The Conscience of a Liberal

2 THE LONG GILDED AGE

Looking at the political economy of the United States before the New Deal from the vantage point of the Bush years is like looking at a sepia-toned photograph of your grandfather and realizing that he looked a lot like you—in fact, that in some ways you resemble your grandfather more than you resemble your father. Unfortunately the family features that seem to have reemerged in your face after skipping a generation are deeply unattractive.

Pre–New Deal America, like America in the early twenty-first century, was a land of vast inequality in wealth and power, in which a nominally democratic political system failed to represent the economic interests of the majority. Moreover the factors that let a wealthy elite dominate political life have recognizable counterparts today: the overwhelming financial disadvantage at which populist political candidates operated; the division of Americans with common economic interests along racial, ethnic, and religious lines; the uncritical acceptance of a conservative ideology that warned that any attempt to help the less fortunate would lead to economic disaster.

You might be tempted to say that I’m overstating the resemblance, that America today isn’t as unequal as it was before the New Deal. The numbers, however, say otherwise. As Table 1 shows, the concentration of income in the hands of a narrow elite today matches its concentration in the 1920s.

Now, it’s true that the oligarchic nature of pre–New Deal politics and the often bloody way the power of the state was used to protect property interests were more extreme than anything we see today. Meanwhile, though the inequality of income was no greater than it is now, the inequality of living conditions was much greater, because there were none of the social programs that now create a safety net, however imperfect, for the less fortunate. All the same, the family resemblance between then and now is both striking and disturbing.

Before I say more about that resemblance, however, I need a better name for the period I’ll be discussing than “pre–New Deal,” which defines the era only by what it wasn’t. Historians generally say that the Gilded Age gave way to the Progressive Era around 1900, and they have a point. The cultural and political tone of the country shifted considerably around 1900. Theodore Roosevelt, who became president in 1901, was less reliably proplutocrat than his predecessors; the Food and Drug Administration was created in 1906; the income tax was reintroduced in 1913, together with a constitutional amendment that prevented the Supreme Court from declaring, as it had before, that it was unconstitutional. These changes, however, had little impact on either the inequality of income and wealth in America or the minimal role that the U.S. government played in mitigating the effects of that inequality. As best we can tell, America in the 1920s, although richer than it had been in the late nineteenth century, was very nearly as unequal, and very nearly as much under the thumb of a wealthy elite.

So at the risk of annoying historians, I’ll refer to the entire period from the end of Reconstruction in the 1870s to the coming of the New Deal in the 1930s as the Long Gilded Age. It was a period defined above all by persistently high levels of economic inequality.

We don’t have detailed statistics on the distribution of income and wealth in America during most of the Long Gilded Age. There’s enough evidence, however, to show that America was a vastly unequal society circa 1900—an observation that won’t surprise anyone. Perhaps more surprisingly, the evidence also suggests that the level of inequality remained almost unchanged through the twenties.

That’s important to know. The persistence of extreme inequality right through the Jazz Age is a first piece of evidence for one of this book’s central points: Middle-class societies don’t emerge automatically as an economy matures, they have to be created through political action. Nothing in the data we have for the early twentieth century suggests that America was evolving spontaneously into the relatively equal society I grew up in. It took FDR and the New Deal to bring that society into being.

What’s the evidence that the Gilded Age persisted, in crucial respects, right through the 1920s? One useful number that we can compute, even lacking extensive statistical data, is the number of extremely rich Americans. J. Bradford DeLong, an economist and economic historian at Berkeley, has calculated the number of “billionaires,” whom he defines as those with wealth greater than the annual output of twenty-thousand average American workers. (That was about a billion dollars in the mid-1990s, when he devised the measure, but close to $2 billion today.) In 1900 there were, by DeLong’s count, twenty-two American billionaires. By 1925 there were thirty-two, so the number of billionaires more or less kept up with population growth right through the Progressive Era. It was only with the New Deal that the billionaires more or less vanished from the scene, dropping in number to sixteen in 1957 and thirteen in 1968.[1] (Around 160 Americans meet DeLong’s criterion now.)

