More than social security, job creation programs, or Keynesian fiscal policy, the idea of full employment galvanized the progressive intelligentsia and excited the imagination of working-class Americans in the 1940s. If historians of the period discuss it at all, however, it is usually as a footnote to New Deal liberalism. These accounts fall short of considering the broader implications of the idea as well as the vigorous business-led opposition to full-employment legislation. The promise of full employment united farmers, workers, and a broad cross-section of the progressive middle class in the conviction that the right to work could be defended against the caprices of a market economy. By questioning business control over the labor market and investment, full employment challenged some of the most essential prerogatives of capitalism. More than security, it promised a fundamental reordering of postwar society.
More than any single legislative initiative of the New Deal era, the idea of full employment challenged the most fundamental privileges of American capitalism. Historians have explored in depth the political debates that produced the Employment Act of 1946, a diluted version of the full employment bill that sought to translate Franklin D. Roosevelt’s principle of “freedom from want” into legislative reality. The ratification of that tepid act is now seen as a watershed in the transition from New Deal regulation to Keynesianism fiscal management. In the prevailing narrative, the anemic employment act represented the abandonment of structural reform and economic planning for the promise of “state-organized capitalism.”1 Relinquishing the policies of redistribution for the techniques of demand management, liberals rendered the politics of scarcity and stagnation hopelessly obsolete, if not a little dangerous.2
Charting a process of liberal Democratic “adaptation” to prosperity, historian Alan Brinkley’s influential End of Reform cast a jaundiced eye on the looming abandonment of an entire tradition of American progressive reform, one that had once viewed the untrammeled concentration of wealth as a threat to republican independence and the ethic of democratic equality. Given that it was written in the years when the Democratic Party seemed entirely complicit in the dismantling of the New Deal state, one could certainly understand Brinkley’s skepticism.
Yet in stressing the capitulation to fiscal Keynesianism, Brinkley and others who espouse the “end of reform” thesis inadvertently diminish the transgressive implications of full production.3 According to historian David Ciepley, “[of] the strategies advanced in the 1930s to end the Depression and tame the business cycle, Keynesianism was the most conservative of all, doing nothing to interfere with market relations or the price mechanism.”4 If this was the case, why did conservatives find the Keynesian-inspired idea of full employment so threatening? In large part, because it questioned the authority of private enterprise to determine the contours of the economic order. From pricing to wages, profit margins to investment priorities, full-employment Keynesianism did indeed challenge the “prerogatives of capitalists.”5 Reducing the idea of full employment to its legislative rise and fall has obscured this challenge.
At the same time, it has minimized the internal contradictions of Keynesian policy itself, which promised to stabilize capitalism while consistently pointing beyond a system predicated on production for profit alone. More than social democratic amelioration, the idea of full employment probed the very horizons of a post-capitalist society.6 It was the widespread support for the idea of full employment as a worthwhile and attainable goal, argues Margaret Weir, that gave the policy its intrinsic legitimacy.7 Full employment was not simply the culmination of piecemeal liberal reforms. Nor, in its most radical formulations, did it constitute a less threatening alternative to antimonopoly regulation. Instead of organizing firm by firm to decommodify labor, full employment proposed to achieve this goal by organizing the entire labor market.8 In that sense, it offered the most comprehensive vision of working-class democracy in the 1940s.
Progressive economists and journalists explored this question at a time when it seemed as if New Deal policy makers had almost entirely abandoned them. After all, unemployment still ran at 9.5, a conservative estimate that did not include those employed on federal works projects.9 This was motivated by the recognition that business overaccumulation of profit and under-capacity utilization still plagued the American recovery. As Agriculture Department economist and planning advocate Mordecai Ezekiel observed in 1941, the Fair Labor Standards Act had established a baseline for most wages, and the National Labor Relations Act promoted collective bargaining and higher wages, but together they had “made at best only a moderate change in the distribution of income as paid out by business.” Neither would guarantee the economic security achieved through full production. Ezekiel argued that regulation alone could not solve the problem of business restoring profitability at “relatively low levels of output.” When companies did operate close to full capacity or utilize labor-saving technology, they steered the additional savings into higher profits, not increased wages or lower prices. Only economic planning could achieve “low prices, high wages, and full production,” since no company would unilaterally adopt these measures.10
Although a vigorous proponent of economic democracy, Ezekiel was silent on the implications of a national policy that would require firms to maintain full production. While he acknowledged that it would require companies to “adjust production” to meet the shifting needs of consumers, it would also compel them to adjust their profit expectations. Profits, of course, were still recovering from the stagnation of the 1930s. Although full employment promised to remedy the chaotic decentralization of the market economy, it would come at the price of private enterprise’s nearly unilateral authority over investment and its expectations of returning to the spectacular net gains of the labor boom.11
Even as the regulatory impetus of the early New Deal seemed to lose ground at the policy level, the democratizing possibilities of economic planning excited the imaginations of progressive intellectuals and economists. Wartime mobilization and the achievement of full production convinced economic planners that the specter of unemployment could finally be banished. Yet the horizon of victory also stoked fears of a return to depression. The potential for resolving nagging inequalities joined the fear of dislocating postwar readjustments to produce a feverish interest in the question of full employment.12 It was the social promises of guaranteed employment, not simply the lure of abundance, that stimulated interest in achieving a more humane, democratic, and rational economic system during the Second World War. Pursuing the logic of Keynesianism to some of its discomfiting conclusions, progressive intellectuals questioned profit maximization and the customary entitlements of private enterprise itself.13
The transformative possibilities of full employment were equally evident in the work of the institutional economist Alvin Hansen, frequently portrayed as the representative Keynesian liberal of the 1940s. Through Fiscal Policies and Business Cycles (1941), Hansen advanced the case for compensatory fiscal measures that would stimulate investment and maintain high employment. It established him as a leading voice in national economic debate. He would leave his stamp on public policy through his contributions to the National Resources Planning Board (NRPB) and in his capacity as a prominent influence on the Employment Act of 1946, pinnacle of the legislative drive to institutionalize full production. According to proponents of the “end of reform” thesis, Hansen fashioned a Keynesian program designed to stimulate consumption while relegating aggressive regulatory and antitrust measures to the fading memory of the 1930s.14
Yet focusing exclusively on the shift from regulation to fiscal Keynesianism obscures the heterodox crosscurrents in Hansen’s thought as well as the ideological elasticity of this historical moment. Writing in 1942 on planning for the postwar world, Hansen challenged the classical theory that government intervention “distorted” the marketplace. “The view that it is dangerous for a government to play any important role in the initiation and promotion of developmental and innovational projects requires re-examination in the light of the historical development of modern capitalism,” Hansen calmly observed.15 Historicizing American business practices, Hansen was led to question the prerogatives of capitalism itself. “In the past,” he reflected ruefully, “we have for the most part permitted the economic order to serve us as best it could on the automatic functioning of this mechanism,” the pursuit of profit in an unregulated market economy. Whatever benefits it conferred, Hansen argued, society accepted them as the “inevitable concomitant of a system of free enterprise operating under the price system.” What Hansen found most objectionable was not the failure to achieve utopia but the fact that market mechanisms were permitted to determine the most basic questions of production and distribution. The “system” had the capacity to distribute adequate housing, health care, nutrition, and employment, but when it failed to provide these goods in sufficient volume, Americans “accepted the result with a stern, ascetic fatalism.” Turning to this feckless economic order to fulfill the “needs, desires, and aspirations of human beings,” society persistently found it wanting.16
If Hansen’s critique lacked the progressive era’s fervent antipathy for the malefactors of wealth, it achieved a deeper insight into the contradiction of industrial capitalism. The problem was not simply obnoxiously wealthy tycoons and bloated monopoly concentrations, but a system capable of producing enough for all that was geared only to generate as much as was profitable. It was this humanistic critique, this egalitarian and democratic sensibility, more than any dream of a consumer’s cornucopia, that motivated his economic analysis. This was the case even when he insisted that the objective of full employment theory was to save free enterprise.
