Commentary — November 23, 2011, 11:01 am

The Job Creators Strike Out

Thomas Frank’s December Easy Chair column, “More Government, Please!” focuses on the specter, raised by Republicans, of a capital strike by the nation’s “job creators.” For Harper’s online, Frank writes about the history of this rhetorical bogeyman.

On September 15, House Speaker John Boehner announced that the nation’s “job creators” — a flattering euphemism for “business owners” — were on strike. This was the proximate cause of the nation’s unemployment woes, Boehner maintained. Until those business owners received the low-tax, deregulated world they wanted, they would continue to keep their wallets in their pockets.

Boehner is not the first to imagine a strike by society’s well-to-do, but he is certainly the first conservative political leader to make a formal statement on the matter. In times past, a “capital strike” was a thing to deplore, not something to be announced proudly with the obvious expectation that the world would promptly surrender to capital’s demands. But times have changed.

Herewith, a brief history of the capital strike.

There were two distinct “capital strikes” during the administration of Franklin Roosevelt. The first, which is still referenced on the website of the Securities and Exchange Commission’s historical society, consisted of a decline in new stock and bond issues in the first years of the New Deal.

The second was a more general revolt of business interests, which were supposedly struggling to preserve laissez-faire political conditions by withdrawing investment from the economy in 1937, sabotaging the recovery and the chances of President Roosevelt. Secretary of the Interior Harold Ickes delivered a ferocious iteration of this theme in December of that year, warning that “the United States is to have its first general sit-down strike — not of labor, not of the American people — but of the sixty families [a then-popular term for what we now call “the 1 percent”] and of the capital created by the whole American people of which the sixty families have obtained control.” Should Americans yield to the demands of the walkout, Ickes warned, “then the America that is to be will be a big-business Fascist America—an enslaved America.”

Roosevelt’s future Attorney General, Robert Jackson, hit upon the same theme, denouncing the “capital strike” and deploring monopoly and the concentration of wealth. It was, suggests historian Alan Brinkley, “the bitterest attack on private wealth and corporate power ever to have come from the New Deal.” Reading Jackson’s words today and understanding that they came from the mouth of a high government official is a startling experience:

Our democratic forms of government offer a periodical chance at election time to check and change political administrations. But there is no practical way on earth to regulate the economic oligarchy of autocratic, self-constituted and self-perpetuating groups.

With all their resources of interlocking directors, interlocking bankers and interlocking lawyers, with all their power to hire thousands of employees and service workers throughout the country, with all their power to give or withhold millions of dollars worth of business, with all their power to contribute to campaign funds, they are as dangerous a menace to political as they are to economic freedom.

Perhaps this was the historical episode that inspired Ayn Rand to write Atlas Shrugged, the thousand-page 1957 novel in which politicians badmouth business, and business leaders launch a vast counterattack — a capital strike — that does indeed bring the nation to its knees. As Rand’s entrepreneur-hero John Galt announces in one of the book’s most famous passages: “We are on strike, we, the men of the mind. We are on strike against self-immolation. We are on strike against the creed of unearned rewards and unrewarded duties. We are on strike against the dogma that the pursuit of one’s happiness is evil. We are on strike against the doctrine that life is guilt.”

Historians, for their part, have generally regarded the Roosevelt Administration’s talk of a “capital strike” as either a gross exaggeration or a conspiracy theory. David Kennedy, in his landmark 1999 book, Freedom From Fear, says the theory had “little basis in fact.” According to Brinkley’s Liberalism and Its Discontents (1998), Roosevelt himself once asked the FBI to investigate a conspiracy of business leaders on evidence Brinkley calls “extraordinarily frail: an unsubstantiated letter from a hotel waiter in Chicago who reported overhearing a conversation among railroad executives.” Conrad Black, no mainstream historian, seems to represent the consensus in describing “capital strike” talk as a “conspiracy theory” in his 2005 biography of Roosevelt.

Now, let us historicize the historians. When those books were written, the idea of a “capital strike” was something you denied, something everyone knew could not really be taking place. Markets didn’t work that way: economic power was (and always will be) too diffused and decentralized for such a concerted effort. But let us get a few years into the Big Recession and see how the consensus changes. Here is columnist Amity Shlaes, telling us in 2009 that a capital strike really did happen back in 1937, and that capital strikes will happen again whenever governments treat banks too badly, tax too assertively, or spend too liberally: “Today, too, capital ponders going on strike,” she writes. “And without big policy changes the economy will face similar consequences.”In a twist I don’t really understand, Shlaes also claims that business is disgruntled because it wants the Glass-Steagall Act back.

