Process
Status Items Highlights Done See section below Claims None Questions None Output None
Highlights
Time 0:12:59
Electoral Politics and Populism
- By 1904, political candidates across the spectrum recognized the effectiveness of aligning with the common person’s interests to win elections.
- This shift in political strategy was influenced by the populist message of William Jennings Bryan, who championed the cause of the working class against the wealthy elite.
- Theodore Roosevelt, although a Republican, adopted a similar stance, advocating for regulating the economy to serve the public interest, marking a change from previous conservative platforms. Transcript: Speaker 1 By 1904, Eric says, candidates from the left to the right saw that if you wanted to get elected, you should side with the little guy, or say you did. Speaker 3 The Republican Party, for the first decade or so, of the 20th century, is the national home of what becomes known as Progressivism and stands for not overthrowing the capitalist order Or the industrialist order, but regulating it in some semblance of the public interest. And of course, there’s a big row where in fact there are a series of rows over what the public interest might be, but there is this generalized notion for which Theodore Roosevelt is an Articulate spokesperson, that the economy ought to be bent to serve ordinary citizens. Speaker 1 Era. People hungry for progress embraced horrific ideas like
Time 0:16:33
Shifting Pendulum of Economic Reform
- Early 1900s saw corporations improve worker conditions (e.g. Hershey’s, Wrigley’s, Max Factor) while also mass-producing new goods and paying their employees livable wages.
- Post-World War I, economic prosperity lessened the urgency of working-class demands.
- By the 1920s, the Republican party under Harding and Coolidge retreated from progressive policies, reducing taxes, deregulation, suppressing unions, and generally pursuing anti-progressive politics.
- While many Americans enjoyed the economic boom, many still couldn’t afford the consumer goods and relied on loans for purchases like cars and stocks.
- This marked a shift away from the prior era’s economic reforms. Transcript: Speaker 1 The corporations that are churning out new mass-produced machines and consumer goods, Hershey’s chocolate, Wrigley’s chewing gum, Max Factor Cosmetics, are also taking somewhat Better care of their workers. Speaker 3 They’re creating products for the masses while paying their employees a livable wage with safe working, and a standard 40-hour workweek. Speaker 1 Again, that’s the History Channel series, The Men Who Built America. But pendulums do swing. During and after World War I, economic times were good in the U.S., and the demands for change from the working class got less loud. By the end of the 1910s, says Eric Roushway, members of one major party at least decided the economic reforms had gone far enough. Speaker 3 And so by the time you get to the national elections in 1920, the Republican party has brought its progressives to heel or at least made them know that they’re not particularly welcome In their party. So you have the Harding,, first the harding and then the Coolidge Republicans at the national level, which preside over a retrenchment of much that was identified with progressivism. There’s a lowering of taxes, there’s a withdrawing from regulation of business, there’s a cracking down on unions, and in general the adoption of what we would fairly well recognize As anti-progressive politics. Speaker 1 The 1920s, yes the roaring 20s, are again a time when a lot
Time 0:19:47
Stock Market Speculation in 1920s
- In the 1920s, stock speculation became rampant, fueled by a booming economy and easy credit.
- Arthur Robertson, a stock speculator, recalls witnessing widespread speculative fever, with people like shoeshine boys buying large amounts of stock with minimal down payments.
- This excessive speculation, driven by hope and fueled by debt, created a classic bubble in the stock market, with prices far exceeding their actual value. Transcript: Speaker 1 Arthur Robertson, also from the Turkle Archives. He was a stock speculator. Saw people, shoeshine boys, that were buying 500 down. Everything was bought on hope. By the fall of 1929, US consumers had run up big debts, and stock prices were
Time 0:19:47
Stock Speculation in the 1920s
- In the booming US economy of the 1920s, widespread stock speculation fueled by borrowed money became common.
- Arthur Robertson, a stock speculator, recalled seeing everyday people making risky bets on stocks with minimal down payments.
