The Unemployment Century
Of the five centuries during which the United States has been settled by Europeans, in only one, the twentieth century, has unemployment been a dominant political and economic issue. Whereas in nineteenth-century America passions erupted over inflation and deflation, tariffs and taxes, slavery, the disposition of public lands, central banking, and the regulation of monopolies, public debate about the "unemployment problem" was sporadic and localized. Indeed, the word "unemployment" did not even exist during most of the century, and when Alfred Marshall wrote the definitive nineteenth-century treatise on economics in 1890, he mentioned the word on but one page. 1
By contrast, unemployment became the dominant economic issue of the twentieth century both within the academy and in the realm of public policy. During the 1890's, there were but two articles dealing with the issue in serious journals of economics and statistics; by the 1930s, scores of papers were published discussing the measurement, determinants, and effects of unemployment. 2 While in the last presidential election of the nineteenth century, that of 1896, the central economic issue was monetary policy and the gold standard, by 1932 unemployment had moved center stage.
Rising public concern over unemployment led to political pressure to "do something" about the unemployment problem. Even in the first decade of the new century, the unemployment arising out of the panic of 1907 led to cries to eliminate the root cause of financial instability. This, in turn, ultimately led to the Federal Reserve Act, the first major federal involvement in macroeconomic intervention. A few years later, during the 1920-22