The Anxious Triumph
Page 49
Two opposing myths, one triumphant and optimistic, the other sombre and tragic, but both containing some truth, sought to explain the American miracle. The first narrative was essentially liberal: ordinary people free from the prejudices of the Old World and able to compete as individuals in the marketplace, repelled the growth of government and became prosperous, in fact, the most prosperous people in the world, while remaining free. By 1949 an average income in the United States was 1,453 dollars at a time when no other country exceeded 900 dollars; the runner-ups were Canada, New Zealand, and Switzerland (800–900 dollars), followed by Sweden and the United Kingdom (700– 800 dollars).23
David M. Potter, a historian writing in 1954, waxed lyrical over the wonders of the American model: ‘Everyone knows that we have, per capita, more automobiles, more telephones, more radios, more vacuum cleaners, more electric lights, more bathtubs, more supermarkets, more movie palaces and hospitals than any other nations.’ Abundance was a conspicuous feature of American life, he continued. America had a greater measure of social equality and social mobility than any other society in human history. Business was conducted as if social barriers did not exist. But the citizen had to be ‘educated to perform his role as a consumer, especially as a consumer of goods for which he feels no impulse of need’. The only institutions ‘we have for instilling new needs, for training people to act as consumers, for altering men’s values, and thus for hastening their adjustment to potential abundance is advertising. That is why it seems to me valid to regard advertising as distinctively the institution of abundance.’ The perils of advertising, together with those of waste, were, in David Potter’s somewhat starry-eyed narrative, the only cause for concern.24
The second narrative, favoured by left-wing and populist historians, described the United States as a country taken over by capitalists who were bent on destroying a developing democracy by naked force and bribery, who stamped upon the human spirit, and imposed a system based on greed and the accumulation of wealth in the hands of the few.25 People were made to work hard in order to buy goods they do not need and which do not make them any happier. On the contrary, devoured by envy, they are unhappy when others have what they themselves do not have. Consumption sets individuals against individuals in a race no one can win since capitalism constantly creates new goods that make everything you had before quite obsolete. The only beneficiaries of this ‘Joyless Economy’ (the title of a book by the economist Tibor Scitovsky, published in 1976) are large corporations. The clash between these two narratives, writ large at the planetary level, still informs most politics.
A consumer society required a level of earnings greater than that needed to provide the ‘basic’ necessities such as food, clothing, heating, and lodging, though even these are culturally and financially determined (lobster or polenta?; any old jeans or Giorgio Armani’s?; penthouse or trailer?). In France, as elsewhere, clothing was the first item that benefited from the reduction in the proportion of expenditure on food in the 1880s.26
In the United States in the 1880s, of the 12.5 million families recorded in the census, 12 per cent had an income greater than $1,200 a year (and 200,000 of these had an income higher than $5,000). One can thus surmise that most of non-food consumption was then directed towards the top 12 per cent, and most luxury consumption would be absorbed by the richest one per cent whose total income was larger than that of the poorest 50 per cent.27 After 1910 the USA grew not only richer (as was the case with most European countries) but also increasingly unequal in terms of income until 1940. Income inequalities then dropped sharply only to start a new climb in the 1980s.28
The United States was well ahead of European countries in the construction of a consumer society. The wealthier European countries, as well as Canada, New Zealand, and Australia, followed, at some distance, catching up with the United States only in the decades after the Second World (along with various Asian enclaves of prosperity such as Singapore, Hong Kong, Qatar, South Korea, Japan, and Israel). Private consumption, on its own, does not provide a sufficient index of well-being because the real revenue of ordinary people is made up not only of their post-tax income but also of the benefits they get in kind or in cash. A worker with a take-home pay of, say, $300 a week, may appear to ‘earn’ more than one on $200. But if the latter is a citizen of a country with an advanced welfare state, free healthcare, free childcare, free education for the children, and a pension when she retires, all paid for from taxation, that is not so.
