Let's Have A (Populist) Party!
Farmers in the late 19th century were frustrated.
As the west ‘filled up’ with white homesteaders, choice farmland was increasingly rare. The U.S. Government had run out of peoples to remove, and even at their most Manifestly Destined could find no justification for another war with Mexico.
In a few more years, the 1890 Census would declare the frontier ‘closed’, to the chagrin of men like Frederick Jackson Turner who believed the westward struggle against nature and bouts of deprivation both defined and strengthened American character. Things were already so desperate that homesteaders were beginning to look lustfully towards Oklahoma – the same ‘Indian Territory’ (I.T.) to which the bulk of surviving Amerindians had been forcibly removed, given the unlikelihood of anyone civilized ever settling there by choice.
I.T. had been chosen both for its distance from existing ‘civilization’ and the tacit assumption it represented the most god-forsaken plot of unlovable soil on the continent. Now it was being eyed with a desire born of desperation and a few hopeful shots of delusion.
By 1889, the first sections would be opened to white settlement via land run, and eventually Oklahoma would become the 46th State of the Union.
In the meantime, farmers across the Great Plains – even those in slightly more cooperative climes than Oklahoma’s – were enduring hard times. This was not unprecedented, but it did seem to be unusually persistent. And, thanks to advances in both literacy and communication, struggling farmers were aware that things were rolling along just fine for much of the rest of the country.
The Farmers’ Dilemma
It wasn’t a lack of production. Most farmers across the Plains were quite successful - at least in the traditional sense. They were growing and raising more good stuff than ever before! Wheat! Corn! Cotton! Moo-cows! Chickens! Tomatoes! Quiche!
Thanks to the laws of supply and demand, the more they raised, the lower the selling price. That’s great for those purchasing, but far less exciting for those producing. Throw in ongoing improvements in European agriculture, and the American farmer was in a world of hurt.
As individualists, their initial solutions were individually sensible and individually labor-intensive – they found ways to produce MORE.
Farmers already worked 365 days a year, sun-up to sun-down. They worked on Sundays, birthdays, Christmas, and while ill. They labored in the earth and cared for their animals, enduring drought and deluge, heat waves and freeze, in hopes of coaxing forth from the earth sustenance for themselves and the world.
They grew and raised stuff you could eat, or wear, or – back in the day – smoke. They were useful. Heck – they were essential!
But this was a time of the ‘newer and better’ – machinery, fertilizers, and other technological wonders (“Just look at these scientifically curved ThresherTM brand thresher blades, patented in SWEDEN!”) With ‘newer and better’, they could bring even more land into production! Purchase more acres, more machinery, more seed, more productivity - PROGRESS!
But… lots of new stuff cost lots of new money.
Banks, Business, and Bitterness
Looking east they saw a world of bankers and businessmen, of numbers and percentages, stock markets and manipulation. Men in suits, working what had already become known as “bankers’ hours” – 5 days a week minus holidays, done by mid-afternoon, inside by the stove when it was cold and near an open window when it was hot.
They didn’t actually grow anything, or produce anything your kids could eat, or wear. Their labor resulted in nothing you could smoke, drink, or otherwise enjoy.
Instead, they scribbled in little books, mysterious ciphers wrapping obscure terms, and this somehow meant they got to keep part of your money.
You needed them – they held the power of loans, financing, equipment, and seeds. They could say yes or no to your very survival during the patient years. And yet, you couldn’t for the life of you explain exactly WHAT they did or HOW they held this power… it was the opposite of everything you understood, or were.
There’s a reason Dickens only a generation before had written Ebenezer Scrooge as a money lender (albeit a British one) – what could be more cold-hearted and useless in this life?
It wasn’t JUST the banks, of course – farmers felt taken advantage of by railroads, the operators of grain elevators and silos, and pretty much anyone with money or influence in a system they instinctively understood to be warped in favor of the Ebenezers. They may have lacked the time or inclination to fully decipher that world, but they were increasingly certain it bore them malice.
It even kinda seemed un-American.
But the banks loaned money to the farmers, and the farmers purchased land and equipment. And it worked – they became even more productive. They raised even MORE stuff you could eat, smoke, and wear!
Which meant, of course, that prices went… even LOWER.
In some cases, increased production left farmers unable to break even. Some couldn’t pay back their loans. They renegotiated, perhaps borrowed more, bought more, raised more…
See a pattern?
For the first time in American history, it seemed, a large demographic was doing everything right – they were honest, hard-working, productive, and responsible – and they were failing.
