leap is made, or, at least, its immediate premises are laid. Later, the old brawl between business and government will start up again, but the fundamentals have already been decided: there will be either verbal battles, from the rearguard in particular, or, as we will see, they will have new causes. Either way, all will be carried out on the ground created by the New Deal and will often even extend it.
Roosevelt, for his part, is perfectly aware of what is happening, and he comes to embody it rapidly, in spite of his purported pragmatism: “The truth of the matter, of course, is that the exponents of the theory of private initiative as the cure for deep-seated national ills want in most cases to improve the lot of mankind. But, well intentioned as they may be, they fail for four evident reasons – first, they see the problem from the point of view of their own business; second, they see the problem from the point of view of their own locality or region; third, they cannot act unanimously because they have no machinery for agreeing among themselves; and, finally, they have no power to bind the inevitable minority of chiselers within their own ranks.”4
Obviously, we’re not talking about the discovery of state intervention: those who stop at this vacuous generality would risk misunderstanding, entirely of their own fault, and would have reason to object – like an Italian expert of labor law – that, when seen really on the institutional and political level, the New Deal was a direct heir of the neo-nationalism of the first Roosevelt or even of the politics of W. Wilson, in the way that its effective management practically contradicted Jeffersonian ideology.
At the same time, we’re not seeking to simply counterpose a “positive government” to a “negative government;” we’re dealing instead with a different total function and therefore with a qualification of the New Deal’s “positive government” different even in comparison to the “positivity” of previous interventionism. This difference also isn’t to be found in the charge of “empire,” with greater or lesser intensity of constriction, in regards to single capitalists, because from this point of view, there were far more sanctioning mechanisms in the Sherman Act or the Clayton Act, with its Federal Trade Commission, than in the NRA (National Recovery Adminstration) and its “codes,” of which tbe only unique (or quasi-unique) formal guarantee was bound up with the abolition of the Blue Eagle [in 1935], collective capital’s certificate of merit given to its own functionaries. Nor does the difference lie in the immediate contents of the intervention, if it is true that between the concrete administration of anti-trust legislation in the years of the New Deal and the declared aims of the NRA, or the “efficientist” imposition enacted in the course of the “second New Deal,” there was perfect continuity.
So just what are we dealing with? One lone, unadorned fact alone offers the key to an answer: in the space of one year, the more than 600 laws sanctioned by Roosevelt – containing price fixes, production quantities, wage conditions, etc. – pertained to 95% of American employers! Here it is no longer a question of interventionism but of the direct responsibility of the state, in the first person, for the entire production of value. Here, even in symbolic form, a whole series of traditional presuppositions of the State and its relation to society (and the economy) discover, in the framework of an uninterrupted continuity of power, their own practical reversal.
In reality, if one really wants to find precedents and practical origins of the first New Deal models, they should be sought in the brief, exceptional experience of the War Industries Board: and it is hardly accidental that here, in General Hugh Johnson of the NRA or George Peck of the AAA, one can even identify them with specific persons. But it is really this reference to the model of war industry management, which is achieved by now and which imposes itself out from here, that can spontaneously generate the objection that, because that was an episode, imposed by circumstances and limited in time, the required leap made by the institutions of the New Deal, and of which NIRA was without doubt a qualifying element, can also be traced back to a parenthesis, imposed by the no less dramatic situation of the war and totally dominated by the need to exit the crises however possible, the need to secure the recovery by whatever means necessary.
It’s an idea that, in turn, might find ample confirmation in the fact that, between ’35 and ’36, a large part of institutional construction put in place in the preceding years had to fall and that, therefore, of this construction, it was specifically the NIRA that would not be brought back to life; yet this shouldn’t be accidental or surprising, because it was then believed, and still is by many, to be a largely “failed” measure.
There emerges here, in other words, an interpretative tendency to separate, if not to oppose, recovery and reform within the overall New Deal experience; a tendency that was nourished also by the distinction, to which we’ll return, between a “first” and “second” New Deal.
Even if one had, in general, excellent reasons for doubting every attempt to abstractly distinguish between “recovery” and “reform,” between conjuncture and development, how should one reconcile these apparently contrasting elements in this case? How to square the importance of NIRA – here assuming for simplicity that exemplary and summary moment of the political-institutional leap – with the admission (and in line with current view) not just of the exhaustion of its function but truly of its failure, less than two years from its founding?
