The Populist Wave: Democracy Lessons from the 1890s
Writer's Voice sits down with labor educator Steve Babson to talk about his book, The Forgotten Populists: When Farmers Turned Left to Save Democracy.
This is the transcript of an interview of Babson for the podcast of Writer's Voice with Francesca Rheannon. Listen to the podcast.
Key words: book recommendations, author interview, history, writer's voice, Francesca Rheannon, Steve Babson, Lesléa Newman, LGBTQ+ rights, populism, Matthew Shepard
Summary
A lot of folks call Donald Trump and other right-wing autocrats “populists.” The real populists are probably turning over in their graves...
They were the first ones to really articulate a progressive program for changing what American capitalism would be about. It would still be a market system, but they wanted a government that was amplified by democratic power and expansion of democratic rights and would be able to take on big business.
— Steve Babson
The term “populist” has evolved into a pejorative label, implying demagoguery and right-wing autocracy. But the actual populist movement of the 1890s advocated for a broader democracy to counter corporate monopoly and profiteering.
The movement, which brought together farmers and workers, black and white, and women and men, changed American politics for the better.
As Steve Babson reveals in The Forgotten Populists, the Republican and Democratic parties were forced to recognize the rising support within their ranks for progressive change due to populist influence. They co-opted the populist's radically democratic message, adopted some reforms, and then hounded the populists into oblivion.
But the movement's example of a broad-based movement for working class rights has nonetheless reverberated down to today. Babson argues that recovering the historical meaning of their challenge to corporate absolutism is crucial for understanding current struggles against corporate profiteering and right-wing authoritarians.
Interview Transcript
[lightly edited for narrative flow]
FR: Steve Babson, welcome to Writers Voice.
SB: It's a pleasure to be here. Thank you for inviting me.
Your book, The Forgotten Populists, is a wonderful corrective to what seems to be the mainstream notion of what populism is. Tell us what populism really means.
The original Populists were very different from what people might conclude listening to today's commentary that likens Donald Trump to the forgotten populists of the 1890s.
They were calling for change at a time when farmers, and railroad workers, and coal miners, and a wide range of reformers were very upset with the extraordinary power being wielded by what we call today “Robber Barons.” And that's what they were called back then as well.
The Robber Barons
This was the class of new investors, very powerful, wealthy men, the Vanderbilts, the Rockefellers, the Carnegies, who had established extraordinary corporate power, a new kind of presence in the American economy and society.
After the Civil War ended in 1865, they rise to power. And many farmers and workers find that while there was the promise of access to new markets and international trade, and that's a positive thing, they were finding that the monopoly power of these huge corporations was actually stifling their capacity to participate in that new system, and particularly when these robber barons were basically counting on the support which they got in ample amounts from both the Democratic and the Republican parties. Both of them were devoted to advancing the interests of this new elite of mega-rich folks.
And by the way, this might sound a little familiar today because we've had some of the same issues today where folks are confronting extraordinary inequality in income and looking for changes and positive change.
And the Populists were the first ones to really articulate a progressive program for changing what American capitalism would be about.
And the Populists were the first ones to really articulate a progressive program for changing what American capitalism would be about.
It would still be a market system, but they wanted a government that was amplified by Democratic power and expansion of Democratic rights and would be able to take on big business.
Rather than a small government that could be dominated by big business, they wanted a government strong enough to empower working people and farmers against this new class of mega-rich, the robber barons.
We are in a new gilded age. I was just looking at some figures the other day that shows that our income inequality is very close to what it was at the end of the 19th century when it was extraordinary.
You also write that the Populist defense of democracy and their challenge to the growing power of corporate monopoly transformed the nation's political terrain.
Now, we'll go a little bit more into detail in this in a little bit, but just briefly give us a broad introduction to that statement.
Well, what I'm about is trying to underline how at that moment in the 1890s, both of the main political parties, the Republicans and the Democrats, were devoted to supporting and subsidizing and gifting these corporate leaders with extraordinary power and public resources, really.
For example, to build the railroads, the federal government and state governments lavished extraordinary gifts upon these new corporations, including, in the case of the federal government, they gifted the Union Pacific, Southern Pacific, Pennsylvania Railroad.
They gifted those railroads 170 million acres of free land.
