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Labor: a Polish Tiger, an American Pussycat

<i> Eliot Janeway publishe</i> s <i> the Janeway Letter; his latest book is "The Economics of Chaos" (Dutton)</i>

“History repeats itself only as farce,” Karl Marx said, and he knew more about the history of capitalism than the future of communism.

“A Yale Man and a Communist” was the provocative title of a Fortune magazine article published at the height of World War II. The longest strike of the war had shut down the Emerson Electric Co. in St. Louis and shut off key components of the Navy’s crack fighter plane. The president of the striking local was a declared communist.

James V. Forrestal, then Navy secretary, persuaded Stuart Symington to take over Emerson management and settle the strike. Symington went to the mat with the communist labor leader and demonstrated a willingness to learn how the other three-fourths live. He also opened his adversary’s eyes to the connection between beating Hitler and building planes. Symington put Emerson back to work, later became secretary of the Air Force and then senator from Missouri.

Another Yale man and another provincial communist strike leader have just had their own confrontation. The road show revival has been something of a farce.

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When President Bush went to Poland and Hungary, his audience had money in mind. East Europeans were prepared to cheer his rhetoric, but only after counting the size of the bundles he brought with him.

Bush played Poland safe, or so he thought. He offered an agricultural country living below subsistence levels a diet of generalities about free-market economics and a petty-cash handout of $100 million.

The communist strike leader explained Poland’s need to the Yale-trained President. The process included a lesson in the rudiments of economic reality when people have nothing to lose but their faith.

Lech Walesa warned Bush that his offer was incendiary; he told Bush straight out that to load planned unemployment on top of systematic starvation would trigger civil war, “worse than in China.” Moving from politics to economics, Walesa made more sense than all the President’s advisers.

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Of course, the U.S. government is broke, Walesa conceded, and can’t take on new obligations at home by itself, let alone abroad. Poland does not expect it to try. But U.S. banks are loaded with lending power, as their antics in the takeover games advertise. Time Inc., for example, has just rejected an offer of $27 billion in new bank loans to support its Warner Communications strategy. Poland owes only $12 billion more than that for its entire foreign debt.

No one expects U.S. banks to risk their own money on new loans to Poland, Walesa concluded, but since $10 billion would establish the primacy of American connection there, a U.S. government guarantee of $10 billion in new bank loans would do wonders.

A $10-billion loan would buy a great deal of shipyard capacity in Poland, a better business deal for the United States than some of the commitments made to bail out busted S&Ls.; With Russia announcing arms reductions and entering Europe peacefully, $10 billion of U.S.-guaranteed loans to Poland would certainly be worth their weight in Western arms cutbacks.

Admittedly, Poland’s Gdansk shipyard is antiquated, overdue for scrapping or modernization. Yet the yard’s unique asset is its politicized labor force. Scrapping the place could extinguish the spark that animates the Polish phenomenon. Modernizing it should make the difference between living and surviving throughout Eastern Europe.

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The power of politicized labor started in the United States during wartime in the 1940s. The communist minority in the unions neither started nor dominated it, but another strike leader, with an unusual combination of charisma and organizational genius, did. As Franklin D. Roosevelt’s initial effort with “guns-and-butter” was failing, Walter Reuther mounted a Detroit soapbox to call for conversion of the country’s auto plants to full war production. The best brains in the U.S. economic Establishment were unanimous in laughing off Reuther’s proposal. Auto management and the top layer of labor leaders ratified that laughter.

But Reuther’s politicized approach, including strike-organizing initiatives, prevailed. America won the war in Detroit before it launched the invasion of Europe. And while the production war was on, Reuther showed that labor militants would work their hearts out for causes that inspired them.

Walesa’s followers would bring the same productivity to Gdansk--and to Poland.

The White House has yet to focus on a big issue: that strikes in Poland and Russia are economic activity becoming a political force. Current Washington thinking grapples with the problem in reverse, taking the political explosion first. The Administration sympathizes with strikes in communist lands but has profound reservations about strikes in the U.S. economy--a threat of interference with “market forces.”

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This awe of market forces interferes with economic pragmatism; economists less ideologically driven make analytical sense out of labor disputes, measuring the onset of strike threats as indicators of business recovery, and vice versa. No strike threats mean no pep in the economy.

While Walesa was talking to the President, his opposite numbers inside Russia were hitting the bricks. The spontaneous strike wave that has already shut down half the coal mines in the Soviet economy may remind Westerners that coal miners can be the most militant arm of the labor force. This was true when “coal was king” here. Technology has not yet started to depose it in Soviet Russia. One of the paradoxes in Soviet life has left the domestic economy dependent upon coal--and a docile labor force--while oil reserves go to export.

Russia has no experience of strikes since 1917. The authorities, ordered to put aside their bludgeons, have panicked.

This strike is political because it is economic. The strikers are being politicized without a Reuther to tell them that they need to be, or a Symington to warn them that they dare not be. They thereby emerge as a political force without using force themselves.

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Everyone everywhere wants to know what Mikhail S. Gorbachev will do about the new Soviet leaders produced within its own coal pits. At first, Gorbachev welcomed strikers as children of glasnost and fathers of perestroika , challenging “the dead souls” inside the power structure. As the strike spread, however, Gorbachev has begun to threaten action against the strikers.

The United States, meanwhile suffers a different form of union trouble. The one-liner about Philadelphia back in the Gilded Age--"corrupt and contented"--applies today to what the late John L. Lewis called the House of Labor. One union after another has accepted management schemes, selling them to the membership rather than battling in behalf of labor. Reuther would have offered constructive counterproposals.

Today, the main concern among union members is also the main concern among bank vice presidents: job security. If good times have burned the idealism out of union members, perhaps their fears are realistic; then labor leaders can’t be faulted for catering to their remaining dues-payers.

In practical terms, however, labor cannot be both a pussycat in the lap of management and a tiger that the Federal Reserve Board and its Wall Street constituents fear. Fed Chairman Alan Greenspan and company have spent the last year worrying about an impending resurgence of wage inflation, so far a false alarm. Before U.S. labor entered its salad days, founding father Samuel Gompers summed up union goals as “more.” Today, while labor becomes a potent political force in communist countries, U.S. free labor seems willing to settle for less.

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