In Illiberal Reformers, Thomas Leonard reexamines the economic progressives whose ideas and reform agenda underwrote the Progressive Era dismantling of laissez-faire and the creation of the regulatory welfare state, which, they believed, would humanize and rationalize industrial capitalism. But not for all. Academic social scientists such as Richard T. Ely, John R. Commons, and Edward A. Ross, together with their reform allies in social work, charity, journalism, and law, played a pivotal role in establishing minimum-wage and maximum-hours laws, workmen's compensation, antitrust regulation, and other hallmarks of the regulatory welfare state. But even as they offered uplift to some, economic progressives advocated exclusion for others, and did both in the name of progress. Leonard meticulously reconstructs the influence of Darwinism, racial science, and eugenics on scholars and activists of the late nineteenth and early twentieth centuries, revealing a reform community deeply ambivalent about America's poor. Illiberal Reformers shows that the intellectual champions of the regulatory welfare state proposed using it not to help those they portrayed as hereditary inferiors but to exclude them.
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Race, Eugenics & American Economics in the Progressive Era
By Thomas C. Leonard
PRINCETON UNIVERSITY PRESSCopyright © 2016 Princeton University Press
All rights reserved.
Redeeming American Economic Life
When American economic life transformed itself in the last quarter of the nineteenth century, the world had never seen anything like it. A furious expansion of railroad networks, fueled by government loans and land grants, opened a vast continental market. American business, powered by a transformative set of new production technologies, industrialized on a revolutionary scale. Interstate commerce grew so rapidly that hundreds of local clock conventions had to be replaced by a national system of standardized time in 1883.
In 1870, the last of the Civil War amendments to the US Constitution was ratified. Thirty-five years later, the US economy had quadrupled in size. American living standards had doubled. US economic output surpassed each of the German, French, and Japanese empires in the 1870s. It overtook the nineteenth century's global colossus, the British Empire, in 1916.
The industrial juggernaut propelled the American economy upward but did so undependably. Financial crises triggered prolonged economic depressions in the 1870s and the 1890s. Growth also distributed its copious fruits unevenly, creating vast industrial fortunes alongside disgruntled rural homesteaders and a newly visible class of the urban poor, a contrast journalist Henry George encapsulated as Progress and Poverty, a runaway best seller.
The transformation from an agricultural to an industrial economy — and from rural communities to a metropolitan society — produced social dislocations so unprecedented as to require new words, such as urbanization, a term coined in Chicago in 1888 to describe the migration from farm to factory and the explosive growth of America's industrial cities. Just over half of American workers in 1880 worked on farms. By 1920, only one-quarter remained on the land. Crowded into tenements, urban workers confronted substandard housing, poor sanitation, and recurring unemployment.
Industry's voracious but volatile demand for labor was met by immigration to America on a grand scale, which introduced polyglot peoples with disparate cultural and religious traditions. Fifteen million immigrants arrived in the United States between 1890 and 1914, and nearly 70 percent of the new arrivals were Catholics, Jews, and Orthodox Christians from southern and eastern Europe. Most congregated in the cities. In 1900, three out of four people in New York City, Chicago, Boston, and San Francisco were immigrants and their children. By 1910, the foreign born accounted for 22 percent of the US labor force and for 41 percent of non-farm laborers.
Industrialization and immigration gave rise to a labor movement whose growth was as fitful as the economy's. Labor unions grew explosively from 1880 to 1886, from a mere 168,000 to 1.2 million members. The violence of the 1886 riots in Chicago's Haymarket Square undid these gains. Organized labor then recovered its 1886 level in 1900, after which another surge doubled union membership to 2.4 million in 1904.
Labor conflict was rampant and sometimes violent. From 1881 to 1905, American workers organized an average of four strikes per day, more than 36,000 in total. Names like Homestead (1892), where steelworkers engaged in pitched battles with Carnegie Steel's armed strike breakers, and Pullman (1894), a strike that brought US railroads to a standstill until President Grover Cleveland deployed US Army troops to quash it, still commemorate the industrial violence of the era.
The turn of the century produced a new form of economic organization, the consolidated firm, or "trust." Between 1895 and 1904, a sweeping merger movement consolidated scores of American industries: 1,800 major industrial firms disappeared into 157 mergers. Nearly half of the consolidated giants enjoyed market shares of more than 70 percent.
