1968-1978: Contours of Crisis

September 25, 2007

Even as it began, 1968 seemed to mark a new historical period for the world economy and the world-wide class struggle. "With so many problems flowing together, [the U.S.] was battered by a flood tide of frustration and anxiety," lamented Time magazine in its first editorial of the year. Echoing the concerns voiced by other ruling class representatives that
year, Time foresaw a new era of "post-industrial society growing ever more bewilderingly urbanized, ungovernable and impersonal."(1)

The ten years since 1968 have proven the fears of the bourgeois press to be more real than even they cared to believe. Today the commercial media tells us that 1968 was merely a "crack in time," as this year's ABC TV special called it, a series of freak events inconsistent with the historical development of capitalism and "democracy."

But 1968 was no inconsistent "crack" in history. It was more, as it is said in Spanish, un ano fronterizo - a "border year" signaling a new era of economic crisis and unrelenting assault on the working people of the world. The events of 1968, and the profound changes since, cry for a thoughtful reevaluation.


The Vietnam war dominated the headlines and our lives throughout 1968, as the Tet offensive and a mounting anti-war movement forced Washington to take its seat at the peace talks in Paris. Slowly the reality was sinking in: the sun just might set on the U.S. empire after all - only to rise again, vibrant red on the shoulders of a victorious Vietnamese people. Troubles were also brewing in the Middle East where U.S. hegemony was being challenged by growing Soviet influence. And as if to underscore the withered position of the United States as a world power, 1968 also saw the capture of the U.S.S. Pueblo by the North Koreans.

In Latin America, a preserve of profits and political power long taken for granted by U.S. business and government, revolutionary up-heaval persisted throughout the sixties. U.S.
interventions in Brazil (1964) and the Dominican Republic (1965) and the CIA-aided assassination of Che Guevara (1967) had not returned "stability" to the Americas. Instead, by 1968, students were rebelling in Montevideo and Mexico City, and new revolutionary organizations like the Montoneros in Argentina and the MIR in Chile were forming underground as the traditional left increased its public presence in national politics.

Not only was its power challenged internationally, but the U.S. bourgeoisie also faced trouble at home. A decade of liberal reforms - won at the insistence of a militant civil rights movement - had done little to change the conditions of poor people.

So in 1968, the black civil rights movement launched the Poor People's March on Washington, bringing together blacks, native Americans, chicanos and Appalachian whites in a massive protest at Resurrection City. And from the Mexican community of the United States, the Chicano Movement erupted full-force in 1968, with an intense struggle over land rights in New Mexico and the student walk outs in Los Angeles schools and throughout the southwest to protest the racism of the school system. The student rebellion also swept through the United
States in 1968, as it did in France, Germany, Japan, Mexico, Uruguay and elsewhere, and in its best moments - rare though they were - provided important support to the civil rights
anti-war and labor movements.

U.S. labor was also on the move in '68. The eight-month, 26-union strike which shut down the nation's copper producers, the 35-month- old United Farm Workers strike in California,
and particularly the growing militancy of public employees were causing the bourgeoisie to look at U.S. labor with renewed anxiety.


These political challenges, both abroad and at home, gave the bourgeoisie particular cause for alarm in 1968, because they coincided with the first sharp signals of imminent economic
crisis. In 1968, several economic trends that had been underway for a number of years asserted themselves as omens of an end to the unprecedented period of post-War expansion.

The overall growth rate of the U.S. gross national product had been on the decline for several years, dropping from an annual increase of 4.7 percent in the first half of the sixties to 3
percent in the last half.(2) More significantly, the rate of profits in the U.S. was beginning to decline, while the rate of inflation - which when kept under control is viewed by big
business as a boon to profits - was starting a fast upward climb.

Underlying the start of an inflationary spiral was a much more fundamental problem. The almighty dollar was under assault, and the Bretton Woods international monetary system, imposed on the world by the United States after World War II, was on the verge of collapse. The dollar's weakness stemmed from two major problems. First, competition from European and Japanese capitalists was causing the U.S. trade surplus to dwindle. This, combined with tremendous government spending on the
Korean and especially the Vietnamese war, led to an outflow of dollars into the world economy far in excess of what other countries needed for monetary and trade purposes. These
developments forced down the value of the dollar, and in March 1968, the convertibility of dollars into gold was the first principle of Bretton Woods to be defacto abandoned.(3)

