To Be Jobless In America

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Matthew Josephson, author of the Depression best seller The Robber Barons , spent considerable time talking with down-and-outers in municipal lodging houses. Once he treated a group of them to a meal. “Things just can’t go on like this,” he said to them. Why didn’t they take part in the protests that radicals were organizing? They told Josephson that they were ” ‘good Americans’ and didn’t go for that ‘Communist stuff.’ ” Another radical journalist, back from a tour of the country, wrote of the unemployed: “The more I saw of them … the more I was depressed and outraged both by their physical and spiritual wretchedness and by their passive acceptance of their condition.” The trouble with the unemployed, the Marxist labor organizer A. J. Muste complained, was that they were “devoted to mere selfpreservation.”

There was, of course, considerable active protest by unemployed groups—mass meetings, hunger marches, rent strikes, along with a good deal of petty theft and some violence. But much of the violence of the times was related to strikes, that is, the participants were workers , not persons who had lost their jobs. The famous bonus army of World War I veterans who marched on Washington in 1932 to demand relief, only to be dispersed at President Hoover’s order by troops, was remarkably passive, an “army of bewilderment,” according to one newspaper correspondent, their behavior marked by “a curious melancholy.” When informed that the Senate had defeated the bonus bill, the marchers gathered outside the Capitol meekly accepted the suggestion of their leader that they sing “America,” and then returned to their ramshackle camp on Anacostia Flats. The violence associated with the bonus incident was supplied by General Douglas MacArthur’s soldiers, not by the poor veterans. Election statistics tell a similar story—in the bleak days of November, 1932, with Hoover discredited and Franklin Roosevelt still attacking him for reckless spending that had unbalanced the federal budget, and with over 12,000,000 Americans out of work, the Communist party received only 102,000 votes, and the Socialist party fewer than 900,000.

The unemployed did vote their own interests as they saw them; certainly they supported Roosevelt’s New Deal overwhelmingly in later elections. But they nowhere became an effective pressure group or an independent political force. Political activism was apparently incompatible with joblessness. Insecurity caused the unemployed to be fearful and dependent. Fear and dependence eroded their confidence and destroyed hope. Lack of confidence and hopelessness undermined their expectations. Typically, when workers lost their jobs, they had not suffered enough to become rebels. By the time they had suffered, they had somehow lost the capacity for militant protest.

World War II finally brought an end to the Great Depression and to the high unemployment that had plagued the United States and the rest of the world for a decade. But what changed the way unemployment was seen and experienced by society, including the unemployed themselves, was not the war but the economic theory that wartime policies had proved viable—the so-called General Theory of the British economist John Maynard Keynes. According to Keynes, whose chief work, The General Theory of Employment, Interest and Money , was published in 1935, governments could stimulate economic growth in bad times and thus create more jobs by deliberately spending more money than they took in, and by increasing the amount of money in circulation. Conversely, in boom periods, when inflation became a problem, governments could check the expansion by restraining the growth of the money supply and by reducing expenditures or raising taxes in order to create a budget surplus. These latter actions might cause a rise in unemployment; indeed deliberately inducing unemployment was seen as a necessary device for “cooling off” an “overheated” economy. But the basic idea behind Keynesian economics was that by properly manipulating monetary and fiscal policies (by what economists in the 1960’s called “fine-tuning the economy”), something very close to full employment could be maintained continuously without triggering serious inflation.

In 1946 Congress passed the Employment Act. Although hedged about with more than the usual share of political compromises and equivocations, this law, besides establishing a Council of Economic Advisers to provide expert information about economic trends and guidance for the President in applying the proper policies, made the government formally responsible for “creating and maintaining” full employment. With the New Deal Social Security system of old-age and unemployment insurance now fully in operation, this Employment Act appeared to herald the dawn of a new era. Henceforth American workers need not fear prolonged idleness. Should slack times cause unemployment, the government was obligated to swiftly check the trend by stimulating demand, and while the medicine was having its effect, insurance payments would protect the unemployed from serious deprivation.