Well, yesterday was certainly a good day for one of my least favorite American politicians of the twentieth century, Theodore Roosevelt, who combined gross economic ignorance with an almost adolescent jingoism. GOP frontrunner (!) Newt Gingrich has (once again) declared himself to be a “Theodore Roosevelt Republican” (though disclaiming the more socialistic Roosevelt of his post-presidential career) while President Obama, in a much ballyhooed speech, lavished praise on post-presidential Teddy for recognizing the need to add many layers of regulation to the free market.
But the main topic of this post is President Obama’s acceptance and elaboration of Progressive mythology about pre-Progressive America, the America of the late nineteenth and early twentieth century, before a wave of Progressive and World War I inspired regulation significantly increased the role of government in American economic life.
You see, this isn’t the first time America has faced this choice. At the turn of the last century, when a nation of farmers was transitioning to become the world’s industrial giant, we had to decide: would we settle for a country where most of the new railroads and factories were controlled by a few giant monopolies that kept prices high and wages low? Would we allow our citizens and even our children to work ungodly hours in conditions that were unsafe and unsanitary?
This line of thought goes back to the Progressive era itself. As I point out in Rehabilitating Lochner: “Progressives were convinced workers’ living standards were falling, and were in constant danger thanks to unregulated immigration, unregulated labor markets, and a paucity of strong labor unions. Supporters of liberty of contract, by contrast, believed that workers’ lot, though often unpleasant, was gradually improving thanks to the American system of contractual freedom.”
Contrary to the implications of Obama’s speech, the latter group seems to have had the better of the argument. Despite massive immigration during this period and despite (or maybe because of) the lack of labor regulation and low unionization, best estimates are that real wages in manufacturing in the U.S. increased almost 40% between 1890 and 1914. Lawrence H. Officer, Two Centuries of Compensation for U.S. Production Workers in Manufacturing (2009); Albert Rees, Real Wages in Manufacturing 1890-1914 (1961). [Update: I don't have statistics handy, but working hours were going down without government intervention--for example, few bakers, the subject of the 1895 ten-hour a day law invalidated in Lochner, worked more than ten hours by 1910--and child labor was declining rapidly outside the impoverished Deep South.]
Oddly enough, Obama also praises Roosevelt for supporting a minimum wage for women. Chapter 4 of Rehabilitating Lochner describes the impetus for such laws, and much of the relevant the information in that chapter can be found in this paper published in Law and Contemporary Problems. The history is too rich to give an adequate summary here. Let’s just say that the history of such laws is not pretty. The laws’ primary supporters included male-only labor unions that wanted to keep women out of the workplace–women-only minimum wage laws almost never passed without strong from unions that typically opposed minimum wage laws for men; eugenicists who wanted women to stay home and take care of their children; bigots who thought that only the lower order of men (including Eastern European immigrants) would allow their women to work for wages; moralists who believed that low-wage women were susceptible to vice and should therefore stay out of the workforce; and economists who believed that, as Felix Frankfurter summarized in his brief in Adkins v. Children’s Hospital, women who wanted to work but could not command a government-imposed minimum wage were “semi-employable” or “unemployable” workers who should “accept the status of a defective to be segregated for special treatment as a dependent.”