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Introduction

Prehistory of an Idea

People Must Live by Work discusses the history of an idea, one that seems completely alien to Americans today: that the government should fight unemployment (especially, but not only, in massive global depressions) by hiring the unemployed directly. The policymakers who invented and elaborated on this idea believed that the government had both a moral mandate and the practical capacity to obliterate unemployment altogether. It could deploy direct job creation measures to fine-tune the unemployment rate and eradicate mass joblessness, even in periods as calamitous as the Great Depression.

The concept was not merely theoretical. For ten years (1933–1943), direct job creation was put into practice on a national scale by the federal government, which became the largest single employer in the country. After World War II (during which millions of Americans worked for the federal government either in uniform or in factories), a furious debate ensued over whether the right to a job should be enshrined in law and whether direct job creation should be used to give it life. Arguments persisted for thirty years, culminating in a clash over a 1978 bill meant to abolish unemployment forever. Thereafter, there was silence, and direct job creation fell out of the national policy conversation for a generation.

Even today, despite one of the longest and slowest economic recoveries in history, calls for austerity and balanced budgets are voiced loudly while direct job creation has been pushed outside of the boundaries of acceptable policy discourse. Why was a manifestly successful concept shunted to the sidelines? That is the central question of People Must Live by Work. I seek to explain how and why direct job creation was created and put into practice; how it came within a hairbreadth of becoming a permanent feature of American social policy; how it survived as a contender in debates over economic policy; and why it has been largely forgotten or discounted today.

To understand how and why direct job creation developed the way it did, I begin with its origins and the impulses and desires that gave rise to the demand for government-provided employment. One might imagine that the preconditions arose with the advent of industrialization, the universalization of a wage labor economy, and the dislocations that the business cycle introduced into economic life. However, demands for relief from unemployment appeared well before the Industrial Revolution—emerging with the enclosure movement, which took hold in sixteenth-century England, pushing millions off the land and into destitution.

In 1536, Thomas Cromwell introduced a draft of a Poor Law into Parliament that would have provided for public works jobs for the unemployed, financed by an income tax on the wealthy.¹ The bill was promptly shredded by Parliament. Instead, English Poor Law moved in the opposite direction, frowning on the very idea of relief for the able-bodied poor. Nevertheless, the idea persisted. In 1660, the Quaker “Appeal to the Parliament Concerning the Poor That There Be No Beggar in England” called for state-operated labor exchanges, and in 1696 John Bollers made one of the first proposals for the establishment of state-sponsored cooperative factories for unemployed workers as an alternative to traditional poor relief.²

In pre-Revolutionary eighteenth-century France, when most of the population were still peasant farmers, the emergence of mono-crop agriculture in the silk- and wine-growing regions of southern France made finding seasonal work a matter of survival for millions during the fallow period of the year. Crop failures frequently produced widespread unemployment; hence, people looked to the state to provide work. To fulfill its responsibilities, and avoid the social consequences that would follow from the mass migration of the unemployed poor, the ancien régime created a network of (underfunded and inadequate) charity workshops. As Alan Forrest and Lisa DiCaprio have shown, the French Revolution radicalized and expanded these traditions into a demand for the universal provision of work to the unemployed. National Workshops were established to arm and clothe the armies of the First Republic, confirming the government’s ability to address structural unemployment and imbuing social justice with patriotic implications. Working-class citizens grew to expect that the droit au travail was theirs, and they demanded that it be written into the constitution of the Second Republic. Despite the political controversy around it, the idea persisted as the cri du coeur of French socialism long after the 1848 Revolution.³

Across the Atlantic, the concept that citizens had a right to a job followed from the growth of industrial labor in late nineteenth-century America, emerging in a very similar form to that in Europe (though about a generation later).⁴ The Panic of 1873, triggered by European financial failures and America’s contractionary monetary policy, saw a wave of bank failures, starting with Jay Cooke’s investment bank. Overbuilt and over-leveraged, the railroad sector collapsed. Unemployment doubled.⁵ In response, a wave of demands for economic redistribution and democratic control of the economy swept the country: a self-appointed Committee of Safety assembled in New York City’s Tompkins Square Park, calling simultaneously for an end to charity and for the creation of a city Labor Relief Bureau that would provide work for the unemployed with $100,000 in city funds ($1.83 billion in 2011 dollars).⁶ During the Depression of 1893, Coxey’s Army, the first national protest march, saw six thousand men travel from Ohio to Washington, DC, to call on the national government to create public works jobs and to pay workers with inflationary paper money (fusing direct job creation with the ideology of the Greenback movement).⁷