The new industrial behemoths were of a scale Americans could barely comprehend, 100 or even 1,000 times larger than the largest US manufacturing firms in 1870. John D. Rockefeller's Standard Oil Company was capitalized at $100 million in 1900. James Duke's American Tobacco Company reached $500 million in 1904, and the United States Steel Corporation was valued at $1.4 billion at its creation in 1901.
Historian Thomas Haskell described the American economic transformation of the late nineteenth century as "the most profound and rapid alteration in the material conditions of life that human society has ever experienced." Those who lived through it recognized its revolutionary aspects.
Simon Nelson Patten, a pioneering progressive economist at Pennsylvania's Wharton School, saw in industrialization an age of material abundance so unprecedented as to form a new basis for civilization. Wisconsin economist Richard T. Ely, the standard bearer of progressive economics, cofounded the American Economic Association in 1885 to organize and promote the new political economy required, he said, to comprehend a "new economic world." Frederick Jackson Turner told his fellow historians they were witnessing nothing less than the birth of a new nation. One can hardly believe, John Dewey marveled at the turn of century, "there has been a revolution in all history so rapid, so extensive, so complete."
Patten, Ely, Turner, and Dewey were all progressive scholars making a case for economic reform, and none were strangers to hyperbole. But here they did not need to exaggerate. Conservative observers marveled no less at the speed and scope of the American industrial revolution. In 1890, David A. Wells, an influential Gilded Age defender of free trade and sound money, described the economic changes since the Civil War as the most important in all of human history.
* * *
Revolution, which suggests abrupt discontinuity or rupture, is an imperfect term for changes wrought over forty years. But revolution is not inappropriate when we recognize that the late-nineteenth-century American economic transformation launched the United States on a permanently different economic course, with profoundly far-reaching and long-lived consequences. Between the end of Reconstruction and the United States' entry into the First World War, the speed and scope of economic change was such that few Americans could be spectators only. Welcome or not, change was thrust on them, and there was no choice but to meet it.
Ordinary Americans met economic change with responses as different as their situations. Some responded by embracing new opportunities, freedoms, and identities. Middle-class women went to work outside the home, glimpsing the prospect of greater economic independence and, for some, even a vocation other than motherhood. Young people found the new pleasures of city life liberating. Former journeymen started their own businesses, and some met with success. University enrollments more than quadrupled, giving women and a burgeoning middle class their first chance at higher education. Immigrants did not find streets paved with gold, but many found refuge from starvation, pogroms, and peonage.
For other Americans, change offered not new opportunities but new constraints, not new freedom but new oppression, not new identities but new stigmas. The brutal reestablishment of white supremacy in the American South confronted African Americans with disenfranchisement, debt peonage, and organized racial terror. Native Americans, decimated when Europeans colonized America, were decimated again by coerced relocations, carried out by a postbellum US Army in need of new missions. Egged on by agitators like Dennis Kearney, white mobs attacked Chinese immigrants, accusing them of undercutting the American workingman.
Hard money and deflation punished farmers and other debtors. When they joined the migration to the cities, farmers and journeymen discovered their hard-won skills mattered less. They might command higher compensation at the factory, but employment threatened their republican self-identities. Having been raised to disdain the "hireling," they now accepted wages themselves. A boss told them what to do, and did not care whether his factory hands had once owned land or other property.
Those disenfranchised, damaged, and devalued during the Gilded Age met change individually and also collectively. Farmers formed cooperatives, skilled workers organized trade unions, men joined fraternal groups, women started clubs, and immigrant communities created a host of mutual aid societies, which provided credit, insurance, and other mutual services. Evangelicals founded youth associations, the Salvation Army, and other agencies organized to redeem the impressionable and the fallen.
Activists such as Ida Wells exposed mob violence against African Americans and organized antilynching campaigns, at home and abroad. African Americans chose to leave the South's racial caste system, their migration northward quickened by job opportunities created during mobilization for the First World War.
These grassroots movements were an essential part of America's many and varied responses to the economic, social, and political consequences of industrialization. American historical writing began telling the stories of ordinary Americans in the 1970s. Before this historiographic turn, Progressive Era histories were political and focused on those who made reform a vocation — the progressives. It is their story that Illiberal Reformers tells.
THE ECONOMIC PROGRESSIVES
The longstanding emphasis on politics and reform professionals was itself a progressive legacy. The earliest accounts of Progressivism, written by such historians as Benjamin Parke DeWitt, were self-portraits. They painted ordinary people into the background as passive victims of the rough winds of economic change. The progressives filled the foreground, a vanguard of selfless scholars and activists leading the People — if not any recognizable people — in a crusade against wealth and privilege.