- This speculative bubble, built on hope and unsustainable stock prices, ultimately burst in 1929, creating widespread uncertainty and contributing to the Great Depression. Transcript: Speaker 1 Arthur Robertson, also from the Turkle Archives. He was a stock speculator. Saw people, shoeshine boys, that were buying 500 down. Everything was bought on hope. By the fall of 1929, US consumers had run up big debts, and stock prices were way higher than they had any business being. A classic bubble. It’s a feature of a capitalist economy that it has to grow. If it’s not growing, that’s a crisis. And if economic activity slows down by a lot, that’s a calamity. So capitalism also depends confidence or faith. If a whole bunch of people stop believing all at once that growth is going to continue, well, we know the story. Eric Roushway. Speaker 3 When it does crash in 1929, and it crashes a couple of times actually, that creates a tremendous amount of uncertainty about what’s going to happen next, about which companies are going To prove to be solvent, which are going to fail. It makes people less likely of course to invest. It makes lenders less likely to lend. If you have this economy, both domestic and international, that’s built on the continuing lending of money, and all of a sudden people are a little bit more hesitant to lend, you can See how that would slow down other
Time 0:22:50
The Great Depression: Peggy Terry’s Perspective
- Peggy Terry, in an interview with Studs Terkel, shared her experience of the Great Depression, stating simply, “you were hungry.”
- She emphasized the difficulty of conveying the experience to those who haven’t lived through it.
- Terry noted a shared understanding among those she knew that the Depression wasn’t their fault, but rather a failure of the ‘machinery’ of the system.
- While many blamed President Hoover, she recognized that the economic collapse wasn’t solely attributable to one person. Transcript: Speaker 1 And it’s really hard to to talk about the depression because what can you say except you were hungry? Speaker 2 And it’s hard to make that sound like anything, until you’re that way yourself and then you know. Speaker 1 Peggy Terry of Oklahoma, talking to Studs Terkel decades later. And back then I’m not sure how the rich felt. I think the rich were as contemptuous of the poor then as they are now, but at least among the people that I knew and came in contact with, we all had a sense of understanding that it wasn’t Our fault, that it was something that had happened to the machinery. And in fact, most people blamed Hoover. I mean, they cussed him up one side and down the other. It was all his fault. I’m not saying he’s blameless, but I’m not saying either that it was all his fault because our system doesn’t run just by one man, and it doesn’t fall just by one man either.
Time 0:26:25
Political Climate of the Great Depression
- During the Great Depression, Americans sought significant changes to prevent future economic collapses.
- Some were drawn to the far left, with the Communist Party gaining popularity.
- Others were attracted to the far right, with fascism rising globally.
- The U.S. ultimately shifted center-left, possibly due to the conservative government being in power during the economic collapse and thus shouldering the blame. Transcript: Speaker 1 Eric Roushway says given the severity of the depression, some Americans wanted big changes in the nation’s economic and political systems to make sure nothing like this could happen Again. For some, the changes they hoped for were inspired by the far left. The Communist Party reached the peak of its popularity in the U.S. In the 1930s. For others, says Eric Roushway, the attraction was the far right. Speaker 3 I mean, you know, fascism is on the rise throughout the world in 1932. Adolf Hitler comes to power at almost the same time as Franklin Roosevelt, and that’s another direction that could be taken in reaction to this sense of civilization failing. Speaker 1 Many historians asked why the United States moved to the center left in response to the Great Depression instead of the far right.
Time 0:26:25
US Political Shift Post-Depression
- The Great Depression’s severity pushed Americans to desire significant economic and political system changes.
- Some were inspired by the far left (Communist Party’s peak popularity), while others leaned towards the far right (fascism’s rise).
- Historians debate why the US shifted center-left instead of far-right, citing factors like the incumbent conservative government taking blame for the collapse.