Universal male suffrage, which emerged in the late nineteenth century, complicated these social tensions. Unemployed workers had become voters.⁸ This tension was especially strong in the United States, where the expansion of suffrage had begun earlier and gained greater traction. From the time of the early republic, fear of the capacity of the poor to overwhelm the political power of the landed drove the Founding Fathers to restrain the potential populist impulse of the majority. The American system of checks and balances, the development of cross-class political parties, and a laissezfaire ideology cast suspicion on the idea of public works.⁹

However, a competing version of republican ideology stressed the need to secure the independence of the “producing classes” by restoring a “rough equality of means” between citizens. According to this theory, a sovereign people should be masters of their own economic destiny. When millions of Americans lost control over this key aspect of life, many turned to the state to regain a semblance of autonomy. That government should provide work to the unemployed was merely one of the many proposals advanced toward this end. Railroad regulation or nationalization, the construction of public municipal utilities, and the establishment of an eight-hour day and a minimum wage were among the others.

These proposals threatened the very basis of classical liberal economic orthodoxy, as identified by Karl Polanyi. The balanced budget was supposed to act as a bulwark against “class legislation,” the gold standard was supposed to restrain governments from violating taboos against inflation by pegging the monetary supply to a tradable commodity, and free trade (especially in currencies) would punish governments that debased their currency through capital flight and devastating deflation.¹⁰

As with the collapse of the National Workshops in the French Second Republic of 1848, these radical demands for public work were initially met with state violence—with the Tompkins Square Park “riot” broken up by mounted police. Coxey himself was arrested for walking on the grass of the National Mall and his “army” was quickly dispersed.

However, state repression could not quell this agitation. It moved from public protests to the emergence of populist third parties and new bills in state legislatures. As Nancy Cohen notes in Reconstruction of American Liberalism, “as the new social movements of workers and farmers arose, protesting the economic developments of the era … liberals reacted … [and] invented a new liberalism that posited an active role for the state in society and economy, even as it justified constraints on democracy and the ascendancy of corporate capitalism.”¹¹ While Gilded Age liberals worked to thwart populist efforts to regulate corporations, they also feared that the masses “would use the powers of the state to tax wealth out of existence and redistribute it to the poor and the worker.”¹² Municipal reformers not only objected to outright political corruption, but also “complained that urban ‘bosses’ overtaxed property owners, in order to pay for the distributive programs that would keep the working-class voters loyal.”¹³ Thus, along with efforts to restrain the powers of the national government to enforce civil rights and of state governments to regulate the economy, liberals also worked to limit the fiscal powers of the state by returning to the gold standard, reducing the tariff, and “imposing numerous limitations on state legislatures … especially by curtailing the distributive functions of the legislatures … [and] den[ying] municipalities the power to incur debt.”¹⁴

This conservative attitude to redistributive spending automatically rendered any attempt by the government to hire the unemployed an impossible proposition because it required taxation to support. Accordingly, the Panic of 1873, two recessions in the 1880s, and the Panic of 1893 sowed distress throughout the land without much effort by the federal government to prevent unemployment. The arrival of the Progressive movement changed little. Progressives were more willing than Gilded Age liberals to challenge the prerogatives of corporations or embrace regulation, but they shared many of the same prejudices against activist fiscal policy. The new expert-driven model of government was supposed to ensure that governments would be efficient and frugal. Spending would not be dominated by working-class graft. Public works especially would be judged by the businesslike standards of “self-liquidation” (whether projects would generate enough revenue to repay costs), not by human need.¹⁵

The Great Depression of 1929–1933 (and the years of failed attempts to solve it using the tools of liberal political economy) shattered the edifice of orthodoxy. New economic theories and public policies emerged out of the wreckage, designed to remedy the economic collapse. Some nations took advantage of this opening and some did not.

