Without the mobilized counterweight of angry protest, Southcentral L.A. has been betrayed by virtually every level of government. In particular, the deafening public silence about youth unemployment and the juvenation of poverty has left many thousands of young street people with little alternative but to enlist in the crypto-Keynesian youth employment program operated by the cocaine cartels. Revisiting Watts nearly a generation after a famous pioneering study of its problems, UCLA industrial relations economist Paul Bullock discovered that the worsening conditions described by the Times’s ‘Watts: 10 Years Later’ team in 1975 had deteriorated still further, and that endemic unemployment was at the core of the community’s despair. Bullock observed that the last rational option open to Watts youth – at least in the neoclassical sense of utility-maximizing economic behavior – was to sell drugs.

Since the late 1970s, every major sector of the Southern California economy, from tourism to apparel, has restructured around the increasing role of foreign trade and offshore investment. Southcentral L.A., as we have indicated, has been the main loser in this transformation, since Asian imports have closed factories without creating compensatory economic opportunities for local residents. The specific genius of the Crips has been their ability to insert themselves into a leading circuit of international trade. Through ‘crack’ they have discovered a vocation for the ghetto in L.A.’s new ‘world city’ economy.

Peddling the imported, high-profit rock stuff to a bipolar market of final consumers, including rich Westsiders as well as poor street people, the Crips have become as much lumpen capitalists as outlaw proletarians. If this has only underwritten their viciousness with a new competitive imperative, it has added to their charisma the weight of gold-braided neck chains and showy rings. In an age of narco-imperialism they have become modern analogues to the ‘gunpowder states’ of West Africa, those selfish, rogue chieftaincies who were middlemen in the eighteenth-century slave trade, prospering while the rest of Africa bled. The Latino Eastside gangs, by contrast, are still trying to catch up. Dealing largely in homegrown drugs, like PCP, amphetamines and marijuana, with relatively low turnover values in a market consisting almost entirely of other poor teenagers, they are unable to accumulate the fineries or weaponry of the Crips. They have yet to effectively join the world market.

Left to themselves and the principles of Adam Smith, the consortia of Medellin investors would no more see themselves as criminals than did the Dutch or English venturers into the Indies trade (including opium), who organized their speculative cargoes in much the same way . . . the trade rightly resents being called a mafia. . . . It is basically an ordinary business that has been criminalized – as Colombians see it – by a U.S. which cannot manage its own affairs.

In the meantime gang members have become the Stoic philosophers of this cold new reality. The appearance of crack has given the Crip subculture a terrible, almost irresistible allure. Which is not simply to reduce the gang phenomenon, now or in the past, to mere economic determinism. Since the 1840s when tough young Irishmen invented the modern street gang in the slums of the Bowery, Five Points and Paradise Alley (making the Bowery Boys and the Dead Rabbits just as dreaded as the Crips and Bloods are today), gang bonding has been a family for the forgotten, a total solidarity (like national or religious fervor) closing out other emphathies and transmuting self-hatred into tribal rage. But the Crips and Bloods – decked out in Gucci T-shirts and expensive Nike airshoes, ogling rock dealers driving by in BMWs – are also authentic creatures of the age of Reagan. Their world view, above all, is formed of an acute awareness of what is going down on the Westside, where gilded youth, practice the insolent indifference and avarice that are also forms of street violence. Across the spectrum of run-away youth consumerism and the impossible fantasies of personal potency and immunity, youth of all classes and colors are grasping at undeferred gratification – even if it paves the way to assured self-destruction.

