for a generation.
Even today, despite one of the longest and slowest economic recoveries in history, calls for austerity and balanced budgets are voiced loudly while direct job creation has been pushed outside of the boundaries of acceptable policy discourse. Why was a manifestly successful concept shunted to the sidelines? That is the central question of People Must Live by Work. I seek to explain how and why direct job creation was created and put into practice; how it came within a hairbreadth of becoming a permanent feature of American social policy; how it survived as a contender in debates over economic policy; and why it has been largely forgotten or discounted today.
To understand how and why direct job creation developed the way it did, I begin with its origins and the impulses and desires that gave rise to the demand for government-provided employment. One might imagine that the preconditions arose with the advent of industrialization, the universalization of a wage labor economy, and the dislocations that the business cycle introduced into economic life. However, demands for relief from unemployment appeared well before the Industrial Revolution—emerging with the enclosure movement, which took hold in sixteenth-century England, pushing millions off the land and into destitution.
In 1536, Thomas Cromwell introduced a draft of a Poor Law into Parliament that would have provided for public works jobs for the unemployed, financed by an income tax on the wealthy.1 The bill was promptly shredded by Parliament. Instead, English Poor Law moved in the opposite direction, frowning on the very idea of relief for the able-bodied poor. Nevertheless, the idea persisted. In 1660, the Quaker “Appeal to the Parliament Concerning the Poor That There Be No Beggar in England” called for state-operated labor exchanges, and in 1696 John Bollers made one of the first proposals for the establishment of state-sponsored cooperative factories for unemployed workers as an alternative to traditional poor relief.2
In pre-Revolutionary eighteenth-century France, when most of the population were still peasant farmers, the emergence of mono-crop agriculture in the silk- and wine-growing regions of southern France made finding seasonal work a matter of survival for millions during the fallow period of the year. Crop failures frequently produced widespread unemployment; hence, people looked to the state to provide work. To fulfill its responsibilities, and avoid the social consequences that would follow from the mass migration of the unemployed poor, the ancien régime created a network of (underfunded and inadequate) charity workshops. As Alan Forrest and Lisa DiCaprio have shown, the French Revolution radicalized and expanded these traditions into a demand for the universal provision of work to the unemployed. National Workshops were established to arm and clothe the armies of the First Republic, confirming the government’s ability to address structural unemployment and imbuing social justice with patriotic implications. Working-class citizens grew to expect that the droit au travail was theirs, and they demanded that it be written into the constitution of the Second Republic. Despite the political controversy around it, the idea persisted as the cri du coeur of French socialism long after the 1848 Revolution.3
Across the Atlantic, the concept that citizens had a right to a job followed from the growth of industrial labor in late nineteenth-century America, emerging in a very similar form to that in Europe (though about a generation later).4 The Panic of 1873, triggered by European financial failures and America’s contractionary monetary policy, saw a wave of bank failures, starting with Jay Cooke’s investment bank. Overbuilt and over-leveraged, the railroad sector collapsed. Unemployment doubled.5 In response, a wave of demands for economic redistribution and democratic control of the economy swept the country: a self-appointed Committee of Safety assembled in New York City’s Tompkins Square Park, calling simultaneously for an end to charity and for the creation of a city Labor Relief Bureau that would provide work for the unemployed with $100,000 in city funds ($1.83 billion in 2011 dollars).6 During the Depression of 1893, Coxey’s Army, the first national protest march, saw six thousand men travel from Ohio to Washington, DC, to call on the national government to create public works jobs and to pay workers with inflationary paper money (fusing direct job creation with the ideology of the Greenback movement).7
Universal male suffrage, which emerged in the late nineteenth century, complicated these social tensions. Unemployed workers had become voters.8 This tension was especially strong in the United States, where the expansion of suffrage had begun earlier and gained greater traction. From the time of the early republic, fear of the capacity of the poor to overwhelm the political power of the landed drove the Founding Fathers to restrain the potential populist impulse of the majority. The American system of checks and balances, the development of cross-class political parties, and a laissezfaire ideology cast suspicion on the idea of public works.9
However, a competing version of republican ideology stressed the need to secure the independence of the “producing classes” by restoring a “rough equality of means” between citizens. According to this theory, a sovereign people should be masters of their own economic destiny. When millions of Americans lost control over this key aspect of life, many turned to the state to regain a semblance of autonomy. That government should provide work to the unemployed was merely one of the many proposals advanced toward this end. Railroad regulation or nationalization, the construction of public municipal utilities, and the establishment of an eight-hour day and a minimum wage were among the others.
These proposals threatened the very basis of classical liberal economic orthodoxy, as identified by Karl Polanyi. The balanced budget was supposed to act as a bulwark against “class legislation,” the gold standard was supposed to restrain governments from violating taboos against inflation by pegging the monetary supply to a tradable commodity, and free trade (especially in currencies) would punish governments that debased their currency through capital flight and devastating deflation.10
As with the collapse of the National Workshops in the French Second Republic of 1848, these radical demands for public work were initially met with state violence—with the Tompkins Square Park “riot” broken up by mounted police. Coxey himself was arrested for walking on the grass of the National Mall and his “army” was quickly dispersed.
However, state repression could not quell this agitation. It moved from public protests to the emergence of populist third parties and new bills in state legislatures. As Nancy Cohen notes in Reconstruction of American Liberalism, “as the new social movements of workers and farmers arose, protesting the economic developments of the era … liberals reacted … [and] invented a new liberalism that posited an active role for the state in society and economy, even as it justified constraints on democracy and the ascendancy of corporate capitalism.”11 While Gilded Age liberals worked to thwart populist efforts to regulate corporations, they also feared that the masses “would use the powers of the state to tax wealth out of existence and redistribute it to the poor and the worker.”12 Municipal reformers not only objected to outright political corruption, but also “complained that urban ‘bosses’ overtaxed property owners, in order to pay for the distributive programs that would keep the working-class voters loyal.”13 Thus, along with efforts to restrain the powers of the national government to enforce civil rights and of state governments to regulate the economy, liberals also worked to limit the fiscal powers of the state by returning to the gold standard, reducing the tariff, and “imposing numerous limitations on state legislatures … especially by curtailing the distributive functions of the legislatures … [and] den[ying] municipalities the power to incur debt.”14
This conservative attitude to redistributive spending automatically rendered any attempt by the government to hire the unemployed an impossible proposition because it required taxation to support. Accordingly, the Panic of 1873, two recessions in the 1880s, and the Panic of 1893 sowed distress throughout the land without much effort by the federal government to prevent unemployment. The arrival of the Progressive movement changed little. Progressives were more willing than Gilded Age liberals to challenge the prerogatives of corporations or embrace regulation, but they shared many of the same prejudices against activist fiscal policy. The new expert-driven model of government was supposed to ensure that governments would be efficient and frugal. Spending would not be dominated by working-class graft. Public works especially would be judged by the businesslike standards of “self-liquidation” (whether projects would