Individuals had of course failed before, but individual failure can be attributed to fate, or sin, or some personal shortcoming hidden in the mix. This was the most revered and idealized segment of American Dreamers – those whom Jefferson declared “the chosen people of God,” however. And they weren’t just struggling – they were facing bankruptcy. Their kids were starving. They were losing their land.
Either malicious players were subverting the system, or the system was broken. Farmers began to collaborate in search of solutions – the Grange, the Farmers’ Alliance, eventually even turning to the one entity powerful enough to tackle perceived corruption on such a grand scale. Those whose lifestyles defined ‘individualism’ in the American psyche began talking, and joining together, to petition their government for a redress of grievances.
The Populist Party was born.
The Populist Paradox
They wanted what in their minds would be a return to a lost balance, one consistent with foundational American ideals. Greater government control over railroads, grain storage, even telegraphs – wasn’t about making things ‘easier’, but about keeping the system ‘fair’ (although presumably the railroads and other owners would have quibbled over the definition of this term).
The Populist Party reached their zenith in the 1890’s. Although they won state and local elections here and there, before and after this decade, their only real shot at the Presidency came in the Elections of 1896 and 1900. Both times they ran William Jennings Bryan as their candidate, and both times the Democratic Party joined them in the nomination.
Both times they were defeated by Republican William McKinley. So, that must have sucked. Still, Bryan did leave behind one of the most memorable speeches in all of American history – at least in terms of the big finish:
“…we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold!”
Make sure you thrown your arms wide open and drop your head at the end dramatically when you read it. Yes, he really went there. And yeah – the audience totally loved it. Not everyone was impressed – that famous cartoon every history teacher thinks of in relation to this speech is a criticism of Bryan’s policies and his sacrilege. He’s shown trampling on a Bible being torn apart by his shenanigans.
Historians argue (as historians love to do) about the extent to which Populism impacted the Progressive movement a few decades later or the New Deal after that, but the cause/effect relationship between them isn’t nearly as important as the underlying question behind ALL of them:
How much should the government help? How do we balance freedom – including personal liberty and capitalistic choice – with security? Even assuming the government has the ability to deftly swoop in and regulate the economy and interactions of a nation into perfectly balanced equity, is this a good idea?
Consider Harry Potter, safe and secure under the stairs at the Dursley’s. No harm could come to him - literally. As the series progressed, he grew increasingly autonomous and faced greater and greater danger. Finally, released even from the rules of Hogwarts or the direction of Dumbledore – completely and totally independent…
He dies. At least for a while.
The same tension exists in owning a dog, managing a school, or legislating a nation. Too many restrictions stifle growth, maturity, progress, and basic fun. Too few, and it’s chaos.
Not that most American farmers in the late 19th century were pondering such abstractions. The majority had joined their voices – and their votes – to demand a few specific and finite policy changes they hoped would return their worlds to ‘normal’.
What did they want?
First, government regulation (or even ownership) of railroads, telegraphs, banks, etc. - anything so ubiquitous as to essentially be a public utility. In the same way government today regulates the companies providing gas, water, or electric in your home, they considered certain services too essential to be left to the whims and biases of the free market.
Second, they wanted a progressive income tax. Under a flat tax, everyone paid the same percentage of their income. You made $10,000 this year? Pay ten percent. You made $50,000? Ten percent. $250,000? Ten percent.
Those making the least paid the least; those making the most paid the most.
The Populists wanted a weighted system. If you made $10,000 this year, you pay little, or nothing. You made $50,000? Maybe fifteen percent. $250,000? Twenty-five percent. $1,000,000? Forty percent.
Those making the most were still left with more than everyone else, and those making the least were freed from the burden of paying at all.
The Populists called this equitable. Those who felt they were being punished for staying in school or working hard disagreed. The basic argument continued for the next million years.
Third, and maybe biggest on the list, the Populists wanted to dramatically increase the money supply. They wanted more coins minted, and they wanted to allow paper money to be backed up by silver in the national treasury as well as gold. This was called a 'bimetallic standard' - 'bi', of course, meaning 'two'.
If you're a bi-cycle, you have two wheels.
If you're bi-lingual, you speak two languages.
If you're bi-polar, you have two emotional extremes.
If you're bi-pedal, you walk upright, on two feet.
If you're bi...
Huh. I can't think of any other examples. But hopefully you get the idea.
Today, U.S. currency is backed up by the ‘full faith and credit of the federal government’ – making us all feel MUCH, MUCH better about things. Not so in the 19th century – back then it was actual specie. Precious metals.
