Must-Read: Suresh Naidu and Noam Yuchtman: Lessons on inequality, labour markets, and conflict from the Gilded Age

Must-Read: Suresh Naidu and Noam Yuchtman: Lessons on inequality, labour markets, and conflict from the Gilded Age:

A key feature of successful strikes was the ability of incumbent employees to prevent the use of replacement workers, via persuasion, pickets, or violence…

Given these stakes, it is unsurprising that employees were willing to use physical coercion, when necessary, to try to prevent the hiring of scabs. Employers, too, understood that breaking picket lines was crucial, and they responded to striking workers’ use of force with coercion of their own. This was often accomplished by enlisting the power of the state. Riker (1957) shows that between 1877 and 1892, the modal use of state militia was in response to labour unrest…. Government intervention on the side of employers was supported by the courts, particularly following the adoption of the judicial labour injunction as a legal tool to prohibit strikes….

Looking around today, it is obvious that inequality and conflict over the distribution of wealth and income remain salient a century after the first Gilded Age. History is never a perfect guide, but the late 19th century suggests that even as markets play a greater role in allocating labour, legal and political institutions will continue to shape bargaining power between firms and workers, and thus the division of rents within the firm. What remains to be determined – and battled over – is which institutions are empowered to act, and whose interests they will represent. Regardless, latent labour market conflict seems likely to be a prominent feature of our new Gilded Age.