In the popular memory of the 1970s, truckers appear mainly as the source of the CB radio fad and the outlaws featured in country music songs and the Smokey and the Bandit films. In that decade of oil shortages, economic stagflation, women’s liberation, and culture wars, this obscure corner of the transportation sector seems far removed from the political conflicts that were reshaping the nation. Yet on three dramatic occasions, a loose coalition of independent truckers attempted to shut down the interstate highway system and disrupt the distribution network that carried food across the United States. In effect, they tried to shut down America.
The OPEC oil embargo triggered the first two strikes, in late 1973 and early 1974, as long-haul truckers protested skyrocketing fuel costs, blockaded highways and gas stations, and engaged in sporadic violence against drivers who did not respect the boycott. The truckers demanded federal intervention to protect their economic interests, including price caps on diesel fuel, a government investigation of alleged profit gouging by oil companies, and the lifting of the recently imposed 55 mile-per-hour speed limit. President Richard Nixon responded by refusing to bargain with “a handful of desperadoes.” In 1979, when the Iranian Revolution worsened the energy crisis, about 75,000 truckers went back on strike, calling for federal action to freeze diesel prices and provide subsidies for independent owner-operators through a surcharge on the large, unionized trucking corporations regulated by the Interstate Commerce Commission (ICC). The Independent Truckers Association, a newly formed group that organized the 1979 shutdown, also seized the opportunity to press for the complete deregulation of the industry. The Democratically-controlled Congress responded by deregulating freight trucking in the Motor Carrier Act of 1980, six months before Ronald Reagan entered the White House.
In the conventional narrative of political realignment, economic deregulation represents a key stage in the collapse of New Deal liberalism and the triumph of free-market conservatism with the “Reagan Revolution” of the 1980s. But where on the political spectrum should we locate the independent trucker revolts, which combined “liberal” demands for substantial government intervention with “conservative” calls for freedom of enterprise? Mike Parkhurst, the leader of the Independent Truckers Association and a self-defined “radical conservative,” portrayed deregulation as the antidote to a corrupt system of monopoly capitalism dominated by big corporations, big unions, and big government. And yet leading liberals such as Senator Ted Kennedy and activist Ralph Nader also championed trucking deregulation as a pocketbook reform that would break up government-sanctioned freight shipping cartels and reduce prices for American consumers. President Jimmy Carter endorsed this approach to fight inflation and restore economic growth, an agenda that also shaped his administration’s deregulation initiatives in the airline, railroad, telecommunications, natural gas, and banking industries. The Teamsters Union and the large firms in the American Trucking Associations bitterly resisted deregulation, but the Motor Carrier Act drew support from a broad alliance that included liberal consumer groups, the small-business lobby, agribusiness corporations, and conservative economists such as Milton Friedman and Alan Greenspan. Deregulation, far from being solely a right-wing cause, had surprising bedfellows.
The current crisis in the global credit markets and the massive taxpayer bailout for Wall Street have led many Democratic politicians and liberal policymakers to rethink the free-market mantras of the past three decades and reconsider the virtues of the New Deal regulatory state. “Of course, something must be done–and quickly,” wrote Katrina Vanden Heuvel and Eric Schlosser in the Wall Street Journal. “What we really need is a new New Deal”–not just a bailout for large banks, but “relief for ordinary Americans.” But if today’s progressives hope to resurrect the lessons of the New Deal in order to address the nation’s worst financial emergency since the 1930s, it is imperative that they recognize the weaknesses as well as the strengths of the regulatory policies that shaped America’s political economy from the Great Depression through the recession of the 1970s.
The New Deal state always contained two competing strains of economic regulation: a top-down market stimulus approach that favored large corporations and monopoly capitalism, and a more bottom-up redistributionist approach promoted by progressive labor and consumer groups that supported curbs on the power of big business. The history of the unusual coalition that advocated trucking deregulation in the 1970s serves as a timely reminder that the contradictory features of New Deal economic policymaking cannot be reduced to a simple battle between liberal support for government intervention and conservative demands for free enterprise.
