"Rationality & Welfare: Public Discussion of Poverty and Social Insurance in the United States 1875-1935"

by Professor Theron Schlabach

Chapter 7: The Experts' Two Designs

VII. The Experts' Two Designs

While social workers, medical doctors, businessmen, unionists, and others occasionally commented on social insurance, a few men and women in the United States studied the reform thoroughly and became social insurance experts. The experts were attached to universities and other organizations that subsidized the production of words, and ultimately most of the ideas and rhetoric that carried the social insurance movement along came from them. Usually they spoke the assumptions and the more or less disciplined arguments of the trained social scientist. They more than any other group articulated the urge to reduce the welfare problem to logical terms and meet it with rationalized institutional solutions. But for them the same problem appeared that had plagued earlier social engineers, such as Brooks, Willoughby, and Henderson: around what framework of premises and goals should they build their smooth, new, functionally-designed structures? The experts did not agree, and were caught still arguing over their blueprints when the Roosevelt administration decided in 1934 to go ahead and build as best it could.

At first the experts worked together easily, mainly within the American Association for Labor Legislation. Begun in 1905 by Adna Weber of the New York Department of Labor, Henry Seager of Columbia, Henry Farnam of Yale, Richard Ely and his former student John R. Common of Wisconsin, and others, the AALL promoted study and standardization of labor legislation, and served as the American branch of the International Association for Labour Legislation. One of its first major crusades was workmen's compensation, which it continued to help perfect long after states had passed the initial laws of the 'teens. In the 1914-1915 recession it promoted unemployment insurance along with other solutions to joblessness, and then from about 1915 to 1920 it devoted much of its energy to its campaign to insure health. When that effort failed and the post-World War I recession set in, it shifted its priority back to unemployment insurance, promoted the idea and helped propagandize for a bill in Wisconsin in the 1920s, and then sharply intensified its campaign in the depression years of the early 1930s. Meantime it promoted old age pensions, and with the Fraternal Order of Eagles and the United Mine Workers developed a model bill that was widely used by pensions crusaders in the 1920s. At its outset the AALL was an eclectic group. In 1913, when it formed a committee on social insurance in order to move out beyond workmen's compensation, it appointed men as different as Hoffman of Prudential Life Insurance Company and Isaac M. Rubinow, an outspoken advocate of full-fledged compulsory systems.(1)

But as the social insurance movement got underway and the AALL developed more definite positions, some of the experts began to drift away--sometimes angrily, sometimes amicably. Early in the health insurance campaign Hoffman denounced the Association for not giving voluntary efforts a fair trial, resigned, and took up his role as anti-hero of the compulsory social insurance campaign. (2) Gradually even some who agreed that insurance should be public and compulsory began also to work less and less through the AALL. A major reason was the AALL's affinity for what became identified as the Wisconsin school of social insurance thought. In the formative years 1908 and 1909, the AALL's secretary (and de facto executive director) was Wisconsin's Commons. Thereafter one of Commons' students, John B. Andrews, took the office, and until both he and the organization died in the 1940s, the AALL was almost synonymous with Andrews' name. In the early 1920s Commons emerged as the leader of the movement for unemployment insurance, and promoted certain controversial ideas on the form the measure should take. Andrews followed Commons' ideas. Those who disagreed found the AALL less and less congenial.

One of those who drifted away was Isaac M. Rubinow. Among social insurance experts Rubinow stood with the stature of a Saul, wrote with the sweet pen of a David, and offered the wisdom of a Solomon. His training and experience were broad-- he studied and practiced medicine, then became a statistician and actuary, then as secretary of B'nai B'rith and in other capacities took up social service--and each vocation helped prepare him further for his constant promotion of social insurance. In 1912 he delivered a series of erudite lectures on the reform at the New York School of Philanthropy, lectures which he published the following year to furnish the most important of the early social insurance treatises in the United States. In his lectures and book Rubinow advocated a complete set of social insurance programs, based on the principles of compulsion, governmental operation, and benefits given on the basis of prior contributions. For the moment, however, he admitted that unemployment insurance might not yet be feasible, due to lack of statistics and foreign experience on which to base it. And he was willing to compromise and allow gratuitous systems for old age and dependent mothers, until the nation was more ready for contributory insurance. (3)

Joining the social insurance crusade in 1919 was the young research director of a Pennsylvania Old Age Pension Commission, Abraham Epstein. Where Rubinow's style was poetic prose and proverb, Epstein's was the zealous utterance of the prophet. And where Rubinow operated congenially as a free lance lecturer, writer, and adviser to various groups, Epstein did not rest until he had created his own organization. Epstein established his credentials by writing two propagandistic but informative books on old age in the 1920s, and a highly intelligent magnum opus covering the entire social insurance field in 1933. In 1927 he organized the American. Association for Old Age Security, which he renamed the American Association for Social Security in 1933, to reflect his broadening scope of programs. To some extent, his organization became a focal point for experts repelled by the Wisconsin line of thought. Yet Epstein had neither the resources nor the magnetism to draw anti-Wisconsin experts into a really cohesive circle. (4)

Most experts were able to operate quite well on their own reputations. William Leiserson won fame for special knowledge of unemployment in 1911, when he wrote a report for a New York commission. Then a degree candidate at Columbia, he had earlier studied under Commons at Wisconsin. Nevertheless, he did not adopt Commons' approach to unemployment insurance, and in the early 1930s he was the main author of the chief rival of the Wisconsin unemployment insurance plan. (5) Another expert was Paul Douglas, of the University of Chicago. In the late 1920s Douglas made a landmark study of historical wage patterns in the United States, and got interested in family allowances and unemployment insurance. At first he had little disagreement with Commons, but gradually he developed his own independent position and emphases. (6) Meanwhile, at Berkeley, law professor Barbara Nachtrieb Armstrong made a thorough study of the broad range of social insurance measures abroad, and in 1932 issued a call to America to adopt a complete insurance and minimum wage program. (7) In New York the Industrial Relations Counselors, with specialists such as Bryce Stewart, Murray Latimer, and Mollie Ray Carrol, began in the late 1920s to publish meticulous studies of company and union benefit systems at home and public systems abroad; and although closely associated with welfare-minded businessmen such as John D. Rockefeller, Jr., they gradually began to advocate public action along fairly liberal lines. (8) At Minnesota economists Alvin H. Hansen, Merrill G. Murray and others developed an "Employment Stabilization Research Institute" and in the early 1930s they added their researches and ideas to the unemployment insurance discussion. (9) These and other experts brought a variety of viewpoints to the American social insurance movement by the early 1930s. The major question among them was how far to accept and what alternatives to offer to the ideas of Commons and the Wisconsin school.

The issue dividing experts was not whether economic insecurity required highly rationalized, carefully-structured institutional solutions. All of the experts incarnated the urge to rationalize welfare. The "haphazard attempts" of public and private charity industrial pensions, and trade union benefit systems to solve the problem of old age, wrote the AALL's Andrews in 1922, were "inadequate and inhumane," "costly and wasteful," and they called for "scientific handling of the problem." On unemployment insurance Leo Wolman, adviser to the Amalgamated Clothing Workers declared in 1931 that Americans had to decide between "hastily devised machinery for the distribution of doles" and "systematic provision for unemployment compensation" that was "wisely conceived and expertly managed." And of all social insurance Epstein wrote in 1933 that it "offers the only coordinated, efficient and economical plan of administering relief--a method far superior to the haphazard, uncoordinated and wasteful system of private and public charity in vogue in this country today." (10) Andrews and Wolman were staunch supporters of Commons' ideas and by 1933 Epstein was the Wisconsin school's most vehement critic. Yet the three men agreed entirely on the need for better-engineered, rationalized security systems--for that was the one idea at the very marrow of the social insurance movement.