The Gilded Age billionaires were exactly who you’d expect: the robber barons, the men who made fortunes off railroads, manufacturing, and extractive industries such as oil and coal. In 1915 John D. Rockefeller topped the list. Behind him were two steel magnates, Henry C. Frick and Andrew Carnegie, then an array of railroad builders and financiers, plus Henry Ford.

The count of billionaires fits with other evidence, such as the sizes of large estates, suggesting that the concentration of wealth at the very top was about the same at the end of the 1920s as it was in 1900. That concentration then declined dramatically with the coming of the New Deal. During the first few decades after World War II, the inequalities of the Gilded Age became a thing of myth, a type of society that nobody thought would return—except that now it has.

The high level of inequality during the Long Gilded Age, like high inequality today, partly reflected the weak bargaining position of labor. For most of the era, large employers were free to set wages and working conditions based on whatever the job market would bear, with little fear of organized opposition. Strikes were often broken up by force—usually involving strikebreakers hired by employers, but sometimes, as in the 1892 strike at Carnegie’s Homestead steelworks and the 1894 Pullman strike, by state militias or federal troops. Unionization rates and union influence gradually rose after 1900, temporarily reaching a peak soon after World War I. But a counterattack by employers pushed labor into retreat again. By the late 1920s union membership, which reached more than 17 percent of the labor force in 1924, was back below 11 percent—about what it is now.

High inequality didn’t mean that workers failed to share any of the fruits of progress. While inequality was great, it was more or less stable, so that the growth of the U.S. economy during the Long Gilded Age benefited all classes: Most Americans were much better off in the 1920s than they had been in the 1870s. That is, the decline in real earnings for many workers that has taken place in America since the 1970s had no counterpart during the Long Gilded Age. Urban workers, in particular, saw a vast improvement in the quality of life over the course of the Long Gilded Age, as diets and health improved, indoor plumbing and electricity became standard even in tenements, and the emergence of urban mass transit systems enlarged personal horizons.*

These improvements, however, shouldn’t lead us to gloss over the persistence of real deprivation. At the close of the twenties many American workers still lived in grinding poverty. For the unlucky—those who got thrown out of work, were injured on the job, or simply grew old without children to support them—there was great misery in the midst of opulence for the few. For before the 1930s there were no significant government income redistribution policies such as welfare or food stamps, nor were there any government provided social insurance programs such as Social Security or Medicare. Government at all levels was very small, and as a result taxes on all but the very richest were extremely low. For example, in the mid-1920s $10,000 bought as much as about $120,000 today, and people with incomes of $10,000 a year were in the top 1 percent of the income distribution—but they paid less than 1 percent of their income in income taxes, compared with around 20 percent for similarly situated people today. So it was a very good time to be rich. On the other hand, since income support programs currently account for most of the income of the poorest fifth of Americans, being poor in the 1920s was a far harsher experience than it is today.

This leads to an obvious question: Given the great wealth being generated during the Long Gilded Age, the great disparities in income, and a democratic system in which poorly paid workers vastly outnumbered the minimally taxed elite, what explains the absence of effective demands that the government do more to soak the rich and help the less well off?

It’s not that the concepts of progressive taxation and the welfare state had yet to be invented, or even implemented in other places. In Germany, Otto von Bismarck introduced old-age pensions, unemployment insurance, and even national health insurance in the 1880s. Bismarck acted out of political calculation, not compassion—he wanted to head off potential opposition to the Kaiser’s rule. But in so doing he showed that more compassionate government was, in fact, possible. Here in the United States the system of benefits introduced after the Civil War for veterans and their survivors was, in important ways, a forerunner to Social Security. The Populist platform of 1896 called for a progressive income tax and public works programs to provide jobs in times of depression—not qualitatively very different from what FDR would finally do almost forty years later.

Nor was America too poor a country to afford such programs. The United States in the 1920s was substantially richer than European countries, yet France, Germany, and the United Kingdom all had substantial programs of public aid several times as large as those in America.[2] In fact the United States in 1925 was about as rich as Britain would be in the early post–World War II years, the years in which Britain established a full-fledged welfare state, including national health care—a welfare state that was in some ways more extensive than the United States has now.

