Computational economics is an interdisciplinary research discipline that involves combines methods in computational science and economics to solve complex economic problems. This subject encompasses computational modeling of economic systems.
Some of these areas are unique, while others established areas of
economics by allowing robust data analytics and solutions of problems
that would be arduous to research without computers and associated numerical methods.
Computational methods have been applied in various fields of economics research, including but not limiting to:
Computational
economics developed concurrently with the mathematization of the field.
During the early 20th century, pioneers such as Jan Tinbergen and Ragnar Frisch advanced the computerization of economics and the growth of econometrics. As a result of advancements in Econometrics, regression models, hypothesis testing, and other computational statistical methods became widely adopted in economic research. On the theoretical front, complex macroeconomic models, including the real business cycle (RBC) model and dynamic stochastic general equilibrium
(DSGE) models have propelled the development and application of
numerical solution methods that rely heavily on computation. In the 21st
century, the development of computational algorithms created new means
for computational methods to interact with economic research. Innovative
approaches such as machine learning models and agent-based modeling
have been actively explored in different areas of economic research,
offering economists an expanded toolkit that frequently differs in
character from traditional methods.
Computational economics uses computer-based economic modeling to solve analytically and statistically formulated economic problems. A research program, to that end, is agent-based computational economics (ACE), the computational study of economic processes, including whole economies, as dynamic systems of interacting agents. As such, it is an economic adaptation of the complex adaptive systemsparadigm. Here the "agent" refers to "computational objects modeled as interacting according to rules," not real people. Agents can represent social, biological, and/or physical entities. The theoretical assumption of mathematical optimization by agents in equilibrium is replaced by the less restrictive postulate of agents with bounded rationalityadapting to market forces, including game-theoretical contexts.
Starting from initial conditions determined by the modeler, an ACE
model develops forward through time driven solely by agent interactions.
The scientific objective of the method is to test theoretical findings
against real-world data in ways that permit empirically supported
theories to cumulate over time.
Machine learning in computational economics
Machine learning models present a method to resolve vast, complex, unstructured data sets. Various machine learning methods such as the kernel method and random forest have been developed and utilized in data-mining
and statistical analysis. These models provide superior classification,
predictive capabilities, flexibility compared to traditional
statistical models, such as that of the STAR method. Other methods, such as causal machine learning and causal tree, provide distinct advantages, including inference testing.
There are notable advantages and disadvantages of utilizing
machine learning tools in economic research. In economics, a model is
selected and analyzed at once. The economic research would select a
model based on principle, then test/analyze the model with data,
followed by cross-validation
with other models. On the other hand, machine learning models have
built in "tuning" effects. As the model conducts empirical analysis, it
cross-validates, estimates, and compares various models concurrently.
This process may yield more robust estimates than those of the
traditional ones.
Traditional economics partially normalize the data based on
existing principles, while machine learning presents a more
positive/empirical approach to model fitting. Although Machine Learning
excels at classification, predication and evaluating goodness of fit,
many models lack the capacity for statistical inference, which are of
greater interest to economic researchers. Machine learning models'
limitations means that economists utilizing machine learning would need
to develop strategies for robust, statistical causal inference, a core focus of modern empirical research. For example, economics researchers might hope to identify confounders, confidence intervals, and other parameters that are not well-specified in Machine Learning algorithms.
Machine learning may effectively enable the development of more complicated heterogeneous
economic models. Traditionally, heterogeneous models required extensive
computational work. Since heterogeneity could be differences in tastes,
beliefs, abilities, skills or constraints, optimizing a heterogeneous
model is a lot more tedious than the homogeneous approach
(representative agent).
The development of reinforced learning and deep learning may
significantly reduce the complexity of heterogeneous analysis, creating
models that better reflect agents' behaviors in the economy.
The adoption and implementation of neural networks, deep learning in the field of computational economics may reduce the redundant work of data cleaning
and data analytics, significantly lowering the time and cost of large
scale data analytics and enabling researchers to collect, analyze data
on a great scale.
This would encourage economic researchers to explore new modeling
methods. In addition, reduced emphasis on data analysis would enable
researchers to focus more on subject matters such as causal inference,
confounding variables, and realism of the model. Under the proper
guidance, machine learning models may accelerate the process of
developing accurate, applicable economics through large scale empirical
data analysis and computation.
