The Racism of John R. Commons--And What It Says about Columbus Day

Two guys on Facebook , Jeremy Horpedahl of the University of Central Arkansas and Phillip W. Magness of Berry College, sent me material that documents the racism of John R. Commons. Commons was the chief founder of institutional economics in the United States.

Commons can be fairly called the creator or conceptualizer of the current American industrial relations system and the innovator of much of the New Deal.

Hence, if we are to tear down statutes of Columbus, Jefferson, and Lee because they were racists, so should be consider tearing down the New Deal, which also was the product of racists, conceptualized by racists, and put into place by racists.  Commons, for instance, designed the first workmen's compensation law, in Wisconsin, and discussed social insurance reforms and unionization.

Just how racist was John R. Commons? 

In his "Racial Composition of the American People: The Negro" Commons writes of the western coast of Africa:

The torrid heat and the excessive humidity...produce a race indolent, improvident, and contented...Sexual purity is unknown...Formerly cannibalism prevailed, but it has now been largely stamped out by European governments...The people are unstable, indifferent to suffering, and  easily aroused to ferocity by the sight of blood or under great fear...They exhibit in Africa certain qualities  which are associated with their descendants in this country, namely, aversion to silence and solitude, love of rhythm, excitability, and lack of reserve.  All travelers speak of their impulsiveness, strong sexual passion, and lack of will power.

Donald Trump is fairly criticized for calling African countries "crappy," but what are we to make of an American New Deal, social insurance and welfare system designed by people who made similar remarks?

Commons adds:

slavery tended to transform the savage by eliminating those those who were self-willed, ambitious, and possessed of individual initiative...Other races of immigrants, by contact with our institutions, have been civilized--the Negro has been only domesticated...The very qualities of intelligence and manliness which are essential for citizenship in a democracy were systematically expunged from the Negro race through two hundred years of slavery.

Commons goes on to call "the war of emancipation" one of "dogmatism" and "partizanship" [sic] because equality and inalienable rights took the place of education and slow evolution of moral character. 

He adds: "Self-government means intelligence, self-control, and capacity for cooperation.  If these are lacking, the ballot only makes way for the 'boss,' the corruptionist, and the oligarchy under the cloak of democracy."

In discussing how African Americans can be educated in order to be "prepared" for "citizenship" Commons claims that African Americans lack the ability to be trained to use steam cleaners or to paint ceilings.

He says that the majority of African American mechanics are "careless, slovenly, and ill trained." As well, he adds:

the improvidence of the Negro is notorious. His neglect of his horse, his mule, his machinery, his eagerness to spend his earnings on finery, his reckless purchase of watermelons...these and other incidents of improvidence expalin the constant dependence of the Negro upon his employer and his creditot.

When African Americans did become wealthy due to property ownership, Commons attributes this to "unearned increment" rather than intelligent investing.  He adds, "Negro bosses and foremen are more despotic than white bosses." As well, "the Negro trade unionist has not as yet shown the organizing capacity of other races,"  and "when the Negro demands the same wages as white men, his industrial inferiority leads the employer to take white men in his place."

In response to the list of ways that African Americans were supposedly inferior to whites, Commons proposes "an honest educational test" for voting "enforced on both whites and blacks."

In a closing fit of racism, Commons attributes higher death rates among African Americans to moral rather than environmental and social causes.

In New York City, Mayor de Blasio and his left-wing supporters  have proposed to tear down statues of Columbus and Theodore Roosevelt. Why shouldn't the New Deal, a legal system designed by a racist, should be treated the same way?

The Professional Staff Congress and O'Malley v. Karkhanis

Today's New York Sun carries an article about Sue O'Malley's law suit against Sharad Karkhanis. O'Malley had been an elected officer of the Professional Staff Congress, the union that represents CUNY faculty and is a crony of the Barbara Bowen/Steve London group that is up for reelection in a few years.

The Professional Staff Congress, led by Barbara Bowen, who made a speech at the Manhattan Institute a few years ago in which she vehemently insisted that Aristotle was a misogynist, has every reason to aim to silence Karkhanis. Karkhanis's widely read newsletter Patriot Returns has a circulation of 17,000 readers and has exposed incompetence among the PSC leadership. Given O'Malley's insider status, my speculation in the Sun article below that O'Malley is suing to help the PSC stands to reason although admittedly I have no direct evidence.

The PSC denies that it has anything to do with the law suit, much as they avoided disclosing that they had given a donation in honor of now-convicted terrorist Sami al Arian.

Brooklyn College history professor KC Johnson has a blog on History News Network which raises an interesting question:

>"PSC president Barbara Bowen has suggested that “academic freedom” protected Shortell’s assertion (in a non-academic blog) that all religious people were “moral retards.” Will she now similarly apply her flexible definition of the concept, and rebuke O’Malley’s attempt to silence Karkhanis?