Great Britain, the birthplace of liberal economics, went off the gold standard under a Conservative government after an ostensibly socialist Labour government opted for the balanced budget over the needs of the unemployed. France clung to the gold standard, even after the election of a Popular Front government. The German Social Democratic Party dithered, rejecting the “WTB” Plan for mass public works put forward by three leading trade unionists (Wladimir Woytinsky, Fritz Tarnow, and Fritz Baade; hence the initials). However, the party was unsure whether to cheer the death of capitalism or answer the immediate needs of the working class. Unique among European center Left parties, the Swedish Social Democratic Party rose to power on the back of a call for government job programs.¹⁶

In the United States, despite calls from his own President’s Committee for Employment (PECE) and the President’s Organization on Unemployment Relief (POUR) in the early 1930s, Herbert Hoover absolutely refused to countenance federal public works or relief for the unemployed. He vetoed a series of relief and public works bills put forward by Senator Robert Wagner (D-NY).¹⁷ Even when Hoover was forced to sign into law the Reconstruction Finance Corporation, his insistence that public works be “self-liquidating” meant that only 9 percent out of an appropriation of $1 billion was actually spent during his presidency.¹⁸

Franklin Delano Roosevelt’s victory in 1932 created the perfect opening to break this stalemate: Roosevelt had pledged a “New Deal for the forgotten man,” and he had huge congressional majorities to lean on. In the midst of the economic calamity of the Depression, interest groups on the Left attempted to capitalize on this political moment. Economic planners sought to restructure the American economy. They sought to eliminate the forces of ruinous economic competition, rebalance economic sectors, or foster cooperation between business, labor, government, and consumers, all with the aid of technocratic expertise. Labor economists, especially the members of the Commons School at the University of Wisconsin, pushed to rationalize and humanize the labor market through the use of sanctions, standards, and incentives. Advocates for the abolition of child labor, the provision of public electric power, land conservation, and other causes readied their arguments. On the Left, production-for-use advocates showed a willingness to blur the lines between socialism and capitalism if that meant reducing unemployment and material destitution.¹⁹

Departures from orthodoxy were not unchallenged in the 1930s. Advocates for sound money and balanced budgets still held prominent positions in the executive branch, Congress, and the Democratic Party. Outside the Democratic Party, the true believers in Hoover’s associational approach (where trade associations and other groups of corporations would cooperate to set economic policy with the blessing of the government) struck the alarm over creeping socialism.²⁰ Andrew Mellon proclaimed that deflation should continue so that prices would hit rock-bottom and then recover on their own. These convictions still commanded respect in the national press.

Direct job creation policy emerged out of this chaotic mix, pioneered by a network of radical social workers and (mainly amateur) social scientists clustered in New York City social work circles. Franklin Roosevelt had been one of the few governors to throw himself into the breach of the Depression, founding New York’s Temporary Emergency Relief Administration (TERA). As governor, he tapped the New York social worker Harry Hopkins (then the head of the New York Tuberculosis and Health Association) to lead TERA. Hopkins brought in assistants from outside the field of economics to help organize the new agency. Under his direction, TERA became one of the first modern statewide relief agencies. It was a remarkable and novel effort but was ultimately only able to cover one in ten poor families in New York, because his budget was limited to $20 million while the need was far greater.²¹ Historians of the New Deal looking to understand Roosevelt’s economic policy often focus on the so-called brain trust, a small group of New York City–based economists. But they were not the architects of FDR’s job programs. Hopkins and his TERA colleagues had set the stage for the emergence of direct federal job creation.

Following the 1932 election and the passage of the Emergency Relief Act of 1933, which created the Federal Emergency Relief Administration (FERA) and financed it with $500 million, Hopkins was brought on board to lead the new agency.²² In the FERA halls, the air was filled with unorthodox and dynamic ideas. His first day on the job and still without an office, Hopkins set up a desk in the hallway and, within two hours, wrote out $5 million in relief checks to a long line of governors, mayors, and social welfare officials. By the end of his second day of business, he had hired staff (many of whom were the same assistants who had helped him run TERA), sent out memoranda to forty-eight governors on how to set up state relief agencies, and dispatched emergency aid to seven states that were about to run out of money.²³ Ultimately, FERA would help fifteen million families.

However, as a new model for social welfare, FERA had serious limitations. The Emergency Relief Act mandated that federal funds be matched by state governments at a rate of three dollars of state money for every federal dollar—an ill-conceived attempt to increase state spending on relief. As those states with high concentrations of poverty tended to be among the poorest, the neediest areas were unable to afford the required spending.²⁴ FERA relief came in the form of grant-in-aid—households received food and clothing donations, which kept families together and out of the workhouse, but that prevented them from spending money, which would have stimulated economic recovery. The local administration of relief left plenty of room for discrimination against blacks, other minorities, or members of the wrong political party. Worst of all, even with federal subsidies incentivizing states to improve their ridiculously low benefit levels, each family on relief only received a bare fifty cents per day, hardly enough to lift anyone out of poverty.²⁵ Hopkins objected to every one of these policy provisions, but they were the law of the land.