Dynamic stochastic general equilibrium (DSGE) model
Dynamic modeling methods are frequently adopted in macroeconomic
research to simulate economic fluctuations and test for the effects of
policy changes. The DSGE one class of dynamic models relying heavily on
computational techniques and solutions. DSGE models utilize
micro-founded economic principles to capture characteristics of the real
world economy in an environment with intertemporal
uncertainty. Given their inherent complexity, DSGE models are in
general analytically intractable, and are usually implemented
numerically using computer software. One major advantage of DSGE models
is that they facilitate the estimation of agents' dynamic choices with
flexibility. However, many scholars have criticized DSGE models for
their reliance on reduced-form assumptions that are largely unrealistic.
Computational tools and programming languages
Utilizing
computational tools in economic research has been the norm and
foundation for a long time. Computational tools for economics include a
variety of computer software that facilitate the execution of various
matrix operations (e.g. matrix inversion) and the solution of systems
of linear and nonlinear equations. Various programming languages are
utilized in economic research for the purpose of data analytics and
modeling. Typical programming languages used in computational economics
research include C++, MATLAB, Julia, Python, R and Stata.
Among these programming languages, C++ as a compiled language
performs the fastest, while Python as an interpreted language is the
slowest. MATLAB, Julia, and R achieve a balance between performance and
interpretability. As an early statistical analytics software, Stata was
the most conventional programming language option. Economists embraced
Stata as one of the most popular statistical analytics programs due to
its breadth, accuracy, flexibility, and repeatability.
Journals
The following journals specialise in computational economics: ACM Transactions on Economics and Computation, Computational Economics, Journal of Applied Econometrics, Journal of Economic Dynamics and Control and the Journal of Economic Interaction and Coordination.
Bolshevism and the threat of a communist-inspired revolution in the U.S. became the overriding explanation for challenges to the social order, even for such largely unrelated events as incidents of interracial violence during the Red Summer of 1919. Fear of radicalism was used to explain the suppression of freedom of expression in the form of display of certain flags and banners. In April 1920, concerns peaked with J. Edgar Hoover telling the nation to prepare for a bloody uprising on May Day.
Police and militias prepared for the worst, but May Day passed without
incident. Soon, public opinion and the courts turned against Palmer,
putting an end to his raids and the first Red Scare.
Origins
The First Red Scare's immediate cause was the increase in subversive actions of leftist elements in the United States, especially militant followers of Luigi Galleani, and in the attempts of the U.S. government to quell protest and gain favorable public views of America's entering World War I. At the end of the 19th century and prior to the rise of the Galleanist anarchist movement, the Haymarket affair
of 1886 had already heightened the American public's fear of foreign
anarchist and radical socialist elements within the budding American
workers' movement. In 1917, President Woodrow Wilson established the Committee on Public Information to circulate and distribute anti-German and pro-Allied propaganda and other news. To add to the effectiveness of the Committee, the Bureau of Investigation (the name for the Federal Bureau of Investigation until 1935) disrupted the work of German-American, union, and leftist organizations through the use of raids, arrests, agents provocateurs, and legal prosecution. Revolutionary and pacifist groups, such as the Socialist Party of America and the Industrial Workers of the World (IWW; its members are known as Wobblies), strongly opposed the war. Many leaders of these groups, most notably Eugene V. Debs, were prosecuted for giving speeches urging resistance to the draft. Members of the Ghadar Party were also put on trial in the Hindu–German Conspiracy Trial.
After the war officially ended, the government investigations
abated for a few months but did not cease. They soon resumed in the
context of the Bolshevik Revolution of 1917, the Allied intervention in the Russian Civil War, and the Red Terror.
For some Americans, this was a time of uncertainty and fear over the
prospects of a socialist, communist, or anarchist revolution in the
United States.
On January 21, 1919, 35,000 shipyard workers in Seattle
went on strike seeking wage increases. They appealed to the Seattle
Central Labor Council for support from other unions and found widespread
enthusiasm. Within two weeks, more than 100 local unions joined in a
call on February 3 for general strike to begin on the morning of
February 6.
The 60,000 total strikers paralyzed the city's normal activities, like
streetcar service, schools, and ordinary commerce, while their General
Strike Committee maintained order and provided essential services, like
trash collection and milk deliveries.
Even before the strike began, the press tried to persuade the
unions to reconsider. In part they were frightened by some of labor's
rhetoric, like the labor newspaper editorial that proclaimed: "We are
undertaking the most tremendous move ever made by labor in this country
... We are starting on a road that leads – NO ONE KNOWS WHERE!"
Daily newspapers saw the general strike as a foreign import: "This is
America – not Russia," one said when denouncing the general strike.
