Meg Jacobs. Pocketbook Politics: Economic Citizenship in Twentieth-Century America. Princeton University Press, 2007.

Like Glickman, Meg Jacobs puts purchasing powder at the center of her reinterpretation of American politics from World War I in the 1960s. She argues that fears about inflation and wages were at the heart of liberalism’s brief success in unifying disparate social groups (from middle-class consumers to unionized laborers) in the struggle for fair distribution of the fruits of productivity. The issue of prices and purchasing power (high wages and low prices) – not the rights of minorities and expanding government services which is the more dominating conception – has underscored her definition of American liberalism.


She begins with the story of Edward Filene’s bargain basement stores in Boston from 1908 which challenged the middle name, the brand-name manufacturer, and the corner store by creating the popular expectation of cheap goods by moving massive volumes of low-priced items. Inflation led both to demands by a coalition comprised by the American Federation of Labor, the General Federation of Women’s Clubs, the National Consumer’s League, and the International Ladies garment Workers Union for a ‘living wage’ and to consumer protests against the high price of beef and the escalating prices of other basic goods. This inter-class coalition, as Glickman writes about as well, underscores her history of “pocketbook politics.” Housewives organized rent strikes and boycotted butchers when the price of meat skyrocketed, white-collar workers supported striking workers’ demands for lower prices, and labor organizers and middle-class consumer activists exhorted middle-class women to patronize stores that treated employees well and sold only union-made goods.


Grassroots activism merged with state action to create a formidable consumer movement. World War I-era organizations such as Herbert Hoover’s (!) Food Administration and the National War Labor Board struggled to protect purchasing power by lowering food prices and raising higher wages. And although these wartime efforts were not necessarily successful, they set in motion a new politics predicated on the problem of working-class purchasing power.


In the 1920s small businessmen and manufacturers argued that the biggest threat to the economy lay in unionization and government restrictions on business, the “purchasing power” economists of Liberal reformers like Stuart Chase argued that the real danger lay in trusting business to determine prices and wages. The relative prosperity and conservatism of the 1920s contained the regulation of business, but the Great Depression brought about a pervasion pocketbook politics, most notably championed by Leon Henderon’s brainchilds, the National Recovery Administration (NRA), the Consumer Advisory Board, and the Wagner Act. The NRA held down consumer prices while the Consumer Advisory Board mobilized the general public through national price lists, volunteer watch dogs, and consumer offices to keep the pressure on business to maintain lower prices and thwart underconsumption as Andrew Michael Schanken has shown.


While the NRA and CAB worked for price controls, the Wagner Act maintained wages by guarantying the right to unionize and empowering labor to maintain and wages and ensure that workers maintained their power to consume. This interpretation differs from standard understandings of the Wagner Act which see it as a government effort to give shop floor control to laborers or as a play for labor votes.


However, using a strategy that would eventually succeed in the immediate postwar period, the Liberty League blamed rising consumer prices on labor’s desire for higher wages and attempted to drive a wedge between the alliance of middle-class consumers. And American businessmen looked to creative new marketing techniques, rather than raising wages or lowering prices, to ensure consumer demand. In response, New Deal leaders counterattacked with the Fair Labor Standards Act which maintained purchasing power through the 1930s while the Office of Price Administration continued New Deal administration through WWII.


However, business interests defeated the OPA by 1946 as corporate leaders blamed labor’s guaranteed wage hikes for rising prices. In the 1950s, this strategy succeeded and middle-class consumers grew wary of labor unions and the purchasing power coalition split, as Lisa McGirr notes. Keynsian economic consensus, while spurring growth in the 1930s, validated the notion that economic trends needed to be measured in aggregates rather than in the experiences of the individuals. By this logic, larger economic actors were more important to the state of the economy than the smaller ones and so consumers learned to blame inflation on workers’ demands for better pay rather than rising business profits, which Keynesian thinkers maintained were a blessing for aggregate economic performance. At the same time, David Riesman, Vance Packard, and many other sin the 1950s began to critique commercialism, mass culture, and pro consumption. The coalition between middle- and working-class Americans was always tenuous and she sees their fracture as the decline of consumer politics. If a consumer movement did continue, it increasingly distanced itself from labor unions, shifting its focus from prices and income distribution, to product safety and manipulative advertising – a continuation of Consumer Reports efforts from the 1930s.  Lizabeth Cohen’s Consumer Republic, by contrast, sees the 1950s and 1960s as the apogee of U.S. consumer politics. Cohen additionally does not see the interests of New Deal administrators such as Leon Henderson as synonymous with grassroots consumerism. Grassroots movements led by women and people of color storm the gates of institutional politics in response to the promise of the New Deal and force government administrators to take up causes they had little native interest in.