One can also look at this from the point of view of employers who, in the absence of any kind of state benefits, may have to pay their workers more than those living under a generous welfare system. In other words welfare can also be seen as a state subsidy for private sector wages. It became the role of democratic and socialist parties to promote welfare for those who had not risen far enough up the ladder of consumption.
Werner Sombart, in his 1906 classic Why is there no Socialism in the United States?, attributed the failure to develop a socialist party to the comfortable circumstances and high standard of living of the American worker (there was, as we shall see, a socialist party in the United States but presumably not big enough for Sombart). He wrote, ‘All Socialist utopias came to nothing on roast beef and apple pie.’29 Earlier than Sombart, on 24 October 1891, Friedrich Engels, in a letter to Friedrich Sorge (a socialist leader who had emigrated from Germany to the USA), discussing the apparent lack of radicalism of American workers, surmised that it was due to their higher standard of living (as compared to that of European workers).30 And even earlier than Engels, the American journalist and founder of The Nation, Edwin L. Godkin, pointed out that the real issue lay in the attitude of the working man who, having realized that the capitalist he was confronting had once been a working man, could entertain the hope of becoming a capitalist.31
This explanation for the alleged lack of radicalism of American workers was based on the alleged social mobility of Americans in contrast to the rigid hierarchy of classes in Europe – the idea that only in America could a poor man, just landed on the East Coast, aspire to become a millionaire. Sombart’s reasoning rests with the somewhat simplistic notion that poverty is a powerful force in the creation of a socialist party, a causal relationship for which there is little evidence. (European socialist parties tended to rely on the support of the best-paid, organized, and skilled workers, not the very poor.) Other plausible explanations for the lack of a strong socialist party in the United States (no feudalism, the two-party system, relative prosperity, the constantly moving frontier, massive immigration, and ethnic divisions, etc.) remain unsatisfactory.32 Australia, which shared some similarities with the United States (ethnic problems, immigrant working class, lack of feudalism, similar electoral system, egalitarian ideals) did not follow the USA and developed a strong Labour Party, as did New Zealand.33
Socialist parties in the mould of the Second International were essentially a continental European phenomenon. They were almost non-existent in Latin America, Africa, or Asia. While there were parties everywhere espousing ideas of progress similar to those of traditional socialist parties, they did not attribute the key agency for advancing human progress to the working class, nor did they envisage a future classless society. Great Britain, though industrially more advanced than other European countries, had no strong socialist party until after 1918. So the United States, at least at the time, was not so ‘exceptional’ in not having a strong socialist party. In any case the Socialist Party of America (SPA) was, before the First World War, only a little weaker than the British Labour Party, founded in the same year (1901). By 1912 the SPA, with almost 120,000 members, had 1,200 elected local government officials and the mayors of important industrial cities such as Milwaukee (Wisconsin), home of the world’s largest breweries, and Flint in Michigan, home before the First World War of Buick and General Motors.34 The SPA boasted 323 papers and periodicals, including eight foreign-language dailies. The socialist paper Appeal to Reason (founded in 1895
) had a weekly circulation of almost 400,000.35 Eugene Debs, one of the founders of the Industrial Workers of the World, won over 900,000 votes (6 per cent of the total) as the candidate for the SPA in the 1912 presidential elections. His demands were quite uncompromising:
We demand the abolition of capitalism and wage-slavery and the surrender of the capitalist class. We demand the complete enfranchisement of women and the equal rights of all the people regardless of race, color, creed or nationality. We demand that child labor shall cease once and forever and that all children born into the world shall have equal opportunity to grow up, to be educated, to have healthy bodies and trained minds, and to develop and freely express the best there is in them in mental, moral and physical achievement.36
