American Labor and Economic Citizenship: New Capitalism from World War I to the Great Depression by Mark Hendrickson (review)

Hendrickson offers a fascinating study of policy professionals and social scientists inside and outside the U.S. government who influenced thinking about the “New Capitalism” of the 1920s. Following the postwar boom in industry and labor—marred by a large number of strikes—“a powerful new vision of capitalism” took hold, “one quite different from the capitalism of the late nineteenth and early twentieth centuries” (297). During a period of rising wages, rising output, and rising productivity, socioeconomic thinkers in this new era focused less on conflict between economic concentration and democracy and more on workers as consumers driving the economy in partnership with employers and corporations. President Hoover, along with sundry engineers and policy researchers, focused on economic growth, higher productivity, and increased wages, which allowed workers greater access to the new world of durable goods.

During a time of labor peace the American Federation of Labor (afl) began to emphasize cooperation with business while providing research that showed that workers deserved even greater wage increases to match the rise in value added per worker. The “Hooverites” emphasized volunteerism rather than regulation by the government, and since the focus was on economic growth raising the standard of living for all, inequality per se received little emphasis. But other researchers, like real-wage estimator Paul Douglas, the Women’s Bureau, the National Urban League, and journalists in Survey magazine showed their “activism” by performing careful studies of real wages and the labor conditions faced by women, African Americans, and Mexican migrants. The ideas of the new era of the 1920s set the stage for the efforts of New Deal policymakers to align consumption, production, and wages in their attempts to battle the Great Depression.

A few minor quibbles spring to mind. The American Association of Labor Legislation and the National Industrial Conference Board deserve more than passing mention as sources of research during the period. What Hendrickson generally describes as a genuine move toward cooperation by the afl during a period of labor peace was more a desperate lunge for survival. The labor movement had reached its nadir after the federal government ended its wartime backing of collective bargaining, and the unions lost a series of bitter strikes after the War. Moreover, Hendrickson’s overselling of “activism” on the part of the Women’s Bureau (“speaking truth to power”) could backfire, encouraging some people to discredit the excellent studies and surveys performed under the auspices of the Women’s Bureau and the Bureau of Labor Statistics in general (23).

Anybody who makes use of survey data and research about labor and the economy should read this book. It provides extensive information about the socioeconomic and intellectual environment in which the studies were performed—in particular, the debates regarding the proper measurement of real wages, the National Bureau of Economic Research’s struggles to obtain funding for economic studies without policy recommendations, and the vagaries of government and private funding for studies of labor and minority workers.