Great Depression historian Robert McElvaine is just as perplexed by this line of thinking as me.

Then again, perhaps Shlaes is right. After all, we live in a time when political blackmail works: The bank bailouts and bonuses of 2008 and 2009 were done on an emergency basis, lest the geniuses of Wall Street shrug off their burden and abandon us to Great Depression II. The Republican strategy during last summer’s debt-ceiling fight was simply to point a gun at the global economy’s head. And now, in 2011, the Speaker of the House tells us not only that capital strikes happen, but that the capital strike is happening now. John Galt lives, reader, and your task is to bow down and hail the Big Business America Harold Ickes feared — or be dropped forthwith into the poverty and darkness you no doubt deserve.

Share
Single Page
undefined

More from Thomas Frank:

From the April 2016 issue

Nor a Lender Be

Hillary Clinton, liberal virtue, and the cult of the microloan

Online Exclusive February 19, 2016, 11:06 am

Nor a Lender Be

Hillary Clinton, liberal virtue, and the cult of the microloan

Get access to 165 years of
Harper’s for only $45.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

August 2016

The Origins of Speech

= Subscribers only.
Sign in here.
Subscribe here.

Four in Verse

= Subscribers only.
Sign in here.
Subscribe here.

A Sigh and a Salute

= Subscribers only.
Sign in here.
Subscribe here.

Four in Prose

= Subscribers only.
Sign in here.
Subscribe here.

Don the Realtor

= Subscribers only.
Sign in here.
Subscribe here.

Atlas Aggregated

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
Martin Amis on the rise of Trump, Tom Wolfe on the origins of speech, Art Spiegelman on Si Lewen, fiction by Diane Williams, and more

In Havana, the past year has been marked by a parade of bold-faced names from the north — John Kerry reopening the United States Embassy; Andrew Cuomo bringing a delegation of American business leaders; celebrities ranging from Joe Torre, traveling on behalf of Major League Baseball to oversee an exhibition game between the Tampa Bay Rays and the Cuban national team, to Jimmy Buffett, said to be considering opening one of his Margaritaville restaurants there. All this culminated with a three-day trip in March by Barack Obama, the first American president to visit Cuba since Calvin Coolidge in 1928. But to those who know the city well, perhaps nothing said as much about the transformation of political relations between the United States and Cuba that began in December 2014 as a concert in the Tribuna Antiimperialista.

Illustration by Darrel Rees
Article
Don the Realtor·

= Subscribers only.
Sign in here.
Subscribe here.

"If you have ever wondered what it’s like, being a young and avaricious teetotal German-American philistine on the make in Manhattan, then your curiosity will be quenched by The Art of the Deal."
Photograph (detail) © Polly Borland/Exclusive by Getty Images
Article
The Origins of Speech·

= Subscribers only.
Sign in here.
Subscribe here.

"To Chomsky...every child’s language organ could use the 'deep structure,' 'universal grammar,' and 'language acquisition device' he was born with to express what he had to say, no matter whether it came out of his mouth in English or Urdu or Nagamese."
Illustration (detail) by Darrel Rees. Source photograph © Miroslav Dakov/Alamy Live News
Article
A Sigh and a Salute·

= Subscribers only.
Sign in here.
Subscribe here.

"Si told me that various paintings had spoken to him, but he wished they had been hung closer together 'so they could talk to each other.' This observation planted a seed that would come to fruition years later in his mature work."
Artwork (detail) by Si Lewen
Article
El Bloqueo·

= Subscribers only.
Sign in here.
Subscribe here.

"Amid the festivities and the flood of celebrities, it would be easy for Americans to miss that the central plank of the long-standing cold war against Cuba — the economic embargo — remains very much alive and well."
Photograph (detail) by Rose Marie Cromwell

Amount traders on the Philadelphia Stock Exchange can be fined for fighting, per punch:

$1,000

Philadelphian teenagers who want to lose weight also tend to drink too much soda, whereas Bostonian teenagers who drink too much soda are likelier to carry guns.

Nuremberg’s Neues Museum filed a criminal complaint against a 91-year-old woman who completed a crossword puzzle that was in fact a $116,000 piece of avant-garde Danish art.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Mississippi Drift

By

Matt was happy enough to sustain himself on the detritus of a world he saw as careening toward self-destruction, and equally happy to scam a government he despised. 'I’m glad everyone’s so wasteful,' he told me. 'It supports my lifestyle.'

Subscribe Today