The ‘revolution now in progress’: social economics and the labor question

Abstract

This article revisits postbellum efforts to address the labor question and social reform through the emerging field of economics, in particular through social economics. Social economics, now usually known as institutional economics, offered on alternative path for the field of economics, one which rejected sharp distinction between practical or material studies and social-theoretical inquiries. This broad approach to economics in particular and the social sciences more generally shaped the emerging field of labor history. Labor historians have long been critical of early labor histories, particularly stressing their narrow focus on unions and economic goals. A re-examination of social economics, and the contingent language of institutionalism, however, suggests that social economics can continue to offer labor historians a useful model, one that stressed the position of labor history within broader examinations of political economy.

Notes

Notes

1. ‘Mob Law at Homestead’, New York Times, 7 July 1892.

2. ‘The Sheriff Powerless’, New York Times, 10 July 1892.

3. ‘The Bloodshed at Homestead’, New York Times, 7 July 1892; ‘The Troops Ordered Out’, New York Times, 11 July 1892; ‘Bayonet Rule in Force’, New York Times, 13 July 1892; ‘Marching on Homestead’, New York Times, 12 July 1892; ‘Troops in Full Control’, New York Times, 15 July 1892.

4. Hadley, Economics, 371–2.

5. In the years immediately after the Civil War, the popular press was filled with concerns about permanent class stratification. See, for instance, Blumin, ‘Hypothesis of Middle-Class’, 309–10. The articles Blumin quotes all posit a society divided into two classes, which he suggests reflects a ‘sensationalist literary tradition’ that saw the city as full of the ‘abnormal’. I think, however, we can also take these statements, however stark, as an indication of awareness of a growing urban working poor as well as a fear that this potentially troubling new group would be a permanent feature of American life in the future.

6. Friedman, ‘Labor History Theory’, 159–60.

7. The list of economists’ work (to say nothing of the writings of non-economists) that addresses the labor question is voluminous. Some useful starting points include: Ely, Labor Movement; Walker, ‘Labor Problem of To-Day’; Henry Carter Adams Papers, Box 2, Correspondence 1883–1890 particularly letters to his mother from 1884 to 1886; Clark, Philosophy of Wealth and ‘How to Deal with Communism’; Hadley, Economics. See also, Ross, Origins of American.

8. On the urgency of the need for reform, see for instance Clark, ‘How to Deal with Communism’, 540 and Ely, Labor Movement, 113.

9. On the legacy of industrial pluralism, see Vinel, ‘Other Side’.

10. US Congress, Investigation by a Select Committee, 1.

11. Bigelow, ‘Relations of Capital’, 485–6. Bigelow was hardly alone in his beliefs, and indeed, such views of economic downturns persisted into the twentieth century.

12. US Congress, Investigation by a Select Committee, 131. Chairman Abram Hewitt was apparently so startled by this pronouncement that he interrupted the manufacturer. ‘Their own improvidence?’ he demanded. ‘Yes’, Rothschild replied, ‘When wages were large, they were careless …. They did ask for the future but spent their money carelessly.’

13. For more on moral interpretations of economic success and failure, and the market more generally, see Crowley, Sheba, Self; Johnson, Shopkeeper's Millennium; Dumont, From Mandeville to Marx; Halttunen, Confidence Men; Fabian, Cardsharps, Dreambooks.

14. Patterson Labor Standard. ‘Labor's Hard Lot’.

15. Nor have moral explanations for economic hardship vanished from either the public or academic lexicon. Currently explanations of the origins and effects of the subprime mortgage disaster point at both systemic and regulatory deficiencies and individuals’ own stupidity, gullibility, or greed. Certainly discussions about the causes of individual poverty in the late nineteenth century, and today as well, relied heavily on moral language and explanations. Nonetheless, by the end of the nineteenth century, it was difficult to talk about national recessions or depressions without also discussing systemic crises.

16. Walker, ‘Tide of Economic Thought’, 19.

17. Oxford English Dictionary.

18. Walters, American Reformers, 214. For an extended discussion of the role of religion in American economics, see Bateman and Kapstein, ‘Between God and the Market’. On economists’ continuing ‘moral curiosity to more fully understand the unfolding world around them’ and the influence of religion on that curiosity, see Bateman, ‘Make A Righteous Number’.

