Working on a Metacartel II post as a follow-up to my first one, and it is proving to be the most tedious thing I’ve ever written. I hope it is ends up being an equally tedious read.
In the meantime, here’s a chunk of text from James Livingston’s masterful tome The Origins of the Federal Reserve: Money, Class, and Corporate Capitalism, 1890-1913 that draws out some of the details around the elusive ‘labor republicanism’ that I referenced in my first Metacartel post.
…why were capitalists failing so miserably to increase labor productivity in line with the growth of real wages? What prevented capitalists from exercising effective control of the labor process and managing industrial production in accordance with technical rules of increasing efficiency, productivity, and "reasonable" rates of return on investment? Until the t8gos, it appears, skilled workers were able to enforce those social norms that sanctioned their control of machine production in the factory. Hence the critical microeconomic problem capitalists faced in the 188os was probably not "maintaining control of their operations," as one business historian has suggested, but rather establishing unilateral control of their operations. The official historian of the Carnegie Homestead Works complained, for example, that until the skilled workers' union was destroyed by the lockout of 1892, the "method of apportioning the work, of regulating the turns, of altering the machinery, in short, every detail of working the great plant, was subject to the interference of some busybody representing the Amalgamated Association .... The heats of a turn were designated, as were the weights of the various charges constituting a heat. The product per worker was limited .... " Extraordinary as they may sound, such complaints were neither unfounded nor confined to the iron and steel industry.
With the able assistance of hundreds of Pinkertons and the state militia, Andrew Carnegie and Henry Frick virtually destroyed the Amalgamated Association and thus increased the pace of mechanization in the Homestead Works. They also, and not coincidentally, reduced the high labor costs associated with craft skill. But there are three reasons to believe that their almost total victory was exceptional for the time. First, the number, pattern, and resolution of strikes and lockouts between 1884 and 1894 do not suggest that employers were winning the battle over control of the workplace. The annual number of strikes and strikers increases rapidly after 1884; so does the proportion of sympathy strikes and strikes called by unions over issues of control and working conditions; and there is no clear indication that employers won even a majority of the recorded strikes and lockouts. Second, money wages were not reduced to the extent that employers sought between 1886 and 1894, largely, it seems, because longer hours could not be imposed on workers. Third, productivity growth in the nonfarm sector is barely discernible between 1884 and 1894, suggesting that the mechanization and "rationalization" of the labor process in the factories were not proceeding as fast as employers desired or claimed was necessary.
From the standpoint of capital, therefore, what with hindsight appears to be part of a normal business cycle looked more like a dangerous secular trend toward stalemate-or worse-at the point of production, with all that implied for profits and the attendant social function of capitalists. This perception is, again, consistent with the evidence available then and now. But it is inconsistent with modern assumptions about the social power and cultural authority of "big business." That is probably why the obvious question seems practically impertinent: what could workers bring to bear in their struggles against employers that created the stalemate of the late 188os and early 189os? To put it another way, what resources did capitalists lack?
If we follow the lead of the new labor historians and look more closely at the struggles for control of the workplace that began in earnest in the 188os, the significant variable appears to be the stance of the communities in which the struggles took place. When local officeholders, constables, editors, and small shopkeepers acted in solidarity with striking workers-and this seems to have been the norm-large employers were unable to impose their will on the labor force or to reshape the labor process, even if they imported external forces of law and order. Only when such solidarity was missing at the outset or undermined by protracted strikes, were the large employers able to reduce wages, break unions, and reconstruct the labor process.
In this sense, the microeconomic problem was inseparable from the macroeconomic problem, or, in the parlance of the late nineteenth century, the economic problem entailed a social question. For the stalemate at the point of production was enforced by a larger deadlock that clearly involved more than capitalists and workers. At the very least it involved the loyalties of a middle class that was still rooted in and defined by petty proprietorship, not by occupational ladders within large bureaucratic organizations. It involved a middle class, in sum, that apparently had not acknowledged the permanence or legitimacy of large capital, a class that could, therefore, side with striking workers against large capital.
The middle term in the urban-industrial stalemate was also the middle term in the larger standoff that characterized American society in the late nineteenth century. The solidarity of petite bourgeoisie and striking workers might look anomalous from the standpoint of the late twentieth century, but at the time it was no more anomalous than the political coalition of jackleg farmers and industrial workers that was forged in the late 188os and early 18gos. What all three functional groups shared-what allowed them to act in concert, seemingly as one class between 1889 and 1896-was a commitment to dispersed assets, competitive markets, and control of the property in one's labor power as the condition of self-determination. What all three functional groups shared, in short, was a commitment to the political economy of republicanism. Their profound fear of large capital, of concentrated market power, and their tentative solidarity in the age of the Knights and the Alliance, derived from that commitment.
Can’t believe I never read that one. What do you think of Kolko?
HAVE you ever read this paper? "Origins of the Federal Reserve System: International Incentives and the Domestic Free-rider Problem"
https://annas-archive.org/md5/0a6c7ed7bc063e7324939d8bbd835dad
Argues that a big and underrated reason for creation of federal reserve was so that we could make use of bankers acceptances which had not been allowed under national banking system, a development which allowed the dollar to become an international currency for the first time. Broz doesn't mention it (remains in basic macroecon-theoretical framework) but it is right after this that the Morgan-Rockefeller American International Corporation is trying to expand in China. Their headquarters were in 120 Broadway same as empire trust, and you know all about that.
This is also a good paper on the AIC. Talks about Hog Island too:
https://annas-archive.org/md5/fd17e56211739ef65ee3a35e5d1466ed