Page 5 of 5 THE SHAPE OF US POPULISM, Part 2
Long-term effects of the Civil War
By Henry C K Liu
acquirer. Countless hardworking real entrepreneurs were driven
bankrupt by a select numbers of manipulative robber barons.
The Rockefeller interests and the House of Morgan established interlocking
directorates in the corporations they controlled. The Pujo Commission of the
House of Representatives reported in 1912 that through the banks, trusts and
insurance companies, the Rockefeller/Morgan combination had control of
financial resources amounting to more than $6 billion and that members of the
group held directorships in 112 major corporations with a total capitalization
of $22 billion. The Federal revenue in 1912 was $693 million and the GDP was
$37.4 billion.
Big business, particularly the public utility sectors such as
railroads, oil and electricity, sought with overwhelming success to
make themselves immune from public control by unethical devises ranging from
giving free service to politicians, newspaper owners and editors, and other
influential personage to wholesale bribery to gain control of political
institutions. Several key state legislatures including New Hampshire,
Pennsylvania, California, were known to be under the control of railroad
interests. Massachusetts led the way toward re-imposing public control by
setting up a commission to investigate popular complaints against the railroad
corruption.
Granger laws
The strongest attack on big business corruption was led by a farmer
organization in the Mid West known as the Grange. In 1871, the Illinois
legislator passed "Granger laws" prohibiting price and access discrimination
and setting up a Railway and Warehouse Commission. Similar Granger laws were
adopted in Iowa, Minnesota and Wisconsin. The railroad countered with the
argument that such laws were unconstitutional, but in 1876, in Munn v Illinois
and other "Granger Cases", the Supreme Court upheld the right of a state to
regulate public utility.
Reaffirming traditional common law principles, Chief Justice Morrison R Waite
(in office 1874-1888) declared that "property does become clothed with a public
interest when used in a manner to make it of public consequence and affects the
community at large. When, therefore, one devotes his property to a use in which
the public has an interest, he, in effect, grants to the public an interest in
that use, and must submit to be enrolled by the public for the common good, to
the extend of the interest he had created."
Waite went on to rule that public control include the power to fix maximum
charges and declared: "We know that this is a power which may be abused, but
that is no argument against its existence. For protection against abuses by the
legislature, the people must resort to the polls, not to the courts."
A decade later, the Supreme Court modified its populist attitude. In 1886, in
the case of Wabash, St Louis and Pacific Railway Company v Illinois, the Court
invalidated an Illinois law prohibiting rate discrimination on the ground that
the state had no authority to violate interstate commerce, which was the
exclusive purview of the Federal government.
In the same year, in the case of Santa Cara County v Southern Pacific Railroad,
the Court ruled again that corporations were among the "persons" protected by
the Fourteenth Amendment. In this and subsequent rulings, the Court declared
that a corporation must be allowed a "reasonable" return on its investments,
thus reversing Munn v Illinois.
Corporate hostility towards labor
The hostility held by management towards labor was one of the most
counterproductive errors of the capitalist system. Capitalism is a system that
requires a symbiosis of capital and labor. Capital cannot exist without labor.
Until resources are invested in the improvement of labor productivity, they
remain idle assets. Worse still, if resources are invested in speculation, it
is destructive to productivity.
In the age of industrial overcapacity, oppression of labor either by holding
down wages and benefits or adding to the work load by lengthening the work day
is simply poor macro strategy. Since most capital now comes from worker pension
funds, increasing wages and pension benefits actually increases the supply of
capital for growth.
Toward the end of the 19th century, immigration and urban migration from the
rural areas caused a fourfold increase of the wage-earning class between 1860
and 1900. The labor force in the anthracite coal mines in Western Pennsylvania
and the steel mills in the Mid West were a mixture of newly arrived Italians,
Czechs, Slovaks, Hungarians, Croats, Slovenes, Poles, Ukrainians and Russians.
In 1900, more than 2 million children under 16 were wage earners.
Management distorted the laissez-faire principle against trade restraint to
reject workers' right to collective bargaining to balance the uneven market
power between corporate employers and individual workers. Management believed
the iron law of wages that rationalizes subsistence wage levels to be a natural
law.
Ironically, the investment in machinery required longer working hours to
amortize the capital. Work was organized to maximize utility of the machines
rather than regulated by natural human rhythm, and time motion experts were
constantly devising ways to speed up work by breaking down operations to
monotonous tasks requiring little skill. It was not necessary to let workers
understand the complex design that produced the final product. The time-motion
pressure resulted in high accident rates but workers were not protected by
compensation.
The pain of the cyclical depressions of 1873 and 1893 were borne mostly by
unemployed workers and their families while financiers profited from the
restructuring of distressed company and the consolidation of outdated economic
sectors.
Until the 20th century, non-skilled labor remained unorganized. Labor
solidarity was hampered by racial conflict and discrimination against new
immigrants by native born workers. Such social conflicts played into the hands
of corporate management in its strategy to exploit labor disunity. A craft
labor movement emerged among skilled workers along the line of medieval guilds.