The non-striking part of Seattle's population imagined the worst and
stocked up on food. Hardware stores sold their stock of guns.
Seattle Mayor Ole Hanson
announced that he had 1500 police and 1500 federal troops on hand to
put down any disturbances. He personally oversaw their deployment
throughout the city.
"The time has come", he said, "for the people in Seattle to show their
Americanism ... The anarchists in this community shall not rule its
affairs." He promised to use them to replace striking workers, but never carried out that threat.
Meanwhile, the national leadership of the American Federation of Labor
(AFL) and international leaders of some of the Seattle locals
recognized how inflammatory the general strike was proving in the eyes
of the American public and Seattle's middle class. Press and political
reaction made the general strike untenable, and they feared Seattle
labor would lose gains made during the war if it continued. The national press called the general strike "Marxian" and "a revolutionary movement aimed at existing government". "It is only a middling step", said the Chicago Tribune, "from Petrograd to Seattle."
As early as February 8 some unions began to return to work at the
urging of their leaders. Some workers went back to work as individuals,
perhaps fearful of losing their jobs if the Mayor acted on his threats
or in reaction to the pressure of life under the general strike.
The executive committee of the General Strike Committee first
recommended ending the general strike on February 8 but lost that vote.
Finally on February 10, the General Strike Committee voted to end the
strike the next day. The original strike in the shipyards continued.
Though the general strike collapsed because labor leadership
viewed it as a misguided tactic from the start, Mayor Hanson took credit
for ending the five-day strike and was hailed by the press. He resigned
a few months later and toured the country giving lectures on the
dangers of "domestic bolshevism". He earned $38,000 in seven months,
five times his annual salary as mayor. He published a pamphlet called Americanism versus Bolshevism.
The Overman Committee was a special five-man subcommittee of the U.S. Senate Committee on the Judiciary chaired by North Carolina Democrat Lee Slater Overman.
First charged with investigating German subversion during World War I,
its mandate was extended on February 4, 1919, just a day after the
announcement of the Seattle General Strike, to study "any efforts being
made to propagate in this country the principles of any party exercising
or claiming to exercise any authority in Russia" and "any effort to
incite the overthrow of the Government of this country".
The Committee's hearings into Bolshevik propaganda, conducted from
February 11 to March 10, 1919, developed an alarming image of Bolshevism
as an imminent threat to the U.S. government and American values. The
Committee's final report appeared in June 1919.
Archibald E. Stevenson, a New York attorney with ties to the Justice Department, probably as a "volunteer spy",
testified on January 22, 1919, during the German phase of the
subcommittee's work. He established that anti-war and anti-draft
activism during World War I, which he described as pro-German activity,
had now transformed itself into propaganda "developing sympathy for the
Bolshevik movement".
America's wartime enemy, though defeated, had exported an ideology that
now ruled Russia and threatened America anew. "The Bolshevik movement
is a branch of the revolutionary socialism of Germany. It had its origin
in the philosophy of Marx and its leaders were Germans." He cited the propaganda efforts of John Reed
and gave many examples from the foreign press. He told the Senators
that "We have found money coming into this country from Russia."
The Senators were particularly interested in how Bolshevism had
united many disparate elements on the left, including anarchists and
socialists of many types, "providing a common platform for all these radical groups to stand on". Senator Knute Nelson,
Republican of Minnesota, responded by enlarging Bolshevism's embrace to
include an even larger segment of political opinion: "Then they have
really rendered a service to the various classes of progressives and
reformers that we have here in this country."
Other witnesses described the horrors of the revolution in Russia and
the consequences of a comparable revolution in the United States: the
imposition of atheism, the seizure of newspapers, assaults on banks, and
the abolition of the insurance industry. The Senators heard various
views of women in Russia, including claims that women were made the
property of the state.
The press reveled in the investigation and the final report,
referring to the Russians as "assassins and madmen", "human scum",
"crime mad", and "beasts".
The occasional testimony by some who viewed the Bolshevik Revolution
favorably lacked the punch of its critics. One extended headline in
February read:
Bolshevism Bared by R. E. Simmons;
Former Agent in Russia of Commerce Department Concludes his Story to Senators
Women are 'Nationalized'
Official Decrees Reveal Depths of Degradation to Which They are Subjected by Reds
Germans Profit by Chaos
Factories and Mills are Closed and the Machinery Sold to Them for a Song
On the release of the final report, newspapers printed sensational
articles with headlines in capital letters: "Red Peril Here", "Plan
Bloody Revolution", and "Want Washington Government Overturned".