In the course of elaborating a program of full employment, however, Hansen exposed its vulnerability on the question of profit. Eager to maintain the appearance of compatibility between private enterprise and economic planning, Hansen and other proponents of the Full Employment Bill of 1945 insisted that it would stabilize corporate profits and save an entire society from the gyrations of the business cycle. In an essay titled “The Postwar Economy,” published in 1943, Hansen explained that business profits oscillated in a highly unstable market economy but had to average out in favor of gains in order to lubricate the wheels of capitalism. If the nation could generate the level of income theoretically conceivable at full production, Hansen postulated, “corporate profits, representing the same percentage of national income as that averaged over the cycle in the past, would yield an absolute profit figure far above the experience of 1935–1940.” The problem, he conceded, was that profit margins would decline. The percentages would be predictable, but “such a percentage continuously maintained would be considerably lower than the high ratio of profits to national income reached in the fluctuating society in the peak boom years.” Operating consistently at full employment, Hansen conceded, it was unlikely that business could replicate the astronomical profits it reaped at the height of the business cycle between 1925 and 1929.17 It was only a “fluctuating society,” however, that demanded extraordinary profit ratios, since this was the mechanism through which profit lost by years of contraction could be recovered. More than this, full production would lead to increased earnings, which would produce demands for higher wages, which could conceivably squeeze profit margins. Yet while Hansen and his allies planned for a future defined by social abundance, American business thought in terms of short-term profit maximization.18
It is here that we see the progressive potential of Hansen’s full employment analysis. It was both egalitarian and destabilizing, not because it would immediately overthrow the capitalist class but because it would steadily erode their dominant position while advancing the democratization of wealth in American society. Both higher wages and lower prices would “tend toward a more equal distribution of income than has prevailed in the past boom periods when full employment was reached,” Hansen argued. This was the case “because of the relative decline in the ratio of business profits to the national income at full employment levels,” Hansen stressed.19 Since historians have tended to minimize the progressive potential of income redistribution in favor of the regulatory measures that belonged to the allegedly more interventionist New Deal regulatory regime, it is important to underline Hansen’s point. Contemporary heterodox economists such as Michal Kalecki and John Maynard Keynes fully understood that both direct government spending and income redistribution constituted parallel avenues—in fact, the only avenues—toward full employment.20
Moreover, income redistribution presented a political challenge to business, since taxes on business to fund redistributive measures would necessarily impinge on profit margins. So too could wage increases and price reductions. There are “certain limitations on how far profits can be encroached upon” Hansen warned, since both in combination could produce “unfavorable economic repercussion with respect to the cost-price structure,” by which he meant profit margins as well as inflation. Hansen was not arguing that full employment was theoretically or technically implausible. It was not, in short, an impossible dream. What he drew back from was what many of his less politically susceptible allies would soon point out: full employment would have deleterious consequences for capitalism as a system of profit maximization and class authority.21
This casts his allegedly innocuous vision of a liberal Keynesianism in a different light. In Economic Problems of the Post-War World as well as “The Postwar Economy,” Hansen advocated for measures that did not simply increase consumer demand but advanced working-class interests and power. If this was “mere” Keynesianism, it was the kind that packed the punch of class struggle. Having worked through the logic of full employment, the Harvard economist called for high corporate income and excess profit-taxes, progressive estate taxes, increased income taxes, expanded public health care, and a generously stocked “shelf” of public investments including urban redevelopment, express highways, education, rail transportation, and public housing.22 Hansen and the National Resources Planning Board (NRPB) advocated for a dramatic expansion of the New Deal safety net, including old age pensions, family allowances, and public health. Supposedly protecting the interests of private enterprise, the stagnationists simultaneously expected business to map out “adequate plans” for investment in manufacturing, transportation, housing, and utilities. These were not simply “automatic stabilizers” but decisive impingements on the presumptive unilateral control of business over investment.23
What emerged out of the ruminations of democratic planners from across the Left spectrum was not simply a recipe for “more” but a vision of postcapitalist transformation. In Post-War Planning, the NPRB envisioned a society in which American productivity enabled individual fulfillment and social democratization.24 Urban redevelopment, improved education, as well as “health, nutrition, recreation and public welfare” constituted the interlocking elements of an ambitious effort to secure freedom from want. The contest was not between “free” enterprise and totalitarian “regimentation” but between industrial despotism and working-class emancipation. “Achieving the good life which is sought by all” required the consideration of “proper working conditions,” “just wage rates,” and “fair working hours” which required the privileging of “our democratic purposes . . . in daily working relations” over the imperatives of profit.25
The intellectual crosscurrents permeate Hansen’s voluminous outpourings on the question. He insisted that the “basic political and economic institutions of our country” would survive the crisis of war and all of its attendant dislocations. For democratic planners, it was not simply a matter of survival, for “in a real sense we are already in the midst of a transition to a new order.”26 Full employment promised—and threatened—to usher it in. The NRPB authors of Post-War Planning explicitly outlined the political issues at stake in a war against fascism. “It is not merely a war of words, or of empires, but a fundamental battle over the ideals of civilization,” the board submitted. In language that would soon be anathema in public policy debates, the authors argued that the “many and the few are again at grips, determining whether an aristocratic or a democratic, fraternal view of life, shall prevail.”27 The struggles for economic and social justice had yet to give way to the polarization of the Cold War. More importantly, they were intimately connected to the question of full employment.