Most consequentially, FERA failed to provide a solution to the crippling psychological trauma of unemployment. “Relief was going out in great amounts,” Hopkins noted, “but men were going restless…. FERA field reporters sense the psychological impact of four years of depression … a dangerous feeling of hopelessness and dependence—a spreading of listlessness.”²⁶ These social injuries were exacerbated by the dehumanizing rituals of applying for traditional relief. “It is a shameful business from beginning to end,” Hopkins lamented. “Here these citizens are…. [T]hey go to this relief office, timidly, ashamed, pride hurt, to go and ask a person they had never seen in their lives before [for help], and tell him the enormous secrets of their family life and economic conditions.”²⁷

Hopkins directed his FERA staff to begin drawing up a new method for better meeting the needs of the unemployed masses, and the result was the first American experiment in direct job creation, one that would last for ten years, rebuild much of the country’s infrastructure, and employ more than ten million people.

Historical Perspectives

Direct job creation occupies a strange position in historiography. In contrast to social insurance and welfare, direct job creation has not been seen by historians as a major part of twentieth-century reform efforts like the New Deal and the War on Poverty. Direct job creation has not been discussed in most assessments of recovery from the Great Depression, the economic boom of World War II, postwar prosperity from the 1940s through the 1960s, or the economic crisis of the 1970s. Instead, policy historians have tended to subsume direct job creation within larger categories—“employment policy,” “job policy,” “public works”—in a way that obscures the specific ideas that inspired and justified this dramatic market intervention.

Because it languishes in relative obscurity, direct federal job creation is not easily distinguishable from similar policies. Indeed, during the period in question and in historical accounts, “relief works,” “work relief,” “public works,” “work programs,” “public employment,” and “public service employment” are often used interchangeably to describe direct job creation; but at the same time, not all job programs are the same thing. Subsidies to private employers and nonprofits helped to create jobs in the private sector; public works contracts to private contractors stimulated employment in the construction and materials industries; and subsidized jobs for specific groups of disadvantaged workers affected those workers specifically. In these schemes, the government provided funding to enable other economic actors to resolve gaping holes in the labor market. By contrast, direct job creation involves the government itself hiring, managing, and paying unemployed workers in order to directly lower the unemployment rate.

Direct job creation, thus defined, perennially competed with other policy options. Traditional public works (which involve contracts to third parties), job training programs, Keynesian stimulus, and other forms of planning for full employment were the leading alternatives that posed a challenge to the proponents of direct job creation. People Must Live by Work explores the interactions between these policies and accounts for the successes as well as the ideological and pragmatic conflicts that attended the beginnings of direct job creation.

Job Policy and the New Deal: Historical Debates

Given the extraordinary scope and scale of job programs during the New Deal, most works on job policy focus on this period and roughly break down into several categories of historical studies.

THE AMERICAN POLITICAL DEVELOPMENT SCHOOL AND ITS CRITICS

The first important body of literature is the institutionalist study of the New Deal, centered around but not exclusive to the American political development (APD) school of political scientists and policy historians. These scholars point to a variety of mechanisms to account for the evolution of Depression-era employment policy. They give considerable weight to path dependency: the notion that decisions taken earlier in time have ripple effects later on, closing off alternatives. Policy feedback also plays a role because, they argue, public policy generates its own politics, building coalitions to defend or attack programs. Institutional autonomy and design, the view that governments can act independently of politics to shape policy and to deploy veto points, are key to understanding policy development. How do these theoretical tenets of APD impact our understanding of direct job creation?