It does not seem difficult to isolate the path through which to exit this problem of how to interpret the New Deal “revolution,” as soon as one has got free of that abstract, and merely institutional, approach. In fact: what signifies all that formidable articulation of the state over society, that flows down from the state as from the political heavens,
that coordinates around a single center of gravity the entire process of social reproduction and its conditions? This is, it’s said, the discovery of society, of capitalist society; the discovery of a real dynamic that was grown through many convulsions and that today shows itself before our eyes not just in all its complexity but also in all its terrible simplicity; it is an active discovery, that is an immediate need, of the necessity of organization and control. But now it’s clear that, for the restructuring to be effective and functional, for it to constitute that new “economic constitutional order” of which Roosevelt spoke (in a much-noted speech to the Commonwealth Club of California), the entire structure of society will be learned, in its real consistency and real contradictions, beyond any “popular” ideological residue. Now, the paradox, if you wish, of the American situation in ’31 is this: while capital, that which is wrongly accused of incurable individualism, offers to society a compact political will and rich organizational forms for proceeding with “industrial reorganization,” the working class cannot “offer,” so to speak, anything of this sort: it covers an economically broad surface but one totally, or nearly, without handholds. One can’t take into serious consideration the unions of the Gompersian trades [i.e. the AFL], which gathered less than 3 million workers, an extremely low percentage of the total labor-power of the factory, true leftovers of a situation in which unionized workers were not just the heart but also – still – the relatively restricted elite of the proletariat. Instead, after the rapid massification of workers in preceding years (the disappearance of the proletariat within direct relations of factory production), and under the whip of the crisis, it became an urgent political and economic necessity to recuperate for society a comprehensive and organized figure of the working class.
If there was, with the New Deal, a leap made by institutions, its characteristic internal element was this need for a public remedy through the “economic” organization of the working class. If NIRA was the “heart” of the 100 days [i.e. the first 100 days of Roosevelt’s administration], then paragraph 7(a) – that imposed by law the necessary conditions for unionization5 and that the organizations of industrialists themselves had demanded in a moment of maximum awareness (knowing full well that, without a legislative obligation, each of them at the meeting would be “forced” to squeeze salaries to save their own capital, thereby accelerating the tailspin of the Depression) – is, in outlook, the heart of the entire New Deal.
So, what failed in ’35, when the NIRA was annulled, or better, what had not succeeded to the degree demanded by the circumstances, was really that paragraph 7(a). But it did not shift the fundamental axis of the New Deal one iota: it didn’t shift it for the workers who also, in ’35, speak of the NRA as the “National Round Around,”6 but who together, for their own interests, drive more than the half the struggles of that year on the theme of union organization or, if you prefer, for the “respecting” of 7(a). It did not shift for the New Deal that, in the same year, substituted 7(a) with the Wagner Act, guaranteeing it on a larger scale. Of the latter, one could say from a historical perspective, that it was to be the “most significant measure of the first and second New Deal, that which engraved itself most lastingly on the structure of American society.”7
It is of absolutely secondary importance, in this regard, that the Wagner Act was not a direct Roosevelt initiative or that Roosevelt had taken it up and supported it only after it was approved by the lower House. Those who are embarrassed by this difficulty problem could speak of a “real cunning of reason.”8 It’s important to grasp its absolutely characteristic significance in this specific historical phase. One is simply dealing with the fact of unionization itself: from this point of view, the birth of the CIO, the jump from 3 million unionized workers in ’33 to 7 million in ’37, to 41 in ’45, would seem above all – as in the cover, the recuperation of a delay with respect to the conditions of capitalist production in other countries. But the fact of the matter is that, at that level of the system’s development (and with the crisis having at least served to impose awareness of this), unionization was, or least became, a directly capitalist exigency and need.
We’re not crafting a “fantastic” or ideological story of the New Deal: capital’s needs are always, in the last analysis, hard economic needs. In this case, the immediate need was to resolve the enormous economic problem of the crisis, even if the solution came to condition, as a projection forward, an entire historical phase of capitalist society. Workers’ union organization – that is, the class of workers as seen through the eyes of capital – is necessary because it – not by itself, if you wish; it is just one directly Keynesian face of the New Deal – could stimulate and guarantee the recovery of development, moving from the single grounding point it could find that would let it realize this in a stable fashion. To put the second category of the Marxian schema9 in relation with the first, and to ensure this relation, it is in fact necessary that the process begin again and that it will be guided by the rise of demands, by purchasing power: workers’ unionization in all branches of production signifies exactly that guarantee of the rate of increase of salary in single branches of industry (whose downward rigidity has already been discovered) and of the rise of the global mass of wages.
