The Progressive Movement (1890-1920)The problem: The “Labor Question”• “What should Labor get?”• Was labor a ”commodity” just like any other good, subject to supply and demand?• Should labor be entitled to what it produced or to what the laborer “needed” (“living wage”)?• To put it succinctly: Should identical twin brothers, one single, one to feed a family of four, get the same wage?
The Progressive Movement (1890-1920)The problem: The “Labor Question”Economics teaches that there are two ways market intervention can raise wages (or at least keep wages from falling). One can• limit the supply of labor• change the price of labor directly by creating a “minimum wage”The early progressive economists understood basic economics; they were not “economic deniers”.
Wage Rates S2 S1 S2 Progressive economists E1 D1 D1 wanted to limit additional supply of labor, i.e. a shift of W1 the supply curve to the right, W2 by excluding • immigration of foreigners S1 • Women • “non-white races” E2 • and other feeble-minded, drunks, and those with a low IQ Employment
Wage Rates S1 Minimum Wage D1 D1 MW W1 Employment S1 E2 E1
A “seismic shift” in Economics happened in 1871• Classical economists (Adam Smith, David Ricardo, John Stuart Mills) held on to the “Labor theory of value”: The input factors in the production process determines the value of the final consumer goods. The direction of causation was “Costs determine Prices/Value”• In 1871 three economists (Carl Menger, Leon Walras, and Stanley Jevons) independently turned the direction of causation upside down, by stating that value (what people are willing to pay for a consumer good) determines the prices of the input factors, including wages (No matter how many work hours go into the production of fax machines, if nobody wants fax machines anymore the value of the labor is exactly zero)
The Merger of “Eugenics and Economics”The Science Eugenics EconomicsThe Goal Race control Labor Supply controlThe Target The “Inferior”
Labor Exclusion Policies - The “Unemployable”Who was deemed “Unem-ploy-able” ?
Who were the “inferior” (or the “unemployable”)?• In antebellum America “inferiors” had their place: Women, domestics, and servants at home, slaves and farmhands on the plantation and in the field, laborers on the road cuts, mines, canal ditches, and other underlings in the backs of shops. Who you were determined what work you did, where your work was• After the Civil War, industrialization drew many of these workers to urban employment. They became to be perceived as economic competitors (and as such accused of accepting low wages and undercutting the American workman)
Who were the “inferior” (or the “unemployable”)?They were the• dependent, delinquent and degenerate classes (Henderson)• paupers, feeble-minded, and persons of low moral character• defective, delinquent, and dependent (Richard Ely)• old or weak-minded, physically feeble, or utterly untrained and illiterate (Lippman)• “the depraved, deficient, deranged, deformed, disorderly, dirty and the devitalized, defective, dissolute, and the depleted”
Labor Exclusion Policies • The Unemployable • Immigrants • Women • The Minimum Wage
Labor Exclusion Policies - The “Unemployable”Who was deemed “Unem-ploy-able” ?
Labor Exclusion Policies - The “Unemployable”Who was deemed “Unem-ploy-able” ?
Labor Exclusion Policies - The “Unemployable”Who was deemed “Unem-ploy-able” ?
Labor Exclusion Policies - The “Unemployable”Who was deemed “Unem-ploy-able” ?
Immigration Laws passed during Progressive Era1882 – Chinese Exclusion Act1885 – “Contract labor” is outlawed (i.e. employers paying for immigrants’ passage)1917 – Immigration Act created “literacy test” (designed to exclude immigration from southern and eastern Europe)1903 – “Anarchists, polygamists, and epileptics” were barred1907 – Expatriation Act required American women who married foreigners to surrender their US citizenship1921 - Emergency Quota Act (imposed national quotas of 2% on each nationality’s population in the USA in 1890)1924 – Johnson-Reed Immigration Act (made the Quota Act of 1921 permanent)“As a result immigration from Eastern and southern Europe, which had averaged 730,000 p.a. (1905-1914) plummeted by 97%”
Labor Exclusion PoliciesWomen(in the work force) …employment.
Labor There were two strands of progressive labor Policies legislation:Women 1.Legislation protecting women (or “the (in the work weaker sex”)” force) 2.Legislation protecting men (from female competition)
Labor PoliciesWomen(in the work force)
Labor PoliciesWomen(in the work force)
Labor The “Mother of the Race “ argument (to keep women out Policies of the workforce AND out of universities)Women(in the work force)
Labor Exclusion PoliciesThe The progressives went further than just excluding certain Mini- groups/races from immigration; they also wanted to find mum ways to identify “undesirables” already living/working in Wage America Thus the “Minimum Wage” was born. It provided “A wage test, which identified inferiority with low labor productivity, would catch all inferiors with low standards, the unemployable, the immigrant, and the women.”