In a pair of essays on the rise and fall of the Works Progress Administration (WPA), Edwin Amenta, Drew Halfmann, and their collaborators applied the APD model of veto points to explore how the New Deal’s job programs shaped, and were shaped by, emerging congressional coalitions. Machine politicians in the North were resistant to large-scale federal programs because they offered no scope for graft through the letting of contracts. Liberal and laborist congressmen, committed to a progressive ideological agenda, were more enthusiastic because the WPA held so much promise for their central political constituency: the economically threatened working class. Southern Congressmen eager for agricultural subsidies and other federal assistance accepted the New Deal’s job programs initially, but eventually turned against them when these programs threatened the monopoly of Southern whites over control of the Southern labor market.²⁸

Amenta and Halfmann deploy the idea of policy feedback to explain the remarkable endurance of the WPA, the way that a program that distributed desperately needed jobs and public works managed to build a political coalition that kept the WPA lasting longer than other New Deal initiatives. Most important for my purposes, they argue that New Deal job programs created a “jobs and assistance state.” The architects and managers of the WPA and other employment programs believed that they were creating a permanent system that provided an alternative to standard social welfare policies. This stands in sharp contrast to earlier historians of the New Deal, like Arthur Schlesinger Jr. and William Leuchtenburg, who described the WPA as a temporary response to economic catastrophe.

Other prominent APD scholars, especially Margaret Weir and Theda Skocpol, focus instead on institutional autonomy and structure.²⁹ For them, the key story was how the limited and uneven establishment of economic policymaking institutions within the federal government shaped American job policy in a path-dependent process. Due to the weakness of these institutions (as opposed to the vagaries of congressional majorities, as Amenta and Halfmann would argue), job policy never quite made the jump from the New Deal into the postwar world.

Taking a very different track from the APD school, Brian Balogh instead argues that state autonomy was very limited. Federal authority has historically been exercised through joint public/private ventures and collaboration with private professional associations, allowing the government to hide its hand in a country suspicious of public power.³⁰ Balogh’s point is well taken with regards to the nineteenth-century state that he examined in A Government Out of Sight. Yet in his subsequent volume, The Associational State, Balogh overextends the point beyond what the historical record can bear. Critically, Balogh regards job programs almost entirely as a joint public/private enterprise dominated by the public works contracting process. This view overlooks the WPA’s innovative character, in that the program involved the federal government directly in hiring and managing workers, much to the consternation of the contractors’ associations.³¹

Likewise, in sharp contrast to the occasionally Whiggish implications of APD’s reliance on path dependence, Jefferson Cowie believes that the New Deal’s reforms were a temporary aberration in an otherwise dominant trend of conservativism. In The Great Exception, Cowie asserts that the political strength of individualism and antistatism conspired to render New Deal reforms the exception rather than the transformative rule. Americans were simply not inclined to accept as durable this level of government intrusion into the market. Rejecting an activist policy like direct job creation was made all the more likely by the division of potentially progressive voters by cultural conflicts over immigration, religion, and race.

The historical record calls these pessimistic conclusions into question. Major reform movements—like post–Civil War Reconstruction or the Obama administration’s efforts on redistributive stimulus, health care, or financial reform—must all be defined out of the picture in order to cast direct job creation as an extraordinary exception rather than an example of an alternative perspective: reform and retreat.³² A case can be made that there are few “straight lines” in U.S. social policy. Instead, progressive causes advance new models that succeed for a time, get beaten back, and then reemerge again. The contested terrain is never settled.

PROGRAMMATIC HISTORIES

Nancy Rose, Thomas Frank, and Bonnie Fox Schwartz created what are the most comprehensive of what could be called programmatic histories that focus on the careers of individual job programs, and all three examine job programs as emerging from the broader world of poor relief and welfare programs. Their histories closely resemble the original administrative narratives written by Donald Howard, Arthur MacMahon, and Josephine Brown (all of them veterans of the WPA) in the 1940s, who portrayed the WPA as an evolution in relief policies guided by a new generation of social workers. Finally, Chad Allen Goldberg and James J. Lorence have focused on job programs from a social history perspective, focusing especially on how radical activists among the unemployed people’s movement organized themselves within the New Deal job program workforce, contested their status as quasi-workers/quasi-dependents, and developed their own vision of a radical job program.

Thus we can see some of the basic divisions in the literature focus on questions of categorization and approach. Amenta and Halfmann, basing their argument on congressional studies, would object to a description of job programs as part of a public works economic development program in the Jason Scott Smith or Robert D. Leighninger narrative, which flows out of the records of public works planners; again, Amenta and Halfmann believed that New Deal job programs constituted a separate drive for a “jobs and assistance state.” Schwartz and Rose and the administrative historians would point to social workers within the administration as the driving force behind job policy; social historians such as Goldberg and Lorence would argue instead for the agency of job recipients and their outside organizations.