The issue among the experts was not rationalization per se but how to apply the principle of rationalization. Could the government somehow induce private entrepreneurs to operate their capitalistic system of production and distribution intelligently, so that they no longer produced their goods, services, and profits at the expense of workers' security? Or should reformers assume that capitalism would always operate irrationally, or at least that they could not afford to wait to see if and when it would be tamed. If the former were true, as Commons and his school hoped, the task was to weave social insurance into the patterns of capitalistic decision-making in such a way as to influence the process of production and distribution. in the direction of intelligent reform. If the latter were the case, as more and more experts assumed by the early 1930s, the task was different. It was to construct a social insurance structure alongside the basic system of production, distribution, and income allocation, to mitigate inequities and provide the security that capitalism itself failed to provide.

Commons' belief that with some careful tinkering American capitalism could be made to serve real human needs bore the clear imprint of the progressive period and the 1920s, out of which it arose. From progressivism Commons and his followers took the Reform Darwinists' optimistic view that men, using the new social sciences, could apply deliberate reason to the development of their institutions and thereby cause a truly humane social order to evolve without bitter class struggle or radical change. In the 1920s they found reinforcement for one element of their faith, the belief that the evolution would develop most efficiently if government cooperated with, rather than displaced, enlightened capitalists in the management of the economy. More specifically, Commons and the Wisconsin school built on the conviction, newly popular in the progressive period, that hazards such as sickness and especially unemployment were not matters for charity and relief so much as evidence of industrial maladjustment. Unemployment, for instance, might yield to employment exchanges, vocational training, better collection of statistics, careful plant management, planned public works, and, as emphasized more and more in the 1920s, control of the business cycle; (11) and reformers should view unemployment insurance in its relation to such readjustments. Commons brought the ideas of his time into focus: the first purpose of social insurance, he emphasized, was prevention, to reduce the hazard.

Not that Commons was alone in arguing that social insurance had preventive effects; virtually every social insurance advocate said that. In 1911 Henry Seager, as president of the AALL, declared of workmen's compensation that "we must make our law such that one way in which the employer may make money is making the working conditions of his plant safer." The AALL made preventionism a prominent note in its health insurance campaign, a major argument for a tripartite contribution structure being that the employer, the worker, and the state each had some responsibility to promote health, and making them each pay would induce them to do so. Nevertheless it took some time for preventionism to become the overriding idea of the Commons-AALL school. In their two major briefs for health insurance in 1916 and 1917 Andrews and the AALL emphasized the extent of need and the inadequacy of existing agencies for relief and treatment, quite as much as they stressed prevention. Sometimes they added the preventive argument almost as an afterthought. Unemployment insurance Andrews introduced in 1914 as part of a "Practical Program for the Prevention of Unemployment in America," but within that plan he offered it primarily as a means for decent support of those still left jobless by the truly preventive measures--employment exchanges, better management, public works, vocational training, and the like. In those terms, unemployment insurance was to provide residual relief, rather than being primarily a preventive measure in itself. In 1915 Andrews declared explicitly that unemployment was first of all to induce employers to regularize employment, and only secondly to provide maintenance to workers. But that was an afterthought that Andrews did not fully sustain. When he revived his interest in unemployment insurance in 1920 he presented the measure much as he had in 1914. (12) It was John R. Commons who, for better or for worse, brought clarity to this confusion of social insurance goals. It was he who gave the preventionist doctrine such emphasis that it took on new proportions, and eventually precipitated quarrels over social insurance structure.

Although most famous for applying his ideas to unemployment insurance beginning in 1921, as early as 1915 Commons applied to health insurance a virtually complete version of his doctrines. Commons, even more than most social insurance commentators, was impressed with the way in which workmen's compensation was stimulating a safety-first movement in factories. Insurance and benefits were secondary in workmen's compensation, Commons told a group of medical doctors in 1915. The system was primarily "a kind of social pressure" inducing employers to "devote as much attention to the prevention of accidents" and the speedy recovery therefrom as to any other aspect of their business. And two reforms might accomplish the same for sickness generally: a reorganization of medical practice so that physicians could give their attention to prevention and early diagnosis; and some system of payment by which employers and the public would pay for such activity in advance. But Commons did not espouse "the socialistic ideal of making the medical profession a branch of government organized and supported out of taxes." He believed the physicians would "be far more efficient when joined up with private employers," and so he wanted them working in safety and health departments of private businesses. His model was a system of health insurance structured so as to induce employers to set up medical staffs, hospitals, and sanatoria of the highest quality, and to create the most healthful working conditions possible. (13)

The ingredients of Commons' later unemployment compensation plan were all present in his remarks on health insurance. In unemployment compensation also he would put his faith in capitalism's managers rather than in government officials, and reject the "socialistic" method of having the government actually operate the system. The public role would be mainly to manipulate management's incentives. Where in health insurance he hoped to rationalize the whole of medical practice, unemployment compensation he would design as a tool to rationalize the whole capitalistic system of industrial production. And, of course, he would structure the latter reform to emphasize prevention much more than compensation.

Commons' emphases in social insurance were integral parts of a larger theory of economics and government that he was gradually developing. In the early 1890s he had briefly embraced an evolutionary version of socialism. But much as the American labor movement decided to bargain with rather than try to overthrow capitalism's managers, Commons developed an alternative theory of industrial reform. He was a student of the labor movement, and his reform theory was much akin to the idea of collective bargaining. In 1911 he designed the Industrial Commission of Wisconsin, to administer workmen's compensation and other labor law. In keeping with his collective bargaining approach he specified one employer, one labor, and one public representative on the three-man commission, with advisory committees that similarly represented the interest groups they affected. Beyond that he sponsored a rewriting of Wisconsin factory legislation so that the commission thus composed would have wide discretion not merely to administer labor law but to determine its practical content. (14)

Commons insisted that labor legislation worked best when it was not a matter merely of governmental initiative and dictation, but was designed instead to stimulate the interested parties, especially employers, to assume their social responsibilities. Small wonder, then, that he designed social insurance to rely as far as possible on the initiative of private management. Moreover, he tried to adopt the language of businessmen whenever he could. When capitalists and pro-capitalist courts spoke of business goodwill as a form of property to be protected against the actions of labor unions, Commons appropriated the terminology and put forward a theory of labor relations based on the notion of "industrial goodwill." And when the Supreme Court ruled that some restraint of trade by monopolies was "reasonable," Commons called on courts and businessmen to permit labor unions a "reasonable restraint of trade." (15) Small wonder also, then, that when groups such as the National Industrial Conference Board put forward their false dichotomy between prevention and insurance, insisting on the superiority of prevention, (16) Commons appropriated the idea of prevention for his cause.

In 1933 Leiserson, in a sharp criticism of the Wisconsin school of thought, suggested that Commons had merely tried to turn the tables on employers, and that Commons' followers had taken his preventionist rhetoric far too seriously. There was, no doubt, an element of "put up or shut up" in Commons' emphasis. But the fact was that he genuinely admired businessmen and their managerial abilities. Why did workingmen believe that they could "manage business better than the businessman?" he asked in 1922. He went on to describe prominent business magnates as "self-elected by natural selection," and "brought to the front by their superior ability." (17) His language would have brought a glow of pleasure to any late nineteenth century Social Darwinist.

Thus Commons was receptive when welfare capitalists and scientific managers claimed that they were about to usher in a new day of well-being for their industrial workers. And the rationalizers of business in their turn listened to him with respect. In 1925, for instance, he joined with two such businessmen, Sam Lewisohn and Ernest Draper, to co-author a book whose theme was that management could eliminate unemployment, or at least a very large part of it, by becoming more attentive and efficient. (18) Commons' followers shared his affinity for the enlightened managers. One zealous disciple, Herman Feldman of Dartmouth College, worked with the American Management Association to produce a book, published in 1925, on The Regularization of Employment. Feldman dedicated the volume to Lewisohn and used it to advocate, among other unemployment remedies, Commons' prevention-directed unemployment compensation scheme. The AALL selected businessmen for its presidents throughout most of the 1920s. And in 1933, even in the face of businessmen's great debacle, Paul Raushenbush, one author of the 1932 Wisconsin law that finally brought Commons' theory to fruition, declared that regularizing employment was largely the task of "managers, employers, captains of industry. Where the leadership of business is," Raushenbush contended, "there should the responsibility be." (19)

