LITMIR.BIZ

      Americans concerned about poverty and inequality frequently point to the early twentieth century as a time when new forms of social legislation managed to curb corporate power. But the relationship between business interests and the development of public social policy in that era was far too complex to be captured so neatly. Businessmen of various stripes actually supported the implementation and expansion of a wide range of public social programs throughout the period. In fact, between the end of World War I and the onset of the Great Depression, commercial and industrial elites helped drive social spending in American cities to unprecedented heights.

      With a few important exceptions, business interests in the early twentieth century tended to resist the rise of what we now call the social welfare state—an economic safety net woven from programs like unemployment compensation and public pensions for the elderly whose initial consolidation is perhaps most often associated with the 1930s and the New Deal. Yet to varying degrees in the early twentieth century and with particular fervor in the 1920s, business leaders in urban America championed a very different brand of social policy. Rather than state or national programs, they tended to favor local ones. Opposed to most forms of social insurance, they embraced public schooling, the promotion of public health, and the construction of decentralized cities featuring parks, playgrounds, libraries, museums, and single-family homes. Often through a windfall of public spending, these businessmen hoped to remake American cities and in many cases the citizens who inhabited them. Disdainful of most attempts to reduce poverty and economic insecurity through government action, they turned to government-sponsored social policy for altogether different reasons: to foster social and political stability as well as economic growth. Largely resistant to a social welfare state, they sought to build what might be called a civic welfare state, a network of programs that in the minds of elite businessmen promised to further both the goals of urban reform and urban boosterism, to prepare citizens for work and democracy while helping to lure new firms to their hometowns.

      Commercial and industrial elites were far from the only political activists in the early twentieth century who supported such programs. But by the end of World War I, urban business leaders had become exceptionally adept at promoting the public social policies that they favored. Prodded in part by these businessmen’s political activism, urban budgets skyrocketed in the 1920s. In some cities spending grew by 50 percent adjusted for inflation; elsewhere budgets doubled or even tripled. Across urban America expenditures rose at rates that far outpaced population growth and in many cases spending before the war. The 1920s were hardly a moment of government retrenchment or a time when government growth

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