WAR ON POVERTY

While much of the historical literature on job policy focuses on the New Deal (because it was the period in which the United States was most active in this area), there is also an important body of scholarship that focuses on job policy in the 1960s and 1970s. Here the role of job programs in the War on Poverty takes center stage.

Margaret Weir’s Politics and Jobs focuses on how path-dependent decisions made during the 1940s entrenched the institutional power of fiscal Keynesianism, leading to job policy that was restricted to a palliative training model for targeted populations (as opposed to the larger and broader-based programs of the New Deal) and that failed to navigate the choppy waters of racial politics in the 1960s and 1970s. By contrast, Judith Russell’s Economics, Race, and Bureaucracy gives us another take on the failure of job policy within the War on Poverty that focuses more on the internal dynamics of the Johnson administration and explains why the Labor Department lacked the bureaucratic capacity and political strength to claim a central role in the War on Poverty. Frank Stricker’s Why the War on Poverty Failed offers a third explanation, focusing on the importance of academic theories about the causes of poverty as the reason why Johnson’s social policies ultimately failed to grapple with major problems like unemployment, underemployment, and low wages.

Guian McKee’s Liberalism and the Problem of Jobs provides an alternate, contrasting angle. He shows that, in big cities, declining industry led to a powerful call for job creation as the solution to deindustrialization at the local level. At the same time, progressive insistence on the desegregation of public works projects injected the civil rights community into the debate over the prospects for public-sector employment to address at least some part of the racial gap in employment—setting up conflict between construction unions and the civil rights movement.

Standing back from the literature on job policy, one sees a divide between analyses that focus on New Deal job policy in the 1930s and 1940s and accounts that look at debates over job policy in the 1960s and 1970s. They are generally treated as period-bound policy debates rather than an overarching examination of how or whether government should play a role in creating or stabilizing employment. Only Weir’s work spans the two periods and studies how policy ideas were or were not transmitted between them, but Weir’s analysis remains at the level of institutional structure and economic theory, rather than examining the function of specific programs. As a result, less attention has been paid to how continuities in the debate over government “employment activism” emerged across these time periods. The historical record shows us that some policies emerged in the 1930s, only to be dumped for good thereafter, while others enjoyed stability and were incorporated into the fabric of government policy. For example, economic planning and price controls, which emerged in the Great Depression and were reinforced in World War II, were excluded from the realm of possibility thereafter. Policies like Social Security, agricultural supports, and rural electrification were integrated and remain with us today. Direct job creation occupies an odd position in the middle, as a perennial controversy rather than a policy either mainstreamed or permanently dumped.

Periodization makes it harder to achieve a theoretical clarity that reaches across the time boundaries. Conceptual approaches taken by scholars working in one period have not been deployed in the other. Most of the works that look at the 1930s are either programmatic or institutionalist. Arguably, no historian has subjected New Deal job programs to the kind of analytical examination that Weir, Russell, McKee, and Stricker have provided for the intellectual place of job policy during the War on Poverty. At the same time, the major works on the 1960s and 1970s train their attention on both the intellectual debates that animated the inner circle in the War on Poverty as well as the perspectives that dominated broader political and academic communities. Programmatic studies familiar to students of the New Deal have not been undertaken for the later job programs.

People Must Live by Work seeks to reconnect these two literatures by studying the pre- and postwar eras together. Focusing on the role of ideas in the 1930s enables us to appreciate how the policies created by the New Dealers managed to survive the transition to postwar America. In the hands of the youngest policymakers of the Great Depression, who hit their prime in the Kennedy years and engaged with the labor and civil rights movement, we can see a more continuous debate rather than distinctive periods that developed their own vocabularies and legislative agendas.

However, People Must Live by Work also seeks to move the study of direct job creation in new directions. Contrary to the APD school, I argue that the ideas of New Deal administrators are just as important as the coalitions and institutions they created, and that direct job creation policy specifically has to be understood on its own merits, rather than being lumped into a general category of “job policy.” Unlike Smith and Leighninger, I find that New Deal job programs aimed at (and succeeded in) reducing unemployment rates in the short term, and they were more important in serving this purpose than they were in making a case for direct job creation as a long-term economic development strategy. Programmatic historians like Rose, Frank, and Schwartz fail to grasp the common threads that unite the various job creation programs of the New Deal. Finally, while the lived experiences of jobholders are important, the critical details that account for why direct job creation succeeded or failed took place behind closed doors among small groups of policymakers.