[The protests of capital] in fact project today nothing other than results achieved by the New Deal. It isn’t a question of “verifying” that hypothesis; only, if anything, of fleshing out its construction. It would have to result in, on one side, the adherence of terms of the actual situation to those constructed within the New Deal; and, on the other, as new problems that emerge and demand new solutions born from the internal logic of that balance. We might say that it is all the more possible today to grasp the construction of the New Deal as the opening of the “historical phase” in the development of capitalist society insofar as it reveals itself, and its specific internal characteristics, to be over. Because the United States will now have to refer, in all likelihood, back to the ’50s when capital, determinedly following its “technological way” toward anti-worker repression, made the leap to the “era of automation” and, conversely, spread wide the gap between the autonomous logic of the struggle of workers from that of their “organizations.”10 As always, it is in the moment of crisis that the essential features of the old order are revealed. This transition is perfectly realized in dialectical form. That extraordinary Fordist intuition, having become through the New Deal the Grundnorm of capitalist society, assigns to the wage its role as the strategic share of revenue within the dynamics of the system, and to the working class the concrete function of capital’s “moving motor.” Yet the grand effort of “appropriating” the working class, like the daily appropriation of their labor-power by capital, could have no other result than to render the contradictions of the system even more intimate. Here is rooted the crisis of that same order achieved through the New Deal, a crisis that can only collide with what [the New Deal] sought to claim as its most mature institutional achievement: the “function” of the union.
For this reason, it might seem interesting to give a quick glance at more recent developments; for this, the indications of a good enough manual will suffice. Therefore, today, “certain principles seem to be fixed. Among these are the right of labor to organize for collective bargaining, the duty of each party to negotiate in good faith, the right of employers to express their opinions in a noncoercive way to their employees, the liability of labor organizations to suit, the recognition of the distinctiveness of the supervisor’s position, determination of questions of representation by election, and prohibition of political contributions from corporate or union funds.” 11
The uncertainties still surrounding certain points – like indirect boycott, mass picketing – don’t shift the general framework. But more interesting to consider are new problems: these are the problems born, we’d say, “from the existence of third party interests: the totality of the public.” The so recent use of so old an idea isn’t accidental. It’s the most evident index of a real difficulty, born on properly economic terrain, of the dynamics of these elements to which were entrusted the task of the recovery.
We see in this nothing less than its basic institutional shape, which is of interest to us now. The problem comes to be posed in terms of a “monopoly of labor.” It’s not the problem, mind you, of the closed or union shop, that directs an entire category of workers under a single union. The Taft-Hartley Act, in this regard, may have been a reactionary moment, to the degree it sought to intervene on this point. But the unity of the union in the company or in the category isn’t here in question; the unity of representation is even seen as a positive fact. The co-involved problems are indeed problems of the excessive breadth of the bargaining and of the union. More precisely – for the moment excluding the impracticably drastic solution of resubmitting the unions to anti-trust law – the major open questions were the following two:
1) What must the public political stance in the case that bargaining fails? This is the problem that lies behind the final demand of the outline of labor conflicts prepared by the Railways Act. One could arrange the outline as one liked, one might extend it in all possible ways, but at a certain point, this [failure of bargaining] had to come. It’s precisely this that they sought to avoid: not because workers pressure for wage increases always requires open and official war in order to be heard (also because the struggle was always used consciously by the union, in the initial bargaining phases, as a steam valve to reduce the pressure that built up past a point “rationally” possible to obtain), but more simply because a demand always contains something worrying. And moreover, the problem, in its abstract terms, is irresolvable, or at the least, its conflictuality cannot be eliminated. So in concrete terms, the best solution still seemed to be that of putting trust in the self-regulation of the mechanism, only taking care to handle it in a more “rational” manner or to once again extend the length of its passages. But the dissatisfaction was obvious, as the existing balance’s slump betrayed awareness of its unsustainability.
2) On the other hand, the so-called public interests don’t lie only in the “industrial,” i.e. in the existence of correct relations between involved parties and of procedural rules that could determine the dynamics; nor were they only concerned to avoid blockages of production (which was a later specification of those interests behind this peace). Today, one could say, they concern also the contents of these agreements. The problem can also be expressed in these terms: “whether the public can leave the determination of some issues to private parties whose jurisdiction is industry-wide, or whose decisions are pattern-setting. These decisions may have such large consequences toward inflation, impairment of the American competitive position abroad, increase of unemployment, or other results as to raise a question whether they should be made in a forum where only private parties, under constraint to represent their limited clienteles, participate in the decision.”12
This is an increasingly pressing problem. How to confront it? On one hand, by reinforcing the tripartite bargaining model: if a general interest is in play, it must be represented: and it can be done so indifferently, either by the government or by “neutral” technicians.
