“The UAW has announced that their dedicated union members who fought together, stood together, and walked the picket line together have now voted together to ratify their record contracts. These historic contracts reward the autoworkers who have sacrificed so much with record raises, more paid leave, greater retirement security, and more rights and respect at work. I want to applaud the UAW and each of our Big Three auto companies for their good faith negotiations to reach this record contract. These contracts show that when unions do well, it lifts all workers. Following the UAW’s historic agreements, we’ve seen Toyota, Honda, Hyundai, and Subaru announce significant wage increases as well. The UAW is fighting hard to ensure that all auto jobs are good, middle-class jobs – and I stand with them in that fight.”

(Statement from President Joe Biden on the Ratification of the UAW’s Historic Agreements with the Big Three Automakers, November 20th 2023.)

A 25% wage increase. That is what any proletarian in America or elsewhere who cannot get to grips with the reality of the contracts signed between the United Auto Workers (UAW) and the heads of the Big Three US car companies, General Motors, Ford and Stellantis, will remember. UAW union leader Shawn Fain, the American and international media, particularly European, and US President Biden all stressed that the agreement reached following the six-week strike launched by the union is a victory for workers, for the UAW and for trade unionism in general. Along withthe heads of General Motors, Ford and Stellantis, they emphasized that they were “pleased to have reached a tentative agreement on a new labor contract with the UAW covering our U.S. operations.” (Jim Farley, Ford’s CEO [1]). To hammer home the point about employers’ alleged backsliding, the same Farley was quick to declare that “the reality is that this labor agreement added significant cost, and we are going to have to work very hard on productivity and efficiency to become more competitive.” [2] (emphasis added) The reality of the agreement, which Biden describes as “historic”, is already becoming clearer. The increase in productivity and competitiveness announced by Ford’s CEO already gives a better idea of what the agreement will mean for workers. Now we better understand why and how Biden “stand[s] with them [the UAW] in that fight” and came in person, and in front of the media, to support the picket lines at the factory gates.

A Victory for Auto Workers?

Among the various “gains” obtained by the deal, the 25% increase in wages, spread over the four-and-a-half-year duration of the contract, has met with the international media response it deserved from the bourgeois point of view after more than a decade of continuous wage cuts. But then how to explain that the agreement was ultimately approved by only around 60% of UAW members who took part in the vote [3]? In fact, 47% of the production members themselves voted against it. Entire assembly plants in Michigan, Indiana, Missouri, Tennessee and Kentucky rejected it, sometimes by as much as 69%, according to the Trotskyite site WSWS. A worker at the Stellantis plant in Toledo, quoted by the same website, translates part of the agreement’s content into working-class language for us: “We’ve got two shifts, and we’re working 10 hours a day and 50 hours a week. They’re planning to go to three shifts, eight hours a day. We’re going to lose overtime pay we need to make ends meet.” By the way, this is reminiscent of the 1930s and the New Deal: “The NRA has set the minimum weekly wage at $12 in the South and $13 in the North, but this minimum becomes a maximum because it does not stipulate the minimum number of hours per week: a worker who previously worked 48 to 54 hours per week now works only 35 to 40 hours; the hourly wage is increased, but the overall wage is lower than that paid previously, amounting to $16.71.” (Bilan #3 [4], Roosevelt au gouvernail [Roosevelt at the helm], 1934, translated by us) So what is the real and immediate picture? Have workers gained anything?

The 25% increase spread over more than four years will barely compensate for the 22% loss of purchasing power in recent years, according to official sources, largely due the to the post-Covid explosion in inflation. Moreover, during the 2007 crisis in the US auto industry, when General Motors declared bankruptcy, proletarians in the auto industry saw their wages and working conditions deteriorate sharply. The Obama administration “saved” GM and the other automakers with a financial bailout and sacrifices for the workers that the UAW had imposed on its members. In fact, at the end of the new contract in 2028, and without knowing future inflation, the hourly wage of $40 will still be below that of 2007 in constant dollars. And that is without taking into account the reorganizations announced in many plants. Obviously, the agreement touches on various provisions that are difficult to summarize and present – even more so for the non-American reader. For example, the COLA system of indexing wages to inflation remains the same as in 2007, i.e. without taking current inflation into account, and will be cut by $0.10 an hour by companies to pay for rising healthcare costs. The dual “career” advancement system (the Tier System) was introduced in 2007 when the car industry was restructured and rescued by the state. The salary scale and pension levels are different for new recruits. This system is maintained, as are the sacrifices imposed in 2007 on retirement pensions and health insurance. Few full-time temps will be hired under local contracts. Paid $20 an hour, the temptation will be strong for their employers to lay them off before the nine-month period after which they are supposed to be eligible for another status.