While the tremendous costs of the Vietnam War were a major contributor to the huge U.S. deficit and the decline of the dollar, war expenditures had also been an important stimulus to the economy throughout the sixties. However, "By the end of the sixties," write political economists Magdoff and Sweezy,
with the U.S. being forced by Vietnamese resistance and rising anti-war feeling at home to reduce its military commitment in
Southeast Asia, the underlying expansionary forces were clearly weakening, and the long upswing was showing signs of coming to its natural end.(4)


In the eyes of important sectors of the international capitalist class, a time of economic downswing was no time to grant any further concessions to labor or oppressed minorities. Consequently, bourgeois governments around the world seemed to unleash their repressive forces with renewed venom throughout 1968, especially when working class struggles converged with student mobilizations or when labor demands merged with civil rights issues.

Police attacked Columbia University students with beatings and arrests, for example, when the university was occupied to protest Columbia's encroachment into Puerto Rican and black neighborhoods of Harlem. Likewise, it was just as the political work of the Mexican students began to build popular support that the Mexican government drenched that budding
movement in the blood of several hundred demonstrators on October 2.

And it was, after all, following his march in support of the striking garbage workers in April, 1968, that Martin Luther King - perhaps the only national figure capable of leading a
mass movement at the time - was assassinated and 282 supporters arrested in Memphis. In the days following King's murder, spontaneous protests erupted in nearly 170 U.S. cities. Some 72,800 Army and National Guard troops were
set loose on the black communities, resulting in 24,000 arrests and 43 deaths.(5)

A short two months after King's death, the assassination of Robert Kennedy eliminated the only bourgeois politician with the possible will and ability to have approached the coming
crisis with liberal reforms rather than repression and imposed austerity. Following Kennedy's death and the police repression of demonstrators at the Democratic Convention in Chicago in August, both Republican and Democratic presidential candidates abandoned talk of reforms and put forth a shared motto which would dominate the '68 campaign: Law and Order.

With the November election of law-and-order advocate Richard Nixon (with less than 43 percent of the vote), the stage was set for the period that was to unfold over the next ten years. As post-war economic expansion would give way to world-wide stagnation, the reforms of the 60s would give way to "law and order" and imposed austerity for working people the world over. The 70s would be a period of a new desperate offensive by U.S. imperialism, both abroad and at home.


The 70s began with a 15 month period of recession in 1970-1971. And before the expected return to a more stable period of growth, that recession was followed quickly by
a much more serious one after the rapid rise of oil prices in 1973-1974 which exacerbated all of the problems that were beginning to plague the U.S. economy in the late 60s: inflation, recession and mounting trade deficit.

Since then, the entire capitalist world has faced the same bleak economic picture. Industrial production in all the industrialized capitalist nations since the late 60s has grown at rates far below their post-War averages.(6)(See table.) The growth rate of the U.S. gross national product continued on the downswing, to a mere 2.1 percent annual average in the
1970-1975 period.(7) And most serious of all, from the capitalists' point of view, the U.S. rate of profit has dropped, from a rate of return of 13.4 percent in 1966 to 9.2 percent in 1976.(8)

A crucial aspect of the U.S. capitalist class' efforts to weather the crisis in the 70s has been its aggressive offensive to reassert its strength in the world economy. Presidents Nixon, Ford and Carter have all tried to attack the problem of a growing foreign exchange deficit and an eroding dollar, for example, by pushing U.S. exports and cutting back on imports from Europe, Japan and traditional trading partners
like Latin America. One effect of these policies has been a growing tension among the advanced capitalist nations - all of which simultaneously have attempted to increase their share of the world market.

More serious, however, has been the disastrous effect of the economic crisis on areas like Latin America where the U.S. bourgeoisie has strengthened its grip in the 70s. The "reforms" of Kennedy's Alliance for Progress have given way to the implementation of austerity programs and open support of military dictatorships throughout the continent, forcing most of the popular movements of the 60s into largely defensive struggles for survival.


Mexico is one of the clearest examples of the economic and political changes brought about by the past decade of crisis. Long dominated by many of the same transnational corporations
which control the U.S. economy, and dependent upon the U.S. for three-fourths of its trade, the Mexican economy always responds with wildly erratic ups and downs to every tremor in the U.S. economy. (See table on industrial production.) And with the world crisis of the 70s, the economy has fallen into a chronic slump pushing combined unemployment and underemployment to over 50 percent, while inflation rates have ranged over thirty percent a year.

