WEBVTT NOTE African-American Railroad Workers, 1900-1960: A Critical Reinterpretation 1 00:00:00.000 --> 00:00:11.000 I'm from the University of Massachusetts. I was born and raised there, so it was good to hear from Devin that, you know, not only are the Yankees evil, but they're also rent-seeking tax leachers as well. 2 00:00:11.000 --> 00:00:29.000 So, my paper, it's different from any Austrian paper I've ever seen. Austrians aren't big on labor history. They're not big on race and ethnic studies, so I thought this is sort of filling that gap that no one else has really done. 3 00:00:29.000 --> 00:00:37.000 A lot of people criticize Austrians for being pure theory, they don't look at any history or anything like that, 4 00:00:37.000 --> 00:00:42.000 but Mises wrote a book called Theory and History, and I don't think anyone ever buys it, 5 00:00:42.000 --> 00:00:47.000 there's about ten used copies out there on sale for five bucks, I bought one a couple of years ago, 6 00:00:47.000 --> 00:00:50.000 but Mises has a really good quote in it, he says, 7 00:00:50.000 --> 00:00:56.000 History deals with human action, that is, the actions performed by individuals and groups of individuals. 8 00:00:56.000 --> 00:01:01.840 It prescribes the conditions under which people lived and the way they reacted to these conditions. 9 00:01:01.840 --> 00:01:06.660 The subjects are human judgments of value, in the ends men aimed at, guided by these 10 00:01:06.660 --> 00:01:11.500 judgments, the means men resorted to in order to attain the end sought, and the outcomes 11 00:01:11.500 --> 00:01:13.400 of their actions. 12 00:01:13.400 --> 00:01:17.000 History deals with man's conscious reaction to the state of his environment, both the 13 00:01:17.000 --> 00:01:21.240 natural environment and the social environment as determined by the actions of preceding 14 00:01:21.240 --> 00:01:26.040 Generations, as well as by those of his contemporaries. 15 00:01:26.040 --> 00:01:30.000 Every individual is born into a definite social and natural miloo. 16 00:01:30.000 --> 00:01:34.800 An individual is not simply a man in general whom history can regard as an abstract. 17 00:01:34.800 --> 00:01:40.020 An individual is at any instance of his life the product of all the experiences to which 18 00:01:40.020 --> 00:01:46.840 his ancestors were exposed, plus to those which he himself so far has been exposed. 19 00:01:46.840 --> 00:01:51.720 And that really sounds more like a sociologist than anything else to me. 20 00:01:51.720 --> 00:01:55.440 And I'm trying to sort of build the Austrian School of Sociology. 21 00:01:55.440 --> 00:02:05.680 But what I look at is black railroad workers in the United States from about 1890 to 1950. 22 00:02:05.680 --> 00:02:08.840 And I found that no one's really looked at them. 23 00:02:08.840 --> 00:02:11.880 It's sort of been the realm of moxists. 24 00:02:11.880 --> 00:02:16.540 So I thought, you know, this is some low-hanging fruit, this should be pretty easy. 25 00:02:16.540 --> 00:02:21.420 So what I use is basically three main theorists. 26 00:02:21.420 --> 00:02:26.260 You have Gary Becker, who had The Economics of Discrimination, the idea that racism in 27 00:02:26.260 --> 00:02:31.320 a market economy is penalized. 28 00:02:31.320 --> 00:02:35.180 If you're not going for the best worker, you're going for the worker who just happens to be 29 00:02:35.180 --> 00:02:38.580 white, you're going to lose out to competitors. 30 00:02:38.580 --> 00:02:47.320 And there's also public choice theory that has definitely been ignored by sociology. 31 00:02:47.320 --> 00:02:51.680 And what you find in the history of railroad workers is the idea that employers use this 32 00:02:51.680 --> 00:02:56.180 divide and conquer strategy with their workers. 33 00:02:56.180 --> 00:03:01.140 They would foster racism in order to keep black workers and white workers apart to prevent 34 00:03:01.140 --> 00:03:03.960 some sort of class solidarity. 35 00:03:03.960 --> 00:03:10.960 What you find is, there's very few instances where this actually happened. In my case, 36 00:03:10.960 --> 00:03:16.720 we found that black workers, I mean, excuse me, we found that white workers were racist 37 00:03:16.720 --> 00:03:21.520 themselves. The racism was endogenous to the workers. This is for several reasons. There's 38 00:03:21.520 --> 00:03:29.760 the idea of, you'll see in cultural studies, that racism allowed them to think of themselves 39 00:03:29.760 --> 00:03:33.460 as Working Class and Have Some Pride. 