Brian Lehrer: It's the Brian Lehrer Show on WNYC. Good morning again, everyone. Now we continue our WNYC centennial series, 100 years of 100 things. On Monday, Labor Day, we did thing number 17. 100 years of unionization and de-unionization. Today, as we're still in Labor Day week, it's thing number 18, 100 years of employment and unemployment. The most recent us unemployment stat from July was around 4%. That's historically very low, but politically it's not the stat voters are most focused on right now compared with inflation and the general cost of living. The Federal Reserve Board has actually been trying to push unemployment rates a little higher the last few years as a way to bring inflation down and unemployment varies widely by race and ethnicity. In New York state in the second quarter of this year, according to the Economic Policy Institute, the white unemployment rate was around 3%, Asian Americans 2%, Latinos 6%, and Black New Yorkers more than 7%.

Those ratios, especially Black unemployment, around double the rate of white, are pretty consistent over time. 100 years ago in 1924, according to a chart from the National Bureau of Economic Research, civilian unemployment was around 5.5%. Even though it was the roaring '20s, the economy and unemployment were bouncing around quite a bit. 12% unemployment in 1921, just 3% in '23, and back up to 5% 100 years ago today in 1924.

Two years later, 1926, unemployment was way down below 2% but in the very next decade, as I'm sure you know, the 1930s, the Great Depression saw unemployment at more than 20% four years in a row. We've never seen anything like that since. Even in the pandemic year of 2020 when the nation shut down most of the economy on purpose, unemployment peaked at around 15% and very briefly, according to a year-by-year chart on Investopedia.

Unemployment is one of the most important factors in the economy, if not the most defining factor at every moment. It's certainly one of the most reported on every month in the media, and it has varied a lot over the last century. For this 100 Years of 100 Things segment, we'll look at the ups and downs of unemployment in the US and to some degree globally, which is also a fascinating story, and what kinds of events or government policies affect it.

We have a great guest for this. Economic historian Bradford DeLong, Professor of Economics at the University of California, Berkeley. He was a Deputy Assistant Secretary of the US Treasury during the Clinton Administration. He writes a widely read economics blog now, too, at braddelong.substack.com, and last year, as if anticipating our 100-year series, he released the book called Slouching Towards Utopia: An Economic History of the 20th Century.

Professor DeLong, it's great to have you on our 100 years of 100 Things series. Welcome to WNYC.

Professor Bradford DeLong: Thank you very much. It's very fun to be here, albeit only virtually from 3000 miles away.

Brian Lehrer: Indeed. Well, let's start with a little pre-100-year history from your book and your overall thesis that's starting in around 1870. Industrialization began to pull humanity out of the dire poverty that had been its lot for 10,000 years. That's a big claim. Can you give us a short version of how the world changed around 1870?

Professor Bradford DeLong: Well, let me start with English social science polymath John Stuart Mill's declaration in 1873 that all the mechanical inventions hitherto made have but enabled a larger population to live the same life of drudgery and imprisonment that the bulk of humanity had been living in. Well, since the discovery of agriculture, if not before. Very large numbers of peasants and craftsmen living very close to subsistence.

The typical woman having seven and a half, say eight pregnancies and six and a half live births, of which only three and a half children survived to five, and then others die along the way, leaving only a little more than two to reproduce. Populations that grew very, very slowly because people, the bulk of the population, except for a parasitic and domineering upper class, well, they were sufficiently poor and malnourished that your average child's immune system was compromised so they could be taken down by a common cold.

A lot of women were so skinny that ovulation was essentially hit or miss. The reason was, well, that back in those days, infant and child mortality was so high that even with 7.5 average pregnancies per woman, there was one chance in three that a woman who survived too late middle age would find she had no surviving sons. In a highly patriarchal society, to have no surviving sons means that you are potentially in an awful lot of kinds of trouble.

Brian Lehrer: But then something changed.

Professor Bradford DeLong: Up until 1870, technology was growing so slowly and pressures to have more children to provide some insurance against being left all by yourself in your old age, they meant that whenever there was an invention, population grew. And so benefits of technology were offset by increasing resource scarcity. In 1870, all that blew up. In 1870, technological change for the first time ever became fast enough that living standards began to rise rapidly all over the globe.

As living standards rose, infant mortality fell and people looked around and saying, wait a minute, we don't need to try to have 7.5 children in order to-- or seven or eight children in order to lower the chances that the woman will be left without a surviving son below one-third, we can have a less stressful attitude toward childbearing and fertility. We went through the demographic transition. We're now down to something like 1.8 children per potential mother and with that resource scarcity, relative technology became a much, much smaller thing.