In itself, then, this “historic victory” will, at best, only temporarily slow the deterioration in workers’ purchasing power that has been underway for the past fifteen years, and then only for those current employees who will keep their jobs. It is easy to understand the UAW’s difficulties in ensuring that the approval vote, which law imposes, is in favor of the agreement. Remember that 95% of workers eligible to vote had voted in favor of the strike. And above all, imagine what the result would have been if the agreement had had to be discussed and voted on by general assemblies in the workplaces: there is little doubt that it would have been rejected in most factories.

In fact, the proletarians of the auto industry and, with them, the proletariat as a whole in America, have just suffered a new setback, a new defeat – albeit limited – on top of those suffered during the mobilizations, sometimes strikes, of railway workers, UPS employees, Amazon workers, etc. in the post-Covid years. Expressions of a renewal of proletarian combativeness in the country, these struggles and mobilizations were all totally controlled, framed, and rendered harmless by the unions. The rare gains were akin to the 25% wage increase over four years that President Biden and the UAW hailed as a “historic victory”.

The Legislative and Repressive Corseting of Any Consistent Workers’ Struggle

Let us look for a moment at the conditions imposed on the proletariat by the American state and bourgeoisie, which effectively prohibit any proletarian struggle, and in particular any attempt to extend, generalize and unify the struggle to other sectors, companies and even sometimes within the workplace itself. Labor legislation and the right to organize were established between the American state and the AFL and CIO unions in the 1930s. The “closed-shop” system effectively prohibits any meaningful proletarian struggle. They cannot be in “solidarity” or “political”, and these qualifications rest on the judgment of any judge. Apart from participation in picket lines, organized and centralized by the union, proletarians cannot meet and form general assemblies to decide together on actions to be taken, or even on the strike itself. The legislation imposes very strict and codified strike notices, “individual” votes organized by the union for or against the strike, sometimes via Internet from home, a period of several weeks of negotiations before the strike, then rotating and rolling strikes, the signing of the agreement by the companies and the union signifying the end of the strike where it was taking place, and then, a few weeks later, the individual and isolated vote of some of the workers, those who are unionized. In fact, the state prohibits any proletarian struggle that aims to be effective, and if need be, i.e. if the union fails to keep control on workers’ combativeness, then the government adopts a decree declaring the strike illegal in the name of the national interest or whatever, and launches open repression.

The only alternative to this iron corset around the body of the American proletariat is for proletarians to break it by force, through the fastest possible extension of all class struggle, through the mass strike. In other words, to oppose directly bourgeois legality, and therefore to confront the state and its organs in the working class environment, the unions, just as directly. The bar for entering into effective combat is therefore high and risky. We cannot go into any more detail here on the political preconditions and fight – in particular the role of workers’ groupings in struggle committees or otherwise, and of communist minorities – required to unleash such a dynamic of struggle, even if it were to explode “spontaneously”.

Union “Victory”: an Integral Part of the "Bidenomics"

In reality, and to return to the strike in the American automobile sector, there is a much more important facet to the new contracts between the UAW and the Big Three of the car industry. They pave the way for the transition to electric car production, and thus for a restructuring of the workforce. Tens of thousands of jobs will be lost. Already, the agreement signed with the UAW provides buyouts for workers agreeing to leave the company, early retirement and automatic transfers from one plant to another, i.e. from one region to another, for thousands of workers. According to the WSWS, “new workers at the battery plant will be paid $26 an hour.” The role of the trade union, in this case the UAW, in the American system needs to be strengthened in this period of industrial transition. While the main role of the unions, as political organs of the capitalist state, remains first and foremost to control and sabotage any inclination or dynamic of workers’ struggle, they can, depending on the moment, be important cogs in any breakthrough in industrial policies, requiring discipline and increased proletarians’ support, which is essential for these breakthroughs and new production techniques. Here, opening new factories to manufacture electric vehicles requires a workforce ready to accept and able to “train” in new technologies. As Ford’s CEO stated“we can’t build vehicles in the U.S. without the UAW.” [5] In this sense, it seems that the omnipotence of managerial ideology and managerial framing, which had relegated unions and trade unionism to the sole role of controlling and sabotaging struggles since the 1980s, is no longer sufficient in the new times that are emerging and the storms that threaten. The US ruling class is clear about this: “Furthermore, the theory and empirics are clear on the ways in which unions have, in the past, and could, in the future, increase productivity more substantially: through increasing the voice effect of union members and increasing workers’ happiness and connection to their jobs. Unions are well positioned to target these goals in their negotiations and to emphasize the benefits that could come both workers and firm owners alike with productivity-enhancing actions.”  [6]