40 00:03:33.460 --> 00:03:38.160 This falls under the economics of discrimination because as Mises pointed out, it's a psychic 41 00:03:38.160 --> 00:03:39.160 profit. 42 00:03:39.160 --> 00:03:43.440 They got kicks from saying, well, at least I'm not black, and they got a profit out of 43 00:03:43.440 --> 00:03:44.440 that. 44 00:03:44.440 --> 00:03:55.160 Also, you'll find that in a craft union such as the ones I study in this paper, you actually, 45 00:03:55.160 --> 00:03:57.820 what a union basically is, is a monopoly. 46 00:03:57.820 --> 00:04:02.420 You want to cut the supply to bring wages up. 47 00:04:02.420 --> 00:04:05.740 How do you cut the supply and decide who gets the job and who doesn't? 48 00:04:05.740 --> 00:04:09.540 Well, one easy criteria is, well, we'll give it to all the white workers 49 00:04:09.540 --> 00:04:11.740 and forget about the black workers. 50 00:04:11.740 --> 00:04:16.020 So there's another theory in sociology. It's called the split labor market theory. 51 00:04:16.020 --> 00:04:20.240 No one's really thought about it. It's always been 52 00:04:20.240 --> 00:04:22.820 pushed aside for the Marxist theory. 53 00:04:22.820 --> 00:04:27.500 But it says that a split labor market where you'll have the dominant group that gets paid a lot 54 00:04:27.500 --> 00:04:36.600 in a minority group that gets paid some sort of differential less will lead to ethnic antagonism. 55 00:04:36.600 --> 00:04:41.820 These lead to what Anna Bonacich calls caste and exclusion movements, one of which would 56 00:04:41.820 --> 00:04:50.620 be a labor union. So what I found is if we combine Bonacich's split labor market theory 57 00:04:50.620 --> 00:04:56.380 with the economics of discrimination and public choice theory, it suddenly makes a lot of 58 00:04:56.380 --> 00:05:10.380 I wish I had done a 2x2 matrix because I had a good one but I can't put it up so I'll just tell you a little bit about it. 59 00:05:10.380 --> 00:05:19.380 There's four different ways that you can get the collective action you want of excluding black workers and raising wages. 60 00:05:19.380 --> 00:05:25.380 I do this through individual versus collective and coercive and non-coercive. 61 00:05:25.380 --> 00:05:30.380 First one is to pair private goods and public goods. This is individual and non-coercive. 62 00:05:30.380 --> 00:05:36.380 What you'll see that the brotherhoods, that's what the railroad unions were called, they were very dangerous at first. 63 00:05:36.380 --> 00:05:44.380 So they would pair insurance with union membership. So that's how they got people to join their unions. 64 00:05:44.380 --> 00:05:52.380 The second way it's individual and coercive is to use violence. If black workers try to work the railroads, 65 00:05:52.380 --> 00:05:58.380 You shoot at them, you beat them, you tell them if you ever come back here, your family's dead. 66 00:05:58.380 --> 00:06:01.380 There's also the collective non-coercive way. 67 00:06:01.380 --> 00:06:04.380 There's the use of social pressure and moral pressure. 68 00:06:04.380 --> 00:06:07.380 You'll see a lot of these brotherhoods were also fraternal brotherhoods. 69 00:06:07.380 --> 00:06:12.380 And that's where you get a lot of the social capital that allowed them to organize initially. 70 00:06:12.380 --> 00:06:20.380 And then there's nowadays, which is their favorite, this collective coercive government labor regulations 71 00:06:20.380 --> 00:06:28.380 which tell you who can work, whether they have to be in a union, under what conditions they can work. 72 00:06:28.380 --> 00:06:36.380 There's also Jennifer Obeck, she's really underappreciated, she did a lot of work in the 1980s on racism and rent seeking. 73 00:06:36.380 --> 00:06:44.380 And she says that racism is actually a form of rent seeking because racial exclusion is a public good, 74 00:06:44.380 --> 00:06:48.380 and as a public good, privately it tends to be under provided. 75 00:06:48.380 --> 00:06:55.380 She writes, preferences may matter in the collective in a way that they do not matter individually. 76 00:06:55.380 --> 00:06:59.380 Thus, at the very least, racism can emerge from the rent-seeking process. 77 00:06:59.380 --> 00:07:05.380 At worst, however, the rent-seeking process can actually intensify the already existing preferences. 78 00:07:05.380 --> 00:07:13.380 In effect, people can make themselves better off by drawing rings around themselves, by defining themselves in their groups more shabbily. 79 00:07:13.380 --> 00:07:25.380 These gains can arise strictly from preferences. However, it is certainly possible to increase economic well-being of one group by effectively enforcing an economic cartel arrangement among its members. 