Income inequality in the early 20th century (and now)

COMMISSION ON INDUSTRIAL RELATIONS. Weinstock; Lennon; Garretson; Walsh, Chairman; Commons; Ballard; Delano; Mrs. Harriman. Harris & Ewing, Photographer 1913 (Library of Congress Prints & Photographs Division Washington, D.C.)

Beverly Gage, associate professor of 20th-century U.S. history at Yale University, has a fascinating post at Slate about the Commission on Industrial Relations created by President William Howard Taft in 1912 near the end of his term to address the growing fears of a nation facing serious social unrest due in large part to income inequality.

After three years spent in public meetings listening to Americans from industrialists like Andrew Carnegie and  Daniel Guggenheim to William D. “Big Bill” Haywood, general secretary of the Industrial Workers of the World (IWW), the Commission issued its report in 1916.

There is something almost quaint—but decidedly refreshing—about the commissioners’ blunt language. “Effective action by Congress is required”¦,” the report proclaimed, “to check the growth of an hereditary aristocracy, which is foreign to every conception of American Government and menacing to the welfare of the people and the existence of the Nation as a democracy.” Far from debating whether “corporations are people,” the commission took for granted that concentrations of corporate power were undemocratic, that gigantic fortunes “constitute a menace to the State,” and that it was the duty of government to restore a balance of power.

And how did the Commission propose to solve the problem?

The commission offered two chief solutions, neither one of which has won much of an airing in our latest rounds of debate. The first was an inheritance tax, aimed not at the fearless entrepreneur, but at his sons and daughters, who had done nothing to deserve a fortune. The second was increased support for union organizing, on the principle that workers deserved to elect their own representatives on the job just as they did in the government.

Both of these ideas ultimately became law—the inheritance tax almost immediately, union organizing rights in fits and starts over the next few decades. Today, by contrast, we seem to be going in the opposite direction, with unions under attack and the so-called “death tax” all but eliminated from the federal code.