A major weakness of Commons' theory and of his faith in rationalized management was that it tended to focus the attention on what the individual firm could do to remedy unemployment, as opposed to those solutions requiring broader, concerted action. Most of the illustrations that Commons and his scientific-management friends cited as their evidence were examples of companies smoothing out seasonal unemployment. Such cases said little about the problem of cyclical and technological unemployment. The record of Dennison Manufacturing Company's maintaining production throughout the depression of 1921-1922 was their notable exception, but Dennison's techniques--expansion of the sales force and introduction of new product lines--probably achieved stability at the expense of greater unemployment in competitors' firms. Yet Commons declared in 1922 that apart from the business cycle, all other causes of unemployment were "subordinate and contributory." And he struggled to go beyond the individual firm to the macroeconomic problem of cyclical unemployment. He believed that the essence of capitalism was the credit system, and he argued that unemployment compensation would stabilize capitalism at its very heart. For if the government compelled firms to compensate their reserve labor forces during slack periods, the bankers and financiers who were gaining ever greater control over American business would hesitate to furnish capital for vast expansion in boom times. Thus they would smooth the credit cycle, and, in turn, the business cycle. (20)

But from 1921 to 1934 there occurred a declension in Commons' theory. Somehow the macroeconomic dimension got less and less attention, and in practice Commons and his followers seemed more and more to make unemployment the responsibility of the firm rather than of the entrepreneurial community broadly conceived. In the original version of the famous Huber bill that Commons designed for the Wisconsin legislature in 1921 he followed the pattern of Wisconsin's workmen's compensation law and proposed insurance through employers' mutual insurance companies. (This was in keeping with a Commons doctrine that new measures succeeded best if constructed on lines already familiar to practical men of industry.) On that pattern, prevention was to be achieved by "merit rating," the mutual companies classifying industries and adjusting rates to reward industries and firms with stable employment. But in 1923 Commons helped set up the Amalgamated Clothing Workers' joint employer-union unemployment insurance scheme in Chicago, and became chairman of its board of trustees. There he learned that employers much preferred a separate reserve fund for each individual firm rather than mutual funds, because they did not want to have to help pay to maintain idle labor forces for ill-managed firms. Commons and his fellow architects of the Chicago system granted that privilege to large firms, though they required smaller ones to pool their reserves. At the same time, back in Wisconsin, he altered the Huber bill to allow a firm to opt out of the mutual fund and carry its own reserves, provided it could show sufficient proof of financial responsibility. (21) Commons' belief that in order to succeed reforms should take account of the wishes and prejudices of the interest groups affected was coming to the fore.

The Huber bill, although repeatedly reintroduced in the Wisconsin legislature during the 1920s, did not pass. Finally, in 1930, several of Commons' recent students--Paul Raushenbush, Raushenbush's wife Elizabeth Brandeis, and Assemblymen Harold Groves--engineered a further modification in the direction of the macroeconomic, individual-firm approach: complete segregation of all unemployment compensation reserve funds into individual firm accounts. When a firm had built up its fund to prescribed amounts for each employee, he could first reduce, and then cease, contributions until benefit payments once more reduced the fund. (22) The architects of the segregated reserves had several defenses for their plan. A major one was that making the employer pay for his own unemployment (the Wisconsinites rejected state or worker contributions) and for his alone would result in proper cost accounting: the employer would inevitably add the cost to the price of his product, and the price of each product would therefore reflect the social cost of the unemployment which making that product incurred. That argument was akin to the preventionist argument because its idea was to make the market responsive to all the costs of production, social as well as direct, and thereby to make capitalism work better--by its own logic. Another argument was that of equity: that it was unfair, and bad social policy, to require one firm to pay into a reserve fund for maintaining the labor force of its less well-managed competitor. This argument had force, but it revealed a much more tender concern for equity toward employers than for equity toward the workers who might suffer when the reserve fund of the ill-managed firm was depleted. The main argument was, of course, preventionism: paying only for one's own unemployment, and the possibility of building up the fund and stopping contributions, were inducements even more potent than rate adjustments for the employer to stabilize his employment. (23)

The AALL did not go quite so far with the segregated-reserves principle as did the Wisconsin group. In December of 1930 it offered a scheme under the euphemistic label "An American Plan of Unemployment Reserve Funds." (Commons' followers began to speak of "unemployment reserves" or "unemployment compensation" rather than of "unemployment insurance".) Although the American Plan allowed financially-responsible firms to self-insure, its central idea was segregation of reserves by industry rather than by firm. In 1931 and 1932, on the other hand, a commission representing the governors of six northeastern industrial states put forward proposals that followed the new Wisconsin plan in all essentials. Commons himself, although he had little to do with the latest, radical alteration of the Wisconsin bill, enthusiastically endorsed it. (24) Moreover, the bill earned the prestige of success. In January of 1932 the Wisconsin legislature passed it, the first unemployment compensation law in the United States. The declension of Commons' thought was encased in statute.

That such a radical expression of Commons' preventionism should have succeeded in 1932 was most ironic. The idea had been cast in the progressive period's faith in evolutionary progress, yet it succeeded only when its supporters could capitalize on the fact of sudden economic retrogression. It had been recast in the 1920s' faith in capitalists' ability to rationalize their economic system, yet it bore fruit only amid capitalism's chaos. Its method was to get at the problem of unemployment via the managerial decisions of individual firms, yet it passed when the most progressive of employers were pleading that they were powerless to prevent layoffs, and when those few who had set up firm-by-firm systems of unemployment benefits were rapidly abandoning them or sharply curtailing benefits. Commons had wanted to make capitalism inherently humane and responsive to social needs--not merely to add, to use his words, "philanthropic," "paternalistic," and "socialistic" schemes as in Europe. He had admired great capitalists. He reminisced in 1934, but he had deplored their lack of social responsibility. And so with unemployment compensation, he remembered, "I was trying to save Capitalism by making it good." (25) His was a brave vision. But its ironies were not lost on his critics.

Social insurance experts outside the Commons group were by no means of one mind on all things. Yet one broad principle appeared in the ideas of many of them: that the first duty of a social insurance system was to assure economic welfare, by the direct method of maintaining people's incomes; and that reformers should structure social insurance institutions primarily around that goal. Prevention they considered pretty much a chimera. Some unemployment was inevitable, in some ways even desirable, Leiserson asserted as early as 1911. "What is needed is a method of making the wage-earner's income steady and continuous." Still in the same vein, he argued in a 1930 address to the AALL that industrialization inherently produced fluctuations in employment. The remedies of neither scientific managers nor socialists would eliminate them. Therefore, he asked, should not reformers work for employment guarantees and unemployment insurance that would "stabilize wage payments in spite of fluctuating employment?" (26) Leiserson was articulating the maintenance-of-income approach, and, in so saying, he expressed the emergent thoughts of numerous other social insurance experts.

Preventionists dismissed such an approach as merely providing relief. (27) But their "prevention versus relief" formulation was misleading. All social insurance advocates wanted something very different from the chaotic, discretionary systems that Americans associated with the term "relief". More than that, the formulation oversimplified, for the issue lay much deeper. The historic issue was how directly, how forthrightly, the state would pursue the goal of assuring welfare. Would it continue merely to tinker with capitalism? Or, where capitalism failed to maintain the income of the citizens who worked under it, would it create additional systems, run directly by the government if that seemed necessary, to do the job? The former method was the progressives' approach of regulation. The latter embodied a much more certain welfare-state philosophy.

Not that the regulatory approach was incompatible with welfare-statism, nor that the welfare-statists within the social insurance movement feared to build elements of regulation into their plans; they did not. Indeed, a few, most notably Hansen and Douglas, moved toward a Keynesian-style analysis of the total economic problem, and began to associate insurance with the manipulation of fund flows and other devices for the overall regulation and stabilization of the economy. (28) But while they did not draw back from regulation, neither did the welfare statists fear the more straightforward method of creating new institutions that would be appendices to, more than regulatory mechanisms within, the basic economy--institutions that by logic and structure would exist largely outside of, alongside, the capitalistic system.

The question of what to build into those institutions still allowed room for differences. Welfare statists offered various methods for achieving the income-maintenance goal.