So why wasn’t there an effective demand to, as Huey Long would later put it, “soak the rich and help the little man”?

Republicans, who began as the party of free labor but by the 1870s had undeniably become the party of big business and the rich, won twelve of the sixteen presidential elections between the Civil War and the Great Depression. They controlled the Senate even more consistently, with Democrats holding a majority in only five of the era’s thirty-two Congresses. While the House of Representatives was somewhat more competitive, even there the Republican Party was usually in control.

Furthermore, party comparisons understate the conservative dominance of politics during this era, because one major wing of the Democratic Party—the so-called Bourbon Democrats, who included both reactionary Southerners and probusiness Northerners—was just as supportive of the interests of the wealthy and opposed to government help for the poor as the Republicans. The Bourbon Democrats did differ from the Republicans on some issues: They believed in free trade rather than high protective tariffs, and they decried corruption in politics. But it would be wrong to characterize the Bourbons as being in any meaningful sense to the left of the GOP. And on the rare occasions when a Democrat did take control of the White House, it was always a Bourbon: Grover Cleveland, the only Democrat to win the presidency between the Civil War and Woodrow Wilson’s victory in 1912,[3] was a Bourbon, and so were Democrats who got anywhere near the White House, like Samuel Tilden in 1876.

What accounts for this prolonged conservative dominance in a country in which demands to tax the rich and help the needy should, by the numbers, have had mass appeal? The explanation involves several factors that are all too familiar from today’s political scene, but were present in an exaggerated form.

First there was the effective disenfranchisement of many American workers. In 1910 almost 14 percent of adult males were nonnaturalized immigrants, unable to vote. Meanwhile Southern blacks were effectively disenfranchised by Jim Crow. Between the immigrants and the blacks, about a quarter of the population—and by and large, the poorest quarter—were simply denied any role in the political process. As we’ll see later in this book the problem of disenfranchisement has returned in contemporary America, thanks to large-scale illegal immigration and the continuing low voting participation of blacks—aided by systematic vote suppression that is more subtle than that of Jim Crow days, but nonetheless can be decisive in close elections.

Then there was the matter of campaign finance, whose force was most vividly illustrated in the 1896 election, arguably the only time between the Civil War and 1932 that a challenger to the country’s ruling economic elite had a serious chance of winning the White House. Fearful of what William Jennings Bryan might do, the wealthy didn’t crucify him on a cross of gold—they buried him under a mountain of the stuff. William McKinley’s 1896 campaign spent $3.35 million, almost twice as much as the Republicans had spent in 1892, and five times what Bryan had at his disposal. And bear in mind that in 1896 three million dollars was a lot of money: As a percentage of gross domestic product, it was the equivalent of more than $3 billion today, five times what the Bush campaign spent in 2004. The financial disparity between the parties in 1896 was exceptional, but the Republicans normally had a large financial advantage. The only times the Democrats were more or less financially competitive between the Civil War and Woodrow Wilson’s election in 1912 were in 1876, an election in which the Democrat Samuel Tilden actually won the popular vote (and essentially had the electoral vote stolen, in a deal in which Rutherford B. Hayes got the White House in return for his promise to withdraw federal troops from the South), and in Grover Cleveland’s two victories in 1884 and 1892. Not coincidentally Tilden and Cleveland were Bourbon Democrats. When the Democratic Party nominated someone who wasn’t a Bourbon, it was consistently outspent about three to one.[4] Finally there was pervasive election fraud.[5] Both parties did it, in a variety of ways. For much of the period secret ballots were rare: Most voters used ballots printed by the parties themselves, and these ballots were easily distinguishable by size and color. As a consequence, vote buying was feasible, easy—there was no problem verifying that the votes were actually cast as purchased—and widespread. In 1888 the New York Times acquired a letter sent by William Dudley, the treasurer of the Republican National Committee, to Republican county chairmen in Indiana. It read, in part:

As the Times editorialized, this letter was “a direct incitement to criminal acts…an official handbook for the voter buyers and bribery corps of the Republicans in Indiana.” And it wasn’t unusual. In fact there’s reason to believe that high rates of voter participation in the Gilded Age largely reflected financial incentives. Vote buying was, inevitably, most prevalent in swing states: One widely cited estimate is that during the Gilded Age and the Progressive Era up to a third of voters in New Jersey, which was very much a swing state at the time, regularly took cash for their votes.