19. Henry, John Bates Clark, 1–2. Indeed, Clark applied to Yale Divinity School before the president of the college Julius Seelye urged him to consider political economy as a field of study instead.

20. Sass, Pragmatic Imagination, 59, 92.

21. Schumpeter et al., ‘Frank William Taussig’, 339. On 4 July 1886, Taussig writing to Henry Carter Adams, insisted that ‘We must look to Germany for suggestions, but must work out our own salvation in our own way.’ Henry Carter Adams Papers, Box 2, Correspondence 1883–1890.

22. Grimmer-Solem, Rise of Historical, 25, 130–1. For an extended discussion of the influence of German thought on American economics, see Ross, Origins of American, 172–218; and Rodgers, Atlantic Crossings, 76–111.

23. Wunderlin, Jr, Visions of a New Industrial Order, 1–10.

24. For a retrospective assessment of the heady early days of the AEA, see Ely, ‘Founding and History’. Ely's memory of the founding of the AEA stresses the radical nature of the group; with a great deal of bluster, for instance, he insisted that ‘We were rebels fighting for our place in the sun’ (145). The AEA charter is quoted on 144. See also Coats, ‘First Two Decades’. For a clear and compelling discussion of the founding of the AEA, of the differing views on what it should be, and the influences of German historical economics on it, see Haskell, Emergence, 168–89.

25. Seligman, Review of Nouveau, 336.

26. Folwell, ‘New Economics’, 19, 20, 22.

27. Seligman is often overlooked by historians these days, but his role in the foundation of the AEA, his prolific work on social economics, his long tenure has head of Columbia University's Department of Economics, his editorship of Political Science Quarterly, and his work in the public sector all place him at the center of the ‘new economics’ of the postbellum period. More crucially, though, Seligman's ideas and influence shaped economic thought more informally. His correspondence with other leading economists seems driven less by doctrinaire concerns than by a fondness for intellectual exchange. Long after he and Clark parted company in economic thought, for instance, they continued to engage (and disagree) with each other's ideas; Seligman's speech at Clark's eightieth birthday celebration reads as a notable acknowledgment of both their differences and their friendship. Seligman, ‘Dinner in Honor’, 1–2.

28. Mitchell, ‘Edwin Robert Anderson Seligman’, 911–13.

29. Ross, Origins of American, 188.

30. Seligman, ‘Economic Interpretation’, 284, 295–6, 302, 309–12.

31. Seligman, ‘Social Elements’, 337.

32. Seligman, ‘Social Elements’, 340.

33. At the same time, it is important to remember that even as Clark moved towards neoclassical economics, he did not abandon his hope for a more democratic in general and a more just distribution of wealth specifically. Even as he held that these goals could best be achieved by letting natural law run its course, he actively supported political reforms like the referendum, worked tirelessly for the Carnegie Endowment for International Peace, worked to establish the Federal Trade Commission, was part of the committee that investigated malfeasance on the New York Stock Exchange, and taught courses at Columbia on social reform. Henry, John Bates Clark, 5; Dorfman, Economic Mind, Vol. 3, 320, 205.

34. Seligman, ‘Social Elements’, 323, 326.

35. Clark, The Distribution of Wealth, 52, 44–51; Henry, John Bates Clark, 53; Dorfman, Economic Mind, 201–2.

36. Seligman, ‘Social Elements’, 324. In this statement, Seligman's differences with Clark are most striking. While Clark thought about marginal productivity in an abstract state (as he himself readily admitted), Seligman posited value as the product of both historical factors and contemporary institutions. Such work on the part of Seligman helped create institutional economics. For more on Seligman, Clark, and economics at Columbia, see Friedman, ‘Columbia’, 414–25, esp. 417–19.

