Strikes in the Long Depression

Jorg Nowak, a fellow at the University of Nottingham, UK has just published Mass Strikes and Social Movements in Brazil and India:: popular mobilisation in the Long Depression.  Nowak argues that in the 21st century and in this current long depression in the major economies, industrial action is no longer led by organised labour ie trade unions, and now takes the form of wider ‘mass strikes’ that involve unorganised workers and wider social forces in the community.  This popular mobilisation is closer to Rosa Luxemburg’s concept of mass strikes than the conventional ’eurocentric’ formation of trade unions.

The nature of global labour struggles against capital and the changing forms of class conflict is important.  But what also interested me was Nowak’s chapter on the political economy of mass strikes in the current global capitalist crisis – and in particular the section on strikes and economic cycles (pp113-117).

In that section, Nowak develops the argument that the intensity of class conflict between labour and capital varies with stages in the economic cycle of capitalist economic upswings and downswings.  He cites various authors who seek to show that when capitalism is in a general upswing in growth, investment and employment, class conflict as expressed in the number of strikes rises, particularly near the peak of the upswing.

Nowak surveys the work of those authors (including my own) that assert evidence for a Kondratiev-type cycle or wave in capitalist expansion. The mostly likely length of a full Kondratiev cycle is put at 64-72 years (longer than traditionally claimed).  If that K-cycle is broken down into ‘seasons’; first there is the ‘spring’ period of recovery from depression, with rising profitability of capital and a revival of labour organisation; then there is a summer period of falling profitability and strong labour forces.  Those two seasons complete the K-cycle upswing.  Then in the downswing comes autumn (rising profitability but weakened labour) and finally winter (economic depression).  Nowak reckons that the two periods of most intensive class conflict are at the cusp of spring through into summer seasons (as in 1964-82, for example).  Then there are weaker more local struggles towards the end of the downswing in the winter season. Nowak presents two case studies based on India and Brazil in the period 2010-14 to argue for this theory and to generalise it internationally.

Back in 2006, in my book, The Great Recession (2009), I also argued that K-cycles could be correlated with the intensity of class struggle.  I developed this further in my book, The Long Depression (2016).  More recently, I wrote a chapter on the UK in World in Crisis (2018) in which I outlined the trajectory of the UK rate of profit since 1855 and how it matched broadly the ‘seasons’ in the K-cycle.

In 2017, I took this scenario further in a paper to the Capital:150 conference held in London to commemorate the publication of Marx’s Capital Volume One.  In that paper, I attempted to map out the class struggle in relation to the movement in the rate of profit for the UK.

When Marx was writing Capital, the UK economy was experiencing a boom in profitability and growth and British capital was ruling the world and at its zenith.  However, from the late 1860s, profitability turned down and the UK, along with other major economies entered a long depression through the mid-1880s (longer in the US).  Depression weakened the old unions and class struggle faded.  After the crushing of the Paris Commune in 1871, the first international was dispatched to retirement in New York by Marx.

If we look at the history of British capital after Marx’s death in 1883, I think we can link the profitability of capital to the intensity of class struggle as defined by the level of strikes.  In the period from the 1890s to WW1, we find that strikes were initially high as new mass unskilled unions formed as British capital recovered some profitability after the end of the depression of 1880s.  But strikes dropped off after the late 1890s as profitability rose and wage demands were met.  However, from the 1900s profitability of capital began to diminish and in the years leading up to the war, strong unions and a rising labour movement engaged in more intensified struggle.

After the end of the war, that struggle resumed.  But with the defeat of the transport unions in 1921 and the general strike in 1926, UK profitability jumped up and intense class struggle dropped away through to the end of the WW2.

The post-1945 period started with high profitability and growth (after 1946), leading to a recovery in trade unions (in new industries).  Strikes rose a little but class struggle was generally ameliorated by concessions and wage increases.  However, from the mid-1960s, UK capital entered a long profitability crisis (as in other economies).  Capital needed to reverse this by crushing labour power.  Strong unions took on capital in the most intense class battle since the early 1920s.  Two big slumps and other neo-liberal measures eventually defeated union power and the class struggle subsided.  The neoliberal period ended in the 2000s and capitalism entered a long depression after the Great Recession.  There has been no recovery in the labour movement or class struggle (at least as measured by strike rates).

