The Racketeer’s Progress: Chicago and the Struggle for the Modern American Economy, 1900-1940

Published by EH.NET (July 2004)

Andrew Wender Cohen, The Racketeer’s Progress: Chicago and the Struggle for the Modern American Economy, 1900-1940. New York: Cambridge University Press, 2004. xviii + 333 pp. $60 (cloth), ISBN: 0-521-83466-X.

Reviewed for EH.NET by Louis P. Cain, Department of Economics, Loyola University Chicago and Northwestern University.

The Racketeer’s Progress, based on the author’s University of Chicago dissertation, focuses on the attempt of Chicago’s craftsmen to control their workplaces. Skilled building tradesmen, building managers and maintenance men, shopkeepers, and teamsters formed labor unions and associations that adopted “self-styled laws that favored small, local, and labor-intensive businesses” (1). Initially, the legal system was not used for enforcement as it was considered “too deliberate, too costly, and arguably too biased to be effective” (quoted on 71). Instead, craftsmen turned to their business agents and to “fines, strikes, boycotts, pickets, assaults, bombings, and shootings” (1). The struggle is depicted as one between local craftsmen and national corporations, the latter represented by the city’s business elite — “steel manufacturers, meatpackers, wholesalers, merchants, and bankers” (13).

Andrew Cohen, currently Assistant Professor of History at the Maxwell School of Citizenship and Public Affairs at Syracuse University, argues that the craftsmen, with the aid of “reformers,” ultimately were successful in creating a “limited legitimate space for themselves in Chicago’s economy” (1). Consequently, “the forms of industrial order established in the United States between 1890 and 1940 resulted not from a progressive ‘search for order,’ but from the local struggle between reformers, elite businessmen, small proprietors, and crafts workers” (1). At least in Chicago, the labor market did not evolve peacefully; the most violent episodes were those where the power of the business elite was at odds with the “laws” of the craftsmen. Cohen argues in his introduction that his research calls into question five ideas (modernity, synthesis, voluntarism, corporatism, and legitimacy) that have dominated historical thinking about this era. Business historians will find a few familiar citations here; economic historians will find fewer.

The struggle of Chicago’s craftsmen with the local business elite was usually conducted in the political arena, but not always. In particular, Cohen discusses the Building Trades Lockout of 1900 and the Teamsters’ Strike of 1905, both of which turned violent. Over time, this struggle evolved into debates over the open shop, the use of southern Blacks as strikebreakers, and whether collective bargaining could provide the basis for “responsible” unionism. It actively involved the courts, where “the legal results satisfied no one” (157) as there emerged a “contradiction between the courts’ seeming tolerance for unions and their harsh decisions” (158). Cohen explains this contradiction as part of the open shop campaign against the crafts unions’ governance system. Because the judiciary was “stacked with upper class reformers and reactionaries” (174), Chicago courts endorsed the open shop. It should be noted that the cases cited in support of this proposition predate the Clayton Act (1914) which exempted unions from Sherman Act allegations of being “in restraint of trade or commerce.”

The struggle also took place at the level of the shop floor. It was the ancient struggle to maintain jobs and wages in a world that continually searched for ways to conserve labor. It was not a struggle against progress, for anything that would reduce the labor required to complete an existing job at the existing wage was welcome. Nor was it a struggle against change, for there was a willingness to accept change that could be controlled. It was a struggle against specific inventions and innovations, and the opponent was the entrepreneur who wished to adopt them. At this level, the opponents were not national corporations; as Cohen notes, “The craft economy was overwhelmingly proprietary, dominated by small, unincorporated firms with few employees” (16). Cohen documents this level of the struggle, but he does not develop it to the same extent as that with the business elite. It should be clear, at the shop-floor level, much of the craftsmen’s struggle is consistent with Pogo’s celebrated line: “We have met the enemy … and he is us.”

Further, in the places where Cohen’s craftsmen worked, the open shop was not a factor — “craftsmen regulated consumer options, prices, routes, distributors, and wages in many service and retail trades” (202). Craftsmen did battle over the introduction of motor trucks, electric refrigerators, and prefabricated building materials; they did battle over who would be employed.

During World War I, the federal government granted unions rights they had long sought, but those disappeared as quickly as they came. By the 1920s, the craftsmen’s unions in Chicago grew “desperate” when controlling prices proved increasingly difficult. More and more, they resorted to violence, a trend that had begun shortly before the war. It was in this period that employers introduced the term “racketeering” to “direct growing public concern about bootleggers like Al Capone against the officials who enforced prices and wages” (233). State’s attorneys began taking union officials to court for graft, but, in time, the public demanded that these resources be used to fight the gangsters. Then came the Depression.

Cohen’s penultimate chapter, “The New Deal Order from the Bottom Up,” begins: New Deal industrial policies originated in the construction sites and garages, storefronts, saloons, and union halls of cities like Chicago. Laws like the National Industrial Recovery Act (NIRA) expressed not corporate ideals, as scholars often assert, but rather the values of the tradesmen who had battled corporations over the definition of legitimate association. (265) Among the principal pieces of evidence adduced for these claims are that unions were a crucial part of FDR’s coalition and that “craft governance served as one model for economic stabilization” (265). It is clear the NIRA was consistent with Chicago craftsmen’s governance schemes, but it is also clear it was consistent with the approach of the War Industries Board during World War I, down to the acceptance of a role for labor. When the NIRA was found unconstitutional, the administration was ready to let industrial self-government die; it had become an expanding morass of non-directional regulation. The same was not true of the act’s section VII-A regarding labor relations. Cohen’s “bottom up” perspective works well to explain New Deal support for labor via the Anti-Racketeering Act of 1934 and the Wagner Act of the following year. Analytically, however, the step from Chicago’s craftsmen’s governance to federal labor policy is immense; additional case studies would be welcome.

This is a well-researched book. There are many examples of attempts to enforce what Cohen terms “self-styled laws,” the violence that sometimes accompanied them, and the court cases that resulted from them. There is a large cast including “Umbrella Mike” Boyle, “Knuckles” Cito, “The Camel” Humphreys, “Studdy” Looney, and “Smiles” Paglinghi to single out only those with the most colorful nicknames. Andrew Cohen is a superb craftsman, but his kit would benefit from more exposure to the economic history literature. While his conclusions seem stretched at various points, that problem does not detract from the locally important story he has to tell. In the end, the voices of Chicago’s craftsmen were heard. Their legitimate requests were honored; their illegitimate methods were prosecuted.

Louis P. Cain is Professor of Economics at Loyola University Chicago and Adjunct Professor of Economics at Northwestern University. With the late Jonathan Hughes, he is author of American Economic History (2003).