POWER AS A SYSTEM OF BUSINESS

by the Sandwichman

Brenda Rosser asked me to elaborate on the concerted campaign lurking behind the textbook lore of lumpoflabor. This will be a bit messy because it relies on secondary sources and some conjecture. There is, however, one recent and scrupulously documented historical study that corroborates the overall thesis, if not the specific conjecture.

The story commences at the beginning of the 20th century as major strikes by machinists and anthracite coal miners alarmed business owners about the growing power of unions.

Local and national business organizations, such as the National Metal Trades Association, the Dayton, Ohio, Employers Association, Minneapolis Citizens' Alliance and the Associated Employers of Indianapolis launched aggressive anti-union "open shop" campaigns. Then in 1903, the National Association of Manufacturers, under its new president, David M. Parry, launched its own violent strike-breaking drive and sought to co-ordinate local groups through closely affiliated Citizens' Industrial Association of America and, later, National Committee for Industrial Defense.

Trivia question: who was the first president of the NAM and who is his great-grandson? (Actually, it turns out that the frequently reported "fact" that it was Samuel P. Bush is erroneous. The first president of the NAM was Thomas Dolan.)

The story of the anti-union open shop movement is ably told in William Millikan's A Union Against Unions. Millikan's study focuses on Minneapolis with some reference to national events. The open shop drive was analyzed in the 1940s by Robert A. Brady in his Business as a System of Power. There's also a brief account of the "Organized Revolt of Employers" in the first chapter of Sidney Fine's Without Blare of Trumpets.

The NAM became extremely "influential" in the years before World War I, to the extent that it was known as the "invisible government" after a scandal came to light in 1913 about their methods and the extent of their political influence. One of the key strategies of the various employers' organizations was conducting propaganda campaigns. These campaigns were comprehensive. They included comic strips, movies, lectures, magazines, newspaper editorials, pamphlets, orchestrated letter and telegram campaigns, etc..

And textbooks. The case for the NAM and its allies direct involvement in censuring some economics textbooks and promoting others is largely circumstantial and partly conjecture at this point. There is one celebrated case of a NAM campaign against a high school social studies textbook by Harold Rugg. There is also the documented incident of the Illinois and Missouri committees on Public Utilities Information in the 1920s conducting sweeping textbook reviews and exerting pressure on educational authorities, publishers and authors. Those activities were investigated by the Federal Trade Commission in 1928 and reported in The Propaganda Menace by Frederick Lumley.

The NAM published material clearly aimed at the college market, such as the Open Shop Encyclopedia. It maintained an Open Shop Department, subsequently renamed Industrial Relations Department, headed by a former economics professor, Noel Sargent. The express purpose of that department was "educating the public". It is hard to imagine why or how they could have refrained from blessing some economics textbooks (say by guaranteeing advance purchases) and condemning others.

It is not as if such interventions would have encountered a hostile or even indifferent reception. American universities in the early decades of the 20th century were notoriously reactionary and elitist institutions. See Thorstein Veblen's The Higher Learning in America and Upton Sinclair's The Goose Step for a sense of the general climate. The great majority of university trustees were businessmen or allied professionals. Students generally came from the upper middle classes and went on to become businessmen or professionals. College men were often recruited to work as strikebreakers and did so with enthusiasm. Strikebreaking was not something the collegians did out of desperation for the money -- it was a cause they believed in.

And let's not forget textbook companies themselves -- some of which were active members of anti-union employers' organization. For example, McGraw-Hill was a leading member of the NAM's public relations committee during its anti-New Deal "American Way" campaign and published NAM propaganda (e.g., The American individual enterprise system: its nature, evolution, and future)

So the case of NAM influence on college economics textbooks is a bit of a bear-shits-in-the-woods story. It would be difficult to imagine otherwise. As for the content influenced, I have to fall back on the observation that the shorter workday philosophy was the backbone of American Federation of Labor unionism and its expansion in the last two decades of the 19th century and the first two decades of the 20th. Discrediting the unions' case for a shorter working day would have been a strategic priority. Furthermore, since union arguments were out of step with the prevailing academic economic dogma of the day (which was still inherently classicist Say's Law, laissez-faire fundamentalism), it wouldn't have been such a hard sell. In fact, the Steward/Gunton argument for the shorter working day was probably not all that well understood by union members and spokesmen, either. In some respects, it embodied a kind of ahead-of-itself Keynesianism for which there didn't yet exist a comprehensive theoretical argument. So it took some leaps of imagination. I happen to think those leaps were and are fairly plausible and, at any rate, totally unrelated to any "fixed amount of work" or anti-technology assumption.

PS -- following up on my earlier comment and YouNotSneaky's incredulity about the absence of "price-fixing" in the lump-of-labor textbooks of the 1920s, 30s and 40s: the Public Utilities Information committees specifically targeted "books favoring municipal ownership, mentioning the lack of competition with monopolies, or political corruption of corporations". Is the Pope Catholic?