This map of the class struggle in Britain implies that only a sustained recovery in profitability in capital that also allows labour to recover its organised strength in new industries and sectors can create the conditions for intensified struggle when profitability eventually drops back again – as it will.  That suggests a generation ahead before we can see intense class struggle as experienced in the 1910-26 period or in the 1970s.  This is a similar conclusion reached by Nowak (p115).

Nowak considers two case studies of mass strike waves in the winter season of the current cycle – the Long Depression.  I presented a paper to the Society of Political Economy in Brazil last year (The rate of profit and class struggle) that also looked at the Brazil experience using macroeconomic data.  Noronha et al. (1998) conducted a study about the evolution of strikes in Brazil, identifying some key characteristics observed from the end of decade of 1970s and until the beginning of decade of 1990[i].

According to those authors, the phenomenon of Brazilian strikes began around 1978 in the main industrial area of the country and identified three major cycles of strikes: first cycle had an upward trajectory, ranging from 1978 to 1984, where the organization of unions began in Sao Paulo and spread to other regions in the country; the second cycle occurred between 1985 and 1989 and presents a flat evolution path; finally, the third cycle was characterized by a decline in stoppages after 1990.[ii]  Thus a rise in strikes matched a period of falling profitability from the mid-1970s to the mid-1980s.  Strikes flattened out with the flattening out of profitability up to the end of the 1980s. The rise in the rate of profit in the 1990s and the adoption of neo-liberal policies saw a decline in class struggle.

In Brazil, unionization rates experienced a small decline during the 1990s, yet between 2000 and 2006 this trend was reversed.[iii]  The number of strikes nearly tripled between 2002 (298 strikes) and 2012 (873) while the number of working-hours lost more than tripled in the same period. According to Brazil DIEESE’s estimates, in 2002 working-hours lost due to strikes amounted to around 116.6 million while in 2012 it was around 381.7 million.

The profitability of capital in Brazil peaked in the late 1990s and early 2000s on the measures above.  But Brazil’s labor movement strengthened in the early 2000s, so when profitability began to fall again and employers applied pressure to control the cost of labour, there was a class reaction through increased strikes.  The Great Recession did not affect Brazil’s economy severely until the commodity price boom collapsed in 2011.  The strike wave faded in the initial period of the global crash but started to rise again from 2010 – up to 2016 according to Nowak.

So it seems that class struggle (as measured by strikes) tends to be more intense in the summer ‘season’ of the K-cycle, when profitability has been falling but the labour movement and workers’ confidence has not yet been crushed.  Eventually, labour defeats and economic slumps usher in a period (neo-liberal) when class conflict is subdued.  This continues in the ‘winter’ period of low profitability and weak growth, although Nowak provides evidence that there can also be a strike wave towards the end of this period (2010-14), perhaps from new sectors of the economy that had not been in action before.

[i] Noronha, E. G;. Gebrin, V.; Elias Jr. J. Explicacoes para um Ciclo Excepcional de Graves: o Caso Brasileiro. XXI Congresso internacional do LASA, Latin American Studies Association, 1998.

[ii] Aricieri Devidé Júnior, José Raimundo Carvalho,Strike Duration after Collective Bargaining Legislation Changes: A Reappraisal of the 1988 Brazilian New Federal Constitution with Better Micro Data

[iii] Walter Arno Pichler, Giovana Menegottol, Union membership and industrial action in Brazilian public sector in the 2000s

16 Responses to “Strikes in the Long Depression”

  1. dhlazare Says:

    Makes sense. But what about revolution? At what point do workers graduate from mere economic strikes to more expressly political actions? Presumably, it will not be while wages are strengthening. So will it be in an ever-deeper winter of discontent?

    • vk Says:

      Revolutions are, by definition, the destruction of the system. They are the end (extinction) of the cycle, not a phase of the cycle. Since K-waves can only exist in the capitalist system, then a revolution wouldn’t be part of it, but outside of it.

  2. SimonH Says:

    It’s good I suppose that people are now admitting that K Waves don’t run like clockwork. Not enough in my opinion, I still subscribe to the idea put forward by Ernest Mandel that there is no automatic upturn out of a depressionary long wave. The Upturn after World War 2 after all was underwritten by the United States domination over the capitalist world and therefore its ability to enforce Bretton Woods.