Silver is valuable and not at all common, but it’s far more plentiful than gold. The change would be dramatic. More money in circulation lowers the value of each dollar – counterintuitively helping those with less money, and especially those in debt.
Explaining this in class makes everyone’s brain hurt.
Talking economics in high school is like trying to analyze haiku via telegraph. Students’ brains are not acclimated to this sort of information; they’ve experienced relatively little of the real world, financially speaking.
Then again, when it comes to economics, adults don’t actually know what we’re talking about half the time either. Most economic theories are made up after stuff happens, then applied backwards to prove that whatever happened had to, and explaining why – until next time, at least, when it works differently. It can be a bit of a mess.
But imagine a student – Jacobie – who shows up to class one day with pizza. He’d been to yet another Leadership Lunch Party and walked out with a half-dozen slices left over.
The food quickly draws attention. Maximillian offers him a dollar for one of the slices. He accepts.
Oliana buys another two slices at a dollar each. As supply dwindles and more hungry students express interest – thus increasing demand – Jacobie raises his price to two dollars a slice. One slice even goes for three, although he may have thrown in the only packet of parmesan with that one.
As he’s about to auction off the final slice, Leena approaches him with her head down, but her eyes coyly up. Batting her sad little lashes, she tells Jacobie that she has no money – BUT, if he’ll “loan” her this last slice of pizza – because she’s soooooo huuuunnngryyyyyy – she’ll repay him double tomorrow.
Two hundred percent. In 24 hours.
He of course relents. The pizza is gone.
Vic has been watching this entire process, and believes he’s found the key to both popularity and prosperity. The next day, he shows up in class with a towering stack of saucy goodness – 12 full-size pizzas of various toppings – and two very nicely printed and laminated signs declaring he’s offering them today for only $2.00 per slice.
He sells most of the first box, but things quickly slow. Lowering the price to $1.00 helps a little, but it still looks like he’ll be stuck with 9 or 10 pizzas. With ten minutes to go, he panics and drops to 50 cents a slice… then a quarter… and manages to move enough that he’s only losing a little money for his troubles.
He might actually have broken even if he hadn't splurged on the signs.
Just before the bell, Leena slides up and hands him two quarters. She takes two slices of pizza in a napkin, glides sweetly over to Jacobie, and presents them to him with an appreciative smile. “Here you go – we’re even,” she states.
Has Jacobie made a profit?
On the one hand, he loaned ONE piece of pizza and was repaid with TWO. That’s doubling his investment by any definition, surely?
On the other hand, he loaned out $3.00 worth of pizza, and was repaid with 50 cents worth of the same pizza. Framed in those terms, he lost over 80% of what he put in.
So it is with paper money.
When there’s not very much of it, it’s worth more. This benefits those few who have the money – Jacobie and his limited supply of pizza. It makes things hard for everyone else, but the haves will sometimes loan to the have-nots in a gesture of goodwill and a reasonable return.
Increase the supply, and the value of each individual dollar – or slice – goes down. This benefits the masses, but hurts the people holding the pizza boxes. It particularly chafes creditors. They may receive promised payments, but they’re being repaid in dollars worth less than those they loaned. The numbers say they’re making more, but the value says they’re losing – severely.
The Populist tended to have less money, and to owe more than they had to banks and other creditors. The idea of ‘freeing up’ the money supply was quite appealing to them – ironic, in a way, given that much of their distressed circumstances sprang from overproduction of something.
The Party’s Over
The Populist Party had peaked by the end of the 19th Century. While they’d secured several congressional seats and numerous state offices, the official party soon faded. Most of their platform, however, eventually became law – at least in part.
The omnipresent government regulation considered so radical at the time is more or less the norm in the 21st century, despite periodic efforts to reverse the trend. Our income tax rates are technically progressive, although the web of deductions and exemptions largely eliminate any advantages this gives the lower classes in practice. As to paper money, well… it’s not backed up by gold and silver, but it’s certainly not restricted by whatever savings Uncle Sam has on hand at the time .
Most subsequent generations have seen the rise of at least one figurehead or Presidential candidate crying out against an unjust system on behalf of the hard-working little guy. Populism didn’t create the David/Goliath narrative, but it certainly refined the potential of government’s role as a slingshot.
The underlying demand for ‘fairness’ is nearly universal in modern times, but now as then the problem is one of definitions. Rarely does a social movement or political party step forth to advocate against “fairness” – rather, we contend endlessly over exactly what “fair” looks like. Until we resolve that, it’s impossible to get far making it actually happen.