Pocketbook Politics: Economic Citizenship in Twentieth-Century America

by Meg Jacobs

"How much does it cost?" We think of this question as one that preoccupies the nation's shoppers, not its statesmen. But, as "Pocketbook Politics" dramatically shows, the twentieth-century American polity in fact developed in response to that very consumer concern.

In this groundbreaking study, Meg Jacobs demonstrates how pocketbook politics provided the engine for American political conflict throughout the twentieth century. From Woodrow Wilson to Franklin Roosevelt to Richard Nixon, national politics turned on public anger over the high cost of living.

Beginning with the explosion of prices at the turn of the century, every strike, demonstration, and boycott was, in effect, a protest against rising prices and inadequate income. On one side, a reform coalition of ordinary Americans, mass retailers, and national politicians fought for laws and policies that promoted militant unionism, government price controls, and a Keynesian program of full employment. On the other, small businessmen fiercely resisted this low-price, high-wage agenda that threatened to bankrupt them.

This book recaptures this dramatic struggle, beginning with the immigrant Jewish, Irish, and Italian women who flocked to Edward Filene's famous Boston bargain basement that opened in 1909 and ending with the Great Inflation of the 1970s.

"Pocketbook Politics" offers a new interpretation of state power by integrating popular politics and elite policymaking. Unlike most social historians who focus exclusively on consumers at the grass-roots, Jacobs breaks new methodological ground by insisting on the centrality of national politics and the state in the nearly century-long fight to fulfill the American Dream of abundance.

Genres: History, Politics, American History, 20th Century

368 pages, Paperback

First published November 22, 2004

Reviews

[David · Rating 3 out of 5]

Meg Jacobs’s Pocketbook Politics seeks to explain a shift in American “economic citizenship”: how was the progressive-labor consensus built, how did the New Deal coalition come to be, and why did the coalition falter and fizzle out after WWII? Jacobs posits that the 1900-1917 period was one in which a “new consumer consciousness” took root, one in which “immigrant mothers, middle-class housewives, and organized labor utilized the consumer label in their battle for better living standards” (39). Rather than producerism, a new consumer consciousness united the three under the idea that mass markets enabled social mobility and achieved the American dream, while high wages and the power of organized labor was seen as bolstering “purchasing power” and ensuring a productive, well-oiled, functioning U.S. capitalist economy (38-52).

In the 1917-1930, with the Progressive Era gone and a series of conservative Republican administrations and a solidly anti-radical agenda on the books, the old class struggle line of labour unions and the American non-Marxist left went to the chopping block on La Follette’s failed 1924 Presidential Campaign (78). In such conservative circumstances, “the consumer label [became] a way for pushing for [left-]liberal economic reform,” particularly in presenting the interests of labour as aligned with the rest of society. The dominant moderates of the AFL, for example, presented their rationale for “high wages as essential to sustaining macroeconomic demand,” in compliance with common understandings of capitalist society and dodging accusations of self-interest or radicalism (81-82). This constituted a pre-New Deal form of Keynesianism that was enforced “through a strong union movement rather than the fiscal powers of the state,” the latter impossible under the 1920s conservative governments (82).

In the 1930-1935 period, the first half of the New Deal, New Deal “policymakers were torn between raising prices or boosting buying power. Divided in economic analysis and political calculation, the New Deal would try to do both” (96). Under the influence of prominent left-liberals like the Socialist Party’s Norman Thomas, liberals on the left of the Democratic began to call for government-based economic planning while F. D. Roosevelt began to utilize consumerist language (96-104). Owing to the contradictions within its coalition, the New Deal followed several contradictory directions: the Agricultural Adjustment Act sought to maintain an inflationary agricultural policy to satisfy farmers, while Robert Wagner’s urban bloc sustain increased working-class purchasing power through the National Recovery Administration and Works Progress Administration (104-122). New Deal consumer bodies “gave reformers a position of authority and legitimized their activism” alongside active economic policy (115). Left-leaning New Dealers sought to create “a powerful consumer movement as a way to enforce redistributive policies” (122).

