Wall Street institutions imploded to sow panic. A Democratic president failed to enact promised reforms inspiring the candidacy of an unlikely socialist candidate. A national railroad system at the point of collapse. Though we often think that human progress means we become more advanced, enlightened, and just with each passing year (Stanford), today’s headlines echo a crisis from 19th century America’s infamously corrupt Gilded Age. May 5, 2023, is the 130th anniversary of the Panic of 1893, which sparked what was, at the time, the worst economic depression in U.S. history. The recent implosions of Silicon Valley Bank, Signature Bank, and First Republic raise credible, “widespread fears of a wider banking crisis that could affect the global economy” (ABC News).
By the late 19th century, Reconstruction had collapsed, and Jim Crow laws were in force in the South (History). A wave of xenophobia and anti-immigrant sentiment was on the rise in the face of new arrivals from China and Eastern and Southern Europe (History). Labor laws were used almost exclusively against workers as politicians colluded with big business. Social tensions were already high before it was clear there was a recession coming. Then, in early May 1893, a banking collapse sparked panic among Wall Street investors. By the end of the year, 600 banks and 16,000 businesses had gone bankrupt, including the two largest employers in the country, the Philadelphia and Reading Railroad and the National Cordage Company (History, Encyclopedia). The unemployment rate hit 20%.
• If you have the capacity, redistribute your resources to support those more marginalized.
• Donate to local food banks, mutual aid initiatives, and land trusts.Give money and resources directly to oppressed people in your community.
• Support the Undocumented Worker Fund, POOR Magazine, Los Angeles Black Worker Center, or local efforts by and for low and no-income BIPOC.
• Support or join the Industrial Workers of the World and the Incarcerated Workers Organizing Committee.
A woefully inadequate government response led to massive popular opposition. Kansas organized a Populist Party that spread across the country. The following year, railroad workers called a strike that shut down rail transportation across the country. In response, Democratic President Grover Cleveland deployed federal troops against the workers. Thirteen were killed, and dozens wounded. Railroad union president Eugene Debs was imprisoned for failing to call off the strike. It later emerged that President Cleveland had engaged in a secret deal with banker J.P. Morgan that allowed Morgan to make $18 million from government bonds (Encyclopedia).
Today, less than a year after another Democratic president intervened to stop a railroad strike, high-profile train derailments are regular front-page news. The bank that J.P. Morgan founded just acquired the failing First Republic Bank (BBC). Though Jim Crow laws have been struck down, racial segregation persists (Time). Xenophobia and anti-immigrant deportations do, too.
An impending recession isn’t bad news for everyone. During the first two years of the Great Recession, the net worth of the wealthiest 7% of U.S. households increased by over 25% (Britannica). Black household wealth was cut in half (EPI). Recessions are a recurrent feature of the business cycle, the “boom and bust” periodic expansion and contraction of capitalist economies, which is why the Federal Reserve is trying to create what it considers a “necessary” recession (Yahoo!) with “plans to sharply boost unemployment” (CBS News). The Panic of 1893 was 20 years after a previous recession, aptly named the Panic of 1873 (PBS). Since then, we’ve had the Great Depression, Great Recession, and a dozen economic downturns. Each has been an opportunity for the J.P. Morgans of the world to profit while ordinary people suffer.
The lesson here isn’t that things are inevitably bad. It’s that the real victories we’ve won that make our lives and communities better today are the result of ordinary people like ourselves coming together in moments of crisis. Though the Populist Party never took power, some of their demands became constitutional amendments (Encyclopedia). Though union president Eugene Debs would continue to be incarcerated, he won a million votes as a socialist presidential candidate while campaigning from a jail cell during World War I. He also co-founded the Industrial Workers of the World, a democratic labor union that continues fighting and winning for working people to this day (PBS). And the railroad strike laid the foundation for decades of crucial victories, from farmworker and racial justice organizing in the Jim Crow South to current labor organizing among incarcerated and undocumented workers.
That’s why remembering the dignified resistance of others in the face of economic crisis is so important. Even examples from a century or half a world away should remind us that for working, exploited, and racialized people, only we have truly kept each other safe. If there is another recession coming, we should temper our anxiety and despair with determination to create change. The crisis is an opportunity for solidarity, struggle, and collectively sketching new ways of relating to each other that won’t result in periodic crises that see our communities and neighborhoods get looted by profiteers each generation.
• May 1893 was the beginning of an economic recession with strong parallels to the present day.
• Necessary changes were created only through popular resistance by ordinary people.
• Recessions are necessary for the very wealthy to continue increasing their wealth.