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Cooperative Economy in the Great Depression | Jonathan Rowe
"Entrepreneurs of cooperation
Before Social Security and the WPA, the Unemployed Exchange Association rebuilt a collapsed economy"

"The mood at kitchen tables in California in the early 1930s was as bleak as it was elsewhere in the United States. Factories were closed. More than a quarter of the breadwinners in the state were out of work. There were no federal or state relief programs, nothing but some local charity—in Los Angeles County, a family of four got about 50 cents a day, and only one in 10 got even that.

Not long before, America had been a farming nation. When times were tough, there was still the land. But the country was becoming increasingly urban. People were dependent on this thing called “the economy” and the financial casino to which it was yoked. When the casino crashed, there was no fallback, just destitution. Except for one thing: The real economy was still there — paralyzed but still there. Farmers still were producing, more than they could sell. Fruit rotted on trees, vegetables in the fields. In January 1933, dairymen poured more than 12,000 gallons of milk into the Los Angeles City sewers every day.

The factories were there too. Machinery was idle. Old trucks were in side lots, needing only a little repair. All that capacity on the one hand, legions of idle men and women on the other. It was the financial casino that had failed, not the workers and machines. On street corners and around bare kitchen tables, people started to put two and two together. More precisely, they thought about new ways of putting twoand two together.

Building a reciprocal economy

In the spring of 1932, in Compton, California, an unemployed World War I veteran walked out to the farms that still ringed Los Angeles. He offered his labor in return for a sack of vegetables, and that evening he returned with more than his family needed. The next day a neighbor went out with him to the fields. Within two months 500 families were members of the Unemployed Cooperative Relief Organization (UCRO).

That group became one of 45 units in an organization that served the needs of some 150,000 people.

It operated a large warehouse, a distribution center, a gas and service station, a refrigeration facility, a sewing shop, a shoe shop, even medical services, all on cooperative principles. Members were expected to work two days a week, and benefits were allocated according to need. A member with a wife and two kids got four times as much food as someone living alone. The organization was run democratically, and social support was as important as material support. Members helped one another resist evictions; sometimes they moved a family back in after a landlord had put them out. Unemployed utility workers turned on gas and electricity for families that had been cut off.

Conventional histories present the Depression as a story of the corporate market, foiled by its own internal flaws, versus the federal government, either savvy mechanic or misguided klutz, depending on your view.The government ascended, in the form of the New Deal; and so was born the polarity of our politics—and the range of our economic possibilities—ever since.

Yet there was another story too. It embodied the trusty American virtues of initiative, responsibility, and self-help, but in a way that was grounded in community and genuine economy. This other story played out all over the U.S., for a brief but suggestive moment in the early 1930s.

The UCRO was just one organization in one city. Groups like it ultimately involved more than 1.3 million people, in more than 30 states. It happened spontaneously, without experts or blueprints. Most of the participants were blue collar workers whose formal schooling had stopped at high school. Some groups evolved a kind of money to create more flexibility in exchange. An example was the Unemployed Exchange Association, or UXA, based in Oakland, California. (The UXA story was told in an excellent article in the weekly East Bay Express in1983, on which the following paragraphs are based.) UXA began in a Hooverville (an encampment of the poor during the Depression, so-called after the president) called “Pipe City,” near the East Bay waterfront. Hundreds of homeless people were living there in sections of large sewer pipe that were never laid because the city ran out of money. Among them was Carl Rhodehamel, a musician and engineer.

Rhodehamel and others started going door to door in Oakland, offering to do home repairs in exchange for unwanted items. They repaired these and circulated them among themselves. Soon they established a commissary and sent scouts around the city and intothe surrounding farms to see what they could scavenge or exchange labor for. Within six months they had 1,500 members, and a thriving sub-economy that included a foundry and machine shop, woodshop, garage,soap factory, print shop, wood lot, ranches, and lumber mills. They rebuilt 18 trucks from scrap. At UXA’s peak it distributed 40 tons of food a week.

It all worked on a time-credit system. Each hour worked earned a hundred points; there was no hierarchyof skills, and all work paid the same. Members could use credits to buy food and other items at the commissary, medical and dental services, haircuts, an dmore. A council of some 45 coordinators met regularly to solve problems and discuss opportunities.

One coordinator might report that a saw needed a new motor. Another knew of a motor but the owner wanted a piano in return. A third member knew of a piano that was available. And on and on. It was an amalgam of enterprise and cooperation—the flexibility and hustle of the market, but without the encoded greed of the corporation or the stifling bureaucracy of the state. The economics texts don’t really have a name for it. The members called it a “reciprocal economy.”

The dream fades

It would seem that a movement that provided livelihood for more than 300,000 people in California alone would merit discussion in the history books. Amidst the floundering of the early 1930s, this was something that actually worked. Yet in most accounts the self-help co-ops get barely a line.

The one exception is Upton Sinclair’s campaign for governor in 1934. Sinclair was a kind of Ralph Nader of his day. He based his campaign on a plan he called End Poverty in California, or EPIC, which was based in turn on the self-help cooperatives, UXA in particular. It would have taken the state’s idle farmland and factories and turned them into worker co-ops.