One method was that used in old age and mothers' pensions: simple, direct, gratuitous grants to those who could establish through a means test that they were needy. Welfare-statists' support for such programs contrasted, more or less, with, attitudes of the preventionists. The AALL paid virtually no attention to mothers' pensions, which had scant connection with labor legislation. It persistently supported pensions for the aged, but never with the same zeal it gave health insurance in the late 'teens or unemployment insurance in the thirties. (29) Commons and his oldest associates at Wisconsin discussed pension programs hardly at all. And some welfare-statists, for instance Hansen and Leiserson, were similarly disinterested. Such people were concerned with industrial maladjustments, rather than with the problems of welfare and dependency per se. Other welfare statists, however, viewed the gratuitous systems with more favor. Mrs. Armstrong called old age pensions a "step forward," although still a "makeshift arrangement" that was very deficient, and, because of illiberal features in the actual laws, very little different from poor relief. Douglas believed that if properly financed and administered, by state rather than by local governments, old age pensions were quite defensible. (30) And the two men who epitomized the welfare-state approach, Rubinow and Epstein, devoted much energy on behalf of the gratuitous programs.

Both Rubinow and Epstein had reservations about the ultimate desirability of the gratuitous systems, yet, in this case perhaps putting their welfare statism ahead of their urge to rationalize, they defended the pension systems. Both saw contributory old age insurance as really superior to pensions, being more nearly universal, avoiding the means test, and breaking more sharply with poor relief. And neither thought mothers' pensions satisfactory as actually legislated. By 1934 Rubinow dismissed them as hardly different from charity, and emphasized the superiority of a contributory survivors' insurance system. Epstein, however, would have merely extended the gratuitous principle and transformed the mothers' pension systems into a full-blown scheme of family allowances. Both argued that old age pensions were much more feasible politically than contributory insurance, and utterly necessary as a first step since contributory insurance could do little for those already old. And they saw in pension plans at least some movement away from discretionaryism. They were truly insurance, Rubinow and Epstein argued, because they guaranteed benefits as a matter of right under certain stated conditions. The origin of the funds was immaterial (31)

The gratuitous systems suited a welfare statist emphasis on social rather than individual responsibility. Though mothers' pensions were perhaps only a kind of half-way house to real social insurance, Rubinow argued in 1913, they dramatized the inadequacy of self-help and private charity. And nothing was as important for the success of social insurance as the breakdown of the individualism such methods reflected. Why should the workingman be ashamed to take benefits without prior contributions, he had asked of old age pensions a decade earlier. The worker had toiled productively and his life had been of social value. The pension was merely just. The difference between old age pensions and contributory insurance was a matter merely of procedure, not principle, he declared in 1930. "The principle involved," he continued, reflecting both his welfare statism and his urge to rationalize, "is that there shall be a planned, organized system based upon a recognition of a responsibility of the majority who can work and earn toward those who did work and earn." With such sentiments Epstein entirely agreed. The idea that a man had no claim upon his more wealthy neighbor, he contended, had given way centuries earlier, to the Elizabethan Poor Law of 1601. (32)

One argument that Rubinow and Epstein (and almost all other commentators) used repeatedly in favor of gratuitous pensions, as opposed to contributory insurance, was that contributory old age insurance required long years of building up a reserve. In so saying they violated their idea of social rather than individual responsibility for they assumed that old age insurance was, like a commercial annuity plan, a vehicle primarily for the individual to build up his own savings through time. (33) They would have been more consistent had they conceived of it as a means to distribute the burden crosswise, throughout society, at a given point in time. By 1934 Epstein's aide, Warren Vinton, did advocate a contributory system based on the principle not of reserves but of pay-as-you-go, which, of course, assumed the crosswise distribution. And Rubinow sometimes spoke of fusing the pension and contributory systems together in some undefined fashion, which might have had similar effect. (34) But neither Epstein nor Rubinow demonstrated clearly that they understood how to build a contributory system around the principle of social responsibility.

That failure led Rubinow and Epstein to speak of a two-tier system of old age security, with contributory insurance to cover those for whom a long period of contributions was feasible, and pensions to cover those already old, casual laborers, and others not qualifying for insurance--or even a three-tier system, with some persons qualifying for neither insurance nor pensions, and left to poor relief. And that in turn led to their greatest failure: they never faced squarely the fact that such a tiered system perpetuated something akin to the ancient, discretionary distinction between the worthy and the unworthy poor. Rubinow and Epstein fostered the idea of excluding from the most highly rationalized, least stigmatizing social insurance systems those people who for moral, psychological, or sociological reasons had not been fortunate enough to be very productive economically. Their arguments that it was a man's years of productive toil that gave him a claim upon society, and that old age security systems were to enable those who "can work and earn" to help those who "did work and earn," (35) were further expressions of the same idea. The shunting of the economically productive off into quasi-relief and residual relief programs later became one of the least admirable features of American social security.

The failure was by no means Rubinow's and Epstein's alone, for virtually all pre-1935 social insurance advocates assumed the necessity of tiering. Yet the two men might have done better, for they were the nation's most persistent social insurance experts. They examined the institution and its implications meticulously and repeatedly. They said emphatically that social insurance should institutionalize the principle of social responsibility, not of individualism. That they nevertheless helped perpetuate a system of discrimination against the economically unproductive was tragic.

And the tragedy was deepened by irony, for Epstein and Rubinow originally supported the gratuitous systems, not to discriminate but as a liberalizing device, one technique to achieve the goal of income maintenance.

A second method some welfare statists advocated for achieving their maintenance-of-income goal was a deliberate structuring of social insurance to effect a redistribution of wealth. The preventionists, accepting the propertied classes' definition of equity, said virtually nothing about this method. Commons seemed consciously to reject it, for he once remarked that the success of unemployment insurance depended not on "a different redistribution of wealth," but upon "a larger productivity of industry." But Rubinow began his early writings with a very different assumption. "The class which needs social insurance cannot afford it, and the class that can afford it does not need it," he wrote in 1913. And so he advocated that social insurance not only compel people to make provisions for themselves, and set aside reserves, but that it also distribute the burden of workingmen's security to other classes, through employer and state contributions. In one sense, Rubinow argued, his reform was "nothing but an effort to readjust the distribution of the national product more equitably." Other social insurance experts agreed. Mrs. Armstrong made the fact of employer and state contributions a part of her definition of social insurance. The persistent health insurance advocate Edgar Sydenstricker cited unequal distribution of wealth as one of the major reasons the nation needed his reform. Douglas proposed a system of family allowances in 1927 on the premise that income should be redistributed even within the working class itself. And Epstein thought the principle of wealth redistribution "the most important consideration in social insurance." Employers and the state should contribute, he argued, with the state raising its share through inheritance taxes and taxes on high incomes. (36)

There were, however, some anomalies in the welfare statists' actual application of the wealth redistribution principle. Some welfare statists were quite cautious. Murray and Hansen of Minnesota rejected the idea of state contributions in the 1933 version of their unemployment insurance plan, with the cautious argument that they wished to avoid political pressures for unwarranted benefit increases. Leiserson, as chairman of an Ohio Commission on Unemployment Insurance in 1932, declared that the Commission believed that one purpose of social insurance was to reduce the tax burden that relief was putting upon the public treasury. That caution led to the strange anomaly that the Commission's so-called "Ohio plan" of unemployment insurance, which became the darling of welfare statists, provided no state contribution at all, even for administrative expenses. Some welfare statists bowed more to expediency and circumstance than to innate caution. Rubinow, who as the Ohio Commission's actuary helped devise the Ohio plan, declared apologetically that while he personally had favored state contributions, he had yielded to the compelling fact that Ohio was nearly broke. And outside Ohio Paul Douglas, who in 1932 declared himself for state and even federal contributions to unemployment insurance, conceded in 1934 that so long as states had to rely on general property taxes contributions from them were next to impossible. But Epstein argued that expediency lay precisely on the side of state contributions. In the face of business lobbies with their insistence that depression-plagued business could not afford insurance, he contended in 1933, it was bad politics to put too much of the burden on the employer. So he favored unemployment insurance using Great Britain's tripartite contribution system, and had his Association promote such a bill. (37)