And so now we have a society worldwide that is extraordinarily rich compared to all previous human societies, albeit extraordinarily unequal as well.

Brian Lehrer: You have an extraordinary stat about the percentage of humanity that lived in what's considered dire poverty, under $2 a day by today's dollars. I think the stat is at that time compared to now.

Professor Bradford DeLong: Now we only have maybe 1/16th of a world's population living at a-- call it a pre-industrial standard of living. The standard of living that 75% or more of the human population lived in in 1500 or before. A bottom 400 million now are the only people whose living standards are no greater than the average back then but even they have access to an extraordinary array of public health measures.

Life expectancy back in the bad old days was only about 25. Well, even in the poorest parts of the world today, it's greater than 60.

Brian Lehrer: Where did the US fit into that global picture and that change that took place around 1870? Were we already very well off by global standards?

Professor Bradford DeLong: Well, the US was already very well off by global standards. First, because we brought all of the first generation of the Industrial Revolution technologies from Britain over. Across the Atlantic Ocean over to the United States. Second, the combination of plagues, dispossessions, genocides, et cetera, that pushed their then occupying Amerindian population off the good land and into reservations, left a country that had an extraordinary amount of natural resources per capita for the world as a whole.

Eurasia and even Africa were pretty much filled up, given the technology over the time. The United States was a place in 1870 where the working class standard of living was at least twice what it was in even the relatively rich parts of old Europe. After 1870, the United States took off. It was no longer-- it continued to be the agricultural leader and the working class living standard leader, but it also became the manufacturing and the technology leader from, say, by 1890 to today, a lead in technology and that it still maintains and a lead in manufacturing that we've lost only in the past 10 years or so.

Brian Lehrer: 100 years ago, in 1924, the unemployment rate was around 5%. I mentioned the volatility of the unemployment rate in the 1920s, the so-called roaring '20s before the Great Depression. What was happening to make it so variable during that decade?

Professor Bradford DeLong: Well, it was roaring first because the Federal Reserve which had been founded in 1913 and was still trying to figure out what it was doing because the Federal Reserve had faced the inflation of World War I and decided it had to stop it. Milton Friedman's judgment, and I think we should defer to him and his co-author Anna J. Schwartz on this because they're the people who've looked at it most closely, his judgment was the Federal Reserve moved late and then raised interest rates much too much.

And so as a result, the unemployment rate spiked up to 12% in 1921, as you said. And it was then, the subsequent fall from 12% that did a good deal in giving the decade its wonderful reputation as the roaring '20s. That people in the later 1920s looked back, they looked back at that year of high unemployment when it was next to impossible to get a job. If you lost yours and you did not dare cross your boss or else you'd be fired.

Plus they looked back at the great plague that was the not really Spanish influenza and compared to that, things looked really, really good throughout all the rest of the 1920s. Florida hurricanes and Mississippi river floods as relatively small, disturbing things.

Brian Lehrer: I mentioned in the intro, the racial disparities of today around 2:1 Black to White unemployment these days in New York as one stat. Do you know it roughly for the 1920s, and for that matter, the thirties before the modern civil rights laws.

Professor Bradford DeLong: Hard to say what statistic you really want because the African American population was still largely in agriculture, and in agriculture, you don't have unemployment, you have idle time. There's always something to do on the farm or on your plot. It just may not be very productive and may not produce much in the way of crops or money. Unemployment is really an urban thing.

The 1920s were the very start of the Black migration from the rural south to the urban north but when people got here, the urban north, and when they do show up in the non-farm labor force, the 2:1 ratio looks about the same then as it was now. That the ratio of Black to White unemployment is a little bit lower now than it was standardly in the 1950s, 1940s and 1920s.

The 1930s are different because unemployment as a whole is so high that when the white unemployment rate is 25% the Black non-farm unemployment rate is not going to be 50%, but not much progress in reduced racial disparities in unemployment across the past century.

Brian Lehrer: Such a national failure that deserves to be noted as that. Much of your book is about attempts by the federal government to improve the economic lot of most people, some attempts more successful than others. Can you explain your title in that context? Slouching toward Utopia.

Professor Bradford DeLong: Well, it started out, I needed a working title and I do cast-- you and need a working title. You need to steal something quickly. When you steal, you want to steal from the best and the best in this case is William Butler Yeats with his post World War I poem, The Second Coming, at the end of which some unknown rough beast slouches toward Bethlehem to be born.

Joan Didion picked up the Slouching Toward Bethlehem, used it as the title of her book of essays on the counterculture society she was watching in San Francisco in California at the end of the 1960s. I thought that the right word to add at the end was not Bethlehem, was not a place of revelation and divine intervention, but instead, the right thing to think of was a utopia.

