The ‘20s: Culture, Consumption, and Crash 127Like the Progressive Era reforms in banking and meatpacking, and the
industry and labor associations of the Great War, the new economy was struc-
tured by the state and ruling class to create a more stable environment to do
business. It would be one in which workers would not have to be violently
suppressed, where unruly competition would not drag an entire industry
down, and where legal protections were available for corporations, banks, and
other commercial interests so they could conduct their business affairs without
interference from government or the courts. This “harmonious” relationship
between the government and big business [with labor included in a minor
role] was based on economic growth, or productionism. The basic idea was that,
instead of redistributing existing wealth, as many radicals urged, American
companies would produce vast amounts of goods, thereby selling more things,
making more profit, and being able to pay their workers a wage large enough
to keep them content and also to be able to purchase the goods that they
produced. To put it colloquially, instead of cutting up and rationing the eco-
nomic pie differently, capitalists would make a much bigger pie. To do this,
the state and businesses would work together, and various business leaders in
a specific industry [it could be automakers, steel mill owners, railroad opera-
tors, cotton farmers... whatever] would “associate” with each other to plan
out their production and prices and avoid too much competition. So, while
it may seem complicated at first glance, in fact the corporate state fundamen-
tally meant that corporations and the government would work closely togeth-
er to make economic decisions that would create more profit, avoid too much
competition, and keep workers reasonably happy.
And Commerce Secretary Herbert Clark Hoover was the point man in this
new capitalism. Hoover accepted the cabinet position from Warren Harding
in 1921 on the condition that he got control over economic policy. He
mainly feared that unregulated and unsupervised capitalism [“cowboy capital-
ism”] would only lead to serious problems, as he had witnessed during the
early 1900s in the banking, insurance, and meatpacking industries. Perhaps
Hoover’s most important, and prophetic, insight was, as he said, “the trouble
with capitalism is capitalists; they’re too damn greedy.” To try to keep those
“greedy” capitalists from creating an unstable economy, Hoover wanted them
to be regulated, but mostly to regulate themselves. His key creation toward
that goal would be the trade association. In order to organize the economy
along rational lines, Hoover believed that these trade associations could work
together to make decisions collectively for the benefit of the entire economy,