Harnessing People Power in a Crisis
What a Depression-era movement can teach us about responding to economic crises
In 1929, the bottom fell out of the US economy. After a stock market crash and a run on the banks, the economy spiraled deep into depression as the government spun its wheels in desperation. What started as a simple recession slowly warped into a twenty percent national unemployment rate and a massive contraction in all parts of the economy.
The Great Depression impoverished a huge chunk of the country, driving hundreds of thousands of people into Hoovervilles: shanty-towns named after the president that many felt had put them there. As the Hoovervilles swelled and the newly unemployed looked for work, many began to notice a curious contradiction. While there were millions of unemployed people, there was also an immense amount of work to be done. Factories were empty, farms were barren, and entire neighborhoods were falling into disrepair, but there just wasn’t any money to pay people to do those things.
It was out of this climate that a cellist stepped up. Carl Rhodehamel was a former electrical engineer for GE, who had invented several important technologies that formed the foundation of early radio and film. He had balanced this job with his musical work, where he composed, conducted, and performed. Despite all this, he was now unemployed and searching for work in the Pipe City Hooverville outside of Oakland, California.
Like many others, Rhodehamel found that there was no work, but plenty to be done. So instead of waiting for jobs to come back, he decided to start making some. Gathering in an abandoned grocery store, he and a group of other unemployed workers began to organize a new system of exchange. They went around town to offer small services, such as home repair, in exchange for goods that people had lying around. These goods would then be distributed based on who needed them most. It was a limited system, but as they did more work people became more interested and joined in. Out of crisis, a new system was being built. And not a single dollar was changing hands.
Eventually, this informal system turned into an official organization known as the Unemployed Exchange Association (UXA). Within the UXA, they never exchanged money, just goods and services. The hours that people worked were logged in a book, and people could exchange those hours worked for things that they needed. And everything was managed democratically. Large decisions were made by a General Assembly of all members, which would also elect an Operating Committee that oversaw the day-to-day coordination of the group.
The UXA’s operations expanded well beyond the simple home repairs of its earlier days. Members went into the surrounding community to expand their offerings, and the organization was eventually split into several sections ranging from manufacturing to transportation, construction to health. It even owned a sawmill and a ranch. At its peak it had a membership of fifteen hundred members and was distributing forty tons of food a week.
“We are not going back to barter: we’re going forward into barter,” said Rhodehamel. “We’re feeling our way along, developing a new science.”
The UXA was far from the only organization of its kind. All across California, these labor-based “self-help” organizations sprung up, based on the simple premise that communities could and should take control of their own livelihoods. Without a dollar to spare, these unemployed workers turned the crisis of the Great Depression into a new type of grassroots economics.
It would not take long for people to notice this new system. In 1933, perennial socialist candidate Upton Sinclair suddenly changed his party registration to Democrat and announced that he was running for governor. Sinclair had achieved a great deal of fame for his books, but he had never had much success as a politician. Four years prior, he had run for governor on the Socialist ticket and only won 3.65% of the vote, even in the midst of the depression.
However, the system pioneered by these unemployed workers changed things. For Sinclair, the burgeoning self-help movement showed in practice what he had believed in theory for a long time: it was possible to run an economy without a profit motive driving everything. To bring the principles of this movement to a wider audience, he believed he had to run a more serious campaign (hence the party change), and have a more detailed plan.
The plan he developed was called End Poverty in California (EPIC). At the core of this proposal was the concept of “production for use”. Under the EPIC program, the state would buy idle factories and farms and allow the unemployed to take them over and run them as cooperative organizations. As opposed to typical firms, which created and sold commodities in order to make a profit, these cooperatives would “produce the basic necessities required for themselves and for the land colonies, and to operate these factories and house and feed and care for the workers.” No one made any money off of them beyond their wages. It wasn’t production for profit, it was production for use.
In a state where the unemployment rate was still over twenty percent, the End Poverty in California plan took the public by storm. All across California, EPIC clubs and EPIC newspapers sprung up, especially in many of the Hoovertowns where the self-help organizations thrived. Many of the leaders in these organizations ended up as Sinclair’s advisors, with the grassroots economics of the unemployed workers serving as the engine of his grassroots campaign.
But while this was hardly a Soviet-style centralized economic plan, it was still far too radical for many of the middle class and upper class in California. Establishment figures, both Democrats and Republicans, joined forces to launch one of the first modern political media campaigns against Sinclair. Almost every newspaper was running anti-EPIC comics, almost every radio was blaring anti-EPIC ads, and almost every movie theater was running anti-EPIC newsreels. Additionally, a moderate third-party candidate joined the race, explicitly trying to draw moderate Democrats away from Sinclair.
At the end of the race, Sinclair lost. He won more votes than any other Democrat in the history of the state, but it was not enough to overcome an immense political disadvantage. The self-help cooperatives remained for a time, but various New Deal programs drew people away from the movement, and World War II completely dried up the labor supply for any sort of alternative system. By 1945, this experiment in grassroots economics was essentially over.
However, the failure of this movement does not mean that we can not learn from what it accomplished. It showed a particularly strong example of what is possible when a crisis hits. When people talk about economic crises, there is a lot of focus on the widespread suffering or the brutal measures that can be pushed through during the shock. But the experience of the self-help movement and the EPIC campaign shows that a crisis can also give us the opportunity to seek a better, more humane system. Both on a political level and in our day-to-day lives.
Despite what economists might have you believe, we are not all atomized individuals clawing our way to the top of a perfectly competitive economic structure. Every community, small or large, is an intricate web of friends, family, co-workers, and neighbors. We may find ourselves focusing on the more selfish and upsetting forms of human nature, but the truth is that our days are filled with little moments of social solidarity.
In a crisis, this only expands. While we may direct our rage at looters and price gougers, the fact is that they are vastly outnumbered by those who step up for their communities. For every person that is hoarding hand sanitizer, there are ten people that are checking in on their neighbors or volunteering at a food bank. For every crazed crowd, there is a mutual aid network. For every Herbert Hoover, there’s a Carl Rhodehamel.
At the end of the day, however, it is our political action that is going to determine the long-term outcome of a crisis. The self-help movement during the Great Depression could have thrived if the EPIC plan had been implemented, or if the New Deal had gone another way. If we base our response to crises on the worst of humanity, then we’re just going end up in the same place again. But if we work to create a system that reinforces human solidarity, rather than fighting against it, something better is possible. We truly have it in our power to make the world over again. We just have to use it.