In Trucking Country, University of Georgia historian Shane Hamilton argues that trucking deregulation reflected a “categorical embrace of free-market ideology by workers, consumers and politicians who, since the height of the New Deal in the 1930s, had called upon labor unions and a powerful central government to strike a balance between private economic gain and equality of educational opportunity.” The trucker revolts, a short chapter in this much larger story, contributed to a bipartisan enthusiasm for deregulation that helped lay the foundation for the runaway corporate capitalism that brought with it low consumer prices and rising economic inequality. But the shift from an “equity-oriented” to a “growth-oriented” liberalism began long before, during the World War II era itself, when New Deal regulators began to abandon policies of redistribution and efforts to restrain monopoly capitalism in favor of a Keynesian program to intervene in the economy by stimulating and subsidizing private enterprise. Was New Deal liberalism, built on a contradictory foundation, doomed to fail? And if so, what does that mean for today’s calls to resurrect it? With corporate regulation now back on the political agenda, it’s worth revisiting the story of what New Deal liberalism–and its eventual displacement by the free-market dogmatism of the Reagan/Clinton/Bush era–was all about in the first place.
For the past two decades, political historians have grappled with the linked questions of how to explain the demise of New Deal liberalism and the rise of New Right conservatism. The ascendance of Ronald Reagan sent a shock wave through the profession, leading to the widespread admonition that scholars must start “taking conservatism seriously.” The most influential interpretation of conservative triumph, at least at first, was the racial backlash thesis, which highlighted Republican success in manipulating white anger over busing, affirmative action, and racially coded wedge issues like crime, taxes, and liberal antipoverty programs. According to accounts by Dan Carter and others, liberalism collapsed in the 1960s and 70s because of the success of the Republican Party’s so-called “Southern Strategy” and the parallel revolt of the “Reagan Democrats” in the white ethnic neighborhoods of the Northeast and Midwest.
Social critics like Thomas Frank and Paul Krugman have popularized the backlash thesis–alongside conservatism’s “culture wars” against feminism, abortion, and gay rights–to argue that corporate Republicans from Richard Nixon through George W. Bush have convinced working-class and middle-income Americans to reject New Deal liberalism and vote against their own economic interests. In his best-selling 2004 polemic, What’s the Matter with Kansas?, Frank portrayed the white working-class defection from the New Deal coalition as a form of false consciousness, a “species of derangement that has brought so many ordinary people to such a self-damaging political extreme.” After distracting voters through the top-down orchestration of racial and cultural backlash, conservative Republicans destroyed the New Deal social contract and implemented their real agenda of corporate deregulation, union-busting, tax cuts for the wealthy, and free-market privatization.
But a growing body of research, led by scholars such as Alan Brinkley and Thomas Sugrue, has challenged the backlash narrative for presenting a distorted story of political transformation in modern America, especially in terms of timing. Instead, these historians have traced the ultimate fragmentation of the New Deal order back to the considerable success of postwar “growth liberalism” in launching the Keynesian economic policies that subsidized suburban prosperity, Sunbelt development, corporate expansion, the interstate highway system, and other entitlement programs that helped create an affluent nation of consumers and homeowners.
In this reading, the policies of New Deal and Fair Deal liberalism forged during the 1930s and 1940s established a powerful middle-class social contract that nevertheless contained a number of built-in contradictions. In terms of race, postwar liberals made a commitment to ensure equal opportunity for racial minorities, but federal programs sanctioned housing segregation and other pervasive forms of discrimination in the allegedly “private” market. To hold the Democratic coalition together, liberal policymakers promised to maintain high prices for farmers, good wages for unionized workers, and low costs for consumers–a difficult balancing act that depended on assumptions of permanent economic growth. And instead of continuing the “corporatist” regulations that forced business and labor to cooperate in centralized planning during the Depression and World War II, postwar liberalism primed the economy through massive subsidies for American corporations while pledging that government would take action to maintain a “decent standard of living” for individual Americans.