At the same time, Mexico has come to play an ever greater role in the world economy throughout the 70s, both as a haven for
industry seeking cheap, oppressed labor, and as a source of strategic natural resources like oil and uranium for the United States. The most fundamental consequence of Mexico's growing strategic importance at the same time that its economy is in crisis has been a dramatic sharpening of class struggle. The massive, but still largely petty-bourgeois-led, student movement of 1968 has been eclipsed by a resurgent labor movement facing fierce repression from the Mexican state working hand-in-glove with imperialist agencies like the International Monetary Fund, the CIA and the FBI.(9)

The following article by Mexican activists Salvador Martinez Della Rocca and Roberto Escudero provides important insights into the political changes brought about in Mexico by the ten years of crisis since the Tlatelolco massacre of October 2, 1968. By focusing on the changes in the university movement since 1968, this article demonstrates the much clearer class nature of the struggles being waged in Mexico today and the unrelenting repression faced by Mexican workers as the international capitalist class tries desperately to reassert its control over the world economy.


The international offensive waged by the transnational corporations and the U.S. government in the 70s has been complemented by an attack on labor in the United States designed to shore up profits at home. As one workers' paper from California, Rebel Worker News Journal, sums up the "attack on labor":

This crisis of capitalism provokes the capitalist to attack us ... first through inflation, then through unemployment,
through wage and benefit losses, and finally, through laws that make it a criminal offense for us to organize and fight the attack [such as H.R. 6869].(10)

As in Mexico, what the bourgeoisie has attempted to implement for the U.S. working class is a program of austerity. In order to keep capitalism afloat through the current crisis, argued Business Week, in 1975:

Some people will obviously have to do with less ... so that big business can have more ... Nothing that this nation or any other nation has done in modern history compares with the selling job that must now be done to make people accept the new reality.(11)

Indeed, the selling job has been difficult, for the rapid erosion of workers' buying power in the U.S., as in Mexico, has also rekindled the labor movement. Throughout the 70s, U.S. workers have walked off their jobs in growing numbers, protesting inflation, speed-ups, lay-offs and general work conditions. Rank and file reform movements have emerged in many of the nation's major trade unions, and public employees, who in the 60s waged an average of over 50 strikes a year, call more than 400 strikes annually today.(12)

Despite the militant actions of U.S. working people, however, the "attack on labor" seems to have borne some fruit for the capitalists. The 1971-1974 wage freezes, the widespread implementation of speed-ups, the increased use of lesser-paid part time workers - all these tactics have kept the increase in U.S. wages since 1970 far below the averages in other industrialized nations.(13) Because of lower unit-labor costs,
argues Business Week, "North America has again become the area where potential profitability is greatest, at least among the developed areas of the world."(14) The Wall Street Journal
explains why in surprisingly frank terms:

The value that the U.S. workers add to their products through their labor exceeds their earnings, on the average by $6,895.
The comparable figure for the West Germans works out to only $1,964 ... (15)


Minority workers in the U.S. have been especially affected by the crisis of the 70s. In contrast to the hard-won gains of the civil rights movement in the 60s, the past decade has seen
the oppressed minorities forced into largely defensive struggles to defend the attacks on their gains. The recent Bakke decision is clearly one of the most obvious roll-backs of the concessions won in the 60s.

Among the national minority workers, the undocumented immigrant has been a special target of attack in the 70s, especially as the economic crisis in countries like Mexico has
forced hundreds of thousands of workers to the U.S. in search of jobs In the October 11, 1968 issue of Time magazine - the same issue which carried news of the Tlatelolco massacre - a
short, but revealing article reported that the Border Patrol had found 47 Mexican workers locked inside a truck near San Antonio, Texas. One was dead, two dying and fifteen others had
to be hospitalized for heat prostration. The article went on to signal what was to be an important new development for the U.S. work force over the next ten years - the rising importance of the undocumented immigrant worker:

The added influx of wetbacks coincides with moves by the U.S. to restrict legal entry of migrant workers ... [T)he braceros, who once crossed the border as contract laborers at the rate of 400,000 a year ... have become dispensable primarily because the U.S. government, bowing to the growers' wishes, is so lax in its vigilance of the 2,013-mile border that thousands of Mexican laborers cross into the U.S. illegally.(16)

The vulnerability of undocumented immigrants, stemming from their "illegal" status, and their need to accept even the lowest-paid, most demeaning of jobs, are characteristics U.S.
business finds irresistable - especially during the profit crunch of the 70s. As a result, undocumented workers are now employed throughout the United States, not only in agriculture, but in industry and increasingly in the fast-growing service sector.