80 00:07:25.380 --> 00:07:39.380 So when we look at a history, we find that options 1 and 3, pairing public goods and using social pressure, they allowed unions to organize, but they couldn't let them exclude blacks. 81 00:07:39.380 --> 00:07:43.380 And what you'll also find, using violence was pretty ineffective. 82 00:07:43.380 --> 00:07:48.380 Only through the use of the state were they able to exclude black workers. 83 00:07:48.380 --> 00:07:54.380 I'll go through a little bit of the history just real quick. 84 00:07:54.380 --> 00:08:00.380 Railroads started to come about in the 1880s. 85 00:08:00.380 --> 00:08:14.380 And they were loosely organized, but it wasn't until 1898 that we had the Erdman Act, which is the first national labor law you'll have in the United States. 86 00:08:14.380 --> 00:08:20.380 They figured it was under interstate commerce. This is an open and shut case. We can regulate this. 87 00:08:20.380 --> 00:08:33.380 The Erdman Act outlawed blacklisting, yellow dog contracts, firing of union organizers and it allowed for a voluntarily enforceable arbitration. 88 00:08:33.380 --> 00:08:37.380 Mind you, this was all happening while blacks were disenfranchised in the South. 89 00:08:37.380 --> 00:08:44.380 So blacks have no vote through all these legislative laws that come into effect. 90 00:08:44.380 --> 00:08:49.380 Before the Erdman Act, the union is really ineffective. 91 00:08:49.380 --> 00:08:55.620 1877, you have the Southern Pacific strike. Blacks had worked there since the Civil War. 92 00:08:55.620 --> 00:09:01.860 Whites strike in protests. Management shrugs them off. They go back to work. 93 00:09:01.860 --> 00:09:07.580 1898, Louisville and Nashville. Blacks are introduced and whites go on strike in protests. 94 00:09:07.580 --> 00:09:11.900 Again, management shrugs. They go back to work. 95 00:09:11.900 --> 00:09:17.340 Whites strike a couple years later for nonracial reasons and they're replaced by black workers. 96 00:09:17.340 --> 00:09:22.540 1894 you have the Pullman strike. Blacks actually form the anti-strikers union. 97 00:09:22.540 --> 00:09:26.480 A lot of the literature says blacks are pawns of capital. 98 00:09:26.480 --> 00:09:29.620 It's just not true. Blacks knew exactly what they were doing. They were excluded by these 99 00:09:29.620 --> 00:09:30.940 white unions 100 00:09:30.940 --> 00:09:36.500 so they knew it was in their best interest to be strikebreakers. 101 00:09:36.500 --> 00:09:39.980 All this starts to change after the Erden Act in 1898. 102 00:09:39.980 --> 00:09:43.620 You have the famous 1909 Georgia race strike. 103 00:09:43.620 --> 00:09:48.420 um... blacks replaced some white workers, there was a strike and a lot of violence 104 00:09:48.420 --> 00:09:51.020 the strike fails to remove black workers 105 00:09:51.020 --> 00:09:53.780 but federal arbitrators equalized wages 106 00:09:53.780 --> 00:09:57.300 um... even Robert Higgs, who we all know as a great libertarian 107 00:09:57.300 --> 00:10:00.700 argued that this was due to 108 00:10:00.700 --> 00:10:03.360 that when they equalized the wages, this proved 109 00:10:03.360 --> 00:10:05.940 that there was racism on part of the employers 110 00:10:05.940 --> 00:10:10.220 because blacks were still employed after the wages were equalized 111 00:10:10.220 --> 00:10:14.120 I don't believe that's true. They weren't paid less because they were black. They were 112 00:10:14.120 --> 00:10:23.620 paid less because they weren't in the unions. So again, this shows that employers weren't 113 00:10:23.620 --> 00:10:30.380 the bad guys here. It was the unions. We have the 1911 Queen and Crescent Strike. The same 114 00:10:30.380 --> 00:10:35.600 deal, there's a lot more violence. This time, at least 10 black workers were murdered and 115 00:10:35.600 --> 00:10:39.440 and All Fright is halted across the United States. 116 00:10:39.440 --> 00:10:45.480 This led to arbitration because the halting of trade all across America and actually led 117 00:10:45.480 --> 00:10:48.200 to a contract limiting black employment. 118 00:10:48.200 --> 00:10:53.800 It would say something like black breakmen and firemen will make up no more than 50% 119 00:10:53.800 --> 00:10:56.760 of runs on this line. 120 00:10:56.760 --> 00:11:03.480 This basically became standard for the next few years among white unions. 