A Historiographical Side Note: Why Public Works and Direct Job Creation Are Different

The historical literature on public works, especially during the period of the New Deal, is unusually divided on several key questions: what were the ultimate purposes of federal public works? Relief from unemployment, economic development, or something else? Were public works and direct job creation part of the same political project, or are they distinct?

When it comes to pre–New Deal public works, historiography exhibits greater consensus, especially when it comes to conceptualizing public works as a vehicle for answering questions about the development of the American state. For example, in his influential book Internal Improvement, John Larson focused on public works as a way to complicate our understanding of republicanism and federalism in the early republic. Larson’s work focuses on how struggles over national versus state activism and “different images of ideal future development” found expression in tactical uses of laissez-faire language, but that Federalists, Democratic-Republicans, Democrats, and Whigs all sought to use public works to push their preferred version of economic development when they were in charge of the federal government. As Larson puts it, “The positive use of government power for popular constructive purposes, such as public works of internal improvement, never was proscribed by American republicanism…. [O]ne of the virtues of republican government supposedly lay in its capacity to render safe and liberal the pursuit of human improvement by representative authorities.”³³

Leighninger largely concurs with this narrative, arguing that there were broadly “three historical eras” of public works following the initial attempt by the revolutionary generation to “use … public works to strengthen the nation … aiding commerce and uniting the widely separated colonies” both physically and (through the effort to finance them through federal taxation or deficit spending) politically.³⁴ Notably, there does not seem to be any disagreement that early public works were intended to spur economic development of the young republic or, later in the nineteenth century, “to solve social problems of cities” like public health, water and sanitation needs, education, and housing.³⁵

This consensus runs aground where public works during the New Deal are concerned. Scholars ask whether they should be conceptualized as forms of work relief, with the attendant connotations of charity or poor support, or as a continuation of earlier traditions of national and local improvement through construction. Udo Sautter argues that public works in the 1930s served both purposes simultaneously: “It seems possible to differentiate between public works for relief purposes and work relief,” he wrote, since, “according to one definition, the former term would designate ‘needed public improvements,’ which may have been advanced [in time] to provide employment, but which must have been undertaken in the near future regardless…. [W]ork relief, by contrast, would consist of ‘operations definitively undertaken to provide employment.’”³⁶ However, Sautter argues that this distinction was essentially artificial, because both programs involved hiring workers and producing certain categories of goods (buildings, roads, bridges and tunnels, and so forth), and both tended to concentrate on building projects as an object of federal spending.

Smith offers an amendment to Sautter’s view, arguing that public works and “work relief” were identical, but neither aimed to provide employment. Smith departs from an earlier tradition of economic historians who “generally draw a distinction—unwarranted, in my view, between spending on ‘public works’ done by the PWA and ‘work relief’ performed by the PWA, neglecting the fact that both efforts produced substantial infrastructure throughout the nation.”³⁷ Specifically, Smith “break[s] sharply from previous accounts that dismissed [these programs] simply as temporary efforts that failed to solve the crisis of the Great Depression,” including both consensus historians like Schlesinger and New Left historians like Howard Zinn, Barton Bernstein, and Ronald Radosh, seeing public works and relief programs instead as “important, wide-range investments in national infrastructure” that constituted a “public works revolution.”³⁸ This revolution, in turn, “helped justify the new role of the state, legitimizing—intellectually and physically—what has come to be known as Keynesian management of the economy … and remade the built environment that managed the movement of people, goods,” and much more.³⁹

Leighninger splits the difference, seeing New Deal public works as directed at both unemployment and economic development. In his narrative, “the argument that consumption can revive a sagging economy … got its first test during the New Deal by the Civil Works Administration (CWA)…. [U]nderconsumption theory became a major defense in the continuation of the Works Progress Administration (WPA) and the Public Works Administration [PWA].”⁴⁰ At the same time, he points to the federal government’s deep investment in economic development when it came to transportation, power generation and electrification, and other areas as proof that underconsumption theory was matched by the focus on economic development.⁴¹ Whether these historians see public works in the 1930s as aiming to reduce unemployment or further economic development, public works and direct job creation are seen as part of the same project.⁴²

In my view, this is a mistake: public works and direct job creation were not the same. Treating them as equivalent makes it difficult to explain why the two programs came into conflict, or why conservatives sought to eliminate the last vestiges of direct job creation from the federal government but were perfectly comfortable with Dwight Eisenhower proposing the Interstate Highway System, one of the largest public works programs in history.⁴³