In 1865, William H Sylvis of the Moulders' Union organized the National Labor
Union with a membership of 600,000 by 1868 but disappeared four years later by
1872, having dissipated its energy advocating over ambitious political reforms.
Knights of Labor
The Knights of Labor was founded in 1869 by Philadelphia garment cutters under
the leadership of Uriah Stephens. It admitted all except lawyers, bankers,
stockbrokers, liquor dealers and professional gamblers. It pushed for
organizing cooperatives through legislation rather than direct confrontation
with the employer class. In the spirit of Jeffersonian democracy, it aimed "to
secure to the toilers a proper share of the wealth that they create" and to
make "every man his own master - every man his own employer."
Most readers the world over who have enjoyed Lyman Frank Baum's The Wonderful
Wizard of Oz, and the audiences that have been delighted by the
Hollywood movie, do not realize it is an allegory of populist efforts to reform
the nation in 1896. Born in 1856 near Syracuse to a wealth family, Baum moved
in 1887 to Aberdeen, South Dakota, a little prairie town where he edited the
local weekly until it failed in 1891, during which time Western farmers had
been in a state of loud, though unsuccessful, revolt. The Romantic view of
benign nature had disappeared, replaced by the stark reality of the dry, open
plains. The acquiescence towards social Darwinism served to crush Romantic
idealism.
In 1891, Baum moved to Chicago, where he later saw first-hand the miseries of
the frightful depression of 1893 and was drawn to dynamic reform elements led
by populist governor John P Altgeld. In Chicago, Baum took part in the pivotal
election of 1896, marching in "torch-light parades for William Jennings Bryan".
Bryan consolidated all the farmers’ hopes in a campaign basket of "free coinage
of silver". Even in defeat, he brought the hopeless plight of the little man
into national consciousness.
Between 1896 and 1900, while Baum worked and wrote in Chicago, the great
depression of 1893 was put to an end by the war with Spain, which thrust the
United States into world power status, just as the Great Depression of 1933 was
put to an end by World War ll, which thrust the US into superpower status.
Bryan in defeat maintained control over the Midwestern base of the Democratic
Party and spoke out against US policies toward the newly acquired colonies of
Cuba and the Philippines. By 1900, as Bryan prepared to run again,
anti-imperialism and not silver became the prime campaign issue, with the
silver as a background leitmotif.
Baum introduces Dorothy and Kansas by contrast:
Dorothy
lived in the midst of the great Kansas prairies, with Uncle Henry, who was a
farmer, and Aunt Em, who was the farmer's wife. Their house was small, for the
lumber to build it had to be carried by wagon many miles. There were four
walls, a floor and a roof, which made one room; and this room contained a
rusty-looking cooking stove, a cupboard for the dishes, a table, three or four
chairs, and the beds.
When Dorothy stood in the doorway and looked around, she could see nothing but
the great gray prairie on every side. Not a tree nor a house broke the broad
sweep of flat country that reached to the edge of the sky in all directions.
The sun had baked the plowed land into a gray mass, with little cracks running
through it. Even the grass was not green, for the sun had burned the tops of
the long blades until they were the same gray color to be seen everywhere. Once
the house had been painted, but the sun blistered the paint and the rains
washed it away, and now the house was as dull and gray as everything else.
When Aunt Em came there to live she was a young pretty wife. The sun and wind
had changed her too. They had taken the sparkle from her eyes and left them a
sober gray; they had taken the red from her cheeks and lips, and they were gray
also. She was thin and gaunt, and never smiled now. When Dorothy, who was an
orphan, first came to her, Aunt Em had been so startled by the child's laughter
that she would scream and press her hand upon her heart whenever Dorothy's
merry voice reached her ears; and she still looked at the little girl with
wonder that she could find anything to laugh at.
Uncle Henry never laughed. He worked hard from morning till night and did not
know what joy was. He was gray also, from his long beard to his rough boots,
and he looked stern and solemn, and rarely spoke.
It was Toto that made Dorothy laugh, and saved her from growing as gray as her
other surroundings. Toto was not gray; he was a little black dog, with long
silky hair and small black eyes that twinkled merrily on either side of his
funny, wee nose. Toto played all day long, and Dorothy played with him, and
loved him dearly.
Henry M Littlefield's The
Wizard of Oz: Parable on Populism describes a wealth of allusions to
Gilded Age society in Baum's The Wonderful Wizard of Oz. The wicked
Witch of the East who controls the Munchkins represented Eastern industrialists
and bankers who control the working people; the Scarecrow is the wise but naive
Western farmer; the Tin Woodman stood for the dehumanized industrial worker;
the Cowardly Lion was William Jennings Bryan, Populist presidential candidate
in 1896; the Yellow Brick Road, with all its dangers, was the gold standard;
Dorothy's silver slippers (Judy Garland's are ruby red in the movie, but in
Baum’s version they are silver) represent the Populists' solution to the
nation's economic woes by "the free and unlimited coinage of silver"; Emerald
City is Washington, DC; the Wizard, "a little bumbling old man, hiding behind a
facade of papier-mache and meaningless noise ... able to be everything to
everybody", is the parade of Gilded Age presidents, or Mark Hanna, McKinley's
campaign manager, and subsequent campaign strategist who manufacture winning
images for undeserving candidates.