Ballot-box stuffing was also widespread—and not just in areas dominated by urban machines, though most box stuffers were too bashful to say bluntly, as William Marcy Tweed did, “The ballots made no result; the counters made the result.” There was also extensive use of intimidation to keep the other party’s voters away from the polls. And as a last resort entrenched political groups sometimes simply overruled the will of the voters. For example, in 1897 the Indiana legislature simply unseated several Populists, even though it admitted that they had won a majority of the votes in their districts.

Again, both parties engaged in these tactics, though the financial edge of the Republicans probably meant that they came out ahead in the competitive corruption of politics at the time. More generally electoral fraud reinforced the advantages that money and organization carried: Elections were often decided not by who had the more popular platform, but by who was better prepared to rig the polls. At the same time, it greatly reduced the chances for electoral success of a platform that truly reflected the interests of the majority of the population.

It would be wrong, however, to think of the Long Gilded Age as an era in which there were heated clashes, in which the egalitarian impulses of the populace were forcibly suppressed by the forces of the elite. The truth was that most of the time the system’s inherent bias against any form of populism (with a small p—I’m not referring to the specific programs of the Populist Party, of which more below) was so strong and obvious that politicians didn’t even try to challenge the inequalities of the economic order.

Ironically the extreme weakness of populism in Gilded Age America made politics a more relaxed affair in certain respects than it is today. Most of the time, the conservative forces that sustained the Long Gilded Age didn’t require an equivalent to today’s disciplined movement conservatism to triumph. There was no need for an interlocking set of special institutions, Mafia-like in their demand for loyalty, to promulgate conservative thought, reward the faithful, and intimidate the press and any dissenters. There was no need to form alliances with religious fundamentalists, no need to exploit morality and lifestyle issues. And there was no need to distort foreign policy or engage in convenient foreign wars to distract the public.

The election of 1896 was the striking exception to the long-standing pattern of relaxed oligarchy. For a moment, it seemed as if Populism with a capital P really did represent a serious challenge to plutocratic rule. Populism failed, however, and not just because of a political system tilted in favor of those with money and organization. Populism lacked the kind of leadership that could bridge the divisions among the various groups whose interests would have been served by change. It was shipwrecked on the shoals of ethnic and geographic diversity.

Business interests and the wealthy had good reason to be terrified in 1896: Many Americans were very angry about their situation. Farmers, suffering from falling prices and the burden of debt, were in an uproar. So were many industrial workers, who either lost their jobs or faced wage cuts in the slump that followed the Panic of 1893. The brutality with which the Homestead strike and the Pullman strike were suppressed was unusual even in an age when the use of force against workers was common.

Yet in the end, William Jennings Bryan, a Democrat who also received the nomination of the Populist Party, was defeated. Lack of money and extensive voter fraud were significant factors in his defeat. It’s also clear, however, that Bryan failed to assemble the nation’s disgruntled groups into an effective coalition.

That’s not surprising. The losers from the Gilded Age economic order—the groups that would eventually benefit enormously from the New Deal—were divided along three fault lines that may have been unbridgeable in 1896. Moreover, they certainly weren’t bridgeable by someone like Bryan.

The first and most important of these divides was between city and country. Although the United States was an industrial powerhouse by 1896, the majority of the population still lived close to the land. In 1890, 64 percent of Americans lived in rural areas, and another 14 percent lived in towns of fewer than 25,000 people. The political influence of urban dwellers grew more important over time, but rural and small-town America still contained the great majority of voters as late as 1930.