121 00:11:03.480 --> 00:11:07.160 Also in this area, you'll see they tried to use state labor legislation in order to get 122 00:11:07.160 --> 00:11:13.480 their way. You'll have licensing boards, which will obviously be made up of, you know, white 123 00:11:13.480 --> 00:11:18.820 workers to decide who will be able to do this job. You have literacy requirements. The same 124 00:11:18.820 --> 00:11:24.120 way that blacks were excluded from voting, they're going to try to exclude them from 125 00:11:24.120 --> 00:11:30.000 working. And you also have, this was a big one, full crew laws, that said you have had 126 00:11:30.000 --> 00:11:37.440 had a certain class of each worker, but there were certain classes that were synonymous 127 00:11:37.440 --> 00:11:41.520 with black workers, certain classes that were synonymous with white workers. So what they 128 00:11:41.520 --> 00:11:46.200 would do is, it looked racially neutral, but its effect would be to limit the number of 129 00:11:46.200 --> 00:11:53.400 black workers on certain runs. World War I came around. It helped blacks because it was 130 00:11:53.400 --> 00:11:58.280 a tight labor market, but it also empowered organized labor, which we'll see hurts them 131 00:11:58.280 --> 00:12:06.880 The 1920s and the 1930s, a decade of that violence that we talked about, the instances 132 00:12:06.880 --> 00:12:14.480 where dozens of blacks were shot at, stabbed, murdered, in order to prevent them from going 133 00:12:14.480 --> 00:12:19.000 on these runs. A lot of them were killed, but it didn't have any discernible effect 134 00:12:19.000 --> 00:12:25.680 on the number of black workers in the industry. What we really see is the downfall comes with 135 00:12:25.680 --> 00:12:32.560 The Railroad Labor Act of 1926 and its amendment in 1934. 136 00:12:32.560 --> 00:12:39.600 The 1926 act says that collective bargaining is now the only form of work management bargaining. 137 00:12:39.600 --> 00:12:44.240 Mind you that these are all white unions, blacks and most of them are actually excluded 138 00:12:44.240 --> 00:12:47.040 by constitutional means. 139 00:12:47.040 --> 00:12:49.840 It's not even a custom. 140 00:12:49.840 --> 00:12:57.240 So you'll see that now white unions are in charge of bargaining for not just themselves, 141 00:12:57.240 --> 00:12:59.600 but all workers in that class. 142 00:12:59.600 --> 00:13:05.000 Basically, the government gave racist white unions the power to bargain for the black 143 00:13:05.000 --> 00:13:10.680 workers that they had been trying for decades to remove from this industry. 144 00:13:10.680 --> 00:13:14.080 And what it did, it devastated black workers. 145 00:13:14.080 --> 00:13:18.840 I wish I'd brought the graphs, but you'll see that black representation in this industry, 146 00:13:18.840 --> 00:13:27.360 It was stable for decades, and as soon as these acts came into fruition, it dropped. 147 00:13:27.360 --> 00:13:36.840 You'll see they still didn't get that time, they made a fair employment practice commission. 148 00:13:36.840 --> 00:13:38.880 What they did was they blamed management again. 149 00:13:38.880 --> 00:13:44.200 They said, oh, you need to hire more blacks, and it just didn't get through their heads. 150 00:13:44.200 --> 00:13:48.620 But we found that some employers did try to hire more blacks. 151 00:13:48.620 --> 00:13:54.300 What happened was the unions attacked them viciously, said, oh, this isn't in the contract, 152 00:13:54.300 --> 00:13:58.020 you're breaking the contract, and they had to back off. 153 00:13:58.020 --> 00:14:02.740 Because additionally, the 1934 amendment, not only was there civil penalties, was there 154 00:14:02.740 --> 00:14:12.100 injunctions, but there was also criminal penalties for breaking some of these fair labor laws. 155 00:14:12.100 --> 00:14:20.680 By this time, the 1950s, you see the railroad industry go into a decline. They tried to 156 00:14:20.680 --> 00:14:27.840 pass some laws. The Steele case said they have to bargain fairly on behalf of all workers. 157 00:14:27.840 --> 00:14:34.940 Had no discernible effect. And you'll see, as the industry declined, black workers had 158 00:14:34.940 --> 00:14:45.620 There's no chance of ever coming back and it's just a really sad story and I encourage 159 00:14:45.620 --> 00:14:51.180 anyone who's into Austrian economics to really start looking at race and ethnic studies 160 00:14:51.180 --> 00:14:56.660 and labor studies because it's a really important area where we can make a lot of inroads but 161 00:14:56.660 --> 00:15:02.860 for some reason people have not done so I just gave you one example if anyone wants 162 00:15:02.860 --> 00:15:09.860 Take a look at the paper after, have any suggestions, come talk to me after. Thank you.