While NRPB members paid homage to private enterprise as the engine of capital investment, they simultaneously advocated for policies that challenged the most cherished prerogatives of capitalism.28 The “profit-motivated system of private enterprise” could not sufficiently develop American productive capacities to meet the needs of a society that had only recently confronted the consequences of being left to the tender mercies of unfettered capitalism. Even more boldly, NRPB researchers advocated for the “democratic participation of working people” in the determination of working conditions, wage rates, and hours. Calling for fundamental realignments of political and economic power, they insisted that “no new system” was required—only a “clear realization and bold determination to push government into lines where it is needed.” Yet achieving full employment and protecting the privileges of private enterprise produced contradictions that government planning advocates failed to resolve.29
Unlike the NRPB, Hansen at least acknowledged the disjunctions. In his estimation, redistributing income would promote full employment but also eat into corporate profits; it would fuel demand and expand production but simultaneously threaten the “cost-price balance.” Anticipating the political headwinds that would gather against full employment, Hansen assured his policy-minded audience that redistribution through progressive taxation would minimize the “disruptive” impact on business profits. The idea was to target only those companies actually making a profit. Still, he reiterated, “These methods are feasible up to a certain point, but the point is fixed by the requirements of the cost-price balance.” Conservative opponents would soon contest the idea that liberals, let alone socialists, could ensure the sanctity of the “cost-price balance.” More than this, they would object to the idea that the government could set limits on the accumulation of profit or exercise a check on their investment agenda. To do so would indeed “encroach” upon the privileges of private prosperity and capital’s presumption of social stewardship.30
Economist Mordecai Ezekiel, a leading planner and contributor to the NRPB, understood this as well, even while he downplayed the contradictions just as assiduously as did Hansen. Asked to present a paper on “desirable changes” in the national economy to the American Farm Economic Association in 1943, Ezekiel identified the structural adjustments necessary to achieve full employment. In addition to progressive taxation to lever investment capital from private enterprise and compensatory measures to stimulate consumer spending, Ezekiel endorsed lower prices, higher wages, and “more reasonable profit levels.” Ezekiel, Hansen, and John G. Pierson—analyst with the Bureau of Labor Statistics and a key player in the struggle over the Full Employment Bill of 1945—joined other institutional economists in calling for an unprecedented intervention in both labor and capital markets. The justification, of course, was to preserve “free enterprise” and promote social security. Yet while increasing aggregate spending might indeed benefit industrial enterprise, the individual capitalist heard one thing: the lowering of profit margins. More than this, a general increase in the magnitude of profits did not mean that individual firms would not suffer.31
Those objections would coalesce into a powerful challenge when the idea of full employment promised to become an official policy during the Second World War. Confronted by conservative assertions that full employment threatened cherished liberties, economic planners interrogated the motives behind the rhetoric. In a chapter for a collection of essays on democratic planning, economist Theodore Kreps delineated the class imperative behind the conservative dogma of government nonintervention in economic affairs. “It is one of the amazingly ironical chapters of American history,” Kreps acerbically wrote, “that the cloak of liberty and laissez-faire has for years been worn by those who irresponsibly regiment the lives of millions of workers and consumers. . . . So much so that laissez-faire to the populace still means the anarchistic principle of ‘no government in my business,’ a slogan heartily approved only by outlaws and racketeers.”32
As conservatives dragooned economist Friedrich Hayek’s The Road to Serfdom into the defense of business preeminence, liberals contested their campaign to monopolize the rhetoric of freedom.33 They challenged the argument that conservatives sought to protect the lofty principles of decentralized republicanism against the tentacles of New Deal “regimentation.” According to Brinkley, “liberals were in fact responding to a powerful strain of Jeffersonian anti-statism in American political culture that a decade of the New Deal had done relatively little to eliminate.” Brinkley is not alone in this assessment,34 though it may exaggerate the principled content of the business front’s opposition to full employment. Consider economist Ben B. Seligman’s analysis of the National Association of Manufacturers’ National Industrial Conference Board. Despite the harangues against the Harvard theorists who had “foisted upon the Western world a new gospel of totalitarianism,” Seligman argued that the real dispute was over “control rather than planning itself. If the economic order is run by private enterprise, special interests are bound to dominate. If responsibility for economic operations rests with democratically chosen government agencies, public welfare will prevail. The Conference Board boys are no fools; they understand this very well, and they are quite anxious to have their own bureaucracy in the driver’s seat.”35 The question was not state intervention, per se, since the state had routinely intervened to protect the interests of business throughout the late nineteenth and early twentieth centuries. Instead, the question was: in whose interests would it govern?
Labor leader and CIO Political Action Committee (CIO-PAC) president Sidney Hillman had few illusions about the antistatist rhetoric of the right. Defending the CIO-PAC against right-wing attacks during the 1944 election, Hillman argued that Republicans and their business allies “dare not openly advocate” the laissez-faire principles they applied while in power. Instead, he told an audience of United Electrical workers, they “try to hide their discredited do-nothing doctrine under a smokescreen of states [sic] rights” and rugged individualism, even while the American people refused to return to the abject conditions those doctrines had produced. The reactionary assault on the New Deal and the CIO-PAC was not simply political jousting but a “class war” against the social democratic movement of the New Deal era, which the campaign for full employment now seemed to encapsulate (see Figure 1).36
While conservatives wrung their hands over the danger of totalitarianism in the United States, Kreps, Hillman, and other advocates of full employment examined the class interests behind the free-enterprise revivalism. To them, it seemed a defense of an economic order designed to produce scarcity and insecurity.37 Rather than a leviathan threatening liberty, economist Heinz Eulau argued, the modern democratic state had become the only effective defender of the freedom of average Americans “against the encroachment of the huge economic combines which hide behind the shibboleth of ‘free enterprise.’” The barrage of rhetoric about protecting liberty failed to obscure the evidence that business and its intellectual allies were “more interested in restricting the sphere of government action than in enlarging the sphere of freedom.”38 Writing in 1945 to Bertram Gross, an adviser to Senator James Murray and key supporter of the Full Employment Bill, Louis Bean of the Bureau of the Budget outlined the motives of its opponents, including former brain truster Raymond Moley. The defeat of full employment “means private instead of public planning with concentrations of economic power continuing to take over more and more of our economy” as well as the “steady increase of control over the machinery of government to advance the interests of such aggregations of power.” If there was an insidious force threatening American freedoms, Bean argued, it was not creeping socialism but unbridled capitalism operating under the ideological mantle of free enterprise.39
The idea of full employment crystallized, then, in the context of the political struggles over the Great Depression and at a time when the very structures of American capitalism were changing under the force of current events. Wartime mobilization produced demographic dislocations that altered the character of the industrial working class and created new geographic concentrations of economic power. It also undermined racial and gender hierarchies already shaken by the developments of the 1930s. In this maelstrom of change, exponents of full employment did more than fashion fiscal tools to correct the business cycle; they participated in a wider movement to expand the possibilities for working-class democracy. The NRPB constituted the most conspicuous contributor to this effort.40
Yet the impetus for full employment came not only from progressive journalists, economists, and policy advisers but also from the American public.41 One wartime survey suggested that 68 percent of the American public believed that government intervention would be necessary in the postwar period to maintain adequate employment.42 As the CIO understood, the war had revolutionized the working-class perspective. It had demonstrated that the eradication of unemployment was not some distant and elusive dream. Workers understood “the production possibilities of American industry,” having seen “full employment in action.” Unlike the armies of the dispossessed that cast a shadow over the American experiment in the early 1930s, the industrial laborer of the 1940s knew that the nation had the resources and the political capacity to banish misery. “They are convinced, therefore, that a job at an annual living wage is a right, not a privilege.”43 Achieving full employment only increased the expectation that it could be sustained in the postwar period. By 1945, full employment and the corollary idea of a right to a job had become integral to a vision of postwar economic democracy.44
Political mobilization for the full employment bill highlighted the class divisions that had endured despite wartime patriotism, further exposing the contradictions between private enterprise and maximum production.45 If Keynesian doctrines of full employment really did promise nothing but the stabilization of profit ratios and the taming of the business cycle, why in the world would business leaders oppose it? Leading voices in the American business community objected fundamentally to the proposition that progressive fiscal policy could ever operate in the interest of private enterprise. It was the idea as much as the specifics of the measure that galvanized business opposition. A brief examination of this perspective highlights the ideological polarities in play over full employment.