Direct state contributions to unemployment insurance proper were not the only way to divert public funds to the unemployed. Another was to use general tax money to finance "extended benefits," benefits to the jobless who had exhausted their regular insurance benefits. By the early 1930s more and more of the welfare-statists believed that in periods of general depression this should apply. On this also they contrasted more or less to the preventionists, although on a least one occasion Commons hinted that he might support such a plan. And they differed among themselves as to how boldly to apply the method. Leiserson, in his caution, thought that perhaps the states should merely loan the money to their insurance systems for the extended benefits (as Great Britain had done at first). Epstein, the least cautious, favored outright treasury grants (the much-criticized practice Great Britain had adopted later in the 1920s). Hansen and Murray, in collaboration with Stewart of the Industrial Relations Counselors, tried in 1933 to design unemployment insurance specifically for long-term rather than short-term unemployment, by specifying a long eight weeks between a man's layoff and the beginning of his benefits, compared to most plans' two or three weeks. Their logic was that the longer waiting period would greatly reduce the numbers of claimants in normal years, leaving healthy reserves for very long benefit periods in depression. But they altered their plan quite thoroughly in 1934. They were still interested in long-term unemployment, but they redesigned their regular unemployment insurance for the shorter run and added the idea of emergency benefits paid from the public treasury during depressions. Others, notably Douglas and Eveline Burns of the New York School of Social Work, offered similar plans. (38) Such people were, once again, fostering two-and three-tier welfare systems. And again they did not face up to the discriminations implicit in such systems. But they were proposing a significant injection of public funds into social insurance, with the effect of transferring wealth from the rich to the poor.

Welfare statists' usually proposed that workers, as well as the employer and perhaps the state, pay part of the social insurance premium. This seemed quite anomalous, in light of their principle of wealth redistribution and especially the fact that preventionists generally opposed worker contributions (unless, as Commons and the AALL unemployment insurance plan suggested, they were voluntary (39)). But in fact the two camps' positions were no mystery in light of their overall emphases. The preventionists' reasoning had little to do with wealth redistribution: their arguments of course, were that putting the entire cost of insurance on the employer would induce him to prevent the hazard, and that employer payments made for proper cost accounting. (40) The welfare statists' position, in turn, reflected their much less sanguine view of businessmen: businessmen's power to regularize industry was illusory, or at best very limited, they contended; moreover, having workers contribute gave labor more claim to a voice in planning and administering insurance systems. And it reflected even more their basic welfare statist approach. The contributions would divert more resources into the welfare sector. Legislators were reluctant to tax business too heavily, they argued, and only workers' payments could assure reasonably adequate benefits. (41)

However much some of the anomalies compromised the wealth redistribution principle, they did not destroy it. Most of the welfare-statists' proposals had employers contributing substantially more than employees. The Ohio plan, for example, proposed a two percent payroll tax on the employer, and only one percent on the worker. And even employee contributions represented some redistribution of income from well-established employees with steady work to the less fortunate who absorbed the expansion and contraction of employment. To a greater or lesser degree virtually all welfare statists supported the idea of redistributing wealth as one method of maintaining incomes.

Though they differed among themselves on gratuitous systems or how much to emphasize wealth redistribution, on a third principle the welfare-statists quite agreed. A common denominator running through their arguments, from Rubinow's earliest writings to the vigorous condemnations of the 1932 Wisconsin unemployment compensation law, was that the first purpose of social insurance was to redistribute risk. Not that they always insisted on doing it strictly in accord with the mechanism of actuarial insurance, of course: the public treasury and the government's taxing powers could be an even more potent means of risk distribution. Those who insisted on strictly actuarial principles, Epstein argued, failed "to comprehend the essential nature of social insurance." (42) The principle of distribution of risk was the element that finally brought the welfare-statists to break with the preventionists. The Ohio plan and other truly welfare-statist unemployment insurance plans specified statewide pools of reserve funds, in sharp contrast to the preventionists' principle of segregation. The emphasis on pooling and other means of risk-spreading clearly reflected a welfare statist outlook. Where the Wisconsin plan confined a workers' benefits only to what his employer could pay, and allowed benefits to stop any time the employer's fund ran out, the first aim of risk-distribution systems was to put the strongest possible guarantee behind the benefits, to make maintenance-of-income certain. (43)

Sometimes by gratuitous systems, sometimes by deliberate redistribution of wealth, and always by distribution of risk, the welfare statists pursued their goal of maintaining workers' incomes. Within that framework, they varied in their emphases. Rubinow and Epstein insisted most strongly that there should eventually be a complete system of social insurance, covering the whole range of hazards to workers' incomes. Mrs. Armstrong (reflecting a similar urge to rationalize welfare) concurred in the emphasis on a comprehensive, well-coordinated system, and tied it with the idea of a minimum wage. The Minnesota group addressed itself especially to long-term unemployment. Hansen and Douglas set unemployment insurance in a large, macroeconomic framework and tied it to other proposals for achieving overall economic stability. But whatever their particular emphasis, in their general orientation the welfare-statists differed from Commons. For Commons explicitly rejected the maintenance-of-income emphasis. He wished to divert attention to the "problem of smoothing out employment." he wrote in 1925, and away from the "problem of smoothing out the annual income of the workers." (44)

The two main schools of social insurance thought diverged at various levels. There was a difference in style, especially between those who epitomized the two approaches, Commons on the one hand and Rubinow and Epstein on the other. The two leading welfare-statists were each at one time or another connected with the social work profession, and they thought broadly in terms of the entire problem of dependency. Commons, coming from the angle of labor economics and law, concerned himself more narrowly with malfunctions in the industrial system, and so dealt primarily with unemployment. Commons spoke in the tone of the careful economist and social engineer. Rubinow and Epstein varied their tone. In one breath they spoke in analytical, rationalizers' terms about the chaos and functional inadequacies in current welfare arrangements, and in the next in more sentimental and polemical terms of how the old, or mothers, or weary toilers deserved self-respecting aid. The pages of Epstein's magazine that he did not devote to overly optimistic reports on old age pensions' progress, he used almost entirely for muckraking the debauched poorhouse. To be sure, the AALL also baited the poorhouses in its American Labor Legislation Review, but not with the same flair. Even in 1934, when the social insurance discussion generally had become quite sophisticated, Epstein ran articles such as "Poorhouse the Modern Chamber of Horrors." Perhaps, however, it was to Rubinow's and Epstein's credit that they did not carry the engineering approach to the point that they lost their compassion, or forgot to keep the goal of workers' economic security in the forefront. Commons nearly did. Although

he admitted that the unemployment compensation levels he proposed in Wisconsin were too low to be of much direct relief value, he was unconcerned. His faith, of course, was in steadier employment. (45)

The two schools of thought differed also in that the welfare statists proved in the end to be closer to the labor point of view. To be sure, organized labor's alignment with their position was neither immediate nor complete and clear. The idea of putting prevention ahead of relief was very attractive to men saturated with slogans of "work, not charity," and "jobs, not doles." Especially in the 1920s when the Commons rationale still held sway generally, unionists of all shades who endorsed unemployment insurance strongly emphasized its stabilizing effects. They also agreed very widely with the Commons idea that workers should not have to pay unemployment insurance premiums. (46) That became one of the cardinal points in the AFL's standards for unemployment insurance from 1932 on. Unionists spoke often of making the employer pay because he was responsible for unemployment. And at its 1932 convention, when it finally endorsed unemployment insurance, the AFL put the goal of stabilization ahead of that of compensation. Nevertheless, unionists were by no means constant in their support of preventionism. They seldom spelled out clearly just how employers' payments would reduce unemployment, and it was quite clear that a stronger consideration was simple aversion to deduction from paychecks. And despite its statement of goals, the AFL's landmark report in 1932 put a great deal of emphasis on compensation, and espoused virtually an outright relief view of unemployment insurance. The AFL made no formal commitment as between the Wisconsin and the Ohio plans before 1935. It did endorse merit rating as a stabilization device, if it did not interfere with other standards designed to protect union interests and assure adequacy of benefits. (47) That position scarcely differed from the provisions of the Ohio plan.