Jacobs argues that the problem of the New Deal from 1935 to 1940 was a problem of wages. The Nationl Labor Relations Board based itself policy around underconsumptionist theory which sought to boost the purchasing power of labor, particularly in empowering labor’s position in economic bargaining to attain higher wages without the necessity for federal spending (137-140). 1937, with the expansion of the Congress of Industrial Organizations, the support of the Popular Front, and the workings of the NLRB was a “year of victory” for labor unprecedented in American history before and since (150-164). The Second New Deal, which wholeheartedly embraced Keynesianism and federal spending, led to the creation of the Temporary National Economic Committee, a “price watchdog” which encouraged grassroots consumer price-watching with federal backing, even as early HUAC efforts and Popular Front disarray weakened the labor movement (164-175).

World War II, although causing tension within the New Deal coalition and marking the start of intense anti-Price Administration activism, “strengthened the alliance of labor and consumers in support of more spending power” (179). OPA price controls during the war benefited from intense support from both the grassroots consumer movement and labour, while its opponents could not launch any intense assault on it for fear of patriotic backlash (180-197). Price controls worked in tandem with war bonds and payroll taxes, and the OPA itself was rhetorically connected to wartime sacrifice (197-206). While ensuring full compliance during the war, this set the stage for postwar backlash for the maintenance of price controls as unnecessary or socialistic. Even at the close of the war, as late as 1946, support for the OPA and the 1946 Price Control was pegged at 80% of the American public by contemporary polls (219).

The Truman-era war against the OPA was waged both popularly and among the elite. Among the public, despite increased consumption, rhetoric centered around rationing and a supposed “lack” of meat, while lobbying efforts intensified in Washington (222). Truman’s anti-labor stances in comparison with the Roosevelt-Wallace administration and compromises with big business provided openings for attacks upon the OPA. Meat producers withheld product from the market, which ultimately led to its downfall (225-228). Postwar, post-OPA inflation caused tension within the consumer coalition, and turned middle-class sentiment against organized labor as a source of inflationary pressure, which allowed passage of the Taft-Hartley Act as a part of the American rightward shift; Cold War commitment impeded any possible return to left-liberal policy like that of the 1935-1945 period (231-245). Despite the holdout of purchasing-power liberals like the populist Senator Estes Kefauver, the ideology of “wage-price inflation” among pensioners, the retired, and the salaried middle-class carried Eisenhower to the Presidency and strengthened his administration’s assault upon labor (254-255).

[Katy Sisko · Rating 3 out of 5]

A fairly dry recitation of the economic of the twentieth century.

[Frank Stein · Rating 4 out of 5]

Another of the few books I've been able to read cover to cover at grad school, and well worth it.

Jacobs traces the history of the "consumer movement" or "purchasing power progressives" through the first half of the 20th century, showing that debates about the high cost of living and inflation constituted a surprisingly large portion of US politics in that period. From the U.S. Food Administration under Hoover in World War I to the NRA in the Depression and the OPA in WWII, efforts to control prices were essential to Democratic party politics. That Democratic party's failure to control their union allies and the "wage price spiral" in the post-war era eventually led to the downfall of the old New Deal political order.

Sometimes (maybe even often) Jacobs gets too bogged down in details and extraneous quotes, but overall its a good look at an understudied topic.

[Alessandra · Rating 3 out of 5]

Boiled down, Meg Jacobs argues that consumerism is political. And that the pocketbook politics of the twentieth century (1900-1960) instituted "radical reforms" and restructuring in the American capitalist system. What these radical reforms are, is left unanswered. However, by looking the the OPA and the collective fear of inflation, Jacobs makes a compelling case for the politicization of consumerism, thus countering common notions of consumer indifference. A worthwhile read.