A place where there is enough for everyone so that no one spends a lot of their time thinking about how hungry they are or how cold they are and how wet they are, and in which the enough is distributed equitably enough and used properly so that we all feel safe, secure, are healthy and happy, and live wisely and well. And certainly compare the world of today any much more so compare the United States of today to the United States back in 1870, and we are a lot closer to that potential goal.

We haven't sprinted, we haven't run, we haven't even walked. At most, we have slouched in some shambling way toward that goal over the past century, and we still wonder whether we know what that goal is or if indeed we are heading towards it.

Brian Lehrer: Listeners, a few of your oral histories are welcome. Oral histories of employment and unemployment in your family over the last 100 years, or your questions or comments for economic historian Brad DeLong in our 100 years of 100 things series, thing number 18 for this Labor Day week 100 years of employment and unemployment, 212-433-WNYC. 433-9692 and around his books, Slouching Toward Utopia: An Economic History of the 20th Century.

Utopia is an interesting word when we talk about the economy because it suggests, among many other things, the conflicts between capitalism and socialism. Capitalists tend to say there's no such thing as economic utopia, and that the socialist attempts to aim for it by legislating equal outcomes. We're always doomed to failure and to inadvertently, even if well intended, making things worse.

I realize there's a big difference between, say, soviet communism and the European social democracies, which are very successful but how do you address it in the book, and again, in the context of the word utopia in your title, looking at these last 100 years.

Professor Bradford DeLong: The idea of utopia--

Brian Lehrer: Well, within the context of socialism and capitalism, yes.

Professor Bradford DeLong: The big question is, what exactly do you mean by socialism? If you go back to the founders of socialism, someone like, say, Karl Marx's co-author Friedrich Engels would've said that we used to have a feudal society in which it was obvious that you were born into a particular slot in a very hierarchical society. You were doing what your parents had done, almost surely, and there were those who fought, those who prayed, those who worked, and a few anomalous merchants wandering around.

Depending on whether you were born as one who fought, one who prayed, or one who worked well, you then either had to act like a chivalrous knight, like a pious monk or a priest, or like a working peasant who understood that they owed a third of their crop to the people higher up and that was just the way things work. You then shift to an open, more commercial society with the coming of commerce and the rise of international trade and so forth.

All of a sudden you're not slotted into a particular place, but rather you have your own resources, you have to acquire your skills, and then you have to find people to buy and sell from and work with in order to find your place in a society with a more open economy. All of a sudden, people begin worrying about property and contract and their natural rights to not be thrown in jail arbitrarily by the local bully boy who calls himself a knight.

You have people who say everyone has a right to life, liberty, and the pursuit of happiness, and to live a life making whatever contracts that they like or that they find good. And of those, the biggest is the social contract, the government itself. Hence, you get the idea that governments derive their just powers not because God has set things up this way, but from the consent of the governed.

Friedrich Engels thought we were moving on from commercial society to a new stage. We'd invented all these wonderful things. We had these steam engines, we had great factories. And Engels thought it was obvious that if you looked around, you would say, wait a minute. We are an incredibly productive society, but we are an incredibly productive society because humanity as a group, as an anthology, intelligence has created this enormously productive set of technological principles and ideas about how to manipulate nature and organize ourselves.

Each one of us has a place in that division of labor we set up to use our technology, but no one of us is particularly special. Lots of other people could fill the place we are and are filling it pretty well, so we should recognize that we are all people together, that together we have this enormous inheritance, which is a magnificent technology that has potential to make us all rich but because no one is special, well, then what we should do is we should recognize that it's not that we each have rights and property, and as a result, get things for ourselves.

Instead, it's that we're all working together. Engels thought it would become very obvious that we should all call each other comrade, share everything equally, work happily and productively, rotate through the administrative jobs because they involve very boring activities, like adding up large columns of numbers over again and issuing receipts, and create a free socialist society of associated producers.

Engels thought, writing in the 1870s and 1880s, that it would be so obvious that an equal distribution of wealth, in which decisions about the economy and society would be made democratically from the grassroots up, was such an obvious way to organize humanity that it would come and it would come quickly, and it would come largely peacefully, except for an occasional attempt to stand against history with war, like the southern slaveholders thought to preserve their slaves in the American Civil War.

Now, of course, Engels was completely and totally wrong as to the future of history and all of the socialists and people calling themselves socialists since, have been trying somehow to recapture that vision of equality and prosperity, taught by the fact that we have this technology that is our common creation but none of us have managed to get very-- none of them have managed to get very close to that at all.