American trade unions were then a powerful force, in spite of the constant stream of immigrants and the anti-union violence. They had the respect of their counterparts in Europe. Thus the first day of May, celebrated today as a workers’ holiday throughout Europe and in many other parts of the world, but not, ironically, in the United States, was chosen to commemorate the demonstration in Haymarket Square in Chicago (1886) in favour of the eight-hour day. International Women’s Day (now 8 March) was first decreed by the Socialist Party of America in solidarity with the strike of 1908 by the International Ladies’ Garment Workers’ Union, eventually one of the largest American unions. Social conflicts intensified. Workers organized unions, farmers established cooperatives. By the end of 1889 it might have been possible to imagine the unification of urban and rural protest groups into a kind of American populist-socialist party. Yet American unions chose not to follow the British example and form a labour party.37
Such efforts led instead to organizations such as the Farmers’ Alliances and the People’s Party (known as the ‘Populists’) founded in 1891 (though its founding convention was on 4 July 1892 when the Omaha Platform was adopted), whose aim was to challenge the economic and political power of the businesses and corporations that controlled the financing and distribution of agricultural produce.38 In 1892 the Populists obtained 8.5 per cent of the vote in the presidential election. In 1896 they endorsed the Democratic presidential nominee, William Jennings Bryan, who obtained 46.7 per cent of the vote, though he lost the election (Bryan’s main platform was a demand for the free and unlimited coinage of silver, an inflationary solution to the farmers’ problem of low commodity prices). The Republicans (William McKinley) while endorsing the gold standard also pushed for protectionism. Bryan was openly critical of the Northeast and was reluctant to appeal to non-rural voters. During the subsequent four years of acute depression the People’s Party rapidly declined.
The Progressive Party, created by Theodore Roosevelt, from the left of the Republicans, obtained 27.4 per cent in the 1912 presidential elections on a platform that included a national health service, social insurance, the eight-hour day, and a federal income tax. It was the highest percentage ever obtained by a third party in an American presidential election. Roosevelt’s electoral campaign was unashamedly radical:
There once was a time in history when the limitation of governmental power meant increasing liberty for the people. In the present day the limitation of governmental power, of governmental action, means the enslavement of the people by the great corporations, who can only be held in check through the extension of governmental power.39
The outgoing President William Howard Taft (who obtained 23 per cent) had also pursued left-of-centre policies (antitrust legislation, and the introduction of a corporate income tax). In fact, during his single term in office he launched twice as many antitrust suits as Roosevelt.40 The new president, Woodrow Wilson, during his first term in office (1913–17) introduced the most progressive legislation in the United States before Franklin Roosevelt’s New Deal. In 1900, Wilson had denounced trust busters as unrealistic reactionaries who want to return to a world that can no longer exist. By the time of his presidential campaign of 1912 he had come round to their views:
we used to think in the old-fashioned days when life was very simple that all that government had to do was to put on a policeman’s uniform and keep out of business. But now business is conducted by huge corporations and not individual entrepreneurs, it is a public affair in need of government regulation.41
In 1912, unlike in 2012, America was in tune with the kind of interventionist liberalism that prevailed in much of Europe. Here are the results for the four main candidates, none of whom was right-wing or conservative by today’s standards:
Table 12 USA Presidential Election, 1912
Candidates Party Percentage
Woodrow Wilson Democrat 41.8
Theodore Roosevelt Progressive 27.4
William Howard Taft Republican 23.2
Eugene Debs Socialist 5.9
Much of the progressivism of early twentieth-century America may be regarded just as populist rhetoric, yet it was a sign that one had to be somewhat hostile to business to do well in elections.