And although the AFL declined to choose between Wisconsin and Ohio, at lower levels of union organization the Wisconsin-style plans were clearly losing the day by 1934. Union bodies from the conservative Locomotive Engineers, to the influential New York Federation, to the Amalgamated Clothing Workers from whom Commons had draw his precedents, increasingly rejected the idea of segregating reserve funds. (48) In their movement away from voluntarism, trade unionists were moving toward a welfare state point of view. Commons had long been a student and defender of the labor movement. Yet he had observed in 1925 that his idea of segregating reserve funds suited the "individualistic, competitive, business psychology" of employers, whereas pooling reserves and putting assurance of benefits above making each employer pay for his own unemployment fitted workers' psychology of "mutuality and solidarity." (49) In the end Commons' observation proved entirely correct.

Yet another difference between the two schools of thought was that they put different meanings into words such as prevention and stabilization. Both sides used the words. The "preventionists" earned proprietary rights to their label only because they gave the ideas overriding priority. "The preventive effects of social insurance are too well recognized throughout Europe to need a long argument," Rubinow declared in 1917. The object of unemployment insurance was "not to stabilize industry or abolish unemployment," Epstein wrote sixteen years later, yet indirectly it did offer "the most promising method for the stimulation of further production and greater stabilization of both industry and society." Such language did not denote agreement with preventionists, however. Fireproof buildings had not abolished fires, safety work had not eliminated accidents, and preventive medicine had not ended disease, Leiserson argued cryptically in 1932. Why then did people think that they could invent devices to eliminate unemployment? The theory behind the Ohio plan was that unemployment was inevitable. But "distress from unemployment. . . can be greatly mitigated and largely prevented." (50) As for stabilization, the welfare statists frequently made the point that regularizing the operations of an individual firm usually involved reducing its work force, thus creating more total unemployment.

The prevention and stabilization that the welfare statists expected from unemployment insurance was, as Douglas described it in 1932, that through it the economy would accumulate a reserve during prosperity which, with careful management, could provide extra purchasing power in periods of depression. Thus the system would lessen "the cumulative impact of the downwards spiral of business" at the same time that it assured "a minimum income to the worker." (51) Preventionists used the words to mean trying to keep the hazard from occurring and trying to regularize the operations of the individual firm, or perhaps attempting to smooth the business cycle by working through the individual firm. Welfare statists meant the prevention of the poverty and misery caused by the hazard, and stabilization of the economy in a macroeconomic sense.

A final difference, and one that did much to define the welfare statists as welfare statists, was the two schools' attitudes toward direct use of government. Rubinow and Epstein took pride in governmental activism. "The theory that a large national budget is of itself a dangerous thing, is one of the silliest superstitions of a kindergarten economics," Rubinow wrote-not in 1934 but in 1913. Commons, by contrast, took pride in 1921 that his unemployment insurance plan, with its provision for employers' mutual companies, did not put the state "into the insurance business." (52) At some time Rubinow, Epstein, and Commons were each socialists of some variety. Commons very early, of course, had abandoned socialism for his corporatism-like "collective bargaining state" approach. Epstein, an immigrant from pre-revolutionary Russia, returned to Russia in 1921, was appalled at what he saw, and repented of any sympathy with socialism in its revolutionary form. Thereafter he had close connections with the socialistic workers' education movement and the Conference for Progressive Labor Action, but he indicated in his social insurance propaganda that he recognized capitalism to be a permanent fact of life for the foreseeable future. (53) Rubinow, also an immigrant f rom Russia, was an active Socialist of a benign variety until about World War I, after which he became somewhat less outspoken on the subject in his public utterances. But he assured Americans in 1916 that social insurance would succeed "not because socialists advocate it" but because "the spirit of the new American democracy" would not tolerate continued destitution. After further thought he observed in 1934 that seventeen years of socialism in Russia had not eliminated the need for social insurance. To him, whether or not social insurance advocates "believe in socialism and its 'crazy doctrines' is our personal affair." They did believe that "there is an organized society with common interests." And Rubinow considered the Ohio plan a "mechanism of social cooperation" in contrast to the Wisconsin plan, which was individualistic. With the last point his opponents agreed. The Wisconsin plan was individualism, Raushenbush wrote, "but enlightened and modified by social responsibility." (54)

While not in tune with American individualism, Rubinow and Epstein were no more radical or utopian than the Wisconsinites. Where Commons and his followers envisaged a world of capitalism made good, and thought that by working through private entrepreneurs capitalism could be reformed rather than merely patched, the welfare statists were pessimistic (or perhaps realistic). Consequently they were inclined to have government take initiative, make economic decisions, and create income-distributing institutions quite outside of capitalists' control. Whether or not capitalism itself were regulated or reformed in the process was secondary. Or if there were to be regulation, it would be through creating state-induced fund flows and a vastly enlarged, state-run, rationalized welfare sector, rather than by trying to make the capitalist-run sectors inherently humane. Men such as Rubinow and Epstein took, in Rubinow's words, "the modern world as it is, the bad with the good, wages, profits, rent, interest, speculation, depression and all." (55) Such men were not trying to overthrow or even to displace capitalism. They had resigned themselves to adding correctives. For the practical purposes of the social insurance movement they were not socialists, but welfare statists. Theirs was, however, a welfare statism that departed from the regulatory approach more characteristic of the progressive period and of the preventionists. Theirs was the direct-government-action approach to welfare.

Social insurance experts in the last several years before passage of the Social Security Act made a great point of their differences, especially on unemployment insurance. Actually, their ideas differed less in practical application than in their philosophical expressions. The Ohio plan and other welfare statist proposals for unemployment insurance conceded Commons' main point to the extent of providing for merit rating, the adjustment of an employers' contributions to reflect his or his industry's record of unemployment. (56) The authors of the Wisconsin plan emphasized that providing compensation was indeed very much a purpose of their measure, even if a secondary one. They suggested that when other states adopted unemployment insurance, and removed the competitive disadvantage that Wisconsin faced, Wisconsin might increase its contribution and benefit levels. And they sometimes spoke, like the welfare statists, in terms of stabilizing the economy as a whole as well as stabilizing individual firms. (57) In both camps some of the experts looked for ways to compromise. In 1932 Leiserson and Douglas helped design the Wisconsin-style plan of the six northeastern governors (though Leiserson explicitly dissented at some points). In 1933 Rubinow and the AALL cooperated to modify the American plan by adding a partial-pooling feature. (58) Both schools of experts were, after all, assaulting a common enemy, traditional laissez faire. And both very much exemplified the urge to meet the problem of economic insecurity through efficient, rationalized, automatically-functioning procedures and institutions.

Nevertheless there was a very real philosophical cleavage between the one school's belief in reforming capitalism and the other's impetus toward a direct-action welfare state. The one school wished by regulation to universalize the principles of scientific management, the other pursued the goal of rationalized income maintenance with the fewest distractions imaginable at that time. The cleavage, between an older-style progressivism and a newer emergent kind of liberalism reflected itself elsewhere in the 1930s: in, for instance, the National Recovery Administration on the one hand, and the Federal Emergency Relief Administration on the other (despite the FERA's lack of rationalized mechanisms). The social insurance movement was a victim of a rift in the larger reform tradition in America. Certainly the social insurance experts did their movement no good by pursuing the rift as zealously as they did for a time in the early 1930s, rather than working harder at compromise. But where there was a philosophical cleavage, it was natural that there should be a spirited discussion over the actual structure of social insurance institutions. For what are institutions but the practical embodiments of complex clusters of ideas and attitudes?

NOTES, chapter. 7

1. Lloyd F. Pierce, "The Activities of the American Association for Labor Legislation in Behalf of Social Security and Protective Labor Legislation" (unpublished Ph. D. dissertation, University of Wisconsin, 1953), 2-6, 19; The American Labor Legislation Review (hereafter cited as ALLR), 1-24 (1911-1934, passim. For the range of unemployment remedies see especially John B. Andrews, A Practical Program for the Prevention of Unemployment in America: First Tentative Draft, Submitted for Criticism and Suggestions (New York, 1914.) "Brief for Health Insurance," ALLR, June, 1916), 155-236; "Health Insurance: A Positive Statement in Answer to Opponents," ALLR,7 (Dec., 1917), 627-88; "Committee on Social Insurance," ALLR, 4 (Dec., 1914), 574.