That's equivalent to the size of Texas, plus subsidies for their interest expenses and cash payments for every mile a railroad laid.
And look in the other way as this new class of industrial robber barons were actually stealing from the public welfare.
They were taking extraordinary payments to build these railroads while they were secretly owning the contractors who were double charging the public for building those railroads.
And so the populace were saying, this has got to stop.
Positive and Progressive Change
And they had a whole program of progressive reforms, regulation of corporations, taxing the rich, in some cases taking over the railroads when they no longer were operating for the benefit of the public.
And what happened was is that the Democrats in particular, but also the Republicans, had to concede the point that there was a growing population that wanted change, positive change and progressive change.
And the Democrats in particular began to co-opt, in effect, their Populist program.
The Populists were very successful in the early 1890s as a third party. They had no choice, by the way.
A third party made sense then because there was no primary system. There were no primaries to select and debate within the political parties who might be the better representative of that party's interest.
There were simply conventions dominated by the ruling leadership of those parties. And they would basically force out and marginalize any alternative voice.
And so a third party was the only option, unlike today where there actually are primaries where people can run and contest and challenge a prevailing point of view within those parties. They had to go third party.
But they were very successful. They elected six governors in the 1890s. They elected 50 members of Congress.
And the Democrats in particular had to adopt some of their platform for addressing a whole range of issues.
And in fact, over time, the Populists set in motion a whole range of reforms that they championed and that were eventually implemented. Sometimes it took a few years, sometimes a couple of decades.
Rights For Women and Black Americans
But voting rights for women and African-Americans, for example, Populists favored both.
The Constitution prevented women from voting in federal elections. And of course, in the South, the ruling elite, the white supremacists who ruled in the South, did not want to see what the Populists were advocating.
That was an alliance of black and white farmers who had common interests economically.
And the populace wanted to address their need for cheaper credit, for an expansion of the money supply, a postal savings bank that would loan them money at 2%, as opposed to the sometimes 40% or 50% or more that local merchants and mortgage companies were charging farmers on the Great Plains and in the South as well.
So people were being gouged by these monopoly corporations and were disadvantaged by this new industrial system. They wanted a reformed industrial system.
And in a way, if you think about it, the New Deal in the 1930s was, in a way, a culmination of what the Populists had been advocating all along, a point where the government, as a representative of the people, with expanded democratic rights, giving them access to actually programs that would help working people, that's what you saw implemented in the 1930s, in a way that was very positive.
And even the Republican Party had to shift in response to the Populists. And in fact, there was a new, this sort of sounds like an oxymoron, but there was actually a wing of the Republican Party that called themselves “progressive Republicans.”
And they were the implementation on a wider scale of what the Populists were the first to articulate and force into the public discussion.
Flashpoint: Railroads
That covers a lot of territory, but we'll go a little bit more into the details. I want to ask you, why were the railroads in the 1870s such a flashpoint for the agrarian radicals who ultimately ended up founding the Populist movement?
Well, if you think about it, farmers who want to get their crops to market are going to become dependent on railroads.
And railroads offered a real opportunity for a lot of farmers who otherwise would not really be able to plausibly send their crop, whether it was wheat or corn, or in the case of the South, cotton.
Their access to international trade and markets depended on building of these railroads.
And at first, farmers were very much in favor of this. They wanted railroads to be able to access those markets.
And so there was a lot of public support for subsidizing and providing resources to get these huge corporate enterprises up and running.
The problem was that once they were up and running, they were operated by absentee investors for the benefit of those investors living hundreds of miles away with no particular interest in the welfare of farmers or working people.
And remember, at this time, our economy was still substantially focused on agrarian and agricultural pursuits.
The largest occupational group in 1890, according to the census, was — 43% of all employed and economically active people were farmers or farm workers, 43%.
Today, it's down to under 2% after decades of automation and now actually scaling up into corporate empires, in which the farmers who remain include some family farmers who are hanging on and trying to survive.
But a lot of farmers have been reduced to the status of contract workers for the likes of Tyson.
But back in the 1890s, Kansas farmers, for example, at some points, as crop prices were falling dramatically, they were finding that railroad rates were staying at a very high level.
And it cost more in Kansas in some years of the 1890s to ship corn to the Chicago market than that actual corn would get on the marketplace once it arrived there.
And so in some of these depression years with 20% unemployment, farmers in Kansas were using corn as fuel.