37. Seligman, ‘Social Elements’, 329.

38. Seligman, ‘Social Elements’, 336–7.

39. Seligman, ‘Social Elements’, 346–7. See also, Dumont, From Mandeville to Marx, 100–2.

40. Seligman, ‘Social Aspects’, 53.

41. Seligman, ‘Social Aspects’, 57, 58.

42. Dorfman, Economic Mind, 47; Blicksilver, ‘George Gunton2-6; New York Times, ‘Prof. George Gunton Dead’; Seligman, Review of Wealth and Progress: A Critical Examination of the Labor Problem by George Gunton.

43. Roediger, ‘Ira Steward’, 412.

44. Social Economist, ‘Economy of High Wages’, 194. This article was a reprint of a newspaper report of a speech Gunton gave in March 1894.

45. ‘Sound Economics in Congress’, Social Economist 6 (March 1894): 129.

46. Glickman, Living Wage.

47. Social Economist, ‘Individualism’, 75, 78. Gunton's ideas shaped Richard T. Ely's AEA presidential address as well; indeed, Ely uses very similar language to Gunton. Ely, ‘Industrial Liberty’, esp. 64. Thanks to Gerald Friedman for the citation.

48. Livingston, Pragmatism, 53.

49. See for instance Paul Buhle's scathing critique of the ALF in Buhle, Taking Care of Business.

50. Gompers, ‘Organized Labor in the Campaign’ in Gampers, Unrest and Depression, 203.

51. Gompers, ‘On the Attitude’, 82. Or, as Michael Merrill has pithily explained, ‘Securing high wages is not a diversion from the revolution. It is the revolution’, Clark et al., ‘Transition to Capitalism’, 279.

52. Seligman, ‘Social Aspects’, 49.

53. Though Seligman generally spoke favorably of unions throughout his life, he was never an unequivocal or even, it seems, particularly enthusiastic supporter of organized labor. Other economists who had previously endorsed unions, notably Ely and Clark, now were quieter supporters (in the case of Ely) or largely turned away from the trade union movement (in the case of Clark).

54. Seligman, ‘Economics and Social Progress’, 66.

55. Seligman, ‘Owen and the Christian Socialists’, 249. Trades-unions, Seligman had argued, ‘are composed of workmen, and as workmen pure and simple the lot of artisans cannot be materially altered’. He remained dubious of Owen's belief that industrial co-operation would provide ‘practical independence’ largely because it did not address workers’ lives (or that of their families) outside the workplace.

56. Rutherford, ‘Wisconsin Institutionalism.’ On the varieties of institutionalism and differences between Seligman, Commons, and Thorstein Veblen as well as younger institutionalists such as John Maurice Clark, Wesley Clair Mitchell, and Robert Hoxie, see Dorfman, Economic Mind and Rutherford, Institutions in Economics.

57. On the ‘broad transformative possibilities’ of the early AFL and Gompers, see for instance, Cobble, ‘American Labor Politics’.

58. For a concise overview of the separation of the New from the Old Labor history, see Cameron, ‘Boys Do Cry’. Of course, no sooner had the New Labor History split from the Old than calls for their reunion were issued. See for instance Brody, ‘Old Labor History’ and ‘Reconciling the Old’.

59. The term New Labor History itself predates Gutman's work and seems to have come from the article Krueger, ‘American Labor Historiography’.

60. Two of the earliest and most influential of these nuanced and detailed community studies were Walkowitz, Worker City and Dawley, Class and Community.

61. In other words, there is a disjuncture between the ways in which many historians (often including labor historians) view of the field of labor history and the many works of labor history that are not narrowly focused or nostalgic.

62. Just two examples include the 1997 discussion on H-Labor about the state of the field and the 2003 panel at the Social Science History Association meeting on the ‘New Labor History at Forty’. See too a paper that came out of that panel, Cameron, ‘Boys Do Cry’. On the 1984 conference, see the volume of resulting essays, Moody and Kessler-Harris, Perspectives on American Labor History.

63. Sugrue, Origins of the Urban Crisis; Hirsch, ‘Massive Resistance’; Self, American Babylon; Kruse, White Flight; Lassiter, The Silent Majority.

64. Cohen, Consumer's Republic; Jacobs, Pocketbook Politics.