A crowd of 250,000 masses on the Mall for the Solidarity Day protest, Sept. 19, 1981. Source: AP
A crowd of 250,000 masses on the Mall for the Solidarity Day protest, Sept. 19, 1981. Source: AP

When protesters settled in New York's Zuccotti Park in September, few anticipated how big a phenomenon the Occupy Wall Street movement would become. Soon, dozens of encampments were established around the world.

A month later, the majority of Americans knew about the movement and supported its goals. It seemed that a new form of political action -- youthful, tech-savvy and decentralized -- had scored a major victory. Inequality was back on the agenda.

But here's what didn't happen last September: a large-scale protest by organized labor. To understand why, roll the clock back almost exactly 30 years.

In the summer of 1981, economic conditions were grim. The unemployment rate had floated around 7 percent for the preceding two years. Compounding the misery was inflation, which exceeded a rate of 10 percent. The country felt "a terrible sense of helplessness," according to Alfred Kahn, one of President Jimmy Carter's economic advisers.

Union leaders, like their members, were unhappy and worried about the policies proposed by the new administration of Ronald Reagan. On Aug. 3, the country's air-traffic controllers went on strike. On Aug. 5, the Reagan administration fired controllers who refused to return to work.

Union leaders met in Chicago the next day. Many were frustrated by the controllers' recklessness in provoking a conflict with the new administration. But most also recognized that this was the opening skirmish in a much larger assault on labor. The unions mobilized quickly.

On Sept. 7, 100,000 people marched in New York City's first Labor Day parade in 13 years. And on Sept. 19, labor mounted an even more impressive show of force in Washington. The AFL-CIO called it Solidarity Day. A quarter of a million people traveled to the capital to join the protest, the largest since the civil rights and antiwar demonstrations of the 1960s and 1970s.

It was a blue-collar crowd. "The soundtrack was Country and Western, not folk rock," the New York Times reported, "The marchers tended to smoke Marlboros, not marijuana."

Labor organizers hoped that Solidarity Day would mark the beginning of a campaign that would halt the Reagan administration in its tracks. This was not to be. Instead, it might have been the labor movement's last shining moment -- the final point at which it was capable, within weeks, of organizing a vast bloc of working-class Americans in protest against government policy.

In 1981, the labor movement was already in decline, and the trend accelerated afterward. In 1960, one-third of the private-sector workforce had been represented by trade unions. Today, only 8 percent is. The missing army of private-sector union members -- that is, the number of additional workers that the movement would include today if unionization rates had stayed at levels of the 1960s and 1970s -- is about 20 million people.

We've recently seen the political consequences of this collapse. By many measures, economic conditions today are worse than in the summer of 1981. Real gross domestic product was actually increasing in the four years before 1981, but it flat-lined between 2007 and 2011. The unemployment rate was also higher in 2011 -- stuck at more than 9 percent for almost three years. And the labor-force participation rate declined from 2006 to 2011, while it increased from 1976 to 1981.

Conditions have been ripe for labor protest the past few years. But labor has lost the capacity to mobilize effectively. True, the AFL-CIO did join with other groups to organize a rally on the National Mall in 2010. But turnout was a fraction of what it had been for Solidarity Day. Labor's turnout was lower than for Glenn Beck's Tea Party rally five weeks earlier.

As unions have declined, new forms of mobilization have gained prominence, such as the loosely structured protest networks that have dogged international economic summits over the past decade. These networks have supplanted unions as the main vehicles for articulating resistance to economic liberalization. And they have space to grow because liberalization has crushed the labor movement: They're like the new species that thrive after a wildfire destroys an old-growth forest.

However, this doesn't mean that new forms of protest are equally effective. One problem is the inability of loosely structured networks to mobilize quickly. The economic crisis was already three years old when Occupy began. And there is a problem of representativeness. The Occupy protesters are younger, better educated, whiter and more politically radical than the population at large. This raises the question of whether the movement can articulate grievances with the same legitimacy that once belonged to a broad-based labor movement.

Assuming, of course, that Occupiers can articulate grievances coherently at all. The consensus-based decision making they adhere to makes it harder to define precise demands for action. Although the protesters' coolness toward engagement in everyday politics helps to keep more radical elements inside the tent, it lowers the probability that demands will produce results. The labor movement had similar internal difficulties. But it also had a structure that enabled it to manage those difficulties and express its demands more effectively.

Certainly, the Occupy movement has helped to highlight the problem of inequality. But influencing the policy agenda is only the first step in actually reducing inequality. The question now is whether these new forms of economic protest can evolve to perform the tasks once undertaken by the labor movement: translating broadly felt anxieties into policy demands, mobilizing large numbers for political action and negotiating with policy makers to get results.

(Alasdair Roberts is the Rappaport Professor of Law and Public Policy at Suffolk University Law School. His book "America's First Great Depression: Economic Crisis and Political Disorder After the Panic of 1937" was published by Cornell University Press in April. The opinions expressed are his own.)

To read more from Echoes, Bloomberg View's economic history blog, click here.

To contact the writer of this post: Alasdair Roberts at alasdair.roberts@gmail.com.

To contact the editor responsible for this post: Timothy Lavin at tlavin1@bloomberg.net.