It was no longer profitable or even economically plausible to send it to markets where they couldn't even fetch enough money to pay for the freight costs.
So that's why the railroads initially had a lot of goodwill and public support.
But by their abusive practices, charging extraordinarily high rates, and then, by the way, secretly gifting major corporations substantial rebates.
So that's how John Rockefeller made his money, was by secretly colluding with a whole series of railroads, promising he would ship via the favored railroad if they, in turn, gave him rebates.
That's how he drove his competition out of the market and established, in other words, an artificial monopoly, not based on particular efficiency, but based on collusion and fraud.
The Fight Over Gold, Silver and Greenbacks
So another big issue was also the gold standard. The US was on the gold standard at that time. The value of money depended on the amount of gold that was available. So why was this such an issue?
Well, it's a complicated one. And it's one I tried to provide a plausible understanding of in the book, which is aimed at a broader audience. It's scholastically, I think, sound. But it's an effort to communicate these complex issues to the widest possible audience.
And in the case of the gold standard, it's a bizarre world. Back then, and really up until the Civil War, there was no publicly printed currency. Every bank printed its own bills with the name of the bank on it.
And the idea was that you could go to that bank if you wanted to and redeem that paper bill for an equivalent amount of gold.
That meant, of course, they couldn't issue that many bills because there wasn't that much gold by definition. It's a scarce resource.
After the Civil War, there's still private banks are printing private label bills. And they're not printing any more than they could plausibly cover if a lot of depositors came in and turned in those bills for gold.
The banks liked that, because that made money scarce. And if money is scarce, it's getting a higher interest rate.
And people wanted to be paid back in bills that were, quote, “as good as gold.” It's an artificial restraint, though. It's really not necessary.
And during the Civil War, the federal government, to actually defeat slavery, printed what were called Greenbacks that were basically backed by the power of the government, not by some artificial standard of a precious metal like gold.
And what the Populists wanted was more Greenbacks. They also wanted to monetize silver, thereby allowing an expansion in the money supply that would bring down interest rates.
And again, interest rates were a main issue for farmers and a whole range of folks. But a lot of small entrepreneurs and farmers were finding that they were paying interest rates, double-digit interest rates, often enough.
And in the South, especially, cash-starved, where farmers had to borrow from the plantation owner or from the town merchant, and they were paying effective interest rates of 50, 70, 100%.
So, the demand for an expanded money supply that would bring down interest rates.
And even, by the way, the Populists wanted the Postal Service to open savings banks that could loan money at 2%.
They wanted the federal government to open public warehouses where farmers at harvest could store their grain, use that warehouse receipt as collateral to borrow money at 2% from that warehouse, from that public warehouse, and that would allow them to wait for better prices. If you have to sell at harvest, you're gonna get screwed because there's a huge glut of supply. Prices always go down at harvest.
So farmers would wanna hang on, but they would need some kind of public support to do so.
So it was public resources being used to sustain and make sustainable private enterprise on the scale of small farmers who needed that kind of support.
The Greenbacks that you spoke about were lambasted as, quote, fiat money, which is a kind of scorn that's applied with the same term by the right-wing today. You can go on the internet. I believe it was Rush Limbaugh who was talking about gold and selling gold and how gold was the only thing to have.
Is there a connection between the kind of control of the monopolies and the banks back in the populist era and the right-wing position today?
Metaphorically, yeah. I mean, who's gonna own the gold? That's not something which common folk are gonna be hoarding and storing, you know, in their basement or garage.
It's gonna be the people who have the power to access that precious metal and then use it as an artificial restraint on the amount of money in circulation.
What was happening was that prices were falling across the economy, especially for grain, for cotton, for corn and wheat and whatnot.
The agricultural prices were plummeting, but the prices of manufactured goods, of mechanical reapers, for example, of railroad freight rates, those hardly fell at all.
And in fact, often enough would go up as the companies were colluding.
So what people wanted was a way in which to manage the money supply, to maximize the benefit for the largest number of people, for farmers, for workers, and not simply allow a ruling elite that controlled the gold supply to thereby artificially restrain the amount of money and allow for far higher interest rates than was actually necessary.