Labor Exclusion PoliciesThe Mini-mum Wage
Wage Rates What if you could not only prevent the supply curve from moving to the right, but actually increase D1 S1 wages from the market clearing level (”W1”)? MW Minimum Wage W1 D1 S1 Employment E2 E1 The “Inferiors / ”Unemployable”
Labor Exclusion PoliciesThe “A legal minimum wage, applied to immigrants and Mini- those already working in America, ensured that only mum the productive workers were employed. The Wage economically unproductive, those whose labor was worth less than the legal minimum, would be denied entry, or, if already employed, would be idled. For economic reformers who regarded inferior workers as a threat, the minimum wage provided an invaluable service. It identified inferior workers by idling them.“
The Minimum Wage• “A minimum wage was the holy grail of American progressive labor reform, and a Who’s Who of progressive economists and their reform allies championed it.” • “In 1911, progressives were on the cusp of a string of legislative victories, resulting in minimum wage laws in fifteen states and the District of Columbia and Puerto Rico, beginning with Massachusetts in 1912.”• “American economists engaged in the minimum wage debate of the 1910s, whether pro or con or in between, agreed that a successful legal minimum would idle the least productive workers. If the law raised the cost of hiring unskilled labor, fewer unskilled workers would be employed.”• “The economists among labor reformers well understood that a minimum wage, as a wage floor, caused unemployment,…”
“The Great Contradiction at the heart of the Progressive Era reform…”“…its view of the poor as victimsdeserving state uplift and as threatsrequiring state restraint.”
The Fate of “Liberalism” (in America)
Author’s own Summary
Two Comments on “liberals and progressives”• Liberals did not start calling themselves “progressives” (because they did not want the sometimes negative connotation of “liberal”). Rather, it was the other way around: Progressives ”hijacked” the term “liberal” and changed its meaning.• Early progressives understood economics. By advocating a “minimum wage” they wanted to reduce employment. Today’s “progressives” still want a “minimum wage” but deny that it will have negative effects on employment. In that respect today’s progressives are “economics deniers”.
How and when the term “liberal” changed its meaning Source
How and when the term “liberal” changed its meaning Source
The Progressive Movement (1890-1920)• The heterogeneity of historical interpretation has led some historians to despair of identifying a coherent set of ideas that can be gathered under the rubric of “progressivism” (Filene 1970). • But Progressive-Era historiography, for all the diversity it unavoidably (and rightly) reflects, does evince important narrative and intellectual commonalities, no more so than with respect to economic reform. • Economic reform, perhaps more than any other major tributary of American progressivism, unified progressives. • And though, like progressivism more generally, economic reform cannot be reduced to a single creed, it is possible to recover a real intellectual coherence in the foundational ideas of the Progressive Era economists, and their fellow progressives.
The Progressive Movement (1890-1920)• Tthhee mfiirds-t1 g8e5n0esr aantido n1 8o7f 0A.m erican economic progressives was born largely between • Ntyepaicralyl lay lwl cearme eR efrpoumb lNiceawn aEnndg lUanndio fnaimst.i l ies of Puritan background. Their families • UiWnn atlhrikdee, Catihnvedil GWWeainllrie.a r(mTaht ieGoyrn ga rohefaw m1 u8p S4 ru0em,v emnrieengnr, ttshhueec mh pa arrotsy grOeredlis vpseriervs eWidse ewnnte,d rAeebl lrt aHohooa mlymo Leuinsnc,o gJl rnt.o), L heasvteer s Ferravnekd • T1h88e5 c awdarse ao yf oreuftohrfmul eocnoen. omists that founded the American Economic Association in RICHARD T. ELY (b. 1854), the prime mover behind the Association’s founding, was thirty-one years old at the time. WOODROW WILSON (b. 1856) was twenty-eight, EDWARD W. BEMIS (b. 1860) was twenty-five, and EDWIN R.A. SELIGMAN (b. 1861) was twenty-four. Among the senior charter members, such as Henry Carter Adams (b. 1851) and Simon Patten (b. 1852), John Bates Clark (b. 1847) was, at thirty-eight, the grand old man. The elder statesman selected for the first AEA presidency, Francis Amasa Walker (b. 1840), was then forty-five.
The Progressive Movement (1890-1920)
The Progressive Movement (1890-1920)
The Progressive Movement (1890-1920)
The • A key formative experience of the AEA’s core group – graduate education in Progressive Germany. Movement • Bismarkian Germany gave the young Americans exposure to the ideas of (1890- the German Historical School, with its positive view of state economic 1920) intervention, and its hostility to the idea of natural economic laws, what it disparaged as “English” economics. • Their German university professors, men like Adolph Wagner, Johannes Conrad and Gustav Schmoller were, moreover, accorded respect and authority and they were consulted on important matters of national economic policy. • The example of their German professors permitted the young American graduate students to imagine careers as yet non-existent in the United States – academic advocates with expert influence upon economic policy. • The young American economists’ experience in Germany gave shape and direction, however, to a reform impulse already strong in them. • The progressive economists’ desire to set the world to rights was powered by a quintessentially American phenomenon, an evangelical Protestant reform movement known as social Christianity, or the social Gospel.
The Progressive Movement (1890-1920)
The Progressive Movement (1890-1920)
The Progressive Movement (1890-1920)
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