Corps de l’article
Prior to the publication of a certain book by an English scholar in 1936, there was a strongly held view by economists (and many others) that the overall health of an economy could be explained in terms of the operation of its labour market. In this era, when laissez-faire or neoclassical economics held sway, unemployment and associated economic problems, so it was maintained, resulted from wages being ‘too high’; above the equilibrium level which would result in full employment. The ‘normal’ workings of the market, in turn, determined the living standards of both workers and those that employed them. Mark Hendrickson examines consideration of these issues (though he uses the term industrial relations rather than the labour market) in America in the period from World War 1 to the Great Depression, what he refers to as the New Era exemplified by the political agenda of Herbert Hoover and Republican administrations of the 1920s. His exploration of such issues is situated within the context of broader political and sociological dimensions operating in America: the role of experts, employers’ antipathy to unions and collective bargaining, sexist and racist attitudes to women, African Americans, Mexican immigrants and Mexican Americans.
The latter decades of the Nineteenth Century and the first two of the Twentieth Century have usually been described as the Progressive era in American politics with an optimism of how problems of society can be resolved by the use of tertiary educated experts. The use of experts expanded in the New Era as an increasing number of public and private interest groups called on their services to conduct research and participate in policy debates. ‘Expertise’ was a new weapon interest groups would use in pursuing self-interest. While New Era experts moved away from eugenic and ‘race suicide’ notions of Progressives,[1] sexist and racist notions still played a major role in their deliberations.
Hendrickson sees the New Era as adopting a ‘middle way’ between statist collectivism (Progressivism) and laissez-faire individualism, which he describes as ‘voluntary corporatism’. He says that voluntary corporatism embraces:
[…] the belief that business, labor and the public were to be represented in a system that minimized the need for regulation. Expert inquiry and investigation into public problems, voluntary corporatists believed would reveal the most efficient and appropriate means [to solve problems] … they worked to promote widely shared prosperity by way of economic growth, more widely shared plenty, and the management of the business cycle…voluntary corporatists embraced the notion that labor and capital shared a common interest in achieving these goals.
p. 28
The problem with using the term ‘corporatism’ is that it has a notion of where interest groups can be conceived as being aggregated (or more colloquially, lumped) together with common interests within the aggregates concerned, when in fact, whether they do or not needs to be determined empirically. This aggregation goes against the notion of competition/conflict, which lies at the basis of social science research. The material that Hendrickson assembles is more consistent with the traditional political science model of pluralism with a large number of interest groups struggling with and against each other in pursuit of self-interest.
Experts were called upon when crises emerged, such as industrial conflict, downturns in the economic cycle and race riots. The New Era continued the Progressives concern with efficiency and the avoidance of waste. Extensive research was conducted into the operation of labour markets in a search for solutions to such crises. The major tension between different sets of experts was that of seeing ‘problems’ in terms of the characteristics of different workforces or the power exercised by corporations, their antipathy to unions and discriminatory attitudes and practices towards women, African Americans, Mexicans and Mexican Americans. Experts for the latter sought to utilise the results of their research to break down negative stereotypes and provide evidence concerning the efficiency and competence of such workers when given the opportunity.
Hoover and his followers were fortunate that after a downturn following the end of World War 1, the economy, for most of the 1920s, experienced growth. Hendrickson quotes reports from this period that the distribution of growth was uneven with real wages increasing each year by 2.1 per cent and profits by 9 per cent (not discounted for inflation, see p. 71-72). The New Era with its politics of pluralism leaving interest groups to battle it out in convincing others to embrace their ‘superior expertise’ ensured that the labour market operated according to the dictates of neoclassical economics and domination by corporations.
The downturn in the economy in the early 1920s and the Great Depression of the 1930s demonstrates that neoclassical economics and investigations into the labour market, as important and interesting as they are, do not provide the key to unravelling the problems of the “economy as a whole”. It was John Maynard Keynes with the publication of The General Theory of Employment Interest and Money[2] in 1936 and the macroeconomic revolution, which provided policy makers with tools to manage the overall health of the economy. The successful implementation of Keynesianism provided America (and other western nations) with sustained economic growth until the mid 1970s. This economic success, however, did not put an end to employers’/corporations’ antipathy to unions and collective bargaining; this is something that never waned, or discriminatory treatment against women, African Americans, Mexicans and Mexican Americans. With respect to the latter, advocates would adopt a civil rights rhetoric, rather than an economic one, in pursuing the interests of such ‘minority’ groups.
Hendrickson has conducted extensive research in describing the growth of different groups of experts in the private and public sector, the voluminous research they conducted as they battled with each other for attention and relevance in public policy debates during the New Era. The extent of his reading of both primary and secondary sources is to be applauded. This strength is also his greatest weakness. He needed to learn how to wield Occam’s razor. The volume could have been substantially shortened without any harm or loss of content. Hendrickson cites many sources, which essentially demonstrate the same thing. He also has a bad habit of repetition. Similar basic information is repeated again and again. This makes for a manuscript that is hard work to read which detracts from the overall worth of his scholarship.