As part of the package of repressive and reactionary laws being handed down in 1978 - Bakke, House Resolution 6869, California's Proposition 13, etc. - the Carter administration has a special proposal aimed at undocumented workers. It would partially slow the immigration of Latin American workers through a militarization of the U.S.-Mexico border, and, more importantly, would guarantee the continuation of a second-class, no-rights status for those undocumented immigrants already here. Carter has found the "perfect" solution: make these workers "legal" enough to labor, but keep
them "illegal" enough to be denied any rights or benefits.(17)

The economic crisis has compelled the U.S. bourgeoisie to seek ever more devious methods of dividing the working class by race, sex and legal status. And in the undocumented immigrant, the capitalist class sees an underprivileged sector of labor which it hopes to break off from the rest of the class by fostering anti-Mexican racism, by denying the undocumented workers basic rights such as education, and by developing apartheid-like categories of inferior legal status.

The following article by immigrant-rights activist Marcelo Gonzalez and Peter Baird of NACLA focuses on a particular aspect of this attack: a recent Texas ruling denying free
public education to undocumented children. As the article demonstrates, the fight to defend the rights of undocumented workers from such attacks has caused a resurgence of activity
among chicanos and Mexicans of the United States, unprecedented since the chicano movement of the late 60s and early 70s. What distinguishes the fight to defend the undocumented from the earlier chicano mobilizations is the much clearer class nature of the struggle.

Like the article on the changing Mexican university movement, the article by Gonzalez and Baird provides yet another of the thousands of threads still to be woven together in order to fully understand the changes brought by the past ten years of economic crisis and intensified class struggle. The educational struggles of Mexicans and chicanos presented in
this issue are only two dramatic testimonies to the tremendous deprivations, set-backs and sacrifices borne by working people around the world in the decade since 1968. They are also
testimonies to the advances of the past ten years, years in which the very hardships of economic crisis and repression have made more clear the necessity for class unity and organization - across divisions of race, sex, legal status and international borders.



1. Time, Jan. 5, 1968.

2. Hugh Mosley, "Is There a Fiscal Crisis of the State?", Monthly Review, Vol. 30, No. 1, May 1978.

3. For a fuller explanation of the international monetary crisis, see Harry Magdoff and Paul M.Sweezy, The End of Prosperity: The American Economy in the 1970s, Monthly Review Press, 1977, especially pp. 1-14.

4. Ibid., pp. 59-60.

5. Time, April 19, 1968.

6. Paul M. Sweezy, "The Present Global Crisis of Capitalism," Monthly Review, Vol. 29, No. 11, April 1978.

7. H. Mosley, op. cit.

8. Business Week, Oct. 17, 1977.

9. For more on U.S. collaboration with repressive forces in Mexico, see "Mexico: FBI Terrorism," NACLA Report on the Americas, Jan./Feb. 1978, and "U.S.-Mexico: Military Buildup," NACLA Report on the Americas, Mar./Apr. 1978. For more on the IMF in Mexico, see "Power Struggle: Labor & Imperialism in Mexico's Electrical Industry," NACLA Report on the Americas, Sep./Oct. 1977. For other NACLA materials on Mexico, see the ad on page 33 of this issue.

10. Rebel Worker News Journal, April 1978. For a fuller explanation of the attack on labor, also see Rebel Worker, May 1977. (Available from The Rebel Worker, 3364 26 St., San Francisco, Ca. 94110)

11. Business Week, Oct. 12, 1975, cited in Magdoff and Sweezy, op. cit., pp. 64-65.

12. National Public Radio Broadcast, Jul. 27, 1978.

13. Citibank Economics Department Report, Aug. 1977.

14. Business Week, Jul. 24, 1978.

15. Wall Street Journal, Jan. 19, 1976.

16. Time, Oct. 11, 1968.

17. For more on immigration and the Carter immigration plan, see Immigration: Facts and Fallacies, NACLA, 1977, and Carter's Immigration Policy: Attack on Immigrant Labor, NACLA, 1978.

Tags: economic crisis, Mexico, labor repression, undocumented immigration

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