The Deadly Poppy Field, where the Cowardly Lion fell asleep and could not move
forward, is the anti-imperialism that threatened to make Bryan forget the main
issue of silver (note the Oriental connotation of poppies and opium). Once in
the Emerald Palace, Dorothy has to pass through seven halls and climb three
flights of stairs; seven and three make seventy-three, which stands for the
Crime of 1873, the congressional act that eliminated the coinage of silver and
that proved to all Populists the collusion between Congress and bankers. The
Wicked Witch of the East is Grover Cleveland; of the West, William McKinley.
The enslavement of the yellow Winkies is "a not very well disguised reference
to McKinley's decision to deny immediate independence to the Philippines" after
the Spanish-American War.
Wagner's Ring Cycle Der Ring der Nibelungen (The Ring of the Nibelungen), a cycle of four
epic music dramas by the great German Neo-Romanticist composer Richard Wagner
(1813-1883), is influenced by German populism. Wagner began work on the mammoth
project when aged 35 and completed the cycle over a course of 26 years from
1848 to 1874: Das Rheingold (The Rhinegold) completed in 1869, Die
Walkure (The Valkyrie) in 1870, Siegfried (previously entitled Der
junge Siegfried or The young Siegfried) in 1871, and Gotterdammerung
(Twilight of the Gods) (originally entitled Siegfrieds Tod or The Death
of Siegfried) in 1874.
In autumn 1848, Wagner became involved with revolutionary events and came under
the influence of the writings of German philosopher-anthropologist Ludwig
Feuerbach (1804-1872) that "Christianity has in fact long vanished not only
from reason but also from the life of mankind, that it is nothing more than a
fixated idea." Wagner was also influenced by French social theorist Pierre-Jean
Proudhon (1809-65), whose What is Property (1840) condemned the abuses
of private property. Proudhon, after being elected to the French constituent
assembly after the revolution of 1848, tried in vain to establish a national
bank for the reorganization of credit in the interest of workers.
Under the influence of these ideas, Wagner conceived the fable that was later
set to music in The Ring of the Nibelungen; the intellectual content was
based on the concepts of "true socialism" and symbolically dealt with the
struggle of humanity against the rule of gold. In personal contact with the
Russian revolutionary anarchist Mikhail Bakunin (1814-76) in the spring of
1849, his democratic views had become more radical. He published several
articles in the Volksblätter, edited by August Röckel, propagating anarchist
colored, utopian-socialist concepts and established the necessity of a new
revolutionary uprising.
The young Wagner was influenced by the events of the democratic revolutions of
1848 and participated in manning street barricades in the Dresden uprising from
May 3-9, 1849, in support of the provisional government and called upon the
Saxon military to provide fraternal support for the insurgents. Together with
the leaders of the uprising, he left Dresden on May 9 for Chemnitz, whence,
with the help of Franz List, he escaped a warrant for his arrest by fleeing to
exile in Switzerland.
George Bernard Shaw's The Perfect Wagnerite (1898) interpreted the Ring
as a socialist allegory in the industrial revolution.
During the first years of his exile Wagner still hoped that the revolution
would break out again in Germany. For his own ideological self-awareness and to
define the objectives of his artistic creation, he wrote several works based on
the ideas of his last months in Dresden, among others Art and Revolution
(1849), The Work of Art of the Future (1850) and Opera and Drama (1851).
After 1854, under the influence of the philosophy of Arthur Schopenhauer, he
modified his belief in progress, championed pessimistic and fatalistic views,
and saw the sense of his art as the moral refinement of humanity.
The cycle of four operas tells the story of the struggle by different classes
for the gold Ring, forged from the enchanted flat-stone of the Rhine, which
endows its owner with power over the world but only at the cost of forsaking
love and trading his soul for the Ring’s awesome power. The operas tell the
convoluted story of greed, treachery and betrayal.
Wontan, the leading God, represents the moral pessimism of Schopenhauer. The
Giants, Fafnir and Fasolt, represent capitalism that oppresses workers who are
represented by the Nibelungen, built Valhalla for the Gods, but Wotan, tempted
by Loge, demigod of fire, with the magic fire representing greed, pays the
Giants with the Ring of Rhine gold guarded by Rhine maidens, who represent
bountiful nature the privatization of which would bring destruction to the
world.
As a universal principle, populism is a discourse that juxtaposes the interests
of "the people" with those of "the elites". In practice, populism comes in all
shades in the political spectrum affected by incidental socioeconomic factors.
Next: The progressive era
Henry C K Liu is chairman of a New York-based private investment group.
His website is at http://www.henryckliu.com.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