The “Pro-Middle Class” Discourse

In fact, as the UAW strike illustrates, the new times heralded by the covid pandemic, and confirmed by the wars in Ukraine and the Middle East, are forcing the bourgeoisie to adopt “a new economic philosophy”, as Jake Sullivan, US President Biden’s National Security Advisor, announced as early as 2020 [7]. It advocates to “organize the return of a state at the service of the American middle classes.” [8] The American bourgeoisie, Biden and the Democrats in particular, prefer to use the term middle class to that of working class. Biden’s support for the strike and the UAW and his salute to the “historic union victory” mark a break with the official discourse that had prevailed since the Reagan years, including under the Democratic presidencies of Clinton and Obama. In fact, Trump had already made a break here too, presenting himself as the defender of “blue-collar workers”. What does all this left-wing language and support for the working middle class mean? It would be a mistake to see it only as mystifying and demagogic rhetoric – albeit real – aimed at the proletariat in America, or even as a simple maneuver to win their vote for the 2024 presidential election.

“Persistent inequality in the United States is slowing down economic growth and risks fracturing the democratic stability upon which our economic success depends.” [9] Admittedly, the political and ideological dimension, mystifying towards American workers, is present and aims to avoid reproducing the “anti-democratic” excesses that accompanied Trump’s defeat in the 2020 elections. But above all, this “pro-middle class” language aims to make the productive apparatus of American capital, and especially the living labor force, the proletarians, more efficient and productive. The function of “pro-middle class” social measures is to make the latter both economically more efficient and ideologically more willing.

“This is about strengthening the public systems that connect our roads, our bridges, our ports, universal access to high-speed Internet, affordable high-speed Internet, a modernized power grid, a transportation system and power system that work together toward a zero-carbon future, new schools and childcare facilities that allow – that are the elements that allow people and parents to work.” [10] (emphasis added) The aim here is clear, putting more people to work, and to win the support of as many workers as possible, which the renewal of trade unionism is sure to encourage.

This left-wing discourse thus responds to the rupture announced by Jake Sullivan, among others, and... Trump himself, in “his” way. And the outcome of the UAW strike illustrates the class purpose of the breakaway economic policy being pursued by Biden’s Democratic administration.

The End of Neoliberalism

“As in the past, the United States needs to move beyond the prevailing economic ideology of the past few decades (sometimes imperfectly termed neoliberalism) and rethink how the economy operates, the goals it should serve, and how it should be restructured to serve those goals—and this is a geopolitical imperative as well as an economic one.” [11]

The Bidenomics, as Biden himself calls them, are multi-faceted. As soon as he came to power, he began implementing state plans corresponding to what the same Jake Sullivan had called for back in 2020: “the investments in infrastructure, technology, innovation, and education that will determine the United States’ long-term competitiveness vis-à-vis China.” [12] The purpose of the state’s return to the service of the middle classes is to re-establish an efficient labor force adaptive to the needs of American capital in the face of the challenges it faces, particularly in the face of China’s rise to economic, political and above all imperialist and military power.

The American Rescue Plan Act, passed in March 2021, as soon as Biden took office, succeeded the CARES Act passed under Trump to “help families” following the covid pandemic and containment. “In total, a staggering $5.2 trillion was distributed to American households during Covid-19.” [13] The Infrastructure Investment and Jobs Act, November 2021, $1200 billion, is intended “to renovate all traffic-related infrastructure (...) the drinking water distribution network, the electrical grid (...) and the installation of high-speed internet throughout the country.” The CHIPS and Science Act, passed in August 2022, aims to revive research programs and relocate high-tech production to the United States. This program in particular focuses on the production of microprocessors, semiconductors, CHIPS, with the obvious aim of securing control over them in relation to China, which is lagging behind in this area – let us remember here that Taiwan is the main current producer. And finally, the Inflation Reduction Act (IRA), whose official aim is to ensure America’s “ecological transition” through subsidies and other tax breaks. One of its priorities is to develop the transition to all-electric vehicles by creating electric battery factories. The very plan that UAW union has just given its approval and participation for. There is another reason for its name: inflation is set to fall as a result of higher taxes on the highest-income companies and a drug price cap imposed on pharmaceutical companies. As a result, spending on Medicare – the American social security system – will fall, and many patients with chronic illnesses will be able to take care of themselves – good for them for sure – and... become productive again.