The idea of a genuine economy shorn of Wall Street contrivance touched a chord. Some 2,000 EPIC clubs sprang up. Sinclair won the Democratic primary, but California’s moneyed establishment mustered $10 million dollars to pummel him. EPIC died with his campaign, and the idea has been associated with quixotic politics ever since.

To say UXA and the other cooperative economies faced challenges is to put it mildly. They were going against the grain of an entire culture. Anti-communist “Red Squads” harassed them, while radicals complained they were too practical and not sufficiently committed to systemic change.

But the main thing that killed the co-ops was the Works Progress Administration and its cash jobs. Those WPA jobs were desperately needed. But someof them were make-work, while the co-op work was genuinely productive.

The co-ops pleaded with FDR’s Administration to include them in the WPA. Local governments were helping with gasoline and oil. But the New Dealers weren’t interested, and the co-ops melted away. For years they were period pieces, like soup lines and Okies.

Or so it seemed.

Today, the signs of financial and ecological collapse are mounting. We are strung out on foreign debt and foreign oil, and riding real estate inflation that won’t last forever. Add the impendingc ollapse of the natural life support system, and the ’30s could seem benign by comparison.

In this setting, the economics of self-help are increasingly relevant. The possibility of creating such an economy, though, might seem remote. In the 1930s, there still were farms on the outskirts of cities—family operations that could make barter deals on the spot. Factories were nearby too. Products were simple and made to last, and so could be scavenged and repaired.

All that has changed. The factories are in China, the farms are owned by corporations, and you can’t walk to them from Los Angeles anymore. Products are made to break; the local repair shop is a distant memory. Hyper-sophisticated technology has put local mechanics out of business, let alone backyard tinkerers.

An idea resurfaces

Yet there are trends on the other side as well. Energy technology is moving back to the local level, by way of solar, wind, biodiesel and the rest. The popularity of organics has given a boost to smaller farms. There’s also the quiet revival of urban agriculture. Community gardens are booming—some 6,000 of them in 38 U.S. cities. In Boston, the Food Project produces over 120,000 pounds of vegetables on just 21 acres.Then consider the unused land in U.S. cities: some 70,000 vacant parcels in Chicago, 31,000 in Philadelphia.

Large swaths of Detroit look like Dresden after the firebombing. A UXA could do a lot with that. I’m not getting gauzy here. Anyone who has been part of a co-op — I once served on the board of one — knows it is not a walk in the park. But it is not hard to see the stirrings of a new form of cooperative economics on the American scene today. You can’t explain Linux, the computer operating system developed community-style on the web, by the tenets of the economics texts. Nor can you so explain Craig’s List, the online bulletin board that people use at no or minimal cost.

The cooperative model seems to defy what economists call “economic law”—that people work only for personal gain and in response to schemes of personal incentive and reward. Yet the Depression co-ops did happen. When the next crash … [more]
cooperation  coopeatives  greatdepression  socialism  history  california  us  1930s  economics  solidarity  jonathanrowe  losangeles  compton  farming  agriculture  labor  work  ucro  oakland  carlrhodehamel  uxa  community  mutualaid  detroit  coops  local  fdr  wpa  communism  uptonsinclair  poverty 
5 weeks ago by robertogreco
Opinion | The Real Legacy of the 1970s - The New York Times
"How different this was from previous economic crises! The Great Depression, the 20th century’s first economic emergency, made most Americans feel a degree of neighborly solidarity. The government wasn’t measuring median household income in the 1930s, but a 2006 Department of Labor study pegged the average household income of 1934-36 at $1,524. Adjust for inflation to 2018, that’s about $28,000, while the official poverty level for a family of four was $25,100. In other words, the average family of 1936 was near poor. Everyone was in it together, and if Bill couldn’t find work, his neighbor would give him a head of cabbage, a slab of pork belly.

But the Great Inflation, as the author Joe Nocera has noted, made most people feel they had to look out for themselves. Americans had spent decades just getting more and more ahead. Now, suddenly, they were falling behind.

Throw in wage stagnation, which began in the early ’70s, and deindustrialization of the great cities of the North. Pennsylvania’s Homestead Works, which had employed 20,000 men during the war, started shrinking, closing forever in 1986. Today that tract of land along the Monongahela River where the works once stood is home to the usual chain restaurants and big-box stores, those ubiquitous playpens of the low-wage economy.

Inflation also produced the manic search for “yield” — it was no longer enough to save money; your money had to make money, turning every wage earner into a player in market rapaciousness. The money market account was born in the 1970s. Personal investing took off (remember “When E.F. Hutton talks, people listen”?).

Even as Americans scrambled for return, they also sought to spend. Credit cards, which had barely existed in 1970, began to proliferate. The Supreme Court’s 1978 decision in Marquette National Bank of Minneapolis v. First of Omaha Service Corporation opened the floodgates for banks to issue credit cards with high interest rates. Total credit card balances began to explode.