If O'Malley is suing Karkhanis to further the PSC leadership's reelection bid, as I claim, then we would expect the PSC leadership to remain hypocritically silent about O'Malley's aim to suppress Karkhanis's speech, even as the PSC leadership apologizes for terrorists like al-Arian.

>NEW YORK SUN

Emeritus Professor at CUNY Is Sued for Defamation, Libel
BY ANNIE KARNI - Staff Reporter of the Sun
October 30, 2007
URL: http://www.nysun.com/article/65483

A former head of the faculty senate at the City University of New York is suing an emeritus professor for $2 million for accusing her of recruiting terrorists to teach at the university and campaigning for administrative positions to avoid teaching classes herself.
Susan O'Malley is accusing professor Sharad Karkhanis of libel and defamation for writing in a widely distributed anti-union newsletter that she was "obsessed" with finding jobs for terrorists at the university. Mr. Karkhanis, a former professor of political science at Kingsborough Community College, wrote that Ms. O'Malley was "recruiting naïve, innocent members of the KCC faculty into her Queda-Camp to infiltrate college and departmental Personnel and Budget Committees in her mission — to recruit terrorists in CUNY."
Mr. Karkhanis made the claim last spring after Ms. O'Malley, a professor of English at the Brooklyn college and an officer of the faculty union, proposed to rehire Mohamed Yousry, an Arabic-language translator convicted of supporting terrorist activities. He was fired from York College.
"Given the opportunity, she will bring in all her indicted, convicted, and freed-on-bail terrorist friends" to the university, Mr. Karkhanis wrote in the newsletter, the Patriot Returns.
Mr. Karkhanis also criticized Ms. O'Malley for defending the right of an adjunct lecturer at John Jay College, Susan Rosenberg, to teach at the school after press reports showed that she was a member of a radical group, the Weather Underground, and had served 16 years in prison for keeping explosives in her apartment. The Patriot Returns is a newsletter that has been distributed since 1992 to about 13,000 faculty, staff, administrators, and trustees at CUNY, and is available online. A lawyer for Ms. O'Malley, Joseph Carasso, said in a letter to Mr. Karkhanis that the statements were made with actual malice and intended to "inflict harm through their falsehood."
Mr. Karkhanis said he viewed the lawsuit, which was filed in state Supreme Court last month, as an attempt to infringe on his freedom of speech. He said he would rather serve time in jail than retract his statements.
The professor defended his use of the phrase "Queda-Camp," saying it was meant as satire, and he said it is his right to criticize a leader at CUNY.
"She's a public figure, and I have a right to say that, based on the evidence I have and the pattern I've seen of this woman," Mr. Karkhanis said. "Why would someone try to assist the terrorist people when you have good Americans who are looking for the job?"
A professor of business and economics at Brooklyn College, Mitchell Langbert, said Mr. Karkhanis was acting within his rights. "Sharad is an extremely influential force," Mr. Langbert said. "The union, an ingrown left-wing group, has every motivation to try to silence him. Getting him embroiled in a lawsuit like this would be advantageous to the union leadership."
A spokeswoman for the Professional Staff Congress, Dorothee Benz, said yesterday that the union had nothing to do with the lawsuit.
Ms. O'Malley, reached at her home in Brooklyn, said she did not want to discuss the case. "It's all very, very silly," she said.
No trial date has been set.

Unions and Money: Labor Unions Are Anti-Worker Because They Are Pro-Inflation

Freeman and Medoff have written a famous book, "What Do Unions Do?" in which they distinguish between the voice and monopoly faces of unions. The voice face gives employees an outlet to express dissatisfaction with management and to let management know what the employees want. The voice face includes collective bargaining, grievance procedures, and the elimination of employment at will (in part through progressive discipline rules that limit employers' right to fire employees). Freeman and Medoff argue that employee voice increases employee tenure with the firm, encourages more capable employees who are better trained and raises labor productivity.

In contrast the monopoly face of unionism is where unions raise wages by restricting employment. To concede higher wages to unions firms must restrict employment levels because of the laws of supply and demand. The higher wages cause firms to substitute capital investment and machinery for labor. In turn, the monopoly face causes a two-tier society in which elite workers working for large firms earn high wages, while "secondary sector" workers earn less.

Freeman and Medoff argue that the voice face is stronger than the monopoly face and that union wage gains of 5-30% are mostly due to employee voice, that is, due to lower turnover, more communication and better training.

However, Freeman and Medoff emphasize another piece of evidence: unionized firms are less profitable than non-union firms, and the difference is in the area of 15%. Since their book was written in the 1980s, firms have been increasingly motivated to move plants overseas to avoid the unions' effects on profits.