I would say the closest we got was indeed the social democratic thing, the New Deal order, the system that grew up under Franklin Delano Roosevelt in the United States in the 1930s, and that US victory in world War II then transferred to much of the rest of the world. The thing that historian Gary Gersel calls the New Deal order and that dominated the US at least from the 1930s on up to the end of the 1970s.

Brian Lehrer: Let me jump in on that, because looking at the 100 year history, unemployment peaked in the United States at more than 20% for four years in a row in the Great Depression, it seems like it was lowest during World War II, under 2%. We've never gotten that high again, 20%. We've never gotten that low again. Did the FDR policies even out unemployment rates in a permanent way?

I mean, they've basically never gone above 10% again, except in 2020 when we did it on purpose. How do you see the range of unemployment stats in the last 100 years in the context of permanent change that FDR might have wrought?

Professor Bradford DeLong: Well, the first thing is that the mere shock of the Great Depression made everyone think, we are not going to do that again. We are not going to let that happen again. That the ideas of, say, Coolidge and Hoover's Treasury Secretary Andrew Mellon, which was that when unemployment starts to rise, you should simply let it rip because yes, it's very painful, but high unemployment means that unproductive businesses are shutting down and managers and financiers who've made bad bets are losing their money and losing their place.

Let the unemployment rate rise as high as the market wants it to, then it will be obvious that there are so many opportunities for new enterprises and for new businesses that the economy will quickly reconfigure itself into a much more productive configuration but the period of high unemployment is a necessary thing in order to get the system back into order again like a three-day fast to clear out, to clear out the bad chemicals in your blood.

A cold douche that the economy needs was what economist Joseph Schumpeter liked to call it.

Brian Lehrer: He said that?

Professor Bradford DeLong: After the Great Depression, everyone thought that was totally wrong and that the government had an obligation to, as Federal Reserve chairman Jay Powell said in his Jackson Hole conference speech a couple of weeks ago, as an obligation to not just preserve price stability, but also preserve maximum employment in the economy as a whole.

Brian Lehrer: As we run out of time, looking at the next 100 years as we like to end these segments, if industrialization beginning around 1870 led to a massive reduction in poverty and created lots of jobs, as you discuss in your book, what will the post-industrial world, if that's the right way to characterize today, plus AI, will it take us back in the wrong direction compared to the last 100, 150 years?

Professor Bradford DeLong: Well, there's no fundamental reason why it should take us in the wrong direction. If you really want to worry, you can say that over the past 150 years, the extraordinary advance of technology has been accompanied by Schumpeterian creative destruction, that every single generation, a large group of workers find themselves in the technological bullseye because other people elsewhere, using new technologies, have figured out what they do and how to do what they do much more efficiently, much more easily, much more cost-effectively.

Starting with the stocking manufacturers of England in the late 1700s, a large group have found that the market economy is telling them, you don't really have a job, or if you do have a job, it's at only half the wage that you think you deserved and you've grown up to expect. Every generation, societies that manage have managed to figure out a way to take the technological dividend from more rapid economic growth and properly distribute it in order to assuage discontent, fund retraining, help the economy reorient themselves in a way that people can say, well, maybe I'm not doing so well with deindustrialization, but at least the future of my children [crosstalk].

Brian Lehrer: As a quick follow-up, and we just have a minute left in the segment, we'll be doing another episode of 100 Years of 100 Things. As this is on employment and unemployment, we'll be doing one explicitly on equality and inequality, which is partly to say that employment and unemployment isn't the only relevant measure. Masses of people can have jobs, but if they're at slave wages--

Professor Bradford DeLong: They're not happy.

Brian Lehrer: They're not happy and shouldn't be.

Professor Bradford DeLong: And it's not just slave wages, it's wages that are a lot less than they think they deserve. So far, societies that do not manage to walk that tightrope wind up falling into dictatorship, chaos and war, into fascism, or into revolutionary autocratic communism. The big danger for us for the next 50 years is that dealing with the costs of global warming is going to consume much of the technological dividend we would otherwise expect from invention and innovation.

The standard playbook of take the technological dividend of wealth and figure out a way to redistribute it and transfer it is going to be much harder to do over the next 50 years than it's been over the past 150, and it has not been a cakewalk over the past 150 years.

Brian Lehrer: Economic historian Bradford DeLong. Professor of economics at the University of California at Berkeley, former Deputy Assistant Secretary of the Treasury, author of the book that came out last year, Slouching Towards Utopia: An Economic History of the 20th Century. Today's guest in our series, 100 Years of 100 Things. This was thing number 18, 100 years of employment and unemployment. Thank you. Fascinating conversation. Thank you very much.

Professor Bradford DeLong: You are very, very welcome.

Copyright © 2024 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.