To conceptualize the period as Progressive was to define it by its politics and to associate Progressivism with an elite class: political figures like Theodore Roosevelt and Woodrow Wilson, university social scientists, settlement-house workers, muckraking journalists, conservationists, Prohibitionists, and birth controllers. The protest of the progressives originated not out of personal suffering but rather out of moral and intellectual discontent with the suffering (and enrichment) of others.
Progressives did not work in factories; they inspected them. Progressives did not drink in saloons; they tried to shutter them. The bold women who chose to live among the immigrant poor in city slums called themselves "settlers," not neighbors. Even when progressives idealized workers, they tended to patronize them, romanticizing a brotherhood they would never consider joining.
The distance progressives placed between themselves and ordinary people was not the product of class prejudice alone. Some progressives came from privilege, but far more were children of middle class ministers and missionaries, a number of whom struggled before finding vocational outlets for their intellectual and reform energies. The few who had known real deprivation, such as Thorstein Veblen, never romanticized it.
The distance progressives placed between themselves and ordinary people instead had its origins in the progressives' self-conception as disinterested agents of reform. As they devised ways to make reform a vocation, the progressives found themselves poised between the victims and the beneficiaries of economic transformation. Most opted not to choose sides. Instead, they portrayed themselves as the representatives of the common good, uniquely positioned to transcend personal, class, regional, and partisan interests.
If progressives agreed that they represented the common good, they regularly disagreed on what the common good was. W.E.B. Du Bois and Woodrow Wilson, for example, held entirely opposed views of the proper role of whites and blacks in American life. Senator Robert La Follette vigorously opposed American entry into the First World War, while his one-time Wisconsin compatriot, progressive economist Ely, accused him of aiding the enemy.
Ely and his University of Wisconsin colleagues, John R. Commons and Edward A. Ross, campaigned to bar immigrants they judged racially inferior, while other progressives, such as settlement-house worker Grace Abbott, upheld the America tradition of openness to newcomers, as we shall see in Chapter 9. The same trio of Wisconsin academics crusaded against the evils of alcohol, while John Dewey believed progressives had causes more important than the saloon. Theodore Roosevelt preferred to regulate the trusts, while "the people's lawyer," Louis Brandeis, wanted to break them up, as discussed in Chapter 4.
The upshot was a pattern of conflict and cooperation that led to shifting political alliances and to a reputation for fractiousness. "The friends of progress," Benjamin Parke DeWitt lamented in 1915, "are frequently the enemies of each other."
As diverse and fractious as Progressive Era reformers could be, they all drew on a shared, recognizable, and historically specific set of intellectual understandings, what Daniel Rodgers has termed "discourses of discontent." First, progressives were discontented with liberal individualism, which evangelicals called un-Christian, and more secular critics scorned as "licensed selfishness." As we shall see in Chapter 2, the progressives were nationalist to the core, though they reified the collective using many names besides nation, such as the state, the race, the commonweal, the public good, the public welfare, the people, and, as discussed in Chapter 6, the social organism. Whichever term they used, progressives asserted the primacy of the collective over individual men and women, and they justified greater social control over individual action in its name.
Second, progressives shared a discontent with the waste, disorder, conflict, and injustice they ascribed to industrial capitalism. The furious pace of change had produced unprecedented economic volatility and social dislocation. Many believed the remedy was improved efficiency, the quintessentially progressive idea that the application of science, personified by the efficiency expert or social engineer, could improve virtually any aspect of American life, Efficiency, in business and public administration, is the story of Chapter 4.
Monopoly describes the third source of progressive discontent. Industrial capitalism had brought forth unprecedented and gigantic forms of economic organization — trusts, pools, and combinations. Antimonopoly rhetoric comprised a host of objections to big business — destruction of small business, monopoly profiteering, unfair trade practices, deskilling of labor, exploitation of workers — joined with the longstanding republican fear that centralized economic power corrupted politics.
Progressives used the language of anti-individualism, efficiency, and anti-monopoly for varying purposes. But nearly all progressives used this rhetoric. And nearly all agreed, moreover, that the revolutionary consequences of industrial capitalism required rethinking and reforming American economic life and its governance. As Ely put it, laissez-faire was not only morally unsound, it was economically obsolete, a relic of a bygone era. Whatever free markets had once accomplished, they now produced inefficiency, instability, inequality, and a tendency toward monopoly.