By January 1945, the struggle to define a postwar conversion strategy finally produced legislation in support of full employment. Congressional liberals joined progressive activists from the Democrats for United Action, the CIO-PAC, the National Citizens Political Action Committee, and other liberal and labor groups to champion the Murray Full Employment Bill, or the Murray Bill, named for Montana senator James E. Murray, an early proponent of progressive reconversion proposals. The bill became a lightning rod for debate over social democracy in the postwar era. Hillman and Phillip Murray of the CIO-PAC quickly emerged as leading advocates of full employment.46
It was James G. Patton of the National Farmers’ Union, however, who intervened most directly in shaping the legislation. Patton helped produce a measure that paid homage to “private enterprise” while asserting that those Americans “able to work and seeking work” should have the right to employment. Even this clause represented a concession to conservative interests in Congress, since an earlier draft had guaranteed the “right to a useful and remunerative job” to all Americans “willing to work.”47 Similarly, the December, 1944, draft had proclaimed it “the responsibility” of the federal government to “guarantee that right by assuring continuing full employment,” a clause that rang with the radical implications of Roosevelt’s “freedom from want” principle. By January 22, 1945, that commitment had been whittled away.48 Even so, it was this considerably modified measure that would generate conservative backlash. Despite the plan to promote “full employment in a free competitive economy” and to “foster free competitive enterprise and the investment of private capital,” the bill raised the hackles of business interests convinced that the private enterprise system simply could not produce sufficient demand at all times to maintain full employment.49
The Citizens National Committee, a business-led political action organization, underlined precisely what was at stake in the full-employment issue. It was not simply compensatory spending per se, or budget deficits, or government boondoggles, or even a bloated federal bureaucracy—all standard criticisms of New Deal social policy by the 1940s. Instead, according to the committee’s 1945 Full Employment and the National Budget, it was the principle that the economy should be “guided primarily by business enterprise” and the hegemonic assumption that the state should merely provide “an atmosphere in which business can develop to its fullest extent, unhampered by extended government control or restriction.” The rhetoric could not have more perfectly anticipated the neoliberal ideology of the late twentieth century had it been written by Business Week itself. In the committee’s estimation, which clearly echoed Hayek’s diatribe against state intervention in private enterprise, the regulations that would accompany full employment would “lead inevitably to a government- planned economy and economic dictatorship.” Adopting the histrionic tone that increasingly defined right-wing diatribes against the New Deal, the committee conflated economic planning with the totalitarian theory of state dominance and individual subordination.50
Business pundits railed against New Deal policy infringements on entrepreneurial freedom, personal liberty, and the American traditions of decentralized government, but the Citizens National Committee focused on more prosaic concerns: business taxation. If sustained at present levels (1945), they claimed, taxation would steadily erode the incentive for investment and expansion. The committee said nothing about the spectacular profits that corporations earned because of federal cost-plus contracts.51 Even so, it anguished that “one industry after another will become unprofitable.” Inflation and deficit spending would only exacerbate this gloomy forecast. What distressed the committee the most, though, was the prospect that managing full production would require government intervention in capital’s presumed prerogative to determine prices and wages.52
The Citizens National Committee did not simply object to expanded fiscal and regulatory controls. Instead, it opposed the whole notion of eradicating unemployment itself. Even while it might be a “desirable objective,” “the flexibility required by a free economy is inconsistent with the complete elimination of unemployment.” Acknowledging the “widespread popular demand for job security,” the committee insisted on the primacy of “economic freedom.” Stripped of the Jeffersonian rhetoric, what the committee and its business allies wanted to protect was the discipline of unemployment. The presumed prerogatives of private property now stood in direct opposition to the widespread aspiration to achieve freedom from want, a sentiment the committee frankly acknowledged.53
This was precisely why business lobbied so vigorously against the Office of Price Administration. It was not that wage and price controls did not work; it was that they worked too well, challenging the privileged authority of private enterprise through a popular alliance of labor, consumers, and the state. In fact, as business leaders understood, it was price controls, supported by the OPA’s mass mobilization of working and middle-class volunteers, which made it possible to achieve full employment and contain inflation during the war. Advocating for full employment at a CIO-sponsored conference on the issue, James G. Patton critiqued the conservative proclamations about the virtues of free enterprise: “Translated, this appears to mean: a pledge that government will not tax unlimited profit, and will emasculate the SEC, freeze the social security program, forego planning and take no action to sustain full employment and purchasing power.” Once cleared of the pro-business propaganda, Patton argued that it meant little more than a return to “Hooverism.”54
Full employment also raised the possibility that government might compete directly against industrial capital. Could enough bridges, hospitals, airports, and roads be constructed to employ those now entitled to employment? “When public works fail to provide ‘full employment,’” the committee worried, “it would seem inevitable that there would be further and further extension of government activities until the government goes directly into the field of commercial goods and services.” Business activists did not fear an abstract leviathan but an effective competitor that could reduce profit margins, influence investment patterns, and govern labor markets to the detriment of capitalist control. “The flow of new capital, which is the life blood of a free economic system, will diminish.” What the committee could not bring itself to acknowledge was the likelihood that reducing the overaccumulation of capital would translate into a wider distribution of income, socially beneficial investments, and economic security through guaranteed employment.55
The Citizens National Committee was only one of the more voluble participants in an expansive business coalition that mobilized against full employment. Even so, its position reflected the opinion of organizations such as the National Association of Manufacturers and the US Chamber of Commerce, which spearheaded the anti– full-employment drive. Yet if business leaders articulated the contradictions that progressive economists either elided or ignored, progressive journalists and commentators demonstrated considerably more nerve.56
