Above: General Electric president Gerald Swope
David Leonhart had a piece in the Times yesterday that repeats a commonly-held notion about the mid-century American economy: that CEO’s were kindlier and gentler, less greedy and accepting of unions.
The October 1944 edition of Fortune magazine carried an article by a corporate executive that makes for amazing reading today. It was written by William B. Benton — a co-founder of the Benton & Bowles ad agency — and an editor’s note explained that Benton was speaking not just for himself but on behalf of a major corporate lobbying group. The article then laid out a vision for American prosperity after World War II.
At the time, almost nobody took postwar prosperity for granted. The world had just endured 15 years of depression and war. Many Americans were worried that the end of wartime production, combined with the return of job-seeking soldiers, would plunge the economy into a new slump.
“Today victory is our purpose,” Benton wrote. “Tomorrow our goal will be jobs, peacetime production, high living standards and opportunity.” That goal, he wrote, depended on American businesses accepting “necessary and appropriate government regulation,” as well as labor unions. It depended on companies not earning their profits “at the expense of the welfare of the community.” It depended on rising wages.
These leftist-sounding ideas weren’t based on altruism. The Great Depression and the rise of European fascism had scared American executives. Many had come to believe that unrestrained capitalism was dangerous — to everyone. The headline on Benton’s article was, “The Economics of a Free Society.”
In the years that followed, corporate America largely followed this prescription. Not every executive did, of course, and management and labor still had bitter disputes. But most executives behaved as if they cared about their workers and communities. C.E.O.s accepted pay packages that today look like a pittance. Middle-class incomes rose faster in the 1950s and 1960s than incomes at the top. Imagine that: declining income inequality.
And the economy — and American business — boomed during this period, just as Benton and his fellow chieftains had predicted.
This isn’t inaccurate, but it falls back on the idea of that America was once this place where different classes got along better and economic decisions were made that were fairer. The problem is that when this happened, it was a response to worker power. CEOs hated unions in 1946 as much as in 1918 or 2018. The difference was that in the 1930s and 1940s, workers developed unprecedented power, both in terms of organizing the workplace and in the political world. Closely tied to the Democratic Party, unions were a force to be reckoned with, especially in the nation’s most critical industries. This power was geographically and politically imbalanced, which opened the door to Taft-Hartley and other anti-union legislation that was politically popular in much of the country. But because workers had this much power in key industries, CEOs felt they needed to pay lip service to the new realities during the 40s, 50s, and 60s. But that’s all it was–lip service. Worker power created that lip service, but it was rarely sincere and never long-lasting.
As historians are increasingly exploring, CEOs were setting up the infrastructure to repeal the New Deal and worker power in the 1930s and 1940s. It wasn’t very strong until the early 60s, but these plans and early organizations were already underway. Some CEOs acquiesced to the new reality and could learn to live with unions, but many could not. The steel industry is a great example, where U.S. Steel basically came to terms in the 1930s, but the Little Steel companies not only violently resisted into the early 1940s, but continued to try and bust their unions through the 1950s and 1960s, leading to huge strikes that eventually undermined their own industry, as other industries began pressuring Washington to increase steel imports as American supplies were too unreliable thanks to labor troubles.
We have to understand that this seemingly better period of the past was about power, power, power. Workers had more of it and the nation became more equal. As soon as companies figured out how to undermine that worker power–some of which was through economic restructuring and some through decades of propaganda taking effect–the New Gilded Age came into being.
Leonhardt’s essay gets at how a lot of well-meaning people see the relatively recent past: a period of relative political moderation, where the white working-class voted for Democrats, where unions were powerful, where the courts slowly tended to make life better. But all of this reflected organizing and power and fixing the problems we face today will take the same. Nostalgia for the past is simply not helpful because it obscures how that society developed in the first place. We see this in nostalgia for industrial union jobs, the promoting of white working-class voters as Real Voters Democrats Must Win, the belief that corporate leaders used to be moderate. Those industrial jobs are never, ever coming back. White workers voted for Democrats because they believed the Democratic Party to be the party of the white man–and yes, because it was the party of economic populism at the same time. Corporate leaders said things like Leonhardt quotes because they felt it politically expedient to say them.
Power. It is all that matters in the present and future. And it’s really all that mattered in the past too. Nostalgia won’t help us replicate worker power of the past and it won’t help us win in the present or organize for the future.