  3. ucanbpolitical Says:

    I do not subscribe to K waves. Current determinations of the K wave are very western centric. Consider one fact. As the wave is industrially based it is worth examining country shares of global value added for industry (including construction and utilities). Gross Value Added in 2017 was $22.106 trillion (OECD data). Of this the US added $3.41 trillion or 15.4% (BEA data) while China added $6.44 trillion or 29.2% (Chinese Govt data on primary and secondary industry). Given that a significant amount of the value produced in China is realised elsewhere especially the USA I would suggest the figures are more like 12% and 36%. In other words, China’s industrial economy is probably triple that of the USA which would concur with the physical consumption of things like iron ore, copper, cement and so on. Thus extreme caution must be exercised when describing a global K wave that does not fully take into account China’s phenomenal industrial investment and expansion between 2009 and the end of 2015.

  4. rogeriomaestri Says:

    The work of Jörg Nowak is based on the analysis of two construction sites that do not represent in any way the universe of the demands of the labor movements in Brazil.
    First, one of the chosen construction sites, the Belo Monte grove, which is on the edge of the Amazon forest, something interesting and exotic for a European researcher, and the second the construction site of the port of Pecém, a work of an offshore port of one state in northeastern Brazil, which was chosen because it is closer to the USA than to the economic center of Brazil.
    Second, the labor mobilizations of the Belo Monte plot were in the wake of a wide national and international mobilization against the construction of the dam in an Amazon river, that is, factors not usual in the labor struggles in Brazil, centered on the axis Rio de Janeiro/São Paulo located 1,400 miles from Pecém site and 1,300 miles from Belo Monte.
    Taking these cases as representative of Brazilian social movements is a real joke.

  5. rogeriomaestri Says:

    The data of this work of Jörg Nowak, as in other works, there is no differentiation between public and private sector, something that ignored is totally distorted the data. In the public sector strikes were banned until the 1988 constitution, so there were no strikes that were computed, they were called “shutdowns”, not strikes!
    From 1990 strikes in the public sector were tolerated, leading to an increase to such an extent that these strikes corresponded to around 75% to 80% of the hours lost.
    Studying the striking movements in Brazil without regard to politics is simply to ignore the fact that for a long time the workers and leaderships were arrested and often murdered.
    Any comparison with movements in developed countries without regard to political aspects is simply daydreaming.

  6. rogeriomaestri Says:

    Just one more example:
    From 1964 to 1980 there was no strike of university professors, as it was a case of summary dismissal (with possibility of arrest), in 1980 when teachers’ salaries reached levels close to US $ 150.00 to US $ 300, 00 (monthly salaries) broke the first strike still under the government of General Figueiredo, in which only a small portion of teachers participated.
    However, since the small number of participating teachers were the youngest (my case, for example) and represented the largest workforce (in 24 teachers, I stopped, I stopped more than 15% of the workload of our entire department !!!), the strike lasted more than 35 days and resulted in success.
    The most interesting thing is that there was no union because it was prohibited by law, in 1978 an association was created and it only became a union in 2008!

  7. rogeriomaestri Says:

    Excuse me for English, I speak Portuguese, Spanish and French, my English is deficient.

  8. antonio Says:

    Kondratiev Winter and Revolution,
    Yes, it will be in the depths of Kodratiev’s winter when a revolution can take place. But, the revolutions exist, but I do not have anything sure of the existence of the K-Waves.
    However, and forgetting the K-Waves, the following if it is real: the class struggle if it intensifies (below), the long recession, the depression, the two sides of the ideological spectrum-Lenin and Walter Scheidel-the students and predict the Necessary conditions for a revolution, two other great intellectuals – Rosa Luxemburg, in ‘’Reform or Revolutión’’, and Ragnar Frisch in ‘’Propagation problems and impulse problems in the economy’’.1.933 – define politically (Rosa) and economically (Ragnar) the impulse. economic-political, the impulse of 1.917 of the current revolutionary cycle descends and retreats since the 80s, ergo..will come a new revolution.

