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Mass Politics and “Populism”: An Outtake from “Slouching Towards Utopia: An Economic History of the Long Twentieth Century”

Summary:
Once the people—the male people at first, and the white people overwhelmingly, and the adult people always, that is—had the vote, what were they going to do with it?   5.2.1: Inequality in the First Gilded Age: The coming of (white, male) democracy in the North Atlantic was all mixed up with the coming of modern industry—the move out of agriculture and into industrial and service occupations—the coming of the modern city (the move from the farm to someplace more densely populated), and the coming of heightened within-nation income inequality. America in 1776 was, if you were a native-born adult white male, a remarkably egalitarian country. The richest one percent of households owned perhaps fifteen percent of the total wealth in the economy—including the “human wealth” of their slaves

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Il Quarto Stato

Once the people—the male people at first, and the white people overwhelmingly, and the adult people always, that is—had the vote, what were they going to do with it?

 

5.2.1: Inequality in the First Gilded Age: The coming of (white, male) democracy in the North Atlantic was all mixed up with the coming of modern industry—the move out of agriculture and into industrial and service occupations—the coming of the modern city (the move from the farm to someplace more densely populated), and the coming of heightened within-nation income inequality.

America in 1776 was, if you were a native-born adult white male, a remarkably egalitarian country. The richest one percent of households owned perhaps fifteen percent of the total wealth in the economy—including the “human wealth” of their slaves iu their share of property but not in the aggregate wealth total. (After all, a slave is valuable property to the slaveowner—but equally or rather more so unproperty, antiproperty, negative property to the slave: a slave society can easily have a minority owning more than 100% of the national wealth once this is taken into account.) A top one percent owning only some fifteen percent of wealth is a very low value for such a statistic: the United States today is somewhere north of 40% of wealth owned by the richest one percent of households.

Inequality among white males at least did not grow that much as America’s north began to industrialize in the years up through the Civil War—and the Emancipation Proclamation and the thirteenth amendment gave a substantial equalizing push to the economy. In the aftermath of the Civil War the top one percent of households appear to have held perhaps a quarter of the wealth of the country.

By 1900, however, the United States was as unequal an economy in relative terms as—well, as it was at the peak of the housing bubble, or today. The United States had become the Gilded Age country of industrial princes, and immigrants living in tenements. On the one hand, Andrew Carnegie built the largest mansion in Newport, Rhode Island with gold water faucets. On the other hand, 146 largely-immigrant workers died in the 1911 Triangle Shirtwaist Factory fire in Manhattan because the exits had been locked to keep workers from taking fabric out of the building in order to make their own clothes.

Surveys and guesses suggest that in the first decade of the twentieth century the richest one percent of U.S. households held something like half of national wealth. Attempts to count the wealth of the merchant princes themselves reinforce the suspicion that the pre-World War I U.S. was more unequal than at any time before or since. John D. Rockefeller was some four times richer relative to the wages of the average American of his day than the likes of William H. Gates or Jeff Bezos are today. (And Rockefeller was some ten times richer relative to the total size of the U.S. economy.)

 

5.2.2: An “Aristocracy of Manufactures”: This country of immigrants and plutocrats was very different from a country of yeoman farmers (among, once again, native-born adult white guys: all the stuff about Americans pulling together to raise each others’ barns and respect each others’ claims ignore the fact that the first rule of property law was that no claim by a Mexican or an Amerindian need be respected—if they were then the heir of Mariano Guadalupe Vallejo would be in the same position in California today that His Grace Gerald Grosvener, 6th Duke of Westminster is in Britain today). For at its beginning the United States had been a land of yeoman farmers in its Founding Fathers’ imaginations, and in large part in reality.

How would things change when the society ceased to be one with a prosperous working and a broad middle class, and an elite made up of hard-working lawyers and merchants on the one hand and a few plutocratic slaveholders on the other? How would things work when the inheritors of land or resources or capital lorded it over everybody else—and bought politicians for small change? Alexis de Tocqueville, a keen-eyed commentator on American society in the first half of the nineteenth century and author of Democracy in America, had feared the growth of such a class of plutocrats, such an “aristocracy of manufacturers”:

The territorial aristocracy of past ages was obliged by law, or thought itself obliged by custom, to come to the help of its servants and relieve their distress. But the industrial aristocracy of our day, when it has impoverished and brutalized the men it uses, abandons them in time of crisis to public charity to feed them.... Between workman and master there are frequent relations but no true association. I think that, generally speaking, the manufacturing aristocracy which we see rising before our eyes is one of the hardest that have appeared on the earth...