Conflating public works and federal direct job creation also minimizes the disparate origins of the two programs and how the divergent intellectual and ideological outlooks that gave birth to them shaped how their proponents diagnosed the calamity of the Great Depression and remedies for the employment collapse that it precipitated. WPA staffers saw traditional public works as obsolete and myopically focused on fiscal probity over human need, and they saw themselves—proponents of direct job creation—as an enlightened vanguard that would end the Great Depression. PWA experts saw direct job creation as both a waste of public funds and a potential source of corruption that would rake leaves or dig holes and leave nothing of value in its wake.⁴⁴

Finally, as I will show, these intellectual differences had real material consequences for how these projects operated. These programs determined whether skilled and relatively economically secure workers or unskilled workers off the relief lines would be hired; whether public funds would be spent to maximize the delivery of jobs to the unemployed to increase the return on taxpayers’ money; and ultimately how the federal government in general would fight the Great Depression.

Direct Job Creation and the Public’s Memory

Policy historians have created a lively historiography on different periods of state activism, but they have been less successful in shaping the public’s historical memory, especially in the political news media. Over the past thirty years, conservative historians (mainly outside the academy) have put out book after book, a cottage industry in itself, proclaiming that the New Deal failed, that the War on Poverty was lost, that liberalism was responsible for stagflation in the 1970s. Their ultimate message is that the government cannot deal with unemployment (and that state action only makes things worse). Their arguments have been reflected and amplified by conservative talk radio, mainstream newspapers like the Wall Street Journal and the New York Post, and partisan instruments from the Washington Times to Fox News.⁴⁵

These New Deal denialist histories include Amity Shlaes’s Forgotten Man; Burton W. Folsom’s New Deal or Raw Deal?; Jim Powell’s FDR’s Folly; Richard K. Vedder and Lowell Eugene Galloway’s Out of Work; and Gary Dean Best’s Pride, Prejudice, and Politics.⁴⁶ The argument is standard throughout conservative historiography: the New Deal made things worse, by raising deficits and taxes; by instituting the central planning of manufacturing and agricultural goods; by “attacking business” with taxes, regulations, and rhetoric; by encouraging disruptive and radical labor unions; and by committing a panoply of other liberal sins against the free market. Following from Charles Murray’s arguments, they draw a straight line from the interventionist legislation of FDR to the sins of the War on Poverty, which they argue actually intensified poverty by encouraging “welfare dependency” and single motherhood. Likewise, 1970s stagflation is blamed on liberal social spending and greedy unions.

Academic historians have been loath to engage with these narratives, believing that this lends credibility to politically motivated amateurs. This is a mistake. Without a public rebuttal, readers beyond the ivy walls have only heard from the conservatives. Pessimism about the capacity of government to fight unemployment has shaped American economic policy profoundly, especially following the 2010 midterm elections. Historians, especially policy historians, have a responsibility to correct the record, given their original mission “to inform policy makers through a historical approach to public policy.”⁴⁷

Direct job creation, a public policy born to solve mass unemployment, has been erased from public memory and excluded from the realm of possible alternatives in the national political discourse. People Must Live by Work argues that direct job creation was abandoned for reasons entirely other than the efficacy of the policy, reasons grounded in political institutions and environments that are no longer relevant today. At a time when so many in politics or the media argue that “there is no alternative” to laissezfaire economic policy, or that attempts to fight recessions or alleviate unemployment make things worse, I believe the record shows that there is—and long has been—another and better way.

In this way, this book is intended to be more than an academic project; it is a contribution to the restoration of a more accurate public memory. This book was inspired by my experience of reading Schlesinger’s description of the CWA in The Coming of the New Deal while I watched the Democratic primary debates in 2004. As each candidate talked about the need to “create jobs,” “build jobs,” and “grow jobs,” I read Schlesinger’s account of how the U.S. government had created more than four million jobs in fewer than three months, at a time when the most advanced administrative technologies available were the rotary phone and the carbon copy. As a budding policy wonk, I went onto the websites of the various candidates and was disappointed to discover that their plans amounted to little more than small pots of money for small business loans or tax credits to hire additional personnel. The difference in ambition between the past and the present fascinated me, and I began to wonder why no one was talking about the CWA and why students were not taught about it in school.

My hope is that, with this book, we will begin to talk, to teach, to learn, and to remember.