    A criticism of the article. Are there no organized strikes equal to no class struggle?
    ‘’However, from the late 1860s, profitability declined and the United Kingdom, along with other important information, to the date of the 1880s (more in the US). The depression weakened the old unions and the struggle against the classes. After the crushing of the Paris Commune in 1871, the first report was sent to retirement in New York by Marx ‘’
    There is a strong contradiction in this analysis: if the struggle of the classes faded, the Paris Commune could not have been produced, could it? In addition, it is compatible with the old unions fade and the fight against classes intensify on the street. That the fight not organized by a union or party intensifies. This seems to have happened with the Commune of Paris and so it seems today in 2017 to happen: on the one hand, trade unions are aligned with power and government and, on the other, signals and strikes are by mail, self-organized from the street, from civil society: Yellow vests in France, 15-M in Spain, etc …
    ” This map of the class struggle …… … That suggests a generation ahead before we can see an intense class struggle as experienced in the period 1910-26 or in the 1970s. This is a conclusion similar achieved by Nowak (p115) ”
    I believe that it is a mistake to associate, in a period of recession and increase in inequality (since the 1980s), an increase in class struggle and an increase in strikes. Why? Because an official strike needs strong unions and the recession provokes, precisely, a decrease in its power and … its self-interest in calling strikes. Today, in a period of recession, and in my opinion, one should look at strikes and self-organized demonstrations by its various groups to know if the class struggle intensifies or not. Yellow vests in France, the 15-M in Spain, demonstrations of pensioners, students, public health users, feminists, etc … are evidence of demonstrations with little or no trade union and party presence and prove that if it is intensifying the class struggle

  9. antonio Says:

    On the false myth of non-growth (and inefficiency) of the socialist model. This is an off-topic that I hope will excuse me, but that I understand that perhaps it interests you as (excellent) Marxist macro-economist that is. It is a fact that I have known this week, it is a fact that you. Perhaps you already know, and it is a fact that comes from a Spanish macro-economist-Antonia Díaz, specialized in Public Accounting. She states that in the National Accounts of the Urss and socialist countries the product of the services sector was NOT counted in its GDP. Well, if this is the case, and she confirms this, to be able to make a correct study of that GDP, and, especially, to be able to compare the socialist GDP with the annual GDP of the Western economies, which did count in those years , and today they continue to do so, the services sector in its Accounting, must include the services sector of its economy. Conducting a small ‘home’ analysis (I’m just a private economist not specialized in macroeconomics) if we estimate an easy 40% GDP of the service sector in the socialist countries, we conclude that the growth of these countries has not been about . 5.5% per year as it appears in various manuals, but that GDP would be around 8% per year. This annual growth of 5.5% is estimated for the OECD area and also for the socialist countries in the period 1945-1975. The period called the Thirty Glorious, and, falsely called, the Golden Age of Capitalism. Golden Age falsely called Capitalism, because a national economy with 50% (and up to 70% in the Nordic Countries,) of its economy owned by the public sector, is not, can not, and should not be called a capitalist economy. Being generous, and this is in many manuals, it can be called Mixed Economy. If, finally, we would like to compare socialist growth with a purely capitalist growth, as all economies were capitalist in the 19th century, with a state as owner of a maximum of 10% of annual GDP, and one with an average growth of 1,5% per year (Angus Maddison), we will have as a result that the socialist growth is of the order of 5 times higher, and we will realize that it is not that socialism is superior economically to capitalism, but that socialism literally sweeps, liquidates and buries capitalism. Yes, true, just as Marx recognized that Capitalism had done it with Feudalism.
    The argumentation and economic logic, in addition to the empirical evidence, that because socialism must be superior, and really is, is so simple, known and so overwhelming that it should not be necessary to comment on it, although mentioning the economies of scale derived from the Concentration of Capital may be enough. Otherwise: socialism is a change of economic scale and is even, given its power, a change of scale of evolutionary type.
    Best regards,

  10. rogeriomaestri Says:

    Excuse me meddling in this struggle between economists, but I think there is a middle blurred discussion that probably originates from a preciousness caused by the fight around a basic concept, the class struggle. In the first paragraph of the Manifesto Marx and Engels make one thing clear:
    .
    “The history of all hitherto existing society is the history of class struggles.”
    .
    In the second paragraph perhaps part of the discussion will be clarified.
    .
    “Freeman and slave, patrician and plebeian, lord and serf, guild-master and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes.”
    .
    They divide the class struggle into two moments:
    .
    “….carried on an uninterrupted, now hidden, now open fight,….”
    .
    To quarrel with these or those economic conditions is simply to ignore the conditions for the rise or fall of the struggles of the oppressed. Spartacus in Rome did not measure the intensity of the whip, or whether the Roman economy was growing or not, the important thing was to get rid of the whip. But as Marx and Engels said, the slaves fought against the freemans.
    .
    There are so many variables that allow or not the open struggle, that reducing only the economy is economism. Look at the examples I put on Brazil.

  11. Peter Wright Says:

    “The rise in the rate of profit in the 1990s and the adoption of neo-liberal policies saw a decline in class struggle.” I think that, more precisely, after the long decline in the rate of profit from the heights of the post-war boom to 1975, the adoption of neo-liberal policies during the late 1970s and early 1980s, by suppressing labour, allowed a rise in the rate of profit. The sequence of these events is important. Neo-liberalism succeeded in creating both the ideology and the legal structures to suppress labour so that when profits rose wages have not followed as much as in previous periods and equally, labour has not been organised enough to strike back at capital when their conditions have been rolled back during downturns. Another factor since the 1990s has been the tendency for capital to remove its investments in manufacturing to lower wage countries where labour militancy is low. A decline industrial working class jobs in developed countries has paralleled the decline in labour militancy where unions were formerly strong. Even the rate of employment growth in clerical work has declined as both lower rates of union membership and computerisation and “off-shoring” of clerical jobs has occurred since the 1990s. But the rise in productivity has not led to high wages growth. More recently, in some segments of service industries, employment numbers have been growing. But many of these jobs involve greater exploitation of labour, e.g., in undocumented migrant labour and through the app related and gig economy – Uber, Grubhub etc., and companies like Amazon. Wages for unorganised labour in many of these jobs have been reduced to subsistence levels. Another factor which has suppressed labour militancy is the rising costs of housing combined with the valorisation of home ownership, so that the high mortgage repayments have reduced the willingness of labour to strike. And, of course, the rise in house prices in many countries is a direct outcome of neo-liberal policies.

  12. Joerg Nowak Says:

    Hi Rogerio,

    regarding your second comment: I am not sure why you claim that I would not mention the differentiation between public and private sector strikes in Brazil. I actually do mention several times in the book the significance of public sector strikes, e.g. on page 209.

    Also the argument that I would not look at politics, and violence against trade unions and workers in Brazil is kind of surprising: its actually at the centre of the whole chapter on Brazil. I am happy to send you a PDF of the book if you provide your email address.

    The strikes in construction were significant, since they represented 23 per cent of all strikes in the private sector in 2011, for example (also to be found on p. 209 of my book). The one subsection of strikes in construction that I did not cover more detailed in the book were strikes in urban construction (housing, shopping centres etc.), but I do mention those several times and included them in the table on construction strikes between 2011 and 2014.

    All the best,
    Joerg

  13. Joerg Nowak Says:

    Hi Rogerio,

    I am not entirely sure regarding the focus of your criticism. First, I do not at any point claim that the strikes in Pecem and Belo Monte are representative of social movements in Brazil in general. In fact, I explicitly say that there is no claim of being representative in the first chapter of my book.
    Second, the strikes in Belo Monte and Pecem were typical of the wave of strikes in Brazilian construction from 2010 to 2014 since they represent two of the three kinds of sites that dominated this strike wave: Industrial construction at various sites at the Atlantic coast (i.e. the petrochemical complexes of Comperj in Rio de Janeiro state, and of Suape close to Recife), and in the hinterland for energy production. While the Belo Monte case is special due to the large movement against the dam, there were similar strikes at construction sites for hydroelectric power in 2011 and 2012 in Jirau and Santo Antonio in the state of Rondonia. This large panorama of the strikes in construction is reflected in the book.
    Plus, the book does not deal with the strike in construction of the port itself in Pecem (this construction has been finalised in the 2000s already), but with the construction of a thermoelectric plant and a large steel plant (joint project of South Korean Posco and Brazilian Vale) – and most of the steel so far has been exported to Thailand.

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