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.