Nonetheless an effective progressive coalition needed urban workers—a purely rural movement wasn’t strong enough to win the White House. But the Populists came from rural and small-town America, and few knew how to reach out to potential urban allies. Bryan chose to base his campaign almost entirely on the issue of Free Silver, which was, in effect, a call for inflationary policies that would reduce the burden of debt on farmers. It was an issue that meant nothing to urban workers.

One reason that farmers and urban workers were unable to make common cause was the cultural and social gap that lay between immigrants and the native born. The immigrant share of the population peaked in 1910 at 14.7 percent, with the vast majority in urban areas and particularly concentrated in the biggest cities. In that year 41 percent of New Yorkers were foreign born.[7] And these immigrants were foreign indeed to the Americans of the heartland. The Irish were considered alien well into the twentieth century: The 1928 campaign of Al Smith, an Irish American Catholic, was greeted with burning crosses. And by then the Irish were an old, well-established part of the American ethnic mix—not like the Italians, Poles, Jews, and others who made up much of late-nineteenth-and early-twentieth-century immigration. These immigrants were treated with the same kind of horror, the same claims that they could never become real Americans, that now characterizes the most extreme reaction to Mexican immigrants.

In the 1920s the mutual incomprehension of rural America and the immigrants was made even worse by Prohibition. It’s hard now to appreciate the depth of the fear of alcohol, so extreme that it provoked a constitutional amendment. (We should always remember that the big issues that we think should have dominated past American politics have often been crowded off the public stage by disputes that seem bizarre in retrospect.) And the temperance movement tended to flourish in the same places that bred agrarian revolt: Kansas was both the birthplace of Populism and the birthplace of Prohibition. You could say that Prohibition was the original “values” issue, one perfectly calculated to drive a wedge between poor Protestant farmers and poor urban workers, many of whom came from Catholic cultures in which alcohol was a normal, accepted part of life. To be fair, though, both major parties were divided over Prohibition.

Most deadly of all was the division between poor whites and blacks. As a practical matter this was a problem only for Southern populists, since blacks were a tiny minority outside the South before the 1920s. In the South, however, blacks—consisting overwhelmingly of impoverished farmers—were a third of the population. Was it possible for white farmers, who shared many of the same economic interests, to make common cause with those of a different color?

In the long run the answer was no. One of the themes of this book will be the extent to which racial antagonism has had a pervasive and malign effect on American politics, largely to conservative advantage. Yet it’s possible to glimpse another path that could have been taken. In a remarkable 1892 article, “The Negro Question in the South,” Tom Watson of Georgia, leader of the Southern Populists, called for an alliance between the races:

But Watson’s proposed alliance never materialized. When Bryan won the 1896 nomination as the candidate of both the Populist and the Democratic parties, allowing him to run on two party tickets simultaneously, Watson was the vice-presidential nominee only on Bryan’s Populist ticket. For the Democratic ticket Bryan chose as his running mate a conservative Southerner. And any chance for a populist coalition that spanned the racial gap was put on hold for decades. Watson himself became a harsh racist, as well as anti-Catholic and anti-Semitic, in his later years.

The divisions that crippled Populism in the 1890s continued to cripple reformers right through the 1920s. For evidence one need look no further than the presidential elections of 1924 and 1928. In 1924 it took the Democratic convention no less than 103 ballots to settle on a nominee, because of the bitter division between city and country. Al Smith, the Irish Catholic governor of New York, represented the party’s future. At the convention, however, he was opposed by William Gibbs McAdoo, Woodrow Wilson’s son-in-law—a corporate lawyer who had reinvented himself, in a way all too familiar today, as a cultural populist. As Arthur M. Schlesinger, Jr., put it, he “[made] himself over in the image of William Jennings Bryan…. He deferred to the religious passions of the Bible belt. He even adopted a cautious agnosticism toward the Ku Klux Klan.” Indeed the convention rejected—by one vote—a motion to include a denunciation of the Klan in its platform.[9] In the end neither Smith nor McAdoo won the nomination, which went instead to a compromise candidate, John W. Davis of West Virginia. The vice-presidential nomination went to William Jennings Bryan’s younger brother. And the ticket, needless to say, went down to ignominious defeat.