It is a specific characteristic of twentieth century American unionism that unions reduce efficiency. In Japan, unions are enterprise unions that are sometimes called "company unions" but not quite the same as the term "company union" would mean here. Enterprise unions contribute to firms' efficiency by providing employee voice but also encouraging more efficient production. In contrast, US unions are steadfastly opposed to helping firms, and are often anti-management. Also, they often insist on antiquated work rules that impede flexibility and innovation. This anti-management mentality is a problem that has hurt unions.

Unions have been co opted by left-wing ideology that holds that workers and management are enemies. Until about 40 years ago, American companies were the most dynamic in the world and American workers were the most successful. The two went together. This does not suggest that there is antagonism between labor and management, but rather that both benefit together.

What changed? CEOs, endowed with a rich cornucopia of stock options, have emphasized stock valuation to a greater degree, and so moved plants overseas. However, the situation is somewhat more complicated. Although I am unique in thinking this, I believe that the problem facing unions is due to monetary policy and the Fed.

In the 19th century unions opposed inflation. The Loco Focos in New York, the Workingmen's Parties of the 1830s, the Jacksonian Democrats all favored sound money and the gold standard. They opposed inflation. Inflation is harmful to workers because workers spend most of their wages. In contrast, inflation is helpful to capital because low interest rates, which are caused by the same thing that causes inflation, increasing money supply, boosts the present value of future earnings, hence the stock market, and makes firms more profitable because they can borrow for less.

That is, the Federal Reserve Bank increases the money supply (and has increased it by 68 times since 1913 when it was founded) and the increases in the money supply cause increases in the stock market that are greater than the increases in prices. Since 1913 the stock market has gone up 218 times while prices have increased 16 times.

In the 19th century, the working class was overwhelmingly opposed to inflation, and had the unions favored inflation they would have failed. What the low inflation environment did, though, was cause American firms to grow rapidly not because of financial gimmickry as they do now, but because of improvements in efficiency and innovation. Firms like Standard Oil made repeated breakthroughs in technology such as oil pipelines and were for their time extraordinarily efficient. American firms consolidated markets in areas like steel and meat as well in order to obtain efficiencies. Although there were labor conflicts, the conflicts were occurring in an environment in which hundreds of thousands of Europeans were immigrating here each year in order to work in those same companies. In other words, we had the best paid employees in the world while the labor supply was continually expanding because of immigration. No other economy in the history of the world had come close to expanding the welfare of the poor as did the American economy under laissez faire capitalism.

In the early 1930s, during a depression brought on by Fed policy, the unions switched their position on inflation. This was done at the same time as the National Labor Relations Act was passed and anti-free market legislation under the New Deal became dominant. The unions' new indifference to inflation was justified in terms of the Keynesian economics prevalent at that time (and today). However, this put the union workers at loggerheads with other workers. Relying on pro-union economists such as Freeman and Medoff, unions saw indexing as a way around inflation.

Economists claimed that inflation did not matter because union wages were indexed, but of course few workers' wages were indexed. Inflation exists to help capital at labor's expense, so there had to be two categories of workers, the unionized and the non-unionized. This was facilitated in part by the exclusion of white collar workers from unions. Since the economy was moving away from manufacturing toward services throughout the 20th century, this largely doomed unions by the millenium. Moreover, white collar workers tend to identify with management, which has generally been anti-union.

The result has been that the unions secured a niche for themselves, but were viewed as antagonistic to the needs of the majority of workers, who opposed inflation just as they did in the 19th century. The workers themselves disliked unions. This tension came to a head during the 1980 presidential election, when the union leadership backed the pro-inflation Democrats but the majority of blue collar workers, including most union workers, backed Ronald Reagan who claimed to oppose inflation. In fact, President Reagan did end the inflation of the 1970s, but then recommenced a new cycle of inflation under Alan Greenspan from which we have yet to emerge (and are only beginning to experience the ill effects).

In this cycle there was a surprise effect, namely, because executives were granted stock options and so motivated to cut costs, many union jobs were driven out of the country. Thus, unions backed the wrong horse. They backed the Fed, Keynesianism and inflation because they thought that they were best protected and would gain at the secondary sector workers' expense. But they did not anticipate that the stock market would become more buoyant (because of low interest rates). When combined with executive stock options, the buoyant stock market made executives more eager to combat unions. In other words, the availability of easy credit caused executives to focus less on innovation and efficiency as they did in the 19th century, and more on low-risk cost cutting by moving plants overseas.

The end result is that the American employee has been in bad shape since the 1980s, and unions have done nothing to help. If anything, unions have been an excellent friend to Wall Street at the expense of the poor during the past 70 years.