- Roosevelt’s 1932 landslide victory gave him a mandate for change, leading to programs like the CWA, WPA, CCC, NRA (National Recovery Admin.), farm subsidies, public works, banking regulations, and later additions to the safety net (Social Security and welfare) along with major new labor laws. Transcript: Speaker 1 Eric Roushway says given the severity of the depression, some Americans wanted big changes in the nation’s economic and political systems to make sure nothing like this could happen Again. For some, the changes they hoped for were inspired by the far left. The Communist Party reached the peak of its popularity in the U.S. In the 1930s. For others, says Eric Roushway, the attraction was the far right. Speaker 3 I mean, you know, fascism is on the rise throughout the world in 1932. Adolf Hitler comes to power at almost the same time as Franklin Roosevelt, and that’s another direction that could be taken in reaction to this sense of civilization failing. Speaker 1 Many historians asked why the United States moved to the center left in response to the Great Depression instead of the far right. Say dumb luck was a key factor. A conservative government was in power when the economy collapsed so the right wing took the blame. Roosevelt wins a sweeping victory in November 1932 and he’s sworn in the following march with a mandate. Do something. His administration launches a blizzard of programs with three and four letter acronyms. The CWA, WPA, CCC, the NRA, not the gun lobby, the National Recovery Administration, subsidies for farmers, public works programs that put people to work, bank restrictions and
Time 0:27:15
Roosevelt’s Center-Left Approach
- During the Great Depression, while some Americans sought extreme solutions from the far left or far right, the US moved towards the center-left.
- This was partly due to the conservative government being in power during the economic collapse, leading to them shouldering the blame.
- Roosevelt’s subsequent win and the ‘do something’ mandate allowed him to implement programs that addressed various issues, including unemployment, financial insecurity, and workers’ rights. Transcript: Speaker 1 Say dumb luck was a key factor. A conservative government was in power when the economy collapsed so the right wing took the blame. Roosevelt wins a sweeping victory in November 1932 and he’s sworn in the following march with a mandate. Do something. His administration launches a blizzard of programs with three and four letter acronyms. The CWA, WPA, CCC, the NRA, not the gun lobby, the National Recovery Administration, subsidies for farmers, public works programs that put people to work, bank restrictions and deposit Insurance to protect people’s money, a little later huge additions to the safety net, social security to address rampant poverty among older Americans, and cash welfare for needy Families, and major new labor laws guaranteeing workers the right to organize and bargain collectively. Ladies and gentlemen, the President of the United States. Speaker 3 My friends, since my annual message to the Congress on January 4th last… Speaker 1 In radio broadcasts billed as fireside chats, Roosevelt spoke to the American people in frank detail, explaining his plans and the pragmatic philosophy behind them. Speaker 4 In our effort for recovery,
Time 0:32:09
Markets and Societal Needs
- Markets are essential for wealth creation because they crowdsource solutions to problems, incentivized by financial reward.
- The fall of the Iron Curtain revealed that centrally planned economies without markets were significantly less prosperous than comparable market economies.
- However, markets only address problems that can generate profit, prioritizing needs based on a combination of intensity and wealth, neglecting those without wealth. Transcript: Speaker 1 First, he says, a solid majority of people with influence are convinced that markets really are essential to producing wealth and prosperity because they create a system of crowdsourcing. Markets invite anyone and everyone to figure out the solutions to problems with the possibility of financial reward, rather than assigning that job, say, to a group of bureaucrats. DeLonge says the 20th century bears this out. Speaker 4 When the Iron Curtain fell in 1990, and we could look around, we discovered that those countries on the Soviet side of the Iron Curtain that had tried to run an economy without the market System, to help coordinate and crowdsource, that they really were only about one fifth as rich as the market economies the capitalist market economies that were otherwise very similar To them places that indeed had been similar before the division of Europe and Asia that produced the Cold War had been you know that Southern China only one fifth as rich as Thailand, You know, and so on and so forth. East German only won fifth as West Germany. You know, so we need the market. Speaker 1 At the same time, DeLong says, lots of people see that the market doesn’t work its magic on all human problems, but only those that lend themselves to serious profit making. Speaker 4 That you only exist to the market if you can show them the money. And so what the market sees, what the market really sees, is it sees the intensity of need by a person multiplied by their wealth.
Time 0:33:31
Market Unfairness
- Markets primarily respond to needs backed by purchasing power.
- Those without wealth are largely ignored by the market.
- Survival within a market system depends on perceived usefulness and employability.
