Development on a Cracked Foundation: How the Incomplete Nature of New Deal Labor Reform Presaged its Ultimate Decline

Abstract

Mariano-Florentino Cuéllar, Margaret Levi, and Barry R. Weingast’s excellent essay, Twentieth Century America as a Developing Country, Conflict, Institutional Change and the Evolution of Public Law, celebrates the period during which the National Labor Relations Act facilitated the peaceful resolution of labor disputes and improved the working conditions of American workers. These distinguished authors make a strong case for the essentiality of law in regulating labor relations and the importance of national culture in providing a solid context for the emergence of legal regimes facilitating economic growth and equality. This reply to their essay explores how the New Deal’s failure to eradicate ideological divisions, racial inequities, and anti-labor power structures rooted in our nation’s history compromised the ultimate success of the NLRA, the protection of labor in the international trading regime, the effectiveness and prevalence of American labor unions, and the overall leverage of American workers.

The reply then addresses two related realities: 1) the New Deal idea that all workers deserve economic security, safe working conditions, and a fair say over the terms and conditions of their employment remains sound; and 2) but that idea cannot be realized unless it is backed by legal force in the institutions of law that govern a now global economy. Put simply, the original vision of FDR calling for a global New Deal must be implemented if American workers and their international brethren are to receive fair treatment.

Keywords: labor & employment law, American political development, law & economics, worker protections, economic security, racial inequality, industrial relations, unions & collective bargaining, administrative & regulatory state, NLRB, market-based economy, globalization, Great Depression, global New Deal

JEL Classification: E23, F66, J21, J51, J83, K23, K31