7. The Great Depression¶
Core Argument¶
7. The Great Depression
The Great Depression was not an accident of history or a failure of leadership, but the inevitable convulsion of a capitalist system whose boom in the 1920s was built on the super-exploitation of an atomised working class. Industrial output soared, but workers were stripped of rights, their resistance branded as communist. Beneath the speculative froth lay a fundamental crisis of overproduction: industries from auto tyres to steel had expanded far beyond effective demand. The October 1929 stock market crash was merely a symptom, not a cause. Credit had only postponed the reckoning; the ensuing slump saw industrial production halve, national income collapse from $82bn to $40bn, and unemployment reach 15 million by 1933.
President Hoover refused federal relief, insisting the market would correct itself. Employers imposed savage wage cuts, and the American Federation of Labor responded with craven “no-strike” deals that conceded everything to the bosses. Union membership haemorrhaged from over four million in 1920 to barely two million by 1933, losing 7,000 members a week at the depth of the crisis. Class struggle turned violent: police machine-gunned unemployed demonstrators at Ford’s Rouge Plant in 1932, killing four. Hoover ordered General MacArthur to attack 25,000 unemployed war veterans with tear gas and bayonets. Violence continued under Roosevelt, including ten killed at Republic Steel in 1937.
To avert social revolution, the more far-sighted fraction of the ruling class, under F.D. Roosevelt, implemented the New Deal. Roosevelt aimed to save capitalism, not overthrow it, and was denounced by conservatives as a radical. The reforms had only marginal economic effect; recovery came only with the Second World War. Yet the New Deal’s true significance lay in opening space for working-class organisation. Several AFL unions formed the Committee for Industrial Organization (CIO) to organise the unorganised. Trotskyists like Farrell Dobbs helped lead Teamster strikes that built the CIO. American workers pioneered sit-down strikes—factory occupations—before the French, beginning with a successful occupation at a General Motors plant in Flint, Michigan in 1937. The United Rubber Workers won recognition from Goodyear. The CIO gained two million new members, reversing a decade of decline. Workers displayed class solidarity, defeating bosses’ spies and private police. The depression revealed capitalism’s barbarism; the response proved that only organised workers could force concessions from a system that otherwise offered only crisis and bloodshed.