Above all, full employment promised workers additional leverage. If Hansen noted the shift in power, the New Republic spelled it out. “Our experience with periods of labor shortage indicates that its first effect is greatly to increase the bargaining power of labor, both individually and collectively.” That would mean improved working conditions, rising wages, and the compulsion to make employment appealing, since “the workers are no longer motivated by the fear of losing their jobs.” Southern senators gasped at what the New Republic editors were only too happy to underline: full employment would make it difficult to secure domestic servants unless working conditions, wage rates, and, by implication, racial discrimination, declined. “The status of labor will improve, since employers can no longer rely upon the discipline of discharge to enforce authority,” the editors bluntly observed. “The tendency will be for labor to have more participation in industrial and economic policy.” This was exactly what business feared but what excited at least the most unequivocal advocates of full employment.57
By politicizing the labor market and encouraging workers to adopt a more militant position, full employment promised to advance industrial democracy. It was never merely a question of financial technique, as Pierson and Hansen understood. Full production would liberate employees from the uncertainty that operated as the ultimate check on working-class activism. No longer afraid of technological change as the harbinger of unemployment, no longer terrified by the consequences of arbitrary dismissal, they would invest themselves in the production process and take a greater sense of ownership in it. More than elaborate grievance procedures and seniority entitlements, full employment would promote worker control over the production process itself. This was the last thing management wanted to encourage in 1945, as workers continued to engage in sporadic wildcat strikes, raised questions about the disparity between wartime profits and wages, and challenged working conditions that violated the tenets of industrial democracy. Shop-floor production had already been politicized through agencies such as the War Labor Board and the Fair Employment Practices Committee.58 Full employment promised to institutionalize these gains and realize the promise of Roosevelt’s “economic Bill of Rights.”59
While Keynesian government advisers backpedaled in the face of conservative opposition, progressive journalists and economists continued to paint the full spectrum of change that still seemed possible. Progressive economist Seymour Harris argued in the pages of the New Republic that the problem of unemployment could not be reduced to increasing aggregate demand. It inevitably meant “ensuring the distribution of capital and labor in such a way that, given the total demand, employment may be maximized.” That meant intervening in labor markets and planning for maximum production. It also included government funding of public improvements. And if the New Republic had its way, measures would be adopted to “prevent business hoarding of undistributed profits by some form of penalty tax on those profits neither paid out as dividends nor invested in physical plant expansion.”60 Ultimately, it meant curbing the unilateral power of capital to determine investment priorities and employment levels.
Ezekiel and the other contributors to the New Republic’s special section foregrounded the class antagonism evident in the full-employment debate. The contributors submitted that “the full employment bill and related legislative proposals cut far deeper and more directly into the basic economic divisions of the country” than any question of international relations.61 Equally important, it heightened the expectation that the postwar order might auger the end of forced scarcity and destructive competition.62 In the pages of the Nation, journalist I. F. Stone argued that the social and economic order that full employment challenged was one in which a “margin of poverty and joblessness” was considered indispensable to “the profitable functioning of an unplanned, irresponsible, and anarchistic economic system” of capitalism. Stone unequivocally outlined the contradictions: full employment and monopoly capitalism were completely incompatible. Even Stone was willing to placate conservative opinion, however, by insisting that a drastic change in the structures of accumulation could reconcile the two. The war had produced the conditions for a bold reconfiguration of economic power, not only by generating sufficient demand but also by establishing the planning agencies that could effectively direct production. Should these conditions continue, private capitalism could be saved—but Stone was skeptical at best.63
Yet Stone’s skepticism illustrated how the full-employment idea, riddled with its own tensions, exposed the limitations of modern capitalism as an agent of social improvement. Urging its readers to support the Murray Bill, the editors of the Nation encapsulated exactly how maximum production challenged the pretensions of private enterprise:
The opposition to the bill, led by Taft of Ohio, falls backs on as astounding an argument as was ever advanced by conservative opinion in a changing world. It is that full employment is impossible under capitalism, an extraordinarily subversive and defeatist “line” for conservatives to take. They may be correct—Karl Marx agreed with them—but the experiment is worth trying, and they are completely deluded in the conclusion to which they think their argument leads. To tell the masses that full employment is impossible under capitalism is to invite them to give up capitalism, not full employment. Taft forgets that he is addressing ordinary folk, not a bankers’ convention.64
To a greater and lesser extent, the advocates of full employment sought to resolve the contradictions of Keynesianism. They strove to harmonize full production and private enterprise, to assure their critics that economic planning and compensatory spending would only mitigate the worst of the business cycle, to assuage the defenders of private enterprise’s privileges over investment and the labor market. They did so in part because fiscal Keynesianism and full production were indeed attainable under capitalism. This is, in fact, what happened during World War II. Yet the attainment of full employment was also irrevocably altering the structures of accumulation that business sought so vigorously to restore after the calamity of the Great Depression.
If most developmental economists recoiled from a forthright confrontation with the logic of full production, a few did not. The most important of these was Polish economist Michal Kalecki. Writing in 1943 while advising the British government from his position at the Oxford Institute of Statistics, Kalecki argued that business would consistently oppose a policy of full employment, not because it was technically implausible but because of the “social and political changes resulting from the maintenance of full employment.” Maintaining full employment, he argued, would undermine managerial authority on the shop floor but also the social power of the capitalist class. As Kalecki argued, “The social position of the boss would be undermined and the self-assurance and class consciousness of the working class would grow. Strikes for wage increases and improvements in conditions of work would create political tension.” Despite reliable profits from rising wages and increasing aggregate demand, employers would resist the full-employment regime, convinced that “unemployment is an integral part of the ‘normal’ capitalist system.”65 Kalecki provided the theoretical underpinning for what the Nation editors clearly understood. In the midst of wartime full employment, the masses did not want “the mitigation of slumps but their total abolition.”66
Full employment would invariably challenge capital’s command and control over economic expansion.67 To cope, business would have to develop “new social and political institutions.” These might include wage and price controls to manage inflation, greater employee control over production, and the very kind of economic planning that business objected to the most.68 “If capitalism can adjust itself to full employment,” Kalecki mused, “a fundamental reform will have been incorporated in it. If not, it will show itself an outmoded system which must be scrapped.”69 Like Stone, he did not hold out much hope for the former.
