The Racketeer's Progress: Chicago and the Struggle for the Modern American Economy, 1900-1940 (review)

The Racketeer's Progress uncovers a shadowy world of extralegal market governance and from its history constructs an alternative view of the early twentieth century. From the 1890s onward, Chicago workers and employers in the construction, material manufacturing, teaming, baking, barbering, and other labor-intensive industries with low barriers to entry, resisted both corporate control and excessive competition and established their own form of market control. Usually instigated by strong unions, what Cohen calls "craft governance" enabled trade agreements to flourish because they were entrenched in cartels designed to control competition and set prices, wages, and work rules.

Cohen's narrative is unique because rather than embed this craft governance in the history of capital–labor conflict, the labor movement, or party politics, he portrays it as part of the history of a "radical middle class" defying modernity, an interpretation of the Progressive Era recently advanced by Johnston.¹ Cohen shows that the set of practices engaged in primarily by labor unions to maintain craft governance—such as strikes, fines, and violence against non-employer association contractors, payoffs to avoid strikes, the slugging of non-union workmen, and alliances with local politicians—were condemned by public opinion. After the period from 1903 to 1905, these practices became the subject of a concerted attack by the courts and open-shop employers, but when the smoke had cleared, they had succeeded only in preventing craft governance from spreading outside its enclave. Progressive reformers argued that incorporating unions and legalizing collective bargaining would eliminate the corruption and violence involved in craft–labor relations, but they too were mistaken, as the results of the New Deal showed.

During the "New Era" 1920s, craft unions, according to Cohen, far from being quiescent, were active in resisting the inroads of mass consumption, as well as blacks and women, into their exclusive preserves. Desperately seeking to maintain the status quo, they increasingly resorted to violence, making them susceptible to gangster takeover. In the last of three great attempts to "clean up" the construction industry, leading employers united to force the open-shop on both contractors and unions, but public opinion supported collective bargaining, and the attempt failed.

In a new perspective on the New Deal, Cohen argues that the National Industrial Recovery Act (nira) was based on, and legitimated, existing craft governance practices exemplified in Chicago industries. Moreover, court decisions ending the nira turned on issues emanating from these industries. The courts also ratified the New Deal's redefinition of racketeering to mean the penetration of legitimate associations and unions by gangsters, thus severing the old identity of racketeering with conspiracy and antitrust.

The strength of The Racketeers Progress is its extensive use of data from court records to establish the ubiquity and persistence of extralegal practices of market governance in the local economy of Chicago and, by implication, other large cities in this era. In doing so, it raises new questions and suggests fruitful avenues for further research. But labor historians will question Cohen's deeply unflattering depiction of craft unions' racketeering, in part because this assessment relies largely on court evidence. Moreover, Cohen's claim that the struggle over the legitimacy of craft governance amounts to a viable new interpretation of the Progressive Era is controversial at best. The book presents a caricature of pre-1920s corporate leaders by asserting that they defended free competition and were "predatory," and of the corporate liberal interpretation by claiming that it depicts a consensus achieved without conflict. Cohen also exaggerates the novelty of his arguments, slighting, for example, the many historians who have demonstrated that unions, politicians, and businessmen often cooperated in regulating competition among small-scale urban industries during this era. That said, this provocative book is an admirable contribution to the developing literature of this era's labor, business, and legal history.