In the United States the rising concentration of wealth during the pre-World War I era provoked a widespread feeling that something, somewhere had gone wrong with the country's development. Abraham Lincoln had thought he lived, and for the most part had lived, in an America in which:

the prudent, penniless beginner in the world labors for wages awhile, saves a surplus with which to buy tools or land for himself, then labors on his own account another while, and at length hires another new beginner to help him…

Since the outcome in Lincoln’s day was a largely middle-class society, Lincoln and his era:

[took] it that it is best for all to leave each man free to acquire property as fast as he can. Some will get wealthy. I don’t believe in a law to prevent a man from getting rich; it would do more harm than good. So while we do not propose any war on capital, we do wish to allow the humblest man an equal chance to get rich with everybody else…

As historian Ray Ginger writes:

Lincoln… stood for an open society in which all men would have an equal chance…. “I am a living witness,” he told a regiment of soldiers, “that any one of your children may look to come here as my father’s child has.”… From the Civil War to 1900, Abraham Lincoln dominated the visions of the good society which were being projected to exonerate the successful and to inspire the young…. But during those very decades… the social realities that had shaped the Lincoln ideal were being chipped away…

And he quotes a Chicago laborer:

“Land of opportunity,” you say. You know well my children will be where I am—that is, if I can keep them out of the gutter…

Many of the prosperous (and many of the native-born not-so-prosperous) blamed foreigners for what was going wrong with America in the late nineteenth century: aliens born in China, Japan, Italy, Spain, Poland, and Russia were:

  • incapable of speaking English,
  • or understanding American values,
  • or contributing to American society,
  • and were probably genetically feeble-minded too,
  • with children incapable of ever becoming smart and well-educated enough to be full partners in American civilization—
  • especially the Chinese and the Jews.

Don’t laugh—that’s what they argued, and that was one reason that if you were French or British you had an easy time fleeing Europe for America in the late 1930s on the eve of World War II, but the gates were in all likelihood shut against you if you were Russo- or Polish- or even German-Jewish.

 

5.2.3: Populists and Progressives: Many of the middle class, especially the farmers, blamed the rich, the easterners, and the bankers for what was going wrong with late nineteenth-century America. The Populists of the 1890s blamed the eastern bankers, the gold standard, and the monopolists. They sought the free coinage of silver at a ratio of 16-to-1 to boost the money supply, lower interest rates, and raise farm prices. They sought antitrust to bust monopolies and restore competition. They sought railroad and other forms of rate regulation to make sure that the largely-rural backbone of real Americans were not exploited by those in the cities with market power—whether rail barons, manufacturing monopolies, or bankers.

The Progressives of the 1900s sought reforms to try to diminish the power of what they saw as a wealthy-would be aristocracy: the “malefactors of great wealth” in Theodore Roosevelt’s words. They sought an expanded government role to protect the environment, a progressive income tax, curbs on financial manipulation, and also to make the world safe for democracy. The Progressives got their chance when the assassination of William McKinley moved Republican Progressive Theodore Roosevelt out of the Vice Presidency—the powerless job dismissed by John Nance Garner as “a bucket of warm piss”—and into the White House in 1899, and then again when Roosevelt’s disgust at his successor Taft’s betrayal of Progressive values and sharp, corrupt Republican National Convention practice led him to throw the presidency to Democratic Progressive Woodrow Wilson in 1912.

But the Populists and the Progressives remained minority political currents in America until the coming of the Great Depression. In the meantime, the voters continued to narrowly elect Republican presidents—or that triangulating bastard Grover Cleveland—who were more-or-less satisfied with American economic and social developments, and who believed that “the business of America is business.”

There were some Democrats who sought a more equal distribution of income and more action by the government to put its thumb on the scales of the market in the interest of greater equality. They failed to wield political power even though they had a solid lock on the votes of the south after the disenfranchisement of the 1870s and a pretty solid lock on the votes of immigrants from southern and eastern Europe. Many of the southern Democrats were Democrats only because Lincoln had freed the slaves. And while there were many among the northern Republicans who were Republican only because Lincoln had freed the slaves, they by and large sought a good, competent, activist government and not a more equal America.

Thus while the Populist and Progressive eras win the battle for mindshare in the history books, they failed to make that much of an impact on American policy before World War I—but the availability of the Populist and Progressive agendas made the shift in American politics in response to the Great Depression a generation later rapid and substantial. Pretty much every left-of-center initiative that had been proposed between 1885 and 1914 was dusted off and given a try in Franklin Delano Roosevelt’s New Deal.