Attorney General A. Mitchell Palmer's house with bomb damage
In late April 1919, approximately 36 booby trap bombs were mailed to prominent politicians, including the Attorney General of the United States, judges, businessmen (including John D. Rockefeller), and a Bureau of Investigation field agent, R. W. Finch, who happened to be investigating the Galleanist organization.
The bombs were mailed in identical packages and were timed to
arrive on May Day, the day of celebration of organized labor and the
working class. A few of the packages went undelivered because they lacked sufficient postage. One bomb intended for Seattle Mayor Ole Hanson,
who had opposed the Seattle General Strike, arrived early and failed to
explode as intended. Seattle police in turn notified the Post Office
and other police agencies. On April 29, a package sent to U.S. Senator Thomas W. Hardwick of Georgia, a sponsor of the Anarchist Exclusion Act, exploded injuring his wife and housekeeper. On April 30, a post office employee in New York City
recognized sixteen packages by their wrapping and interrupted their
delivery. Another twelve bombs were recovered before reaching their
targets.
June 1919 bombs
In
June 1919, eight bombs, far larger than those mailed in April, exploded
almost simultaneously in several U.S. cities. These new bombs were
believed to contain up to twenty-five pounds of dynamite, and all were wrapped or packaged with heavy metal slugs designed to act as shrapnel.
All of the intended targets had participated in some way with the
investigation of or the opposition to anarchist radicals. Along with
Attorney General Palmer, who was targeted a second time, the intended
victims included a Massachusetts state representative and a New Jersey
silk manufacturer. Fatalities included a New York City night watchman,
William Boehner, and one of the bombers, Carlo Valdinoci, a Galleanist radical who died in spectacular fashion when the bomb he placed at the home of Attorney General Palmer exploded in his face.
Though not seriously injured, Attorney General Palmer and his family
were thoroughly shaken by the blast, and their home was largely
demolished.
All of the bombs were delivered with pink flyers bearing the
title "Plain Words" that accused the intended victims of waging class
war and promised: "We will destroy to rid the world of your tyrannical
institutions."
Police and the Bureau of Investigation tracked the flyer to a print
shop owned by an anarchist, Andrea Salcedo, but never obtained
sufficient evidence for a prosecution. Evidence from Valdonoci's death,
bomb components, and accounts from participants later tied both bomb
attacks to the Galleanists. Though some of the Galleanists were deported or left the country voluntarily, attacks by remaining members continued until 1932.
The American labor movement had been celebrating its May Day holiday
since the 1890s and had seen none of the violence associated with the
day's events in Europe.
On May 1, 1919, the left mounted especially large demonstrations, and
violence greeted the normally peaceful parades in Boston, New York, and
Cleveland. In Boston, police tried to stop a march that lacked a permit.
In the ensuing melee both sides fought for possession of the
Socialists' red flags. One policeman was shot and died of wounds; a
second officer died of a heart attack. William Sidis
was arrested. Later a mob attacked the Socialist headquarters. Police
arrested 114, all from the Socialist side. Each side's newspapers
provided uncritical support to their own the next day. In New York, soldiers in uniform burned printed materials at the Russian People's House and forced immigrants to sing the Star-Spangled Banner.
Cleveland, Ohio saw the worst violence. Leftists protesting the imprisonment of Eugene V. Debs and promoting the campaign of Charles Ruthenberg, the Socialist candidate for mayor, planned to march through the center of the city. A group of Victory Loan
workers, a nationalist organization whose members sold war bonds and
thought themselves still at war against all forms of anti-Americanism,
tried to block some of the marchers and a melee ensued.
A mob ransacked Ruthenberg's headquarters. Mounted police, army trucks,
and tanks restored order. Two people died, forty were injured, and 116
arrested. Local newspapers noted that only 8 of those arrested were born
in the United States. The city government immediately passed laws to
restrict parades and the display of red flags.
With few dissents, newspapers blamed the May Day marchers for provoking the nationalists' response. The Salt Lake City Tribune
did not think anyone had a right to march. It said: "Free speech has
been carried to the point where it is an unrestrained menace."
A few, however, thought the marches were harmless and that the
marchers' enthusiasm would die down on its own if they were left
unmolested.
