In 1919, U.S. Steel Pulled a Branch Rickey

My economic historian friend, Jeff Hummel, has recommended for years that I read David M. Kennedy’s Freedom from Fear: The American People in Depression and War, 1929-1945. Kennedy is a first-rate historian at Stanford. I’m enjoying the book as I’m working my way slowly through it. Jeff warned me that Kennedy is not an economist, but he is so careful with his facts that an economist can read it and sometimes substitute his own judgment, based on economics, for Kennedy’s. Here’s the first place in the book where I noticed that possible absence of economic knowledge. Although possibly not; maybe it’s a tone thing. Judge for yourself.

Kennedy writes:

Fancying themselves as labor’s aristocracy, craft unionists ignored the problems of their unskilled co-workers. Ethnic rivalries exacerbated the troubles in the house of labor. Skilled workers tended to be old-stock, native-born white Americans, while the unskilled were mostly recent urban immigrants from the hinterlands of Europe and rural America. The AFL [American Federation of Labor], in thus insulating itself from the men and women who were fast becoming the majority of industrial workers, handed management a potent antilabor weapon. Management knew how to use it. U.S. Steel cynically exploited the ethnic divisions that were the bane of American unionism when the AFL in 1919 hesitantly abandoned its traditionally elitist attitudes and led a strike to organize an industrial union in steel. The corporation sent agents into the steel districts around Chicago and Pittsburgh to spawn animosity between native and immigrant workers. They excited the strikers’ darkest anxieties by recruiting some thirty thousand southern blacks, hungry to possess previously forbidden jobs, to cross the picket lines. On these rocks of racial and ethnic distrust, the great steel strike of 1919 foundered miserably.

From everything I know about that era, Kennedy gets it exactly right. U.S. unions were highly racist in those days, a fact that former President Jimmy Carter’s Secretary of Labor, economist F. Ray Marshall, spent much of his academic career documenting. And certainly it would make sense for U.S. Steel to cynically exploit this racism by the white unions. Finally, it’s true that those jobs were traditionally off-limits to black people, largely because of the white unions’ actions, sometimes including murdering their black competitors. That’s why two early 20th-century black leaders, Booker T. Washington and W.E.B. DuBois, although strongly at odds with each other about strategy, agreed that unions were anti-black. As DuBois put it, unions are “the greatest enemy of the black working man.”

So why am I highlighting this?

Over the years, I’ve taught myself to have two personae when reading: that of an economist and that of a normal, non-economically-literate person. The second of my personae reacted highly negatively to U.S. Steel. After all, U.S. Steel acted “cynically” and “exploited” ethnic divisions. Also, U.S. Steel was “antilabor.” That’s pretty damning, especially to one who picks up on emotive words.

But the economist in me thinks much differently. I’m perfectly willing to believe that U.S. Steel acted cynically and exploited ethnic divisions. But that doesn’t mean U.S. Steel was anti-labor. It means that U.S. Steel was anti-union. U.S. Steel was profoundly pro a particular group of laborers, namely 30,000 black laborers who were “hungry to possess previously forbidden jobs.”

It’s possible that Kennedy knows all this. It’s possible that he doesn’t. I simply want to point out the bottom line that David Kennedy has shown: U.S. Steel helped break down racism.