“Finally, both the IRA and the CHIPS Act are part of a certain Bidenomic economic nationalism, fully assumed by its designers. In April 2023, Jake Sullivan gave a speech at the Brookings Institution detailing the international aspect of the new US economic policy. (...) He confirmed that the principle of free trade was being challenged at the highest level, in contradiction with WTO rules. For example, the IRA contains strong protectionist measures.” [14]

According to the canons of neoliberalism and monetarist orthodoxy, the United States’ abysmal indebtedness and chronic budget deficit would, in theory, make it impossible to finance such spending. But this is no longer the time for budgetary and financial balances. “Policy makers should recognize that underinvestment is a bigger threat to national security than the US national debt.” [15] In fact, unlike the other powers, particularly the Western powers, only the United States is in a position to ignore its deficit and indebtedness. As the dollar remains the international reserve currency, the US deficit and indebtedness are largely covered by the rest of the world, which is forced to use the dollar for the majority of international trade, and whose capital is attracted by US treasury bonds [16]. It is precisely this dollar tourniquet on all other powers that China, and others around it, starting with Russia, are trying to escape by attempting to impose their exchanges without using the American currency. In short, and to put it simply, Bidenomics will be largely financed by the rest of the world.

"Bidenomics" or the New "New Deal"

“This is the first time since the New Deal that such large federal investments have been launched to renovate the country’s infrastructure.” [17]

Here we have what has historically been called a policy of great public works. This is where the break lies. This policy is reminiscent of Roosevelt’s New Deal and Nazi Germany’s policies of the 1930s, both of which – among others, including the Popular Fronts – prepared for war by developing “war economies” and rearmament. The New Deal prepared the United States economically, ideologically and politically for World War II. It is particularly important to recall how Rooseveltian policies definitively concluded the historic process of integrating the American unions, AFL and CIO, into the state apparatus for the purposes of World War 2. It is always easy and tempting, but also dangerous, to understand the events of the present as a simple repetition of the past, and to turn them into fixed schemas. Yet there are striking similarities between the New Deal of yesterday and the Bidenomics of today.

Roosevelt signs the Tennessee Valley Authority Act in 1933. “It was created as part of the New Deal (…) to generate electricity and ensure the navigability of the river in order to attract industry. (…) Numerous hydroelectric dams were built on the Tennessee River in the 1930s and 1940s, as the war effort increased demand for energy.”(Quotation and photo French Wikipedia)

Here too, it would be a mistake to see only economic considerations. The American bourgeoisie is quite clear on the fact that the purpose of Bidenomics is to maintain America’s imperialist superpower and contain its rivals, primarily China. We should remember that this policy of containment was already the one that the United States developed towards Japan in the 1930s, until the latter tried to escape the progressive suffocation by war and the attack on Pearl Harbor. To a lesser extent, this is also the policy pursued by the United States towards Russia, bringing NATO to its borders and forcing it to loosen the noose by invading Ukraine. In fact, American economic policy must serve the interests of American imperialism. Is this not precisely what happens in wartime, as the first two world imperialist wars proved? And this is the historic function of state capitalism: to prepare and ensure the centralization and control of the productive apparatus, and social and national cohesion, for and during the war. And for this, unions are indispensable.

“In such a world, economics, at least as much as anything else, will determine the United States’ success or failure in geopolitics. (…) History is again knocking. The growing competition with China and shifts in the international political and economic order should provoke similar instinct within the contemporary foreign-policy establishment. Today’s national security experts need to move beyond the prevailing neoliberal economic philosophy of the past 40 years.” [18]

Preparing for Generalized Imperialist War

As we said, the break came at the end of Obama’s term and with the election of Trump. It was then that the entire American bourgeoisie, Republican and Democrat alike, realized that China was increasingly establishing itself as the main commercial and imperialist rival and with an increasingly threatening military force. Far from being the expression of a loss of political control of the American state apparatus – as many, including Communist minorities, understood – the election of a disruptive figure like Trump indicated the extent of the break to be made.