2. Pierce, "The Activities of the AALL," 270-71. See also Ch. 4 of this study.

3. I. M. Rubinow, Social Insurance, With Special Reference to American Conditions (New York, 1913.

4. For a biography of Epstein, see Louis Leotta, Jr., "Abraham Epstein and the Movement for Social Security- 1920-1939" (unpublished Ph. D. dissertation, Columbia University, 1965). Epstein, Facing Old Age (New York, 1922); Epstein, The Challenge of the Aged (New York, 1928; Epstein, Insecurity, A Challenge to America: A Study of Social Insurance in the United States and Abroad New York, 1933. See also the Association's organ, variously published as its Bulletin, The Old Age Security Herald, and Social Security, and the proceedings of its annual meetings, published under the titles of Old Age Security in the United States and Social Security in the United States;1928-1935.

5. William M. Leiserson, Unemployment in the State of New York (New York, 1911); J. Michael Eisner, William Morris Leiserson: A Biography- (Madison, 1967), 37-38.

6. Paul H. Douglas, Real Wages in the United States (Boston, 1930); Douglas, "The Changing Basis of Family Support and Expenditure," The Family, 8 (Dec., 1927), 288-94; Paul Douglas and Aaron Director, The Problem of Unemployment (New York, 1931); Douglas, Standards of Unemployment Insurance, Chicago, 1933).

7. Barbara Nachtrieb Armstrong, Insuring the Essentials: Minimum Wage Plus Social Insurance--A Living Wage Program New York, 1932 .

8. Bryce Stewart, "An American Experiment in Unemployment Insurance," International Labour Review, 11 (Mar., 1925), 318-28; Stewart, Financial Aspects of Industrial Pensions New York, 1928); Stewart, in collaboration with Jeanne C. Barber, Mary B. Gilson, and Margaret L. Stecker Unemployment Benefits in the United States-The Plans and Their Setting (New York, 1930); Murray Latimer, Industrial Pension Systems in the United States and Canada (New York, 1932); Latimer, Trade Union Pensions Systems and Other Superannuation and Permanent and Total Disability Benefits in the United States and Canada (New York, 1932); Mollie Ray Carroll, Two Years of German Unemployment Insurance (Chicago?, 1929?); Carroll, Unemployment Insurance in Germany (Washington, 1929); Carroll, Unemployment Insurance in Austria (Washington, 1932); Mary B, Gilson, Unemployment Insurance (Chicago, 1933); Gilson, Unemployment Insurance in Great Britain: The National System and Additional Benefit Plans (New York, 1931); Industrial Relations Counselors, Inc.; An Historical Basis for Unemployment Insurance: A Report Prepared for the Employment Stabilization Institute, (University of Minnesota (Minneapolis, 1934).

9. Alvin Hansen and Merrill G. Murray, A New Plan for Unemployment Reserves (Minneapolis, 1933); Hansen, Murray, Russell A. Stevenson, and Bryce Stewart, A Program for Unemployment Insurance and Relief in the United States (Minneapolis, 1934); Industrial Relations Counselors, Inc., An Historical Basis for Unemployment Insurance: A Report Prepared for the Employment Stabilization Institute.

10. John B. Andrews, " Introduction," to Epstein, Facing Old Age, Leo Wolman, "Unemployment Insurance for the United States," ALLR, 21 Mar., 1931), 18 (Wolman was president of the AALL in 1934); Epstein, Insecurity, 72.

11. See, for instance, Stewart et al, Unemployment Benefits in the United States, 3-18.

12. Henry Seager, "Introductory Address." ALLR, 1 (Dec., 1911), 10; "Brief for Health Insurance" (cited note 1), 223-36; "Health Insurance: A Positive Statement" (cited note 1); Andrews, "Social Insurance," The Annals of the American Academy, 69 (Jan., 1917) 42-1:9; Andrews, A Practical Program; Andrews, "The Prevention of Unemployment," Proceedings of the National Conference of Charities and Correction, 42 (1911); Andrews, "Unemployment Prevention and Insurance," ALLR, 10 (Dec., 1920), 233-39.

13. John R. Commons, "Social insurance and the Medical Profession," The Wisconsin Medical Journal, 13 (June, 1915), 304.

14. For a more extended discussion of these ideas of Commons, see Theron F. Schlabach, Edwin E. Witte: Cautious Reformer (Madison, 1969), 19-26.

15. Ibid., 22-25.

16. See Ch. 5 of this study.

17. Leiserson, "Will Industry Provide Security?" in Social Security in the United States: A Record of the Sixth National Conference on Old Age and Social Security (New York, 1933), 80; Commons, "Unemployment Insurance Is Coming," LaFollette's Magazine, (Dec., 1922) 190-91.

18. Sam Lewisohn, Ernest Draper, John R. Commons, and Don Lescohier, Can Business Prevent Unemployment? (New York, 1925), especially Ch. 2. For further evidence of scientific managers' receptiveness to Commons, see, for instance, The Bulletin of the Taylor Society, 8:118; 9:86, 182, 184.

19. Herman Feldman, The Regularization of Employment: A Study in the Prevention of Unemployment (New York, 1925); Pierce, "The Activities of the AALL" cited note 1, 9, 21; Paul A. Raushenbush, "The Wisconsin Unemployment Reserves Law" (reprint from The Quarterly Bulletin of the New York State Conference on Social Work, April, 1933 , 9a

20. See Lewisohn et al, Can Business Prevent Unemployment? Ch. 2, esp. pp. 52-54. Commons, "Unemployment Prevention," ALLR, 12 (Mar., 1922), 20; Commons, "Unemployment: Compensation and Prevention," The Survey, 47 (Oct. 1, 1921), 6-7; Commons, "The True Scope of Unemployment Insurance," ALLR, 15 (Mar., 1925), 44.

21. Daniel Nelson, Unemployment Insurance: The American Experience, 1915-1935 (Madison, 1969), 109-10) 85, 117; Commons, "The True Scope of Unemployment Insurance," 41-43.

22. Nelson, Unemployment Insurance, 118-28; Roger S. Hoar, Unemployment Insurance in Wisconsin (South Milwaukee, 1932); Raushenbush, "The Wisconsin Unemployment Reserves Law," 1-14.

23. For the Wisconsinites' major defenses of their Wisconsin plan see Elizabeth Brandeis, "An Official Challenge to Fatalism in Industry," ALLR, 23 (Sept., 1933), 137-41; Brandeis, "Unemployment Reserves vs. Insurance," The New Republic, 76 (Sept. 27, 1933), 177-79; Harold Groves and Brandeis, "Economic Bases of the Wisconsin Reserves Act," The American Economic Review, 24 (Mar., 1934), 38-52; Groves, "Unemployment Compensation in Wisconsin," ALLR, 23 (June, 1933), 123-30; Raushenbush, "The Wisconsin Idea, Unemployment Reserves," The Annals of the American Academy, 170 (Nov., 1933), 65-75; and Raushenbush, "The Wisconsin Unemployment Reserves Law."

24. "An American Plan for Unemployment Reserve Funds," ALLR, 20 (Dec., 1930), 349-56; "Governors' Interstate Commission Urges Unemployment Reserves," ALLR, 22 (Mar., 1932), 19-23; Commons, "The Groves Unemployment Reserves Law," ALLR, 22 (Mar., 1932), 8-10; Commons, Institutional Economics (New York, 1934), 840-65.

25. Commons, "Unemployment: Compensation and Prevention," 8; Commons, Myself (New York, 1934), 143.

26. Leiserson, Unemployment in the State of New York, 65; Leiserson, "Industrial Fluctuations and Unemployment," ALLR, 21 (Mar., 1931), 65-83.

27. See, for instance, Commons, "The True Scope of Unemployment Insurance" (cited note 20), 40.

28. See especially Alvin Hansen, Economic Stabilization in an Unbalanced World (New York, 1932); and Paul Douglas, Controlling Depressions (New York, 1935).