From this long-term perspective, the most significant turning point for New Deal liberalism came in the 1940s, through a series of fateful compromises that structured the postwar development of the American state, rather than with the populist backlash of the 1960s and 70s or the supposed triumph of free-market ideology in the 1980s and 90s. Although grassroots revolts by working-class and middle-class white voters certainly weakened the Democratic Party, what really destroyed the New Deal Order was the discrediting of Keynesian economics during the long recession of the 1970s, combined with liberalism’s subsequent failure to uphold the promises of growth and security at the heart of the postwar social contract.
Trucking Country intervenes in this crowded debate over the demise of New Deal liberalism from a genuinely original vantage point: the political culture of independent long-haul truckers and the political economy shaped by the agribusiness corporations that they served. Hamilton begins the book by critiquing the backlash thesis and specifically assailing Thomas Frank’s portrait of rural working-class voters tricked by Republican politicians into betraying their real economic interests. He makes a compelling case that “pocketbook politics, not cultural conservatism, framed truckers’ disdain for liberalism.” But Hamilton is less convincing in his equation of the independent trucker revolts with the “triumph of a radically antistatist capitalist ideology” that led directly to Reagan and a new free-market consensus. The independent truckers who mobilized against the tripartite enemy of monopoly capitalism, “undemocratic labor unions and corporate-minded government regulators” were individuals viewing the world through their own windshields–neither the new soul mates of free-market conservatism nor ideologically opposed to all forms of state intervention in the economy. The political revolt in the heartland represented a populist defense of the “common man” against the pro-corporate policies of both political parties, which had long ago abandoned the rural working class in favor of agribusiness and metropolitan consumers. When the working class bore the brunt of the economic recession of the 1970s, liberalism ended up taking most of the blame for the inability to protect ordinary Americans from the crisis.
Although Trucking Country begins and ends with the riveting trucker protests of the 1970s, the heart of the book is a detailed story of “how agribusiness crafted a business model that promoted low consumer prices, low wages, and minimal government regulation as inherent social benefits.” As interstate highways supplanted railroads at the center of the nation’s transportation network, agribusiness corporations embraced long-haul trucking as the cheapest way to move food produced in the rural heartland to supermarkets in the cities and suburbs. They revolutionized the food distribution economy while enjoying massive subsidies from the federal government, part of what Hamilton labels the “regressive New Deal farm policies” that “benefited large-scale farmers and powerful food processors at the expense of smaller farmers, urban workers, and consumers.” At first, policymakers in New Deal agencies pursued a balancing act, keeping prices high for farmers but low for consumers, which in practice meant regulatory favoritism toward the efficiency of agribusiness cartels and other forms of monopoly capitalism. Such compromises–between regressive agricultural policies and progressive labor and consumer politics, and the contradictions of federal subsidies and state-sanctioned monopoly power in an allegedly free-enterprise economy–were structured into the New Deal state from the outset.
Federal regulation of interstate trucking began with the Motor Carrier Act of 1935, a regulatory measure promoted by powerful corporate interests. The pattern in highway trucking resembles the model proposed by Colin Gordon in his revisionist history New Deals, which argues that large corporations often supported government regulations and accepted labor standards as part of their pragmatic search for economic stability and desire to drive smaller competitors out of the market. The pressure for trucking regulation came from the interest groups that would benefit the most: railroad corporations that wanted ICC authority extended to their new competitors on the highways, Teamsters officials who understood that they could organize a small number of large companies much more easily than a large number of small-scale operators, and the major firms in the American Trucking Associations that “used the increased regulatory power of the New Deal to successfully promote their own desires for cartelization.”
At the same time, the rural farm bloc in Congress inserted a critical loophole in the 1935 Motor Carrier Act exempting the transportation of agricultural products from ICC regulation. This agricultural exemption enabled smaller dairy and cattle farmers to use unregulated trucking to overcome the existing railroad-based monopolies that dominated milk and beef distribution, while making it all but impossible for the Teamsters to organize drivers in the farming sector. While the largest freight shippers supported both regulation and unionization in exchange for monopoly power, their agribusiness counterparts circumvented the railroad and highway cartels in a more chaotic marketplace. After carving out a major exemption from federal oversight of trucking, agribusiness
corporations went to war against progressive efforts to regulate the prices they charged for products at the supermarket.