On the other, there’s the formulation of guideposts “for the non-inflationary movement of prices and wages.” This is the most consistent strategic move, especially because, for the time being, it reconciles the desire for public intervention with that of avoiding solutions that are merely impositions or that are irregular or ad hoc presidential interventions. The guideposts (whose principle is the equalization of taxes on wage increases in single branches of industry with the tax on the general rise in productivity) are contained for the first time in the 1962 report of the Council of Economic Advisors; it’s the Council of Kennedy.
In this case, the “new frontier” is that of the entirety of international capital: the “politics of wages” and the repression of legitimate struggles by the “plan” already have nothing uniquely American about them. The New Deal, tested in the highest point of capitalist development in a crucial moment, is by now behind them, and behind us all.
A few conclusive remarks seem possible on the basis of what has just been observed. What reveals itself is a series of contradictory movements in the relation between bourgeois political terrain and the social process of capitalist production. The horizon of the New Deal would seem to be dominated by a unique tension. In effect, what presented itself, in still limited dimensions, for the first time with the “legislation on factories” – “that first conscious and methodical reaction of society against the spontaneously developed form of the process of production”13 – could then become a completely developed reality when all of society is directly inserted into the production process of capital. In the same way that the legislation of factories is already a legislation of capital by capital, of the variable part of itself, on the level of the society-factory it gives objective grounding to legislation of the working class by collective capital. It would not seem unjustified to see in the New Deal a historically foundational point of passage in this development.
However, this process has its own dialectic. On one side, the machinery of the political state tends to increasingly identify itself with the figure of the collective capitalist and increasingly becomes the property of the capitalist mode of production and therefore a function of the capitalist. On the other, however, this “recuperation within society… of the political functions of the state” necessarily participates in the mystifying appearances of a society divided into classes and in the mystified relation between capitalist production and bourgeois society. In fact: as “when the factory becomes boss of all society… the factory seems to vanish,” as “the real rising process of proletarianization presents itself as the formal process of tertiarization,” so “the return of political and state functions inside the very structure of civil society presents itself as a contradiction between state and society: the increasingly strict functionality of politics and economy as the possible autonomy of the political terrain from economic relations.”14
We should also perhaps underscore now that this “appearance” is, or becomes, also a real process, a necessity. Here the New Deal enters it only relatively: it was totally engaged in the “discovery” of capitalist society. The discourse bears on recent developments: when, today, we see the autonomy of the political vigorously confirmed and constructed, while for some time now the state has become the subjective principle of the imputation of the process of social reproduction, in which we can discern a defensive principle, a spy of a capital’s weakness on its own terrain, that found in the New Deal a historic point of departure and the essential terms of its own explication.
This weakness is a reality that capital must learn on its own accord, through experience. The awareness of this is entirely absent in technocratic utopias of controlled industry, of which there were so many in the New Deal. When Berle and Means end The Modern Corporation (1932) by writing: “The future may see the economic organism, now typified by the corporation, not only on an equal plane with the state, but possibly even superseding it as the dominant form of social organization. The law of corporations, accordingly, might well be considered as a potential constitutional law for the new economic state, while business practice is increasingly assuming the aspect of economic statesmanship”15 – this is the confident and optimistic proposition of a new economic order. It’s fitting that the union, officially constituted, enter into this process, because the new order loses every ambiguous corporate residue, and presents itself instead as the organization of freely contracted subjects, a system of “counterposed powers,” and dynamic democracy.
Society-factory, capitalist social plan: from the first historical realization of this movement is born the optical illusion that foresees the “extinction” of the exponential accumulation of social violence. What we can’t see immediately, though, is how the social diffusion of domination and the apparent “truce” between “politics” and “economy” necessarily contains within in itself the concentration of factory despotism [to be spread] over all of society, the relation of separation that must increasingly reunite authority with consensus.
But the experience ends by putting into crisis this optimism about a perfect democracy on economic ground: workers keep pushing, even if in fits and starts, the terms of trade to their favor, doing so in a disordered fashion dangerous given the overall equilibrium. We aren’t reproposing an updated edition of theses of the automatic discovery of contradictions: what is there of the automatic in the workers struggles? Nor are we discussing a mythic system of “high salaries”: high or low, in the end, in terms of what? The problem is that of the function of the wage. Between the New Deal proposition of the wage as the spurring moment of development and the actual generalization of the politics of income as the specific content of the plan, there moves a true and proper historical period, a cycle of development. This is the hypothesis that we are proposing once again. To find its depth and proof, our research will have to properly begin.
– Translated by Evan Calder Williams