- Brad DeLong emphasizes the inherent unfairness of capitalist markets, where rewards aren’t based on merit or need, but often on luck, skill, timing, or even unscrupulous behavior. Transcript: Speaker 4 You only exist to the market if you can show them the money. And so what the market sees, what the market really sees, is it sees the intensity of need by a person multiplied by their wealth. And that’s what it aims to satisfy. You know, no wealth, the market doesn’t care about you. And you can survive only if the market thinks you’re useful enough to be worth hiring and paying. Speaker 1 It’s an undeniable fact about capitalist markets, Delong says, that they’re unfair. They lavish financial rewards, not on the people who are most deserving or most in need, but on. Speaker 4 The people who have been lucky or somewhat skillful or just in the right place at the right time, or kind of unscrupulous, enough to have managed to grab stuff. Speaker 1 The never-ending argument then is what to do about all of the above. Crystallizes the debate by focusing on two economic thinkers, both born in Austria, both influential in the middle of the 20th century. First, that champion of markets, Friedrich von Hayek. Hayek said that inequality, however extreme it might get, is the price a society should willingly pay for freedom. Speaker 4 Hayek said, that’s the best we can do. If we try to accomplish social justice, in addition to market prosperity, well, you know, often the social justice won’t be too just. It’ll just be what one particular group thinks is good. And that may be very bad from everyone else’s perspective.
Time 0:34:39
Hayek’s View on Inequality
- Friedrich von Hayek argued that inequality is the unavoidable price of freedom in a market economy.
- Attempting to achieve social justice alongside market prosperity would likely lead to unjust outcomes, determined by the preferences of a particular group, potentially harming everyone else.
- Such interventions, according to Hayek, would also undermine the market’s ability to function effectively.
- He believed that prioritizing social justice would lead to a form of “industrial serfdom” lacking both prosperity and true justice.
- Hayek’s stance positions market efficiency as paramount, even at the cost of significant social inequality. Transcript: Speaker 1 First, that champion of markets, Friedrich von Hayek. Hayek said that inequality, however extreme it might get, is the price a society should willingly pay for freedom. Speaker 4 Hayek said, that’s the best we can do. If we try to accomplish social justice, in addition to market prosperity, well, you know, often the social justice won’t be too just. It’ll just be what one particular group thinks is good. And that may be very bad from everyone else’s perspective. And also it’ll destroy the market’s ability to do its job. So I quote from Job here, right, that the market giveth, the market taketh away, blessed be the name of the market. That Hayek thinking that was the only gospel that we could afford to believe in and anything else would put us on the road to serfdom, to some form of industrial serfdom in which we would Have neither social justice nor prosperity. Speaker 1 Which brings us to the other Austrian-born thinker. Speaker 4 You know opposed to Friedrich Hayek, there indeed is Karl Polanyi saying that’s just not going to work, that people will not be happy with a society in which the only rights that are vindicated Are property rights. That people will demand a
Time 0:40:17
Post-War Consensus on Social Programs
- In the post-World War II era, a strong consensus emerged among US politicians and business leaders supporting the New Deal social programs.
- President Eisenhower acknowledged the public’s unwavering belief in the government’s responsibility for social welfare.
- He warned that any party attempting to dismantle programs like Social Security, unemployment insurance, and farm programs would face political oblivion.
- This consensus highlights the widespread acceptance and perceived indispensability of these programs during that period.
- Eisenhower considered those who opposed these programs a negligible and foolish minority. Transcript: Speaker 1 In those post-war years of shared prosperity, a striking consensus took hold among the political class in the United States, and even a lot of people in business, that the New Deal Order, As it’s been called, could not be abandoned. The people wouldn’t stand for it. In 1954, President Dwight Eisenhower, a Republican, wrote this in a letter to his brother. Speaker 3 It is quite clear that the federal government cannot avoid or escape responsibilities which the mass of people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything, even to a possible and drastic change in the Constitution. Should any political party attempt to abolish Social Security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political History. There is a tiny splinter group, of course, that believes you can do these things. Their number is negligible, and they are stupid. Speaker 1 Alan, let’s bring you in
Time 0:42:42
30 Glorious Years (with caveats)
- The “30 Glorious Years” refers to the post-WWII period (mid-40s to mid-70s) of shared prosperity and lower inequality in many capitalist countries.
- It’s an ironic overstatement, specifically referring to how well capitalist economies worked for a broader share of the population than usual.
