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Erik Visits an American Grave, Part 1,354


This is the grave of Sumner Slichter.

Born in 1892 in Madison, Wisconsin, Slichter grew up in the local elite. His father was a dean at the University of Wisconsin. That is where the younger Slichter would attend college as well before going on to do a Ph.D. in economics at the University of Chicago.

Slichter got a job at Princeton in 1919 and then moved to Cornell the next year. In 1930, he went to Harvard. It is there that he became pretty famous. The reason is that he hated, loathed, and despised the New Deal. Slichter would become one of the loudest critics of everything to do with the administration. He was true believer in the Gilded Age era of economics, where the state was involved in labor relations–it served to crush labor unions. What Slichter really hated about the New Deal more than anything else was the acceptance of his most hated social movement–the unions.

His philosophical objection was the old canard about incentives. If the government does too much for workers, or–GASP!–guarantees them a job, then supposedly workers have no incentives to labor. Now, we are in the latter days of a minimum experiment in this sort of thing because of the Covid checks. As I stated when Covid started, fundamentally, nothing would change in society. I was of course correct about this. Almost everyone wanted it to go away to get back to normal and a million + dead later, that’s exactly what happened. And don’t give me any of the Long Covid stuff either; obviously society as a whole cares absolutely nothing about this. But because of the checks sent out to replace private employment, we have seen what this does to incentives. And the answer is that workers respond as they will when they have economic power–they will make choices based out of desire more than necessity. To me, and probably to most of you, this is a very good thing. But for someone like Slichter, like it is to Mitch McConnell or the Chamber of Commerce or Larry Summers for that matter, this is disastrous, precisely because the idea behind the labor market for these types is to give workers as little power as possible. So if your goal in running an economy is to make workers poor enough and desperate enough to take your shit work with shit wages, then, yeah, you would hate full employment or basic income plans. You and Sumner Slichter.

Let’s be clear as well, Slichter wasn’t some schmuck in the classroom. He was a highly public figure, doing a lot of popular writing. especially in Harper’s. This was the era of Keynes, but the most read and well-known economist in America was, if not the opposite of Keynes, certainly opposed to a lot of his fundamentals. He also wrote the most popular economics textbook, which is always a way to make a lot of money. He was also president of the American Economic Association in 1941.

Ironically, Slichter was open to advising Democrats. Although he hated FDR, he got on fine enough with a more conservative Harry Truman and became something of an informal advisor to him. One of the reasons is that his reputation was very high at this time. He was one of the economists who disagreed with the fear among many that the end of World War II would bring back the Great Depression. He made the claim that the economy would be driven by soldiers returning home and wanting to own stuff. He wasn’t entirely wrong here–of course the housing crisis of the late 40s was highly driven by people wanting better and bigger housing. But two points here. First, possibly an even greater stimulant to the economy was the need to rebuild Europe and Japan as the Cold War broke. Can’t blame anyone for not seeing that at the moment though. More damning for Slichter is that the reason returning soldiers had the income to spur that level of demand WAS BECAUSE OF NEW DEAL POLICIES! Now they returned to union jobs. They had the GI Bill. The Full Employment Act of 1946 was very weak, but it was still far more than Slichter ever wanted to see. So yeah, he was right there, but no one in power was really like, yeah, you are right for all the wrong reasons!

To the end of his life, Slichter, who published as much as he could and had many popular books, fought the unions left and right. For example, he savaged the CIO and its plans for the steel industry in the late 40s and claimed that raising wages in steel would destroy employment, which was completely untrue. In 1948, he wrote a long New York Times Magazine piece called “Are We Becoming a Laboristic State.” I went ahead and read the thing. It’s interesting in that he was very good at playing the respectable centrist game of noting without overt bitterness, however he felt, that labor was now strong, but that further gains for them were bad. And he was very big on the whole “won’t collective bargaining lead to bad relationships between labor and employer?’ thing that you see commonly today in anti-union campaigns. And of course, he hated the idea that unions could shut down key parts of the economy such as transportation because it would inconvenience the general population. Anti-union arguments never change, that’s what I am getting at here. One can however see how he could communicate these ideas quite effectively. For a mid-twentieth century economist, he was quite a good writer and knew how to speak to the readers of the Times.

Slichter taught at the Harvard for the rest of his career, dying in 1959, at the age of 67.

Sumner Slichter is buried in Mount Auburn Cemetery, Cambridge, Massachusetts.

Slichter’s grandson was the drummer for Semisonic, one of those popular but bad late 90s bands that everyone has forgotten about.

If you would like this series to visit other heads of the American Economic Association, you can donate to cover the required expenses here. Carl Plehn, who headed it in 1923, is in Providence, Rhode Island and John Clark, who was president in 1894, is in Minneapolis. Previous posts in this series are archived here and here.

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