The Journal of San Diego History
SAN DIEGO HISTORICAL SOCIETY QUARTERLY
Winter 1978, Volume 24, Number 1
Thomas L. Scharf, Managing Editor
Douglas H. Strong, Book Review Editor.
The Politics of Business in California, 1890-1920. By Mansel G. Blackford, Columbus: Ohio State University Press, 1977. Appendix, Notes. Bibliography. Index. 225 pages. $12.50.
Reviewed by Lawrence B. Lee, Professor History, San Jose State University.
Students of California history often note the lack of a good economic history of the Golden State. Special monographs there are on the oil industry, the wine industry, the “water industry,” etc. Gerald Nash’s study of business regulation, State Government and Economic Development offers valuable insights. What is needed, however, is a view from the inside of California business looking outward so as to understand how the private and public sectors came to be so intermeshed as they are today. Now the reader has the splendid volume of Blackford’s which examines a cross-section of California industries during the critical modernizing epoch of three decades, 1890-1920. It describes what they were really like, how divided they seemed in size and location. They were different in their philosophies of competition and speculative growth, or stability, and their impact on public policy. Historians will detect immediately that the author has arranged his information in accordance with the popular “organizational synthesis” developed by Samuel Hays, Alfred Chandler, Robert Wiebe, among others. Mechanization, standardization of product, national market, bureaucratic organization, scientific management, cost effectiveness are all code words pinpointed by this interpretation to apply to these changes that transformed both the public and private sectors in the nation during this process of modernization.
Blackford applies this conceptual frame of reference to the California economy. In doing so he offers a revision of the traditional political orientation found in such a work as George Mowry’s California Progressives. The reader soon learns that the whole view of government and business in California in the Progressive Era is not contained within this accepted interpretation. It held that government regulation of business in the public interest started with the political reforms of the Hiram Johnson Progressive Republicans following 1910. Mr. Blackford’s meticulous presentation of the victory by the modernizing element in each of his chosen California industries reveals business leaders actively seeking governmental intervention. They sought to foster the rationalizing goals private enterprise couldn’t win by voluntary private or trade association means alone. The author minimizes the political dimensions of policy changes affecting California business. On the other hand his evidence doesn’t lead him to conclude that big business had co-opted the regulatory machinery in California during the critical years as historians Gabriel Kolko and James Weinstein might conjecture.
General readers have only to turn to those particular industries where their interest is greatest to be surprised with the revelations each developing scenario brought to light. Here—contrary to the mythology of the American free enterprise system—aggressive business leaders actively sought government regulation. The California Fruit Exchange and imitative cooperative organization secured state enforcement of marketing standards. An early consumer movement soon learned that the state market director did not have their interest at heart. Public utilities, the railroads, investment bankers all desired the uniformity of state control. Critical events such as the banking panic of 1907 brought agreement between city and country banks on state regulation as did World War I in forcing the diversified lumber industry into sponsoring the effective forestry act of 1919. Examples drawn from practices in other states were important as with the public utility commission and “blue sky” laws. The competitive forces which permitted unfair business practices such as rebates and twisting (enticing customers from other companies) in the insurance business were so powerful in this uncoordinated industry that small success in regulation was possible. Finally economic development was the spur for business cooperation and pleas for government supervision. Equally important was the urge for professionalism as each industry coveted public good will, so necessary when bills affecting business practices were carried through the legislature.