Few progressives were content merely to deplore the diseases of a modern industrial economy. America needed, they agreed, a new form of government, one that was disinterested, nonpartisan, scientific, and endowed with discretionary powers to investigate and regulate the world's largest economy, as well as to compensate those exploited, injured, or left behind — the administrative state.
Nothing was more integral to Progressivism than its extravagant faith in administration. The visible hand of administrative government, guided by disinterested experts who were university trained and credentialed, would diagnose, treat and even cure low wages, long hours, unemployment, labor conflict, industrial accidents, financial crises, unfair trade practices, deflation, and the other ailments of industrial capitalism. Chapter 3 tells the story of how a small band of scholars remade the nature and practice of their discipline, transforming themselves into expert economists in the service of the administrative state.
The progressives had different and sometimes conflicting agendas. But nearly all ultimately agreed that the best means to their several ends was the administrative state. In this crucial sense, Progressivism was less a coherent agenda of substantive goals that it was a technocratic theory and practice of how to obtain them in the age of industrial capitalism. The heart of Progressivism, as historian Robert Wiebe famously summarized it, was its ambition to "fulfill its destiny through bureaucratic means."
* * *
Illiberal Reformers tells the story of the progressive scholars and activists who enlisted in the Progressive Era crusade to dismantle laissez-faire and remake American economic life through the agency of an administrative state. Historians, just like everybody else, work with the tools they have at hand. I am a historian of economics, and Illiberal Reformers shines its narrative lamp on the progressive economists. But this is not their story alone, and had it been, they would not have recognized it.
American economic reform in the Gilded Age and Progressive Era featured a large, eclectic, and sometimes fractious cast. Most would not have called themselves economists, but nearly all were engaged with fundamentally economic questions — unemployment, low wages, long hours, workplace safety, industrial consolidation, immigration, and more. All of them, not just the academics, undertook social investigations designed to produce economic knowledge and to influence public opinion and policymakers.
Excerpted from Illiberal Reformers by Thomas C. Leonard. Copyright © 2016 Princeton University Press. Excerpted by permission of PRINCETON UNIVERSITY PRESS.
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Table of Contents
Part I The Progressive Ascendancy
1 Redeeming American Economic Life 3
2 Turning Illiberal 17
3 Becoming Experts 27
4 Efficiency in Business and Public Administration 55
Part II The Progressive Paradox
5 Valuing Labor: What Should Labor Get? 77
6 Darwinism in Economic Reform 89
7 Eugenics and Race in Economic Reform 109
8 Excluding the Unemployable 129
9 Excluding Immigrants and the Unproductive 141
10 Excluding Women 169
What People are Saying About This
"Mythologies that arise around individuals, groups, and ideas of the past tend to mask many warts. Thomas Leonard's excellent book about American economics during the Progressive Era shows how progressives' efforts to champion reform drew on a vision of scientific development that would institutionalize the eugenic creed and, in the process, do great violence to the liberal project that had been at the heart of the American system. Illiberal Reformers provides a powerful lesson in the tensions that surround ideals of social progress, scientific expertise, and the democratic system."—Steven G. Medema, University of Colorado, Denver"Economists like to think of their ancestors as heroic seekers of truth, each generation, as Newton suggested, standing on the shoulders of the giants who came before. Thomas Leonard demonstrates clearly that the story of economics in late nineteenth- and early twentieth-century America was far more complex—and more interesting. He shows how the economists of that era combined their passion for social reform with religion, eugenics, and evolution theory in ways that seem incredible today. This book is an eye-opener."—Craufurd Goodwin, James B. Duke Professor of Economics Emeritus, Duke University"This untold story of how Progressive Era activists helped construct the extensive role of government in the economy sheds light on today's technocratic dilemmas. Which decisions need to be left to experts, the ‘social engineers,' and which require democratic participation? Thomas Leonard's book demonstrates that during the Progressive Era this question was resolved only by combining democratic reform with the exclusion of women, African Americans, immigrants, and disabled people as full members of society. It underlines the fact that the tension between ‘expert' economic administration and individual liberties remains at the heart of current political debates."—Diane Coyle, author of GDP: A Brief but Affectionate History"Illiberal Reformers makes a substantial contribution to the much contested history of U.S. progressivism by providing fascinating new evidence of what Leonard terms its ‘dark side.' This book's rich narrative will amply reward readers interested in the discrete histories of social science, science, politics, culture, industrial relations, and general U.S. history, and offers a wealth of new material on discrimination based on gender, race, and class."—Mary O. Furner, University of California, Santa Barbara