Consistency did not always prevail. For instance, the same Theodore Roosevelt who was worried about large corporations in 1912 had been eulogizing about them in 1901 (when, at the age of forty-two, he became President after the assassination of William McKinley by an anarchist), just as Woodrow Wilson had done. In his first message to Congress in 1901, Roosevelt had declared that:
The captains of industry who have driven the railway systems across this continent, who have built up our commerce, who have developed our manufactures, have on the whole done great good to our people. Without them the material development of which we are so justly proud could never have taken place …. The mechanism of modern business is so delicate that extreme care must be taken not to interfere with it in a spirit of rashness or ignorance. Many of those who have made it their vocation to denounce the great industrial combinations which are popularly, although with technical inaccuracy, known as ‘trusts’ appeal especially to hatred and fear.42
But he was soon attacking the ‘trusts’, declaring that the state had the duty to control the great corporations. It was the beginning of the so-called Progressive Era, full of promises about fairness, anti-monopoly legislation, regulating the railway industry, enacting laws against the adulteration of food (such as the Pure Food and Drug Act, 1906), mediating between coal miners and coal owners, and establishing national parks. Progressivism was not confined to the presidential office. One of the most remarkable exponents of the Progressive Era and of Midwestern reformism was Robert M. La Follette (‘Fighting Bob’), a Republican (and later a Progressive) politician who was a congressman (1885–91), then Governor of Wisconsin (1901–6), finally Senator (1906–25) and who, as the presidential candidate for his Progressive Party in 1924, obtained 17 per cent of the vote. Following the depression of the 1890s, there were plenty of protests, particularly in cities such as Chicago and Milwaukee, against inadequate public services, unjust taxation, or corruption in local government.43 What was missing in the various progressive platforms emerging in the United States was a conception of state welfare. Here the USA, then as now, was well behind the European countries.
Concern for the welfare of the poor is, per se, not new. In ancient Greece and Rome philanthropy was regarded as a duty of the nobility. Although encouraged in the Old Testament, giving to the poor is not one of the Ten Commandments. Islam is different: Zakat, one of the five pillars of Islam, is the compulsory and regular giving of 2.5 per cent of one’s wealth to the poor. Competition between Protestants and Catholics in sixteenth-century Europe led to a spread of schemes for poor relief ‘from Augsburg to Zurich by way of London, Paris, Nuremberg, Ypres, Madrid, Toledo, Venice and a great many places besides’.44 In England, the Poor Laws, introduced in 1601 under Elizabeth I (though some poor relief already existed) and administered by parishes, continued in a constantly modified form down to the first half of the twentieth century. In the early nineteenth century almost 10 per cent of the population was covered by such poor relief.45
Poor relief was a
lways a matter of controversy. At the end of the eighteenth century and at the beginning of the nineteenth, the intelligentsia, especially in Britain, turned vehemently against public charity. Thomas Malthus (a clergyman as well as an economist and demographer) thought that giving money to the poor would lead them to have more children and make them even poorer. The Poor Laws, he wrote in An Essay on the Principle of Population (1798), ‘may have alleviated a little the intensity of individual misfortune’ but ‘they have spread the general evil over a much larger surface’.46 It was not the business of the state, he explained, to use public revenue for the benefit of the unfortunate or undeserving few.47 Two years later even Malthus was ready to admit that in some circumstances (e.g. famine) ‘the system of poor laws’ (which he still ‘heartily’ condemned) would be necessary.48 Recent scholarship supports the view that, at least at times of bad harvest, and certainly from the mid-sixteenth to mid-seventeenth century, poor relief kept mortality down.49 But at the time not just dreary pessimists like Malthus but even ‘enlightened’ liberal thinkers from Jeremy Bentham (Observations on the Poor Bill, 1797) to David Ricardo agreed that poor relief was counter-productive. Explicitly endorsing Malthus’s views, Ricardo wrote that ‘the poor laws’ were not ‘as the legislature benevolently intended … to amend the condition of the poor, but to deteriorate the condition of both poor and rich; instead of making the poor rich, they are calculated to make the rich poor.’50 The campaign against the indolence of the poor, which is vigorously waged to this day, led to the great Poor Law Amendment Act 1834, perhaps the most important piece of social legislation of the nineteenth century, affecting almost every aspect of life and labour in Victorian Britain.51