29. ALLR, 1-25 (1911-1935), passim.

30. Armstrong, "The Nature and Purpose of Social Insurance," The Annals of the American Academy, 170 (Nov., 1933), 6; Armstrong, Insuring The Essentials, 6; Douglas, "Introductory Note," in The Care of the Aged: Proceedings of the Deutsch Foundation Conference, 1930 (Chicago, 1931), vii-xii.

31. Rubinow, Social Insurance, 38-87; Rubinow, "First American Conference on Social Insurance," The Survey, 30 (July 5, 1913), 478-80; Rubinow, The Quest for Security (New York, 1934), 275-301, 484-505; Epstein, The Challenge of the Aged, 210-36; Epstein, Insecurity, 537-50, 621-51, 37-38; Rubinow, "Labor Insurance" The Journal of Political Economy, 12 (June, 1904) 362-81.

32. Rubinow, "First American Conference on Social Insurance"; Rubinow, "Labor Insurance," 371; Rubinow, "The Modern Problem of the Care of the Aged," in The Care of the Aged, 13; Epstein, The Challenge of the Aged, 222.

33. See, for instance, Rubinow, The Quest for Security, 289-93, 300-01, and Epstein, Insecurity, 547.

34. Rubinow, for the two-and three-tier idea, see especially Rubinow, Social Insurance, 387-88. Rubinow, "The Modern Problem of the Care of the Aged." 13; Warren Vinton, "Old Age Insurance--The Next Step," in Social Security in the United States-A Record of the Seventh National Conference on Social Security New York, l934)61.

35. For the two-and three-tier idea, see especially Rubinow, Social Insurance, 387-88. Rubinow, "Labor Insurance," 372; Rubinow, "The Modern Problem of Care of the Aged," 13.

36. Commons, "The True Scope of Unemployment Insurance" (cited note 20), 43; Rubinow, Social Insurance, 491, 345, 349; Armstrong, Insuring the Essentials, xvi; Edgar Sydenstricker. "A Study of Standards for Health Insurance," in Social Security in the United States (cited note 34), 81; Douglas, "The Changing Basis of Family Support" cited note 6), 294; Epstein, Insecurity, 97, 37, 42-44.

37. Hansen and Murray, A New Plan for Unemployment Reserves, 26-27; Leiserson, "Ohio's Answer to Unemployment," The Survey, Dec. 1, 1932), 643-47; Rubinow, The Quest for Security, 441; Douglas, Standards of Unemployment Insurance, 150-51; Douglas, "Toward Unemployment Insurance," The World Tomorrow, 17 (Mar. 29. 1934), 160-62; Epstein, "Enemies of Unemployment Insurance," The New Republic, 76 (Sept. 6, 1933), 95-96; "Unemployment Insurance Standards Set Up by Experts," Social Security, 7 (Sept.-Oct., 1933), 5-7.

38. Commons. "Unemployment Reserves and Unemployment Insurance," ALLR, 20 (Sept., 1930), 268; Leiserson, "Will Industry Provide Security?" (cited note 17), 82-83; Epstein, Insecurity, 317-23; Hansen and Murray, A New Plan for Unemployment Reserves,, 37-48; Hansen, Murray, Stevenson, and Stewart, A Program for Unemployment Insurance and Relief, 15, 156, 158; Douglas, Standards of Unemployment Insurance, 101-03; Douglas, Controlling Depressions 262-65; Eveline Burns. "Lessons from British and German Experience," in Social Security in the United States (cited note 34), 143-151.

39. Commons, "Unemployment Compensation," ALLR, 20(Sept., 1930), 250; "An American Plan for Unemployment Reserve Funds" cited note 24), 353.

40. See note 23.

41. See, for instance, Douglas, "Can Management Prevent Unemployment?" ALLR, 20 (Sept., 1930), 273-81; Leiserson in Ohio State Federation of Labor, Proceedings (1932), 86; Rubinow, The Quest for Security, 441-42.

42. Rubinow, The Quest for Security, 441-42; Rubinow, Social Insurance, 3-5, 8; Epstein, "Unemployment Insurance vs. Unemployment Reserves," in Social Security in the United States (cited note 17), 95-97; Epstein, Insecurity, 319.

43. Leiserson, "Will Industry Provide Security?" 78; Rubinow, "The Ohio Idea: Unemployment Insurance," The Annals of the American Academy, 170 (Nov., 1933), 82.

44. Commons, "The True Scope of Unemployment Insurance" (cited note 20), 39.

45. Bulletin of the American Association for Old Age Security, Old Age Security Herald, and Social Security, 1927-1934, passim; ALLR, 1922-1934, passim. Commons, "The Groves Unemployment Reserves Law" (cited note 2 ), 9.

46. These observations are distilled from the kinds of sources used in ch. 6 of this study.

47. See especially the Report of the Executive Council, AFL Proceedings (1932), 39-41, 42, 44; (1934), 114-18; William Green, "Why Labor Opposes Forced Worker Contributions in Job Insurance," ALLR, 24 (Sept., 1934), 101-05; and Green, "Unemployment Insurance," American Federationist, 41 (Dec., 1934), 1292-93.

48. "What Kind of Unemployment Insurance?" Locomotive Engineers' Journal, 66 (Mar., 1932), 188; New York State Federation of Labor, Proceedings, 71 (1934), 115-17, 128-29; Joseph Schlossberg, "The Movement for Unemployment Insurance in the United States," The Advance, 18 (Mar., 1932), 4-5; "Unemployment Insurance That Insures," The Advance, 20 Dec., 1934), 3.

49. Commons, "The True Scope of Unemployment Insurance" (cited note 20), 41-42.

50. "Society Proceedings: Medical Society of the County of New York; Symposium on Compulsory Health Insurance," The Journal of the American Medical Association, 68 (Mar. 10, 1917), 804; Epstein, "Do We Need Compulsory Public Unemployment Insurance? Yes," The Annals of the American Academy, 170 (Nov., 1933), 29, 27; Leiserson, "Dole or Insurance?" The Nation, 13 (Feb. 17, 1932), 193; Leiserson, "Ohio's Answer to Unemployment" (cited note 37), 644.

51. Douglas, "The Need for Unemployment Insurance," in Social Security in the United States (cited note 17), 93.

52. Rubinow, Social Insurance, 490-91; Commons, "Unemployment: Compensation and Prevention" (cited note 20), 7.

53. Commons, Myself, 51, 150; Leotta, "Abraham Epstein" (cited note 4), 28-29, 33, 38, 41-44; Leonard Bright, "C. P. L. A. Organizes," Labor Age, 18 (June, 1929), 3; Epstein, Insecurity, 245, 303, and passim.

54. "Vita" on flyleafs of Rubinow, Studies in Workmen's Insurance (New York, 1911); Samuel Gompers, "Voluntary Social Insurance vs. Compulsory," American Federationist, 23 (May, 1916), 333-57; Rubinow, "The Relation Between Private and Social Insurance," Casualty Actuarial and Statistical Society of America, Proceedings, 2(1916), 342; Rubinow, The Quest for Security, 579; Paul Raushenbush, "Wisconsin's Unemployment Compensation Act," ALLR, 22 (Mar., 1932), 17.

55. Rubinow, The Quest for Security, 551; For similar statements by Epstein, see Epstein, Insecurity, 19-20, 24.

56. Leiserson, "Ohio's Answer to Unemployment" (cited note 37), 646; Douglas, Standards of Unemployment Insurance, 158; Epstein, "New Standards for Unemployment Insurance," The Survey, 69 (Aug., 1933), 282.

57. Raushenbush, "The Wisconsin Idea: Unemployment Reserves" (cited note 23), 65, 69; Groves, "Unemployment Compensation in Wisconsin" (cited note 23), 129; Raushenbush, "The Wisconsin Unemployment Reserves Law" (cited note 19), 2.

58. "Governors' Interstate Commission Urges Unemployment Reserves" (cited note 24), 19, 21n; Douglas and Director, The Problem of Unemployment; Andrews, "Prospects for Unemployment Compensation Laws," The Annals of the American Academy, 170 (Nov., 1933), 90-91; Rubinow, The Quest for Security, 446.