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Welfare Capitalism?

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Jarod Roll

on 29 March 2016

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Transcript of Welfare Capitalism?

Welfare Capitalism?

HIS 318
Dr. Roll

Big Business in command after 1919:
--Harding and Coolidge administrations (1921-1929) the most pro-business in decades, perhaps ever
--government spending cuts, tax cuts (particularly for the wealthy)
--turning government agencies (Dept. of Commerce under Herbert Hoover) to aid business
Wild growth of consumer capitalism in the 1920s:
--new consumer goods: electrical appliances, automobiles, wider range of cars
--buying encouraged by advertising
--buying facilitated by new mechanisms of consumer credit
Yet, profits grow much faster than wages in the 1920s
--corporate profits increased by 62%
--wages in manufacturing increased by 5%
--by 1929, 70% of Americans earned as much or less than $2,500, widely considered the poverty line for a family of five
--spread of mass production techniques and technologies
--assembly line (cars, electronics, rubber)
--mechanization (machine cutting coal, tractors)
--labor needs in road construction, textiles, rubber, and electrical equipment cut between 25 and 60 percent in the 1920s
--manufacturing, coal mining, railroads shed a net of 1 million workers
Unemployment, or precarious employment (layoffs, shut-downs, etc.) endemic in the 1920s
--10 to 13 percent unemployment rate built into the economy
--fear of the loss of work dominant
--de-skilling and unemployment eroded wages
Also, employer assault on labor unions:
--union membership peaked at 3.5 million in the 1920s, less than it had been in 1917
--weakest in new mass production industries, like automobile factories
--Open Shop Campaign
--American Plan
Open Shop campaign:
--Chambers of Commerce, National Association of Manufacturers, League for Industrial Rights all in a concerted campaign to erode rights of workers to join labor unions
--Supreme Court undermined Clayton Anti-Trust Act in a series of early 1920s rulings
--restored the yellow-dog contract
Union conservatism in response:
--John L. Lewis, UMW: defending contracts over organizing new miners
--UMW membership shrank from 500,000 to 150,000

Welfare Capitalism:
--building workers loyalty
--bonus and piece rate premiums, company unions, pension schemes (that disappeared if a worker left a job), leisure activities (picnics, baseball teams)
--company unions: 400 with more than 1.5 million members in the 1920s

Any challenge?
--Progressive Party of America, 1924
--Robert La Follette
--5 million votes, but disastrous election
AFL flirted with Progressive Party, but remained focused on craft unions
--Gompers died in 1924
--William Green replaced, same views
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