 

5.2.4: Chicagoland: So how did politics and economics interact at the bleeding edge—at the most-rapidly growing and industrializing place on the pre-World War I earth, in that era’s counterpart to today’s Shanghai, in Chicago?

In 1840, when the Illinois and Michigan canal opened connecting the Mississippi River with the Great Lakes, Chicago had a population of 4000. In 1871 Mrs. O’Leary’s cow burned down a third of the city. In 1885 Chicago built the world’s first steel-framed skyscraper.

By 1900 Chicago had a population of two million. 70 percent of its citizens had been born outside the United States.

On May 1, 1886, the American Federation of Labor declared a general strike to win the eight-hour workday. On May 3, 400 police officers protecting the McCormick farm equipment factory and its strikebreakers opened fire on a crowd, killing six. The next day eight police officers were murdered by an anarchist bomb at a rally in protest of police violence and in support of the striking workers—and the police opened fire at the crowd and killed perhaps twenty civilians, largely immigrants, largely non-English speaking (nobody seems to have counted). A kangaroo court convicted eight innocent (we now believe) left-wing politicians and organizers of murder. Five were hanged.

In 1889 Samuel Gompers, President of the American Federation of Labor asked the world socialist movement—the “Second International”—to set aside May 1 every year as the day for a great annual international demonstration in support of the eight-hour workday and in memory of the victims of police violence in Chicago in 1886.

In the summer of 1894 the Democratic Party President Grover Cleveland persuaded Congress to make a national holiday in recognition of the place of labor in American society—not on the International Workers’ Day that was May 1 in commemoration of Chicago 1889, but rather a moveable feast on the first Monday in September instead.

In 1893 the new Democratic Governor of Illinois, John Peter Altgeld—the first Democratic Party governor since 1856, the first Chicago resident governor ever, and the first foreign-born governor ever—pardoned the three still-living “Haymarket Bombers,” saying that the real reason for the bombing was the out-of-control violence by the Pinkerton Security Company guards hired by McCormick and others.

Who was this John Peter Altgeld who pardons convicted anarchists, and blames violence on the manufacturing princes of the midwest and their hired armed goons, and is Governor of Illinois?

 

5.2.5: The Career of John Peter Altgeld: Altgeld was born in Germany. His parents moved him to Ohio in 1848 at the age of three months. He shows up in the Union Army during the Civil War, at Fort Monroe in the Virginia tidewater country, where he caught a lifelong case of malaria. After the war he shows up finishing high school, as a roving railroad worker, as a schoolteacher, and somewhere in there he read the law. In 1872 he is the city attorney of Savannah, Missouri. In 1874 he is county prosecutor. In 1875 he shows up in Chicago as the author of Our Penal Machinery and Its Victims. 1884 sees him as an unsuccessful Democratic candidate for Congress—and a strong supporter of Democratic presidential candidate Grover Cleveland.

In 1886 he wins election as a judge on Cook County’s Superior Court. And somewhere in there he becomes rich as a real estate speculator and a builder—with his biggest holding being the tallest building in Chicago in 1891, the sixteen-story Unity Building at 127 N. Dearborn St. As governor, Altgeld lobbied for and persuaded the legislature to enact the then-most stringent child labor and workplace safety laws in the nation, increased state funding for education, and appointed women to senior state government positions.

The largely-Republican and Republican-funded press condemned John Peter Altgeld for his Haymarket pardon. For the rest of his life he was, to middle-class newspaper readers nationwide and especially on the east coast, the foreign-born alien anarchist, socialist, murderous governor of Illinois.

On May, 11, 1894, workers of the Pullman Corporation, manufacturer of sleeping cars and equipment, went on strike rather than accept wage cuts. Altgeld’s friend Clarence Darrow wrote in his autobiography of how the strike looked from his perspective, and how he wound up as the lawyer of the strikers, the United Railroad Assocation, and their leader Eugene V. Debs:

I became the general attorney of the Chicago and North-Western Railway Company.... All sorts of questions were submitted to me... the liability of the company, in cases of personal injuries, in claims for lost freight, in the construction of the statutes and ordinances, and in all the numerous matters that affect the interest of railroads.... [The strike caused] a general interruption of railroad traffic.... The Chicago and North-Western Railway Company was involved with all the rest of the roads, and all who came to the offices thought and talked of little else besides the strike....

A great many [railroad] cars were burned in the yards... each side claimed that their enemies were responsible for the fires.... I had no knowledge of who started the fires, but I was satisfied that most of all those in the yards were sympathetic toward the strikers.... I have observed many deputies and other officials in times of strikes, and also the militia, and have found that generally they were really in sympathy with the strikers.... Industrial contests take on all the attitudes and psychology of war, and both parties do many things that they should never dream of doing in times of peace....