“‘With Trump, the masks come off’. His language is rough, vulgar, rude, insulting, far from the usual subtle diplomatic language. It is a language of war; of trade war; of imperialist war, and of class war. ‘Does this sound like a remake of the 1920s and 1930s? It does – 100 years later.’ (The Guardian, 17/1/2017). In hardly a few weeks of presidency, the “unthinkable and unpredictable” Trump has become an active factor of acceleration of the historical situation and basic contradictions of capitalism which have provoked his very election. With Trump’s election, the American ruling class engages itself in a march towards generalized war.” (Revolution or War #7, The Proletarians Must Respond to Trump and to All Capitalist States, February 2017)

The American bourgeoisie apparently found no better way to ensure the historic break than with the, shall we say, disturbed personality of Trump. Once this had been achieved, at least ideologically, and given the state of the Republican Party, only the Democratic Party – historically the “war party” in the USA – could implement a coherent overall policy. Only it could adopt a policy of direct state intervention through the adoption of various plans for a policy of great public works. Only it is capable of adopting a “left-wing” language aimed at the proletariat – sorry, the middle classes. Only, it can mobilize the unions without discrediting them too much in the eyes of the workers. Only the Democratic Party, and certainly not Trump and today’s Republican Party, is in a position to address and mobilize “minorities” of all kinds.

“Prior economic transformations in the United States have not brought everyone along. By doing it different this time, we will enhance our economic competitiveness. We know that by prioritizing racial and gender equity we can reduce the yawning gaps in wealth and opportunity and unleash stronger growth. We know that by investing in all of America, particularly in those regions that have suffered from decades of deindustrialization, we can avoid further geographic entrenchment and polarization and unlock more of our innovative capability. And by ensuring labor standards for all and incorporating worker voice into the process, American industry will be more resilient for the long term.” [19]

Today, with the outbreak of war in Ukraine in 2022, followed by war in the Middle East, the economic policies announced and implemented by the Bidenomics take on their full historical significance: it is time to prepare for confrontation and contain the military rise of China and its modern-day allies, Russia, Iran , North Korea... Whether it be the Infrastructure Act, the CHIPS Act and, above all, the Inflation Act, all work together to prepare American society for a frontal imperialist and military confrontation with the only rival capable – today – of constituting a pole and, ultimately, a rival imperialist bloc.

In this sense, Bidenomics is a direct attack on the proletariat of America, which seeks both to subject it to the intensification of exploitation for the needs, no longer merely economic, of American capital’s defense, but now and above all for its imperialist and military needs. “Past assumptions led, among other things, to domestic dislocation and to weaknesses and blind spots in the United States’ approach to China. It’s time to discard them. The foreign-policy community should actively reach for a new economic model. America’s national security depends on it.” [20] The first significant battle in the U.S. bourgeoisie’s offensive against its proletariat was the UAW-organized strike in the auto industry. Far from representing a workers’ advance, this strike on the contrary reinforced the ideological and political stranglehold of unionism on the working class, while seeking to subject it to the imperatives of the technological transition essential for the defence of national capital and preparation for war. [21] There will be other class battles, and nothing is yet inevitable. But it is important to recognize this defeat and its real historical significance. If only to warn the international proletariat and revolutionary and communist minorities.

We’ve seen that the Bidenomics are simply continuing and amplifying the path opened up by the Trump administration. A possible return of the latter, or even of a Republican, to power in the 2024 elections will not call into question the historic turn taken by the American bourgeoisie. “The outcome of the forthcoming presidential elections is unlikely to change the course of what has become a resolutely post-liberal economic policy in the United States. The European Union and the rest of the world must continue to adapt to this new situation.” [22]

Just as in the 1930s, Roosevelt’s New Deal, with the Popular Front policies in Western Europe, set the tone for the policies to be pursued by all bourgeoisies in the “democratic” countries, in preparation for war against the “fascist” countries. Today’s Bidenomics, with their pro-middle-class “left” policies, point the way for the bourgeoisies of the old historical centers of capitalism, mainly in Western Europe. The only difference is that they do not have the monetary weapon and tool of the dollar – the euro has never been able to really compete with the dollar to date – to increase their budget deficits and indebtedness without risk; and that imposing on the proletariat the sacrifices that the development of the war economy will undoubtedly be even more difficult than in the United States.

As for the rivals – China, Russia, etc. – national capital has historically really developed on the basis of the war economy under cover of “building socialism”. In a certain sense, they are already ready for war, as Russia’s ability to sustain its war in Ukraine seems to prove. Nevertheless, on both sides of the imperialist polarization, the historical key remains in the hands of the proletariat. Faced with attacks that the bourgeoisie can only redouble, will it be able to respond to the height of events and the historical dilemma? That’s what is at stake. To do so, it must not lose too many battles, like the one it has just lost with the UAW’s “historic victory”.