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Follow up on the Schechters

My entry on the Schechter Brothers from Monday generated a little bit of discussion elsewhere in the blogosphere, including at Reason and Volokh. But the most interesting commentary was by historian Eric Rauchway, who saw my piece after it was linked by Jonathan Dresner at the December History Carnival.

Rauchway perceives me, rightly, as a New Deal critic and he is on a mission to combat what he sees as wrong-headed criticisms of the New Deal. So in addition to taking me to task for my use of "fascist" to describe the NRA (which only echoes FDR's and other's explicit statements that they borrowed from the Italians - one might also consult Luigi Villari's "The Economics of Fascism" for a description of the Italian system and see the similarities for oneself), he presents some additional context to the Schechters' story that he seems to think undermines my argument. The context comes from the historian Andrew Cohen's discussion of the Schechter case. You can read the whole thing there, but the gist seems to be this:

The Schechters were not a small immigrant business, but rather a very successful corporation. Moreover, they gained that success by out-competing (hence the points I raised in my original post) their unionized rivals by keeping prices lower due to lower labor costs. This infuriated the unions, who responded at first by targeting the Schechters with violence: "The tough guys who ran these organizations tried to bully the Schechters into submission, on one occasion putting emery powder in the crankcase of their trucks." Cohen then points out that when the NRA was created, it was the union leadership who was empowered to write the codes and they used that power to, presumably, get back at the non-union firms in the various industries, including the Schechters and poultry. Cohen then reads the Supreme Court's rejection of the NRA not as a matter of such regulation in general being unconstitutional, but rather that it was being driven by the wrong people: " It’s not just the power the state possessed, but who wielded it."

I'm not enough of a constitutional scholar to say for sure, but I'm pretty confident that the decision was not decided quite so ideologically, after all as Ilya Somin points out, all nine justices signed on, including the very liberal Brandeis, to the claim that Congress had execeeded its ability to delegate power under Article I. And nowhere in the actual Supreme Court decision are the issues Cohen raised ever mentioned. (But of course historians with their own axes to grind can always find their own ideological views about anti-labor hatred lurking in the background if they search hard enough.)

Bottom line, perhaps the Schechters weren't quite the small immigrant businessmen Shlaes and I portrayed them as. But that doesn't change the underlying points at all: they were targeted for specific reasons, including the fact that their observation of Kashrut and their skill as businessmen ran them, pun intended, afoul of the NRA, specifically the union organizers who helped write the codes. The fact that they survived attempted union violence and they became targets of those very same unions only enhances the main point of the story, and, in my eyes anyway, their heroism.

It also puts a new twist on the complaints of them competing too hard and paying wages less than NRA code: both of these were pissing off the union bosses in the rest of the industry. Giving those unions the power to help write the codes (in good fascist worker-corporation cooperative fashion, I might add) gave them an opportunity to even the score. Cohen and Rauchway perceive this as rough justice being served and thereby making the Schechters into the villians of the piece. That's a value/ideological judgment on their part and to suggest my history is sloppy and ideological because I see it the opposite way is more than a bit ironic.

Those who live in glass chicken coops....

UPDATE: According to a commenter at the Volokh Conspiracy: "A member of the Schechter family has told me that shortly after the ruling Schechter Poultry went bankrupt. The family claims that the Jews of New York found out that the Schechters has run afoul of their beloved President Roosevelt and therefore stopped giving their business to the company." I have no idea if this is true, but if so, it only adds to the strange relationship between Jewish Americans and FDR.

Posted on Wednesday, December 3, 2008 at 10:41 AM | Comments (17) | Return

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