The Invisible Hand of Planning

The Invisible Hand of Planning: Capitalism, Social Science, and the State in the 1920s

Copyright Date: 1985
Pages: 263
  • Cite this Item
  • Book Info
    The Invisible Hand of Planning
    Book Description:

    Guy Alchon examines the mutually supportive efforts of social scientists, business managers, and government officials to create America's first peacetime system of macroeconomic management.

    Originally published in 1985.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-5496-7
    Subjects: Political Science, Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
    (pp. ix-2)
    (pp. 3-7)

    This is a study of a neglected chapter in the intertwined histories of business and government planning, the social sciences, and modern managerial society. It is, in particular, a study of mutually supportive collaboration between social science and managerial institutions in the attempt to create America’s first peace-time system of macroeconomic management, a collaboration that appeared to be moving toward success in the 1920s but was incapable of preventing the Great Depression.

    Under the leadership of such individuals as Herbert Hoover, Wesley C. Mitchell, Mary Van Kleeck, Henry S. Dennison, and Beardsley Ruml, there developed between 1921 and 1933 a...

  5. CHAPTER 1 Technocratic Progressivism
    (pp. 8-20)

    The last decades of the nineteenth century saw the emergence of the large corporation and the beginnings of modern bureaucratic society. With this emergence, the authority once exercised by traditional, locally centered institutions would be challenged and weakened by a new world of mammoth organizations, powerful hierarchies, and an industrial working class. This new world brought with it, among other things, mass unemployment and industrial violence so severe that by the early twentieth century the words “capitalist” and “proletariat” could be used and understood in America. Thus neither its frontier nor its political institutions could apparently protect the United States...

  6. CHAPTER 2 Technocratic Mobilization, 1917–1918
    (pp. 21-32)

    Randolph Bourne, more than most, understood in 1917 that modern war furthered not only the interests of the state but those of the intellectual classes as well. As Merle Curti would later note, these classes were already in the war before the nation had formally entered it. And it was only later, after much death and suffering, and after the Faustian quality of the bargain had become apparent, that their patriotic zeal and their admiration for war-induced unities and efficiencies would cool. But in the America of 1917, with the century still young and unrevealed, it was not difficult for...

  7. CHAPTER 3 Ideas of Technocratic Reconstruction, 1919
    (pp. 33-50)

    Histories of the World War’s aftermath in America have traditionally concentrated on the three R’s of retrenchment, reaction, and red scare. But the years 1919,1920, and 1921 were also characterized by a debate over a fourth R, reconstruction, that would exert substantial influence over the shape of modern managerial culture. It was a debate formulated largely in technocratic terms and driven especially by the war-sharpened visions of mobilized social scientists and their managerial patrons. The wartime achievements had seemingly turned collaboration among social scientists and functional leaders into a virtue. And so, energized by what they judged to have been...

  8. CHAPTER 4 Institutions of Technocratic Reconstruction, 1920–1921
    (pp. 51-70)

    The goal of sustained economic growth as a cure for distributive conflict was first institutionalized in the countercyclical planning apparatus of the 1920s. But behind this, as previous chapters have noted, was a view of reconstruction that linked the expansion of planning capabilities and social data to the containment of class conflict and the realization of a productivity capable of meeting popular expectations. To bring about this expansion a variety of institutions had been envisioned, and in 1920 two major ones, the Federated American Engineering Societies (FAES) and the National Bureau of Economic Research (NBER), became realities. Their initial studies...

  9. CHAPTER 5 Impulses Toward Techno-Corporatist Stabilization, 1921–1922
    (pp. 71-90)

    The worst depression in thirty years broke out late in 1920, lending fresh urgency to the search for means to stabilize the economy and fashion a steady growth. At its trough in January 1921, following the most precipitous price collapse in American history, unemployment stood at nearly 12 percent. As in the prewar period, this problem would again bring forth designs for technocratic management. Now, however, this development would proceed within the newly established machinery of the President’s Unemployment Conference, the brainchild of the new commerce secretary, Herbert Hoover, and an early and important triumph for his ideas concerning national...

  10. CHAPTER 6 The Business Cycle Report and Its Aftermath, 1922–1923
    (pp. 91-111)

    By the summer of 1922, significant steps had been taken to institutionalize the public authority of technocratic and business planners. Their ability to fashion an enlightened managerialism, so the argument ran, would be instrumental in generating steady productivity and higher living standards. Thus part of the business cycle committee’s job, as Hoover saw it, was to disabuse Americans of any lingering fascination with statist proposals. But as the committee members met to draft their recommendations in the late summer and fall of 1922, their deliberations were punctuated by serious divisions over this question, by institutional rivalries that threatened the project’s...

  11. CHAPTER 7 The Advance of Techno-Corporatist Legitimation, 1924–1927
    (pp. 112-128)

    By the mid-1920s, the business cycle committee’s apparent success in moderating boom and recession had given its ideas and supporters a new standing. Business cycles, it seemed, were amenable to control; and having taken much of the credit for allegedly controlling one, those involved in the committee’s operations proceeded to consolidate and strengthen their positions. On one level this took the form of subsidiary expeditions into sick and badly organized industries such as construction and coal. On a second level, it brought further development of mutually reinforcing ideas and commitments within social science and business institutions. Thus in the years...

  12. CHAPTER 8 Toward a Technique of Balance, 1927–1929
    (pp. 129-151)

    “There is nothing like it in economic history,” Herbert Hoover said in 1927 of America’s recent prosperity. Indeed, so stunning had been the generally stable expansion since 1921 that America had become the world’s marvel. General strikes, debt and exchange difficulties, and recurrent depression had continued to plague Europe, but the United States was experiencing steadily rising wages, increased mechanization and output, and rising living standards. And these were acting as a magnet, drawing to America dozens of investigators and numerous missions of exploration intent upon searching out the sources and unlocking the mysteries of this new kind of economy....

  13. CHAPTER 9 After the Crash, 1929–1932
    (pp. 152-166)

    The collapse of New Era prosperity from 1929 through 1932 shattered the expectations and contradicted the assumptions of Hooverian planning. Not only was the “new capitalism” unable to sustain a stable expansion; it proved incapable, when its business and technical institutions were put to the test, of predicting or mitigating the subsequent deflation.

    In Hoover’s mind, the setback of 1929 was something that should yield to the same organizational initiatives as had been applied in 1921. Consequently, his actions as president consisted largely of efforts to reproduce earlier successes by invoking a range of presumably proven countercyclical measures. Thus late...

    (pp. 167-172)

    In the 1920s the Hooverian vision of a society managed by enlightened private groups contributed powerfully to the mutual legitimation of technocratic professionals and business planners. And although this techno-corporatism failed to provide for and maintain a balance among Saint-Exupéry’s “motive forces,” the technocratic constituency upon which it was built did not suffer the repudiation suffered by Hoover and his program. Indeed, by the late 1920s America’s social science professions had become an established part of the modern managerial constellation, occupying, to be sure, a difficult and subordinate position, but one in which they would be able to exert a...

    (pp. 173-174)
  16. NOTES
    (pp. 175-219)
    (pp. 220-244)
  18. INDEX
    (pp. 245-252)
  19. Back Matter
    (pp. 253-253)