The strike was hardly well under way before the railroads applied to the Federal Courts to get injunctions.... Mr. Edwin Walker... general counsel for the Chicago, Milwaukee, and St Paul Railway Company, for the General Manager’ Association and a special attorney for the United States. I did not regard this as fair.... Mr. Debs and a good many of my friends came to ask me to go into the case.... I was on their side…. I saw poor men giving up their livelihood...

Then that Triangulating Bastard President Grover Cleveland decided to intervene against the strikers and for the railroads. At his direction, United States Attorney General Richard Olney got the courts to enjoin the strikers, forbidding the obstruction of trains and forbidding providing any assistance to anyone obstructing trains—and then ordered the U.S. army to deploy in Chicago. Altgeld protested. Altgeld pointed out in two telegraphs to Cleveland that Art. IV §4 of the Constitution gives the power to the President to use troops inside states against domestic violence only “on application of the [state] legislature, or the executive (when the legislature cannot be convened).” Altgeld pointed out that neither he nor the legislature had applied. Cleveland responded that it was more important to protect property against rioters, anarchists, and socialists: “If it takes the entire army and navy of the United States to deliver a postcard in Chicago, that card will be delivered!”

On July 7, 1894 Debs and the other union leaders were arrested for violating the terms of the injunction, and the strike collapsed.

As Darrow summed up the federal government’s intervention:

Governor Altgeld asserted that there was no authority for sending the troops to Chicago; as clearly there was none.... The Federal troops were really brought in as a gesture... against the Constitution and the laws and the liberties of the people.... Mr. Debs and all the members of his board were enjoined—enjoined from what? Of course no one could tell....

The men left the railroads en masse to keep their wages from being cut and working conditions lowered. The railroads resisted because to yield meant greater cost....

Both sides were right, but I wanted to see the workers win. I knew of no way to determine what a workman should be paid; what he should have in a way is determined by what he can get, and, so far as we can see, every one’s compensation is settled the same way.... Mr. Debs and all his executive board were indicted by the Federal grand jury for conspiracy.... If there are still any citizens interested in protecting human liberty, let them study the conspiracy laws of the United States...

Altgeld then decided that it was time for the Democratic Party to run not a centrist like Cleveland but rather a Democratic candidate from the Democratic wing of the Democratic Party for president, and that he was going to run Grover Cleveland out of the Democratic Party at the convention of 1896. Altgeld organized a grass-roots movement of special state conventions to get state chapters of the Democratic Party on record as supporting U.S. abandonment of the gold standard—free coinage of silver at a ratio of 16 oz. of silver worth 1 oz. of gold. And at the 1896 convention Altgeld seized control of the platform: it condemned the gold standard (supported by Cleveland), condemned government by injunction against labor unions (used by Cleveland), and supported federalism (violated by Cleveland). It also called for either a change in the Supreme Court to declare an income tax constitutional or an income tax amendment, for support for the right to unionize, and for personal and civil liberties.

Altgeld sought to get the Democratic Party to nominate former U.S. Senator Richard P. Bland. The young William Jennings Bryan, however, had other ideas—and wowed the convention. President Grover Cleveland and his supporters abandoned the Democratic Party, and ran ex-Republican Illinois governor and ex-Union general John M. Palmer and ex-Kentucky governor and ex-Confederate general Simon Bolivar Buckner to split off votes from William Jennings Bryan and Arthur Sewall.

Republican Party stalwart Theodore Roosevelt claimed that even though the Democrats had nominated Bryan, the real ruler of the United States would be the more sinister Altgeld:

Mr. Altgeld is a much more dangerous man than Bryan. He is much slyer, much more intelligent, much less silly, much more free from all the restraints of public morality. The one is unscrupulous from vanity, the other from calculation. The one plans wholesale repudiation [of the gold standard] with a light heart and bubbly eloquence, because he lacks intelligence... the other would connive at wholesale murder and would justify it by elaborate and cunning sophistry for reasons known only to his own tortuous soul. For America to put men like this in control of her destiny would be such a dishonor as it is scarcely bearable to think of...

And Harper’s chimed in, telling east coast opinion leaders what they should think:

Governor Altgeld... is the brains... he... chose Bryan in preference to Mr. Bland... Bryan... would be as clay in the hands of the potter under the astute control of the ambitious and unscrupulous Illinois communist... free coinage of silver... but a step towards the general socialism which is the fundamental doctrine of his political belief... He seeks to overturn the old parties, the old traditions, and the essential policies which have controlled the government since its foundation...