- While a white man with a high school degree could support a family with a factory job, many Black people, Latino farm workers, and women were excluded from this prosperity. Transcript: Speaker 1 To all of that. I think of 30 glorious years as slightly ironic in its overstatement, and also as a description of a fairly specific phenomenon. Right? The extent to which capitalist economies were working relatively well for a somewhat broader than usual share of the population. Speaker 2 When, famously, a white man with a high school degree in the United States could get a union job in an auto factory or steel mill and earn a good paycheck that would support a family and A mortgage and send his kids to college. But at the same time, a lot of Black people were still stuck in deep poverty as sharecroppers in the South, and Latino farm workers were just as poor and dispossessed. For women, the doors to many careers were either closed or just beginning to open. Speaker 1 Yes and yes. As I said earlier, there were large parts of the world that were not included in this gloriousness either, or were in fact still being exploited to help make all this prosperity possible In places like the U.S. Speaker 2 We’re going to hear more on that theme later in the season in an episode that takes us to West Africa. Speaker 1 Brad DeLong, the economic historian we heard from here, acknowledges all of these points. He wrote this about that time period. Quote, was closer to material utopia for white guys in the global north than ever before. Speaker 2 With all of those very important qualifiers, we are talking about a time when within the capitalist world, inequality was less extreme than ever before.
Time 0:44:26
Labor Share of National Income
- The labor share of national income measures how much of the total income generated by businesses goes to workers’ wages versus profits for stockholders.
- This measure rose significantly during the “30 glorious years” in the US, from about 57% in 1930 to around 65% in the 1940s.
- While an increase from 57% to 65% may not sound revolutionary, this shift of additional profit to workers in those decades funneled trillions of dollars into working people’s pockets. Transcript: Speaker 1 And I want to bring up one more way of quantifying this. Statistics can make the eyes glaze over, but there’s an economic measure that we don’t hear about as often as things like the unemployment rate, inflation, GDP, those go-to economic Indicators for politicians in the news media. Although I did catch this a while ago, the public radio show marketplace being wonkier than some did report on this measure that I’m talking about. Speaker 4 Next month, the Bureau of Labor Statistics will tell us how much of the income generated by workers’ toil actually went to workers in the first quarter of the year. This stat is called the labor share of national income and as marketplace as Nancy Marshall-Gensler explains that… Speaker 2 The labor share of national income. So of all the income that businesses bring in from sales of their goods and services, how much of that goes to workers as opposed to how much winds up as profits in the pockets of stockholders. Speaker 1 Number, according to the Federal Reserve, also went up significantly during the 30 glorious years in the United States. In the before times, in 1930, workers took home about 57% of the money that was generated by their labor. 57%. That labor share went up in the 1940s to about 65 percent. Almost two thirds of corporate income was going to workers. It stayed over 60 percent for the next few decades.
Time 0:45:06
Labor Share of National Income
- The labor share of national income is the percentage of a business’s income that goes to workers’ wages, as opposed to profits for stockholders.
- During the “30 glorious years” after WWII, this share increased significantly in the US, reaching over 60% and staying there for several decades.
- This resulted in trillions of dollars going to lower-income individuals.
- However, around 1975, the labor share began to decline, returning to levels similar to the pre-WWII era. Transcript: Speaker 4 This stat is called the labor share of national income and as marketplace as Nancy Marshall-Gensler explains that… Speaker 2 The labor share of national income. So of all the income that businesses bring in from sales of their goods and services, how much of that goes to workers as opposed to how much winds up as profits in the pockets of stockholders. Speaker 1 Number, according to the Federal Reserve, also went up significantly during the 30 glorious years in the United States. In the before times, in 1930, workers took home about 57% of the money that was generated by their labor. 57%. That labor share went up in the 1940s to about 65 percent. Almost two thirds of corporate income was going to workers. It stayed over 60 percent for the next few decades. Well into the 1970s. Speaker 2 You know, that doesn’t sound like a huge increase from 50 some percent to 60 some percent. But the result over those decades was trillions of dollars in the pockets of people at the bottom percent of the income scale. That’s money that would have gone to the wealthiest folks without those more progressive policies that reduced inequality. And then guess what? Starting in about 1975, the labor share of national income went down and down until now. Things are more like they were back in the days of Herbert Hoover. Speaker 1 But again, that’s the story of the next