Tariffs and Trusts, Profiteers and Middlemen: Popular Explanations for the High Cost of Living, 1897-1920

Abstract

After decades of decline, US prices rose about 2.5 percent a year from 1897 to World War I and then more than doubled between 1914 and 1920. Popular explanations for these events can be studied via editorials and editorial cartoons, which reflected and contributed to an outpouring of public concern. While economists then and now adduced monetary causes for the price increases, popular theories blamed the tariff, monopolies, middlemen, profiteers, supply and demand, lazy farmers, incompetent housewives, and more. These explanations supported important political positions, and they had significant consequences, because worries over the high cost of living more powerfully shaped Progressive era public policy than has been appreciated. Tariff reduction, parcel post, antitrust prosecution, cold storage legislation, farm credit, standardization of weights and measures, and other reforms were importantly motivated by worries over high prices. Thus, apparently incorrect public understanding of economic events can sometimes lead to desirable public policies.