Bryan and Sewall lost to McKinley and Hobart.

In the 1876, 1880, 1884, 1888, and 1892 elections the Republicans had won by -20,000, won by 7,000, lost by 60,000, won by 2,000, and lost by 380,000 votes. Bryan lost by 600,000 votes—a margin running nearly 700,000 votes behind recent Democratic presidential candidates. Bryan and Sewall lost by 95 electoral votes and by five percentage points in the popular vote. Kentucky, Iowa, and Illinois would have made the difference. But the crucial swing voters in the American electorate did not then want a Democratic candidate from the Democratic wing of the Democratic Party.

When the crucial center of the electorate was asked to choose between protecting property on the one hand and promoting opportunity by making property insecure on the other, they chose property—because they had or thought they would have it, and because they feared that too many of those who would benefit from redistribution were in some sense unworthy of it. Even the very weak-tea leveling associated with pardoning those railroaded after Haymarket and supporting the Pullman strikers was too much leveling for start of twentieth century America to bear.

 

5.2.6: Louis Napoleon and Grover Cleveland: This should not have come as a surprise. Once it is no longer a closed aristocracy of wealth, honor, and blood against everybody else—once upward mobility is possible—full-fledged leveling socialism has not proved to be a terribly attractive doctrine in the North Atlantic. We saw this first in France in June 1848, when Alexis de Tocqueville discovered that the overwhelming majority of Frenchmen did not want to be taxed to provide full employment for urban craftsmen, valued their property more than they valued opportunity for the unemployed, and so were on Tocqueville’s side against the socialists:

The ruin of commerce, universal war, the dread of Socialism made the [Second French] Republic more and more hateful in the eyes of the provinces. This hatred manifested itself especially beneath the secrecy of the ballot. The electors... in twenty-one departments... elected the men who in their eyes represented the [deposed] Monarchy....

I come at last to the insurrection of June [1848]... [that] did not aim at changing the form of government, but at altering the order of society... a combat of class against class... a blind and rude, but powerful, effort on the part of the workmen to escape from the necessities of their condition, which had been depicted to them as one of unlawful oppression, and to open up by main force a road towards that imaginary comfort with which they had been deluded.... They had been assured that the inequality of fortunes was as opposed to morality and the welfare of society as it was to nature....

As we know, it was the closing of the national workshops that occasioned the rising....

Thousands of men were hastening to our aid from every part of France.... Thanks to the railroads, some had already come from fifty leagues’ distance... These men belonged indiscriminately to every class of society... peasants... shopkeepers... landlords and nobles all mingled together... they rushed into Paris with unequalled ardour: a spectacle as strange and unprecedented in our revolutionary annals.... It was evident... we should end by gaining the day, for the insurgents received no reinforcements, whereas we had all France for reserves...

This was true in France in 1848. And it was true in the United States in 1896. The crucial swing voters in Illinois did not want Altgeld either, starting in 1896. In 1896 he lost his bid for reelection as Illinois governor in 1896, was diagnosed with locomotor ataxia, lost his bid for mayor of Chicago in 1899, suffered a cerebral hemorrhage, and died in 1902 at the age of 54.

Clarence Darrow continued his legal career, defending evolution, high school teachers, murderers, trade-union officials—and large corporations as well. His friends among the left-wing Democrats, among the union organizers, and among the social-work settlement house movement were puzzled. He answered them:

I undertook to serve this company or these people, believing they had an ordinance, procured by the aid of boodle. Judged by the ordinary commercial and legal standard of ethics I did right.... I am satisfied that judged by the higher law, in which we both believe, I could not be justified, and that I am practically a thief. I am taking money I did not earn, which comes to me from men who did not earn it, but who get it, because they have a chance to get it.... I determined to take my chance with the rest, to get what I could out of the system and use it to destroy the system. I came without friends or money. Society provides no fund out of which such people can live while preaching heresy. It compels us to get our living out of society as it is or die. I do not choose yet to die, although perhaps it would be the best...

And Darrow shared Altgeld’s opinion of triangulating, electable Democrats:

I had always admired Woodrow Wilson and distrusted [his successor] Republican President [Warren] Harding. Doubtless my opinions about both in relation to affairs of government were measurably correct; still, Mr. Wilson, a scholar and an idealist, and Mr. Palmer, a Quaker, kept [Eugene V Debs in prison; and Mr. Harding and Mr. Dougherty unlocked the door...

Bradford DeLong
J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

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