And you know, that idea of postal banking, that's also very alive today. In fact, I believe Bernie Sanders had included it in the original Build Back Better plan, which of course got scuttled. But a lot of people are supporting postal banking as a way to deal with the huge issue of poor people not having bank accounts.
Absolutely.
A Cooperative Capitalism For Everyone
And in fact, there's another Populist program that's being revived by some.
And that's the idea that if the railroads cannot be operated to maximize the public benefit, if they're only benefiting a small elite of absentee investors, then maybe the government should take back the public resources that were used to actually build those railroads and run them as a public enterprise for the public benefit.
And some people are saying, well, you know, after all these railroad accidents and towns being wiped out by negligent rail companies that are operating these massive trains with understaffed crews, maybe that should be something we consider again too.
This is so interesting, their approach to capitalism, because as you've already pointed out, they wanted to reform capitalism, not to replace it. Of course, I would think there would be some on the left who would say that's probably impossible, but tell us about the Cooperative Commonwealth idea and how they saw that as a way to reform capitalism.
What they wanted to do was, basically it would still be a market economy and there would still be private initiative, but it would be the private initiative of farmers and workers acting collectively on behalf of managing their own labor and the product of their own labor.
So that meant that the organizations that were the social base of the populist party, and there were two, the Farmers Alliance and the Knights of Labor.
And in both cases, they favored the idea of farmers getting together, and I'll talk about the Farmers Alliance, because that was the more important base for the populist.
The Farmers Alliance advocated for a cooperative approach in which farmers, instead of going individually into this massive complex of grain merchants and international trade and getting fleeced and getting the lowest price for their goods, instead they would what they call bulk.
In other words, they would combine, a hundred farmers would get together and they would bulk their cotton or bulk their grain or corn, wheat or corn.
And by doing so, they could then bargain in effect collectively with grain merchants and say to those grain merchants, look, we're gonna cut your costs by we're already pulling together the product of a hundred farmers.
You don't have to negotiate with a hundred different farmers or impose a price upon them.
You can reduce your transaction costs and we will actually provide you with that bulk product at a price which should reflect our effort on your behalf.
So we should get a higher market price for what we've done to enable your large scale economies of scale operation.
And that was the argument that they made in the case of agriculture.
For workers and the Knights of Labor, their argument was, listen, we do the work.
Why should the benefit go to absentee owners living in New York City or Boston or wherever? The idea was we should be the ones who control collectively, but privately. Particularly in this era, when a lot more of it was craft work, it was starting to shift to factory labor. Private initiative, but on a collective basis in a market economy. So it's sort of a halfway point.
And of course, the ruling elite of the time regarded this as one step removed from communism. But most Populists were pressed on the matter, saying, “well, isn't it socialism?” The answer often enough was, “well, yeah, it's called Christian socialism.”
Meaning the greatest good for the greatest number on behalf of social justice in this world. Not some pie in the sky, but right now, how do we implement a social justice outcome on behalf of the farmers and the workers who after all, whose labor is what produces what we need to sustain our world?
Populism A Pioneer In Supporting Gender and Racial Justice
And when it comes to social Christianity or Christian socialism, I mean, they also were really pioneers in gender and racial solidarity. Although, you know, there are nuances to it. I think they were probably better on gender from the beginning than they were on racial solidarity. So talk more about this. I mean, you did mention that up in the beginning. What was the role of women in the populist movement?
Well, actually, it was quite extraordinary because at that time in the 1890s, no other political party invited women to participate. Not the Republicans, not the Democrats.
In the Populist Party and in the Farmers Alliance before that, women were very active and very prominent, especially at the state and local level where women could vote for the officers of the organization.
Women could run for those positions. Women were speakers. Women were bookkeepers. Women were doing all of the work that normally would be done in the household, but also running for leadership in these local alliances, as they called them.
And in that regard, it represented something quite different.
And so this was an organization and a movement that brought men and women together on an ongoing basis.
Now, in terms of race, it was a step forward, but not as far as we would have hoped looking back from our perspective 130 years later.
The Populists favored a multiracial movement on behalf of the economic interest shared by workers and by farmers.
They did not, however, take the next step and criticize the social segregation of the races…
In the South, it was tough enough for the Populists by organizing a multiracial challenge to the power of the large landowners and banks and corporate enterprises.
They were already putting themselves at enormous risk. And in fact, many of them paid with their lives.