Four years later Al Smith easily won the nomination on the first ballot—but the old antagonisms resurfaced almost immediately. One Tennessee Democrat wrote to McAdoo that Smith planned to appeal “to the aliens, who feel that the older America, the America of Anglo-Saxon stock, is a hateful thing which must be overturned and humiliated; to the northern negroes, who lust for social equality and racial dominance; to the Catholics who have been made to believe that they are entitled to the White House, and to the Jews who likewise are to be instilled with the feeling that this is the time for God’s chosen people to chastise America yesteryear.” During the campaign the Ku Klux Klan stirred up anti-Catholic sentiment—Smith could see crosses burning as his train crossed Oklahoma. In an era when the South was normally solidly Democratic, Smith lost all the border states and five states of the old Confederacy.[10]

In short, during the Long Gilded Age—as in today’s America—cultural and racial divisions among those with shared common economic interests prevented the emergence of an effective political challenge to extreme economic inequality. The difference between then and now was that the divisions of the Long Gilded Age were significantly more extreme than they are today. At the same time there were fewer people, even among political leaders, with the vision to see beyond them. This, in turn, brings us to another feature of the Long Gilded Age: the intellectual dominance of conservative, antigovernment ideology.

The January 7, 1923, edition of the New York Times ran a special article under the banner headline GROWING NATIONAL TAX BURDENS AS MENACE TO NATIONAL WELFARE. The blurb continued, “Rates of Increase in Countries World Over Shown—Federal Taxes Per Capita in United States Six Times as High as Before War—Public Expenditures Big Jump.” The article conceded that most of the spending increase of the previous decade had been the result of World War I, but it warned ominously that “when the roaring of the guns ceased public expenditure still continued on a high scale. The result has been that heavy tax burdens remain an enormous drain on the resources of nations.” Notably, the piece was presented not as opinion but as news; it presented the results of a study by the National Industrial Conference Board on the evils of excessive taxation, with no suggestion that anyone might disagree with the study’s conclusion.

The reality behind the headline, by the way, was a rise in federal spending from 2 percent of GNP before the war to 4.7 percent afterward. Most of this increase was war related: even after the “roaring of the guns ceased,” there was wartime debt to be serviced and veterans’ benefits to be paid. Non-war-related spending had indeed risen, but only from 0.6 percent of GNP before the war to 0.9 percent afterward. And by the late 1920s, after a decade of renewed Republican political dominance, non-war-related spending as a percentage of GNP was back down almost to prewar levels.[11]

Today liberals complain about the success of movement conservatives in turning antigovernment ideology into conventional wisdom. This book will contain a fair amount of that kind of complaining in later chapters. In the Long Gilded Age, however, the tyranny of antigovernment ideology was far worse, and closer to the desired results of today’s conservative propagandists. It was an era in which respectable opinion simply assumed, as a matter of course, that taxation had devastating economic effects, that any effort to mitigate poverty and inequality was highly irresponsible, and that anyone who suggested that unmitigated capitalism was unjust and could be improved was a dangerous radical, contaminated by European ideas.

We shouldn’t ignore the fact that there were a fair number of genuinely dangerous radicals around. In particular there were surely far more communists and anarchists in America during the Long Gilded Age, particularly after the Russian Revolution, than there are today. There weren’t enough to make a revolution, but there were enough to give conservatives yet another stick with which to beat back reform. In 1919, after a bomb exploded in front of the home of A. Mitchell Palmer, the attorney general, the U.S. government began the infamous Palmer raids, arresting thousands suspected of radical activity. Like the paranoia that gripped the nation for a while after 9/11, the Red Scare after World War I had the incidental effect of discrediting or intimidating ordinary liberals, people who believed that capitalism could be made more just without being abolished. And there were few enough of those in any case.