Miller’s concept of Fontana was presented as an alternative to aristocratic citrus colonies like Redlands as well as to the more speculative settlements in the eastern San Gabriel Valley. Fontana was envisioned as an unprecedented combination of industrialized plantation (Fontana Farms) and Jeffersonian smallholdings (subdivided by Fontana Land Company). Fontana Farms was a futuristic example of vertically integrated, scientifically managed, corporate agriculture. Its primary input was the City of Los Angeles’s garbage which, from 1921 to 1950, it received in daily gondola car shipments by rail. (The garbage contract was so lucrative that Miller was forced to make large payoffs to corrupt city councilmen – igniting a 1931 municipal scandal.) The five or six hundred daily tons of garbage fattened the sixty thousand hogs that made Fontana Farms the largest such operation in the world. When the hogs reached full weight they were shipped back to Los Angeles for slaughter, recycled garbage thus providing perhaps a quarter of the region’s ham and bacon. The coincident accumulation of manure was no less valued: it was either utilized as fertilizer for Miller’s citrus grove (also the world’s largest) or peddled to neighboring ranchers. Fontana Farms even made a small profit reselling the silverware it reclaimed from restaurant garbage.

While Fontanans were watching their trees die, Kaiser was shattering the illusion of starry-eyed San Bernardino County supervisors that the plant would be an enormous tax windfall. Assessed at normal rates in July 1943, the Company rejected the County’s bill out of hand, warning that they ‘might be forced to close the plant’. Although reporters scoffed at the obviously absurd threat to shutter the brand-new, $110 million mill, overawed supervisors obediently reduced the assessment to a small fraction of the original. Their concession set a precedent that allowed Kaiser officials to protest any prospective tax increase as undercutting the economic viability of the plant. As a result, San Bernardino County saw its major potential tax resource evolve into a net tax liability (a fact that helps explain official apathy to the plant’s closure a generation later).

The Vietnam War – which jump-started the Japanese export offensive – dramatically transformed economic relationships around the Pacific Rim. In 1965 Japanese steel imports claimed a tenth of the US West Coast market; by the war’s end, a decade later, nearly half the steel in California was Asian-made and the state was officially included in the Japanese steel industry’s definition of ‘home market’. Kaiser Steel made large profits exporting iron and coal to the Japanese only to see these raw materials shot back at them in the form of Toyotas and I-beams for skyscrapers. Together with US Steel’s Geneva mill (still entirely open-hearth since USS’s plant modernization had been concentrated in the East), Kaiser Fontana could supply barely half of Western demand, and they were constrained from adding capacity because of their technological inability to compete at cost with the foreign steel. Thus the Japanese, and increasingly the Koreans and the Europeans as well, were able to confiscate all the Vietnam-boom growth in Western steel demand. The so-called ‘trigger price mechanism’, adopted by the Carter administration at Big Steel’s urging, only worsened the situation on the West Coast. Trigger prices were too low to prevent Japanese imports and, because they were calibrated higher in the East, they actually encouraged EEC producers to dump steel in California.

Local 2869 mustered for a last stand, as best it could, but it had tragically few friends or resources. A desperate move to trade wage and work-rule concessions for job-protection guarantees was cold-shouldered by the company before being vetoed altogether by the international.1 As horrified members watched another two thousand pink slips being readied, the Local clutched at the final straw of an employee buyout, an ‘ESOP’. British Steel, long interested in finding a stable market on the West Coast for its unfabricated steel slabs, signaled that it was ready to consider a liaison with a restructured Fontana mill under ESOP ownership. Local 2869 retained the Kelson Group as advisors and sent representatives to Sacramento to lobby Governor Brown and the Democratic leadership.108 In the event, however, Kaiser’s intransigence about the ESOP frightened off British Steel, while government inter-vention on behalf of Fontana – or, for that matter, of any of California’s floundering heavy industrial plants – was ruled out by Jerry Brown’s new entente cordiale with the California Business Roundtable.

Rial’s swashbuckling depredations finally provoked a backlash from Kaiser Steel’s preferred stockholders who allied themselves with Bruce Hendry, the famous scrapdealer in distressed companies (he had previously picked over the remains of Erie-Lackawanna and Wickes).120 Forcing Rial aside as CEO in 1987, Hendry proposed to rescue the stockholders’ equity at the expense of the ex-Kaiser workforce. Borrowing a leaf from Frank Lorenzo, Hendry plunged Kaiser Steel into a chapter-eleven proceeding in order to liquidate worker entitlements.