More than two dozen American communities, mostly urban areas or
industrial centers, saw racial violence in the summer and early fall of
1919. Unlike earlier race riots in U.S. history, the 1919 riots were
among the first in which blacks responded with resistance to the white
attacks. Martial law was imposed in Charleston, South Carolina, where men of the U.S. Navy led a race riot
on May 10. Five white men and eighteen black men were injured in the
riot. An official investigation found that four U.S. sailors and one
civilian—all white men—were responsible for the outbreak of violence. On July 3, the 10th U.S. Cavalry, a segregated African American unit founded in 1866, was attacked by local police in Bisbee, Arizona.
Two of the most violent episodes occurred in Washington, D.C., and
Chicago. In Washington, D.C., white men, many in military uniforms,
responded to the rumored arrest of a black man for rape with four days
of mob violence, rioting and beatings of random black people on the
street. When police refused to intervene, the black population fought
back. When the violence ended, ten whites were dead, including two
police officers, and 5 blacks. Some 150 people had been the victims of
attacks. The rioting in Chicago
started on July 27. Chicago's beaches along Lake Michigan were
segregated in practice, if not by law. A black youth who drifted into
the area customarily reserved for whites was stoned and drowned. Blacks
responded violently when the police refused to take action. Violence
between mobs and gangs lasted 13 days. The resulting 38 fatalities
included 23 blacks and 15 whites. Injuries numbered 537 injured, and
1,000 black families were left homeless.
Some 50 people were reported dead. Unofficial numbers were much higher.
Hundreds of mostly black homes and businesses on the South Side were
destroyed by mobs, and a militia force of several thousand was called in
to restore order.
In mid-summer, in the middle of the Chicago riots, a "federal official" told the New York Times
that the violence resulted from "an agitation, which involves the
I.W.W., Bolshevism and the worst features of other extreme radical
movements". He supported that claim with copies of negro publications
that called for alliances with leftist groups, praised the Soviet
regime, and contrasted the courage of jailed Socialist Eugene V. Debs
with the "school boy rhetoric" of traditional black leaders. The Times
characterized the publications as "vicious and apparently well
financed," mentioned "certain factions of the radical Socialist
elements", and reported it all under the headline: "Reds Try to Stir
Negroes to Revolt".
In mid-October, government sources again provided the New York Times
with evidence of Bolshevist propaganda targeting America's black
communities that was "paralleling the agitation that is being carried on
in industrial centres of the North and West, where there are many alien
laborers". Vehicles for this propaganda about the "doctrines of Lenin
and Trotzky" included newspapers, magazines, and "so-called 'negro
betterment' organizations". Quotations from such publications contrasted
the recent violence in Chicago and Washington, D.C., with "Soviet
Russia, a country in which dozens of racial and lingual types have
settled their many differences and found a common meeting ground, a
country which no longer oppresses colonies, a country from which the
lynch rope is banished and in which racial tolerance and peace now
exist." The New York Times cited one publication's call for
unionization: "Negroes must form cotton workers' unions. Southern white
capitalists know that the negroes can bring the white bourbon South to
its knees. So go to it."
The American Federation of Labor
(AFL) began granting charters to police unions in June 1919 when
pressed to do so by local groups, and in just 5 months had recognized
affiliate police unions in 37 cities. The Boston Police
rank and file went out on strike on September 9, 1919 in order to
achieve recognition for their union and improvements in wages and
working conditions. Police Commissioner Edwin Upton Curtis
denied that police officers had any right to form a union, much less
one affiliated with a larger organization like the AFL. During the
strike, Boston
experienced two nights of lawlessness until several thousand members of
the State Guard supported by volunteers restored order, though not
without causing several deaths. The public, fed by lurid press accounts
and hyperbolic political observers, viewed the strike with a degree of
alarm out of proportion to the events, which ultimately produced only
about $35,000 of property damage.
Bolshevism in the United States is no longer a specter. Boston in chaos reveals its sinister substance.
— Philadelphia Public Ledger
The strikers were called "deserters" and "agents of Lenin." The Philadelphia Public Ledger
viewed the Boston violence in the same light as many other of 1919's
events: "Bolshevism in the United States is no longer a specter. Boston
in chaos reveals its sinister substance." President Woodrow Wilson,
speaking from Montana, branded the walkout "a crime against
civilization" that left the city "at the mercy of an army of thugs".
The timing of the strike also happened to present the police union in
the worst light. September 10, the first full day of the strike, was
also the day a huge New York City parade celebrated the return of
General John J. Pershing, the hero of the American Expeditionary Force.
A report from Washington, D.C., included this headline: "Senators Think Effort to Sovietize the Government Is Started". Senator Henry Cabot Lodge