There was a wide range of episodes in which Populist leaders in the South were simply assassinated, or they would be boycotted, or they would be shunned, or there would be violence against them, Black and white.
And so they went one step towards a multiracial economic movement.
And that's why Martin Luther King, many years later, lauded the Populists as an early first step in the right direction. It didn't go far enough, but it was a first step.
And a lot of Populists paid dearly for taking that risk.
Populism’s Achilles Heel
And yet, also, you feel, you say in this book, Steve Babson, in The Forgotten Populists, that the lack of total solidarity, the lack of social solidarity, actually was a kind of Achilles' heel or chink in the armor, because it allowed for a kind of divide and conquer that developed in the South. Is that right?
I think so.
And it also meant that the alliance on economic matters would wither and fade if you were still living in worlds that are so completely apart and so separate, and in which, implicitly, it was a hierarchical arrangement, in which, yeah, they're two separate realms, but they are not co-equal.
And the white society obviously prevailed in terms of economic and political power, and it was naive to believe that that could prevail while you worked for equality in economic matters as farmers.
It had to be a complete package, and we learned that later, and a lot of what the 1960s was about was implementing that approach and understanding.
Populism’s Lessons for Today
Finally, what's so striking, I think, is the 180-degree turn that has been taken by so many farmers, and now even a lot of workers, from these very same regions, away from progressive roots to right-wing Trumpism today.
Why do you think that happened, and do you think that that can be changed by looking back at the Populists?
Well, I would hope so, and that was one of my motivations for writing the book, was to say, you know, these are still issues that are so relevant today, and really worthy of consideration in terms of who the real populists were, not the fake populists like Donald Trump, who, you know, talks a game in which he claims to be a representative of the common people, but that's absurd if you look at his actual life and programs and what he's done when he was President: you know, tax cuts for the rich, and denial of climate change, and a whole range of approaches, reducing the voting rights of folks, and disparaging minorities and immigrants and women.
He had nothing to do with the Populist legacy, and so it's really a misnomer to be relating him to folks who actually deserve our respect and appreciation for the changes they set in motion, and it's time to reconsider what that would mean today.
I don't necessarily, by the way, mean that it has to be called Populism, but what we're looking at in the case of Trump — there's a lot of presumption that what we're looking at here is the white working class.
It's actually when they look at who has been the supporters and the cult followers, and particularly those arrested back in 2020 at the Capitol riot, it's really, it's more of a middling small investor class that's aligned with and linked to some very prominent wealthy folks who are mouthing the same rhetoric and the same kind of nasty approaches to anyone who disagrees with them.
There are working people who are frustrated, and for good reason. Not many farmers left these days.
I mean, they're a much, very different group these days, much more capital intensive farming, very few of them left, and many of them employers of farm workers themselves.
And so they're divided in a way and represent something quite different from what prevailed back in the 1890s.
But for working people, a lot of folks felt abandoned by some of the policies that were advocated by the Democrats, as well as the Republicans. NAFTA would jump out right away.
If you're gonna promote the movement of jobs, many of them, by the way, rural factories, supplier plants that were union and paid a decent wage, and then they closed and they moved to Mexico.
And the Democrats seem to be on board with that. In fact, it was Bill Clinton who signed that bill.
So a lot of folks felt abandoned by a Democratic Party that had lost track of where its roots were in the New Deal.
And it's still an ongoing debate about what the future of that party is gonna be and who it's gonna align with.
And I would hope some of the recent events in terms of the labor movement would inspire more Democrats to say that that's our social base. That's where we should be, is with those folks who are fighting for better wages, for a return on their extraordinary labor and work, and to reduce the extraordinary gaps in pay between new hires and legacy employees, as they call them in the auto workers.
Those are all positive things. And I would hope that many people would see that as the future of the Democratic Party.
I could not agree more. Well, Steve Babson, it's a terrific book. It's short. It's got lots of great illustrations: The Forgotten Populace, When Farmers Turned Left to Save Democracy. Thank you so much for talking with us.
Thank you very much for inviting me.
About the Author
Steve Babson is a labor educator and union activist. He's published seven books, including Working Detroit, The Making of a Union Town, Lean Work, Empowerment and Exploitation in the Global Auto Industry, and The Color of Law, Ernie Goodman and the Struggle for Labor and Civil Rights in Detroit.