Kalecki also had the opportunity to intervene more directly in the policy debate. In response to an inquiry from Senator Murray, the principal sponsor of the full-employment bill, he outlined the dangers of swearing off budget deficits in order to appease political opponents. The problem would only be compounded if policy makers standardized the forty-hour week. If Congress rejected budget deficits, full-employment architects would have three options remaining: stimulating private investment, redistributing profits and high salaries to wages, and financing public expenditures through taxation. Yet the inadequacies of private investment as a vehicle for achieving genuine full employment exposed the contradictions of the Keynesian dedication to reviving monopoly capitalism. “For if private investment will increase productive capacity at a higher rate than that at which full employment output increases as a result of the rise in population and productivity of labour,” Kalecki argued, “this will tend to create excess capacity and thus to depress private investment,” creating an ultimately “self defeating” mechanism for resolving unemployment.70
If deficit spending were cut out of the equation, then, the difference between what business could profitably produce and what society needed to produce in order to ensure full employment could only be resolved by the redistribution of income or the progressive taxation of profits. In essence, Kalecki was elaborating on Hansen’s central problem: the evidence that mature capitalism generated enormous productive capacity but consistently faced diminishing investment opportunities because of the legacy of previous investment.71
Critically, Kalecki explained that the problem was ultimately a political rather than an economic one. From a “purely economic point of view such a solution is quite feasible,” he argued, provided that taxation did not discourage investment, as Hansen had worried. “But there is no doubt,” the economist assured the senator, “that such measures will encounter a formidable political opposition which may render them impracticable.” Kalecki concluded emphatically that “the most realistic policy seems to me to push the redistribution of income from profits and high salaries to wages as far as it is politically possible and to deal with the remaining deficiency by means of a Budget deficit” (underlining in original). He added that this did not require massive public works, a politically volatile issue considering business opposition to New Deal planning. It could also be achieved through deficit financing of family allowances, price subsidies, and other measures that would support the social wage. What becomes clear is that compensatory and redistributive policies other than public works did not represent a retreat from full employment but a politically pragmatic path toward it. Equally important, Kalecki and other advocates understood just how politically contentious the supposedly less intrusive version of Keynesianism would prove to be.72
Business had every reason to oppose full employment, then, even when the federal government did not try to achieve it through direct investment. If the federal government promoted income redistribution, which both Keynes and Kalecki believed completely sound, it would have to do so by taking a bite out of profit margins, a political action that could only be effected by taxing capital. This was precisely the “encroachment” scenario that distressed Hansen. Yet general wage increases generated the conditions of full employment both by augmenting aggregate demand and by politicizing the issue of inflation. Rising wages did not immediately threaten capital, but by raising questions about the political and economic organization of society, the greater militancy and class consciousness that accompanied full employment did.73
Even had progressives successfully organized, there was little chance that they could have overcome the conservative coalition in Congress, particularly since southern obstructionists stood in the way of any measure that threatened to disrupt the region’s racially stratified labor market.74 Unable to derail the measure entirely, conservatives successfully whittled away at the bill’s provisions for achieving freedom from want in the form of guaranteed employment. Now the bill featured a vague commitment to “maximum employment” and the unambiguous approbation of free-market enterprise. In 1946, the Employment Act became law, providing for a Council of Economic Advisers that could make recommendations promoting employment and economic growth. Nothing that remained in the legislation compelled Congress or the president to take effective steps that would actually achieve “maximum employment.”75 The problem was not the failure of nerve among progressives but the monumental opposition they faced from a capitalist class determined to shred any measure that challenged their control over investment decisions and the labor market. The National Labor Relations Act was bad enough—the idea of full employment was worse.
Yet the idea of full employment, not to mention the homage liberal advisers paid to it in the postwar era, continued to roil the waters of capitalist equanimity. A pale reflection of the Murray Bill, the Employment Act at least provided a degree of intellectual legitimacy for the idea that government should be committed to maintaining maximum employment, which persisted as a fixture of American economic policy at least until the 1960s. More than this, since American industry frequently approximated full production, and since tight labor markets persisted at least until the late 1960s, the act did what neo-Marxists like Kalecki expected it would: it emboldened American workers to challenge the presumptions of capitalist control. As union activist and writer Chris Maisano explains, the achievement of average unemployment rates below 3 percent in the industrialized West “dramatically increased working class leverage by eroding the disciplinary power of the boss, who could no longer discipline workers by pointing to the unemployed masses outside the factory gates or the office door.” The augmentation of workers’ leverage was expressed in the dramatic increase in strikes between 1968 and 1973, in which labor “sought not only higher wages and expanded benefits but a measure of control over the organization and management of the workplace itself.”76 The approximation of full employment created the environment in which workers could demand a wider distribution of wealth and power.
Despite the historically low rates of unemployment, however, the United States never really did achieve full employment in the postwar period, if this is understood as the availability of more jobs than job seekers. African Americans as well as white workers hit by automation and deindustrialization or stuck in the economic miasma of Appalachia put the lie to the notion that prosperity for all had been achieved. Moreover, the crisis that struck capitalism in the 1970s finally brought even the idea of full employment into question. Equally important, as economic historian Robert Brenner has convincingly demonstrated, this crisis was not a function of a wage-price squeeze, as supply-side economists then and since have proposed, but the consequence of American capital’s overcapacity in an environment of aggressive global competition.77 That crisis was resolved through an episode of class aggression that renewed profitability at the expense of workers and any meaningful commitment to the policy of full employment.
The abandonment of economic planning, the failure to promote aggressive income distribution, and the steady domestication of a once militant labor movement rendered the idea of full employment a historical curiosity. It was all that much easier to topple when the ideology of market freedom and individual liberty became the dominant orthodoxy. Yet the idea was powerful, the Keynesian formulation inherently unstable, and the transformative potential of it exhilarating. In the absence of a cohesive labor movement and a social democratic party, it remains only an idea.78
Inspired by theorist Friedrich Polloch, Nancy Fraser uses the term to describe the development of a “social formation in which states played an active role in steering their national economies.” N. Fraser, “Feminism, Capitalism, and the Cunning of History,” 100.
Brinkley, “Idea of the State,” 109; Brinkley, End of Reform, 229, 266, 268. The shift from regulation and redistribution to Keynesian compensatory fiscal policy is echoed in Rosenof, Patterns of Political Economy in America, 164–209. Similarly, Nelson Lichtenstein sets “structural changes in the distribution of economic power”—such as the CIO’s tripartite corporatist arrangement between business, the state, and labor—in contrast to a “liberal agenda” of social security unemployment insurance and a “commitment to full employment.” Lichtenstein, “From Corporatism to Collective Bargaining,” 127. By contrast, Steve Fraser sees full employment as a constituent element in a “Keynesian cooperative commonwealth,” a “managed cooperative commonwealth” defined by “rigorous planning and countercyclical fiscal management” as well as business and labor cooperation. Fraser’s notion of “social Keynesianism” comes closer to the radical implications of full employment, but it is undercut by the implication that the policies, if not their proponents, would produce little more than harmonious social abundance and political stasis. See S. Fraser, Labor Will Rule, 507–26.
