by Martin Harris
Consider the remarkable origins of the Progressive movement –a conservative-roots pushback against the ward-heeler urban politics and government-corporate crony capitalism of the post-civil-War period, led at first by Fighting Bob LaFollette, Republican Wisconsin Governor in the late 19th century. It’s not surprising that contemporary Progressives delight in reciting some of those statistics from the 1865-1900 period to prove their superior understanding of the economy and their obligation, as the top-ten-percent-in-intellect, to govern the rest of us, for our own benefit, of course, with “…a social welfare system and state regulations…” as they deem necessary because “…the alternatives seem so much more terrifying.” Latest example: a guest editorial by Progressive professor (that label places him in the 90% opinion-majority in the academic professoriat) Francois Furstenburg in Addison County’s “other newspaper”. It’s headed “Lessons from the 19th century may still apply” and in it he recites some the fairly-well-known ’65-to-’00 stats describing the three decades of deflation as Washington systematically reduced the money supply by calling in and redeeming the non-gold-backed paper money bills, (that’s why they were derisively called ‘greenbacks’) issued to fund the Union side of the late War. That monetary policy got one short sentence in his full-page-length commentary.
All the other stats got more of his attention: labor unrest, economic shrinkage, corporate bankruptcies, rich-v-poor wealth disparity. But he chooses not to mention the declines in farmgate commodity prices or freight rates or the growth in urban wages and incomes. Not a word re the advances in such then-luxuries/now/essentials as electrical usage, indoor plumbing, consumer-goods-availability (think Montgomery Ward and Sears-Roebuck), and, of course public and private transportation –inter-urban trolleys, the rise of the first suburbias, and the introduction of the private automobile, all huge gains in standard-of-living we consider as near-entitlements today. Here are some of those skipped stats. They ‘re in “The Americans, an Economic Record”, by Progressive professor Stanley Lebergott.
He takes the Census wage data and adjust them for inflation or deflation into 1914 dollars, 1914 being the year when farm and non-farm earnings were supposedly at parity. In 1865 the wage was $338. By 1900 it was $573. That’s an unrecognized-by-Furstenburg gain of 70%. Today, of course, Progressive economists, professorial or otherwise, complain about income stagnation, but when it was a dominant economic fact that inconveniently disputes their ideological template –that the late 19th century was a free-enterprise-caused disaster– then, the pen skips. And cost-of-living wasn’t rising with urban earnings, either. Consider food costs, for example.
The earliest stats in the Historical Statistics of the US are a bit uneven, but it is possible to compare family income in MA, 1875, ($763) with family income all States 1901 ($651) for a 15% deflation; but food expenditures dropped from $427 to $266, a 38% deflation. At the beginning of the post-CW decades, consumers were spending 56% of their income for food; at the end, it was down to 40%. In the same 3.5 decades, Willard Cochrane writes in “The Development of American Agriculture”, wheat went from $2 to $.50 by 1895, and freight rates (Lebergott, p.286) on the New York Central, for example, went from over $2/ton-mile to under $.50, which explains (Furstenburg doesn’t) why the railroads wanted a new Interstate Commerce Commission to save them by setting rates. Yes, the Vanderbilts and Carnegie’s were compiling fortunes, but previously destitute urban wage-earners were getting into the middle class while Midwestern farmers were struggling, but the handful of new millionaires interests the Progressives far more than the socioeconomic advances of millions of off-the-farm new urbanites. The most succinct source is the National Council of Economic Education, which has on its web site, an eight-page summary of the post-War decades. Here’s one sentence: “From 1870 to 1900, the prices American consumers paid for goods and services generally declined.” But Professor Furstenburg disagrees with the NCEE: he describes the post-War decades as a time of “economic decline” with “…continued economic misery for the many, juxtaposed against fabulous wealth for the few…” and bemoaning “…the inability of government policies to mitigate the crisis…” and so on. Not enough government, then, for the Professor. And not enough now, apparently: he argues that what he sees as the lesson of the 19th century –insufficient government command of the economy and regulation of the citizenry– needs to be applied now, with more of both.
As befits an Opinion column, here’s Humble Scribe opinion: the professor is perhaps entitled to present his ideological views to students who don’t yet know better; and he’s perhaps even entitled to down-grade the scores of those few who challenge him; but he’s not entitled to let his pen skip over the facts and numbers of history and economics which, inconveniently, refute his preferred view of the truth. The facts and numbers of major gains for most of the US population during the post-War decades don’t even need to be searched out in obscure government publications and the books of equally obscure economists; they can be found on Wikipedia. Here’s a sample:
“This period of rapid economic growth and soaring prosperity in North and West (but not the South) saw the US become the world’s dominant economic power. The average annual income (after inflation) grew by 75% from 1865 to 1900 grew another 33% by 1918”.
A distinguished member of the academic professoriat, invited to write a guest editorial column, should aim to be at least as accurate as Wikipedia.