This was a peculiarly American blind spot. As early as 1881 Bismarck described the rationale for what we would now call a welfare state, which he saw as a way to pacify the lower classes and secure the kaiser’s rule. The government, he said, “should cultivate the view also among the propertyless classes of the population, those who are the most numerous and the least educated, that the state is not only an institution of necessity but also one of welfare. By recognizable and direct advantages they must be led to look upon the state not as an agency devised solely for the protection of the better-situated classes of society but also as one serving their needs and interests.”[12] With Bismarck’s Germany leading the way, Europeans had begun to develop New Deal–like policies well before the U.S. political system was prepared to contemplate anything of the sort. In particular, Britain introduced a limited old-age insurance system in 1908 and a health insurance system in 1911.[13] Before World War I, Britain, Germany, and France—which developed its own distinctive early welfare state—were spending more on social programs, as a share of GDP, than the United States would until the late 1930s.

But in the United States the gospel of free enterprise remained dominant, so much so that it was one more factor crippling the Democratic Party. Al Smith’s defeat in 1928 owed a lot to bigotry. But the populists in his party had another big reason to be disillusioned: Smith’s first act after being nominated was, in effect, to declare his fealty to the ruling economic ideology. He chose as his campaign manager John J. Raskob, a Republican industrialist whose only apparent point of agreement with liberals was his opposition to Prohibition, and appointed four more millionaires to top campaign positions. During the campaign Smith actually tried to win business support by portraying Herbert Hoover as someone dangerously inclined to impose government regulations on business. In effect Smith ran as a Bourbon Democrat. Like earlier Bourbons he was financially competitive: The Democrats spent $5.3 million, compared with $6.3 million for the Republicans. But with nothing distinctive to offer, Smith suffered a crushing defeat.[14]

Smith receded further into conservative dogma as the years went by. In his doomed attempt to gain the 1932 Democratic nomination, he was the voice of business, the opponent of change and reform. H. L. Mencken, characteristically, summed it up most pithily: “His association with the rich has apparently wobbled him and changed him. He has become a golf player.”[15]

To a modern observer the political mood in America after the 1928 election, when conservatives seemed everywhere triumphant and liberalism a lost cause, evokes more recent memories: the mood after the 2004 election, when commentators rushed to declare the death of liberalism and the birth of a permanent Republican majority. Actually, the commentators of 1928 seemed to have much greater justification: Herbert Hoover beat Al Smith in the popular vote by 58 to 41 percent. Even New York went for Hoover, although Franklin Delano Roosevelt managed to eke out a paper-thin victory in the gubernatorial race, winning by only 25,000 out of 2.2 million votes. It seemed as if the Long Gilded Age would go on forever.

What changed everything, of course, was the Great Depression, which made the New Deal possible. In retrospect, however, we can see that modest moves toward a more equal society were already under way before the depression struck—not at the federal but at the state level. As early as 1901 Maryland passed a workers’ compensation law, entitling workers injured on the job to payments financed by mandatory employer contributions, only to have it declared unconstitutional. New York’s 1910 law was similarly thrown out by the courts. But between 1911 and 1913 thirteen states managed to create basic workers’ compensation systems. Over the same period a number of states created basic aid programs for widowed mothers and children.

Old-age support followed. In 1923 Montana, Pennsylvania, and Nevada passed old-age-pension laws. In the latter two states the laws were swiftly struck down by the courts. Nonetheless, by 1928 eleven states had some kind of retirement program, that is, some form of precursor to Social Security. And at the end of the decade, as the depression began to be felt, there was a push for unemployment insurance, with Wisconsin creating the first program in 1932. These programs had modest funding and covered few people; nonetheless they did establish the principle of social insurance, and also generated experience on which the New Deal could draw.

What is remarkable, in a way, is how many years of depression it took before the federal government was prepared to take similar action. Herbert Hoover had made his name with postwar relief efforts in Europe, yet he dug in his heels against any major attempt to provide aid at home in the face of national crisis.

Eventually, however, there was both the political will and the leadership for a true liberal program. Where Bryan, whose last major career act was as denouncer of the theory of evolution at the Scopes trial, had been the wrong man to change Gilded Age America, Franklin Delano Roosevelt was very much the right man at the right time. And under his leadership the nature of American society changed vastly for the better.