Then along came Ronald Reagan. The great secret to his success was not his uncomplicated optimism or his instinct for seizing a moment. It was that he freed people of the responsibility of introspection, released them from the guilt in which liberalism seemed to want to make them wallow. And so came the 1980s, when the culture started to celebrate wealth and acquisition as never before. A television series called “Lifestyles of the Rich and Famous” debuted in 1984.

So that was the first change flowing from the Great Inflation: Americans became a more acquisitive — bluntly, a more selfish — people. The second change was far more profound.

For decades after World War II, the economic assumptions that undergirded policymaking were basically those of John Maynard Keynes. His “demand side” theories — increase demand via public investment, even if it meant running a short-term deficit — guided the New Deal, the financing of the war and pretty much all policy thinking thereafter. And not just among Democrats: Dwight Eisenhower and Richard Nixon were Keynesians.

There had been a group of economists, mostly at the University of Chicago and led by Milton Friedman, who dissented from Keynes. They argued against government intervention and for lower taxes and less regulation. As Keynesian principles promoted demand side, their theories promoted the opposite: supply side.

They’d never won much of an audience, as long as things were working. But now things weren’t, in a big way. Inflation was Keynesianism’s Achilles’ heel, and the supply-siders aimed their arrow right at it. Reagan cut taxes significantly. Inflation ended (which was really the work of Paul Volcker, the chairman of the Federal Reserve). The economy boomed. Economic debate changed; even the way economics was taught changed.

And this, more or less, is where we’ve been ever since. Yes, we’ve had two Democratic presidents in that time, both of whom defied supply-side principles at key junctures. But walk down a street and ask 20 people a few questions about economic policy — I bet most will say that taxes must be kept low, even on rich people, and that we should let the market, not the government, decide on investments. Point to the hospital up the street and tell them that it wouldn’t even be there without the millions in federal dollars of various kinds it takes in every year, and they’ll mumble and shrug."
1970s  economics  greed  inflation  selfishness  us  policy  ronaldreagan  joenocera  greatdepression  johnmaynarkeynes  newdeal  taxes  solidarity  miltonfriedman  liberalism  neoliberalism  regulation  supplysideeconomics  paulvolcker  michaeltomasky 
11 weeks ago by robertogreco
Masterpiece: The Making of Migrant Mother - YouTube
"The story of how Dorothea Lange created perhaps the most iconic photograph in American history.


James C. Curtis, "Dorothea Lange, Migrant Mother, and the Culture of the Great Depression"
Winterthur Portfolio, Vol. 21, No. 1 (Spring, 1986), pp. 1-20 "
greatdepression  dorothealange  2019  videoessays  photography  evanpuschak  nerdwriter 
11 weeks ago by robertogreco
Black Mountain College Museum en Instagram: ““FBI people showed up all the time, and they looked like something out of a grade B movie [...] They always had trench coats on, and you…”
“FBI people showed up all the time, and they looked like something out of a grade B movie [...] They always had trench coats on, and you could spot them a mile away [...] And of course the students at Black Mountain put on an act for them. One of the favorite student tricks was to not have shoes on in the middle of the winter, and to crunch out a cigarette butt with their bare feet … It confirmed their worst opinions, and we did not answer any of their questions.” -Dorothea Rockburne (Interview with Connie Bostic, 2002.)


This spring, the fascinating story of BMC's FBI investigation is coming out of the shadows (along with other pivotal moments in political history, including WWII, The Great Depression, and Jim Crow) The Politics of Black Mountain College, curated by Connie Bostic, Jon Ellison, Jay Miller and Alice Sebrell opens February 1st.


Image: Dan Rice and Robert Creeley at Black Mountain College photographed by Jonathan Williams."
bmc  blackmountaincollege  fbi  education  history  politcs  conniebostic  jonellison  jaymiller  alicesebrell  jimcrow  greatdepression  ww2  wwii  dorothearockburne  jonathanwilliams  danrice  robertcreeley 
december 2018 by robertogreco
A new history of the French banking crisis during the Great Depression | VOX, CEPR Policy Portal
This new picture of the French Great Depression shows that a broad view on the financial system is needed to understand the channels and consequences of banking panics. The previous literature on the Great Depression in France had underestimated the size of the banking crisis because it was limited to a subset of banks. The French case demonstrates that some minor macroeconomic assumptions and extrapolations on monetary statistics can be misleading and introduce large, persistent biases in historiography. // look at UK deposits and German deposits after '31!
banking  finance  greatdepression  france  economics  economichistory 
december 2018 by yorksranter
Blade tumbler
Can you lengthen the life of razor blades by sharpening them on the inside of a drinking glass?
GreatDepression  lifehacks 
september 2017 by M.Leddy
Stop lying about Roosevelt’s record. | The Edge of the American West
These people, these people who spend their time propagating these incorrect lessons from the Great Depression, the truth is not in them. For the record, here’s a quick look at economic performance under the New Deal.
NewDeal  Economics  FDR  wealth_inequality  unemployment  grade_A  grade_AA  grade_AAA  GreatDepression 
may 2017 by Marcellus

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