For example, Jefferson Cowie and Nick Salvatore cite Brinkley in arguing that “after 1937, the liberals’ job was to manage the system toward the Keynesian dream of full employment and broad-based consumption. . . . The gutted Employment Act of 1946 and the Taft-Hartley Act of 1947 were early evidence of the trimmed prospects of the New Deal for the postwar era.” Cowie and Salvatore, “Long Exception,” 8, 21; also see Phillips-Fein, Businessmen’s Crusade against the New Deal, 32. Lizabeth Cohen posits that liberals promoted mass consumption through full employment as a means of “reconciling capitalist growth and democratic commitments without endorsing too planned an economy or too powerful a welfare state.” By contrast, Meg Jacobs makes the case for “labor and others on the left” who were the most Keynesian in approach, seeking full employment at high wages . . . to sustain mass purchasing power.” Cohen, Consumer’s Republic, 116. Meg Jacobs makes the case that the politics of consumption persuaded state actors to impose market regulations that “promoted not only a Keynesian program of full employment but also militant unionism and government price controls.” Paralleling Jacobs’s line of inquiry, this study proposes that many Keynesian planners believed that full employment would foster labor militancy and require price controls. Jacobs, “State of the Field,” 569–70.
Full employment exponents occupied a continuum with the mid-century intellectuals who espoused what Howard Brick describes as a “postcapitalist vision,” which connected economic planners such as Rexford Tugwell, Wesley Clair Mitchell, Adolph Berle, and Gardiner Means to an intellectual “long wave” extending back to the progressives’ search for a new social order, forward to industrial democracy, and beyond an exclusively socioeconomic analysis to a psychological and cultural critique of capitalism. This expansive postcapitalist vision applied to the proponents of full employment, who consistently believed that maximizing production would produce the foundation for a more humane society, not just a consumer’s horn of plenty. While Brick is reluctant to admit it, this expansive vision also embraced notions of democratic socialism. See Brick, “The Postcapitalist Vision in Twentieth-Century American Social Thought,” 21–35.
That does not mean that proponents of full employment considered labor unionism superfluous. In general, they saw it as a concomitant of social welfare legislation, market regulation, and economic planning. On the connection between full employment, labor militancy, and social democratic reform, see Lichtenstein, “From Corporatism to Collective Bargaining”; on the importance of full employment and productivity to the social democratic project of the postwar period, see Pells, Liberal Mind in a Conservative Age, 26–32.
Robert A. Margo, “Employment and Unemployment in the 1930s,” Journal of Economic Perspectives 7 (Spring 1993): 43. If the calculation of those involuntarily unemployed included working for the WPA and other federal job creation agencies, the figure reaches as high as 14.6 percent.
For example, S. Fraser describes a “keynesian elite” at the head of the Labor Department, the Interior Department, the National Labor Relations Board, and the National Resources Planning Board. But the suggestion that Beardsley Ruml and Frederic Delano presided over a “welfare state” overlooks the protean, evolving, and frequently contentious policies they were actively shaping in relation to an ideological and political environment that was not nearly as stable as Fraser suggests. In the conflict over full employment, liberals would discover how fragile this “state” really was. See S. Fraser, “Labor Question,” 71.
Ibid., 10–11, 13.
Ibid., emphasis original.
NRPB, Post-War Planning. Citing a 1944 Fortune poll on what workers wanted after victory, popular economist Stuart Chase underlined the supremacy of security over higher wages, shorter hours, and labor-management committees. An annual guaranteed wage, the chance for advancement, the desire to be treated “like human beings,” and the yearning for personal fulfilment and social purpose in their work meant more than the promise of increased wages. “Most workers,” Chase concluded, “feel that the federal government should guarantee security in the form of full employment,” Chase, Democracy under Pressure, 88–89.
Together with its advocacy of national economic planning—which challenged a racially segregated labor market in the South as well as the rehabilitation of business dominance—the NRPB’s critique of free enterprise earned it the enmity of a conservative coalition of southern Democrats and northern Republicans. In 1943, they conspired to cut off the agency’s funding. See Critchlow, “Deficit Spending as a Political Belief, 1932–1952,” 19.
Brinkley, End of Reform, 160; see also Ciepley, Liberalism in the Shadow of Totalitarianism, 168–70. While Ciepley considers full employment fairly innocuous, he argues that “the idea” of totalitarianism gripped the imagination of a considerable swath of intellectual opinion in the United States (176).
“Address to United Electrical, Radio, and Machine Workers by Sidney Hillman,” September 27, 1944, box 16, folder “CIO-PAC September-November 1944,” Beanie Baldwin Papers, Special Collections, University of Iowa Library (hereafter Baldwin Papers).
Eulau, Ezekiel, Hansen, Loeb Jr., and Soule, “Toward a Free Society,” 414; “Congress and Full Employment,” New Republic 113, September 24, 1945, 413.
Louis Bean to Bertram Gross, June 9, 1945, box 12, folder “Correspondence,” Louis Bean Collection, Franklin D. Roosevelt Presidential Library (hereafter Bean Collection), Hyde Park, New York.
David Plotke, Building a Democratic Political Order, 180–99. Hansen’s own contribution to the NRPB proved critical. In his 1942 study “After the War—Full Employment,” he outlined a program of economic expansion that challenged the shibboleths of balanced budgets, advocated for a substantial redistribution of wealth, and anticipated the need for massive public works projects to compensate for the profit-maximizing priorities of private capital. Hansen’s report, as well as the NRPB’s ambitious 1943 report titled Security, Work, and Relief Policies, established the footwork for the idea of an “economic bill of rights,” which President Roosevelt enunciated in 1944. Wasem, Tackling Unemployment, 22–26; Harvey, Securing the Right to Employment, 106–7.
“Steel Fights for the Nation,” CIO pamphlet, 1944, 1–3, box 18, folder “Undated 1944,” Elmer Benson Papers, Minnesota Historical Society, St. Paul; Haber, “Economic and Social Readjustments in the Reconversion Period,” 30–31. The appeal of full-employment and fair-employment legislation among organized labor and civil rights groups is addressed in Phillips, Renegade Union, 75–77.
Having suffered losses in the 1942 election, liberals found themselves on the defensive against the new right-wing alliance. Emboldened by its growing influence during the war and by the reactionary tone in Congress, business interests spearheaded a drive against the New Deal that ultimately targeted full employment. S. Fraser, Labor Will Rule, 501–2; Rosen, Roosevelt, the Great Depression, and the Economics of Recovery, 228–29; Katznelson, Fear Itself, 344–46, 389–402; Lichtenstein, Labor’s War at Home, 207–8.
Bailey, Congress Makes a Law, 57–58. The liberal-labor coalition that championed full employment saw it as the summit of left progressivism, not as a “panacea.” See Flamm, “National Farmers Union and the Evolution of Agrarian Liberalism,” 74–75; and Patton, “Full Employment,” 421.
Bailey, Congress Makes a Law, 58–59. Congressional advisers anxious about political opposition also inserted protections against inflation while eliminating explicit commitments to improving health care, education, urban rehabilitation, and rural electrification.
Bailey, Congress Makes a Law, “Appendix A, The Full Employment Bill as Originally Introduced, 79th Congress, First Session, S. 380,” 243–44. Richard B. Duboff charts the debate over what exactly full employment meant, not only to its advocates and adversaries in the 1940s but also to those who continued to defend it into the 1970s. In congressional hearings on the bill, Secretary of Commerce Henry Wallace and H. C. Sonne of the National Planning Association were prepared to pin 2.5 percent as the anticipated “frictional jobless rate” for 1945–50. Yet as Duboff points out, the proponents of a 2.5 percent unemployment rate found themselves besieged by partisans of a considerably higher rate. See Duboff, “Full Employment,” 9; Bailey, Congress Makes a Law, 49–51; and Ezekiel, “Full Employment—Beveridge Model.”
Citizens National Committee, Full Employment and the National Budget, Report #2–417, 5.
In 1940, after-tax corporate profits stood at $5.8 billion; by 1944, these had climbed to $10.7 billion. Rosenberg, American Economic Development since 1945, 33.
Meg Jacobs, “‘How About Some Meat?’ The Office of Price Administration, Consumption Politics, and State Building from the Bottom Up, 1941–1946,” Journal of American History 84 (December 1997): 912–13; Martin Hart-Landsberg, “Popular Mobilization and Progressive Policy Making: Lessons from World War II Price Control Struggles in the United States,” Science and Society 67 (Winter 2003–2004): 400–401; CIO-PAC, Four Men Speak About Jobs (1944), box 18, folder titled “CIO Political Action Committee,” Benson Papers.
Bailey focuses on the National Association of Manufacturers, the Chambers of Commerce, the American Farm Bureau, and the Committee for Constitutional Government, but he acknowledges that these only indicate “the scope and power of the opposition pressures” mobilized against the Full Employment Bill. Bailey, Congress Makes a Law, 148; also see chap. 6.
“The Meaning of Jobs for All,” New Republic 113, September 24, 1945, 395.
“Possible Employment Policies,” New Republic, September 24, 1945; see also “What the Bill Proposes,” New Republic, September 24, 1945, 396–97, which explicitly links the Murray Full Employment measure to Roosevelt’s “economic Bill of Rights.”
Harris, “Way to Full Employment,” 784. Harris, “Possible Employment Policies,” 402.
“Congress and Full Employment,” New Republic, September 24, 1945, 411.
Homage to private enterprise aside, it insisted that “the full employment program must, however, be guaranteed by government with a prepared program of jobs at useful work, with standard wages and working conditions, if and to the extent that private industry falls short of the goal.” This was not simply countercyclical Keynesian spending. “Whenever workers and capital are unemployed,” the PAC writers asserted in a draft statement of the organization’s postwar reconstruction plan, “the national government has the responsibility for their productive employment” (emphasis added). CIO-PAC, “Program for Victory,” 3, box 16, folder “CIO-PAC Platforms 1944,” Baldwin Papers (emphasis added). See also “Program of the CIO Political Action Committee,” 3–5, box 16, folder “PAC Platforms 1944,” Baldwin Papers; and Remarks of Philip Murray, “Full Employment: Proceedings of the Conference on Full Employment CIO Political Action Committee,” January 15, 1944, 58, box 16, folder “Leaflets, Pamphlets, and Broadsides,” Baldwin Papers.
“Speed the Murray Bill!” Nation, August 25, 1945, 161 (emphasis added).
Kalecki, “Political Aspects of Full Employment,” 326, emphasis in the original.
Ibid., 330; see also Robert Brenner, Economics of Global Turbulence, 17–18.
Kalecki to James Murray, May 5, 1945, Louis Bean Papers, box 12, folder titled “Correspondence,” Bean Collection.
And the problem with which Hansen grappled was the one that troubled Keynes as well as Marx. Foster and McChesney, Endless Crisis, 59.
Kalecki to James Murray, May 5, 1945, Louis Bean Papers, box 12, folder “Correspondence,” Bean Collection, emphasis in the original. Secretary of Labor Frances Perkins supported Kalecki’s general recommendations. Responding to an inquiry from Senator Murray, she recommended an analysis of the bill presented by A. F. Hinrichs, Acting Commissioner of Labor Statistics. Hinrichs underlined the benefits of taxation aimed at redistribution, including subsidies, progressive taxation, and income transfers, which would mitigate the accumulation of “idle savings” and avoid public works projects that smacked of “leaf raking.” A. F. Hinrichs to the Secretary of Labor, December 29, 1944, and Frances Perkins to Senator Murray, December 29, 1944, box 12, folder “Correspondence,” Bean Collection.
Foster, “Marx, Kalecki, and Socialist Strategy,” 5–7; Kalecki, “Class Struggle and the Distribution of National Income,” 7–8; Pollin, Contours of Descent, 17; Pollin, Back to Full Employment, 27–28. In “Class Struggle and the Distribution of National Income,” Kalecki argues that bargaining for higher wages is not the only effective means of pressuring capital and achieving full employment:
It should be noted that it is possible to devise other forms of class struggle than wage bargaining, which would affect the distribution of national income in a more direct way. Actions may e. g. be taken for keeping down the cost of living. This may be achieved by price controls, which, however, may prove difficult to administer. But there exists an alternative: the subsidizing of prices of wage goods financed by a direct taxation of profits. Such an operation, by the way, will not affect aggregate net profits. (7–8)
Harvey, Securing the Right to Employment, 109–10; Weir and Skocpol, “State Structures and the Possibilities for ‘Keynesian’ Response,” 141–48; Katznelson, Fear Itself, 378–82. The importance of full employment to the civil rights movement and to the drive for women’s equality was already evident during the war. In 1945, Willard S. Townsend wrote that it would ease “the caste system which prevents democracy from becoming an accomplished fact in America.” Full employment would promote the security of all workers, thus resolving the racial divisions that undermined working-class unity. Townsend, “Full Employment and the Negro Worker,” 9–10. The importance of full employment for women was clear enough to the Social Science Review, which posited that “full employment includes full opportunity for women to work in order to support themselves and their dependents as well as supplement family income and living for themselves” and their dependents. “Women Want to Work,” 555.