At the end of World War II, the left flank of the New Deal coalition sought to forge a permanent political alliance between labor unions and consumers through redistributionist policies that would guarantee high wages without price inflation. But the agribusiness lobby denounced the Office of Price Administration as a violation of “free enterprise” and defeated the effort by convincing consumers that government regulations and powerful unions represented a greater threat than monopoly capitalism. Then in the late 1940s, Secretary of Agriculture Charles Brannon proposed a sweeping revision of farm policy that would reduce the price support system for agribusiness corporations by shifting federal subsidies to small farmers and metropolitan consumers. The agribusiness lobby attacked the Brannon Plan as another socialist scheme to destroy free enterprise, and Congress again rejected price controls. Hamilton rightly assesses this moment as the “high tide of economic liberalism in farm and food politics” and concludes that “its spectacular failure underscored the resurgence of economic conservatism” in postwar American politics–a pivotal turning point that came three decades before the deregulatory wave of the late 1970s and early 1980s.
After the failure of these regulatory efforts to link consumer and labor politics, mainstream liberals fully embraced the Keynesian framework that government should manage an economy of abundance by spreading the wealth while subsidizing, rather than curbing, the expansion of big business. As Hamilton explains, federal bureaucrats and agribusiness interests recognized that unregulated long-haul trucking offered a “technological fix” that could reduce consumer prices while maintaining high profits for corporations by dramatically lowering transportation costs. In the 1950s, Republican policymakers celebrated the “free market” while continuing the New Deal price supports (via bureaucratic regulation) for corporate farms, turning the Department of Agriculture into a massive research and development complex for the benefit of agribusiness, and establishing the greatest government subsidy of all with the federal interstate highway system. Long-haul trucking eventually enabled a new group of agribusiness companies, such as Tyson Foods, to eclipse the railroad-based cartels and establish a deregulated version of monopoly capitalism that delivered low consumer prices while fighting labor unions and defending “free enterprise.” The New Deal state laid the foundation for this food economy, which benefited corporations and middle-class consumers by exploiting the farm workers who harvested the crops and the independent truckers who delivered products to the cities and suburbs.
The phrases “free enterprise” and “free market” remain within quotation marks throughout Trucking Country, and for good reason. Hamilton often labels it “ironic” that agribusiness companies sought and received massive government subsidies while condemning state regulation as a violation of the private enterprise system. But this is how capitalism works, for everyone from independent truckers who demanded both protection and freedom from the federal government, to corporate lobbies that pushed for regulation when it suited their material interests and deregulation when it did not. “Free enterprise,” in short, is a political fiction wielded as a form of power in the struggles to shape the mixed public-private economy of modern America.
As the history of the New Deal economy reveals, regulation is not an inherently progressive mechanism of government intervention set in ideological opposition to an inherently conservative free-market platform. Regulation is a policy tool that can be deployed for a wide range of purposes–to buttress or attack monopoly capitalism, to distribute resources to certain interest groups over others, to place the state in the service of corporate profits or to redistribute those profits to workers and consumers.
Neo-New Dealers would do well to remember that corporate interest groups have displayed a persistent ability to “capture” the policymaking process in regulatory agencies initially established to curb their power, especially when bureaucrats make their peace with cartels and monopolies in the name of market efficiency. Likewise, liberal politicians and policymakers generally have sided with corporations over organized labor when forced to choose the side of the “consumer.” For their part, conservatives consistently have harnessed state power for the benefit of their corporate allies while fighting against regulatory protections for workers and consumers–the critical path not taken by New Deal liberalism during the showdowns over farm subsidies and food prices during the 1940s.
Given this history, progressives who believe that the answer to three decades of capitalist excess since the “Reagan Revolution” is simply more “regulation” should first come to terms with the ways in which the compromises built into the New Deal state established the pro-corporate and pro-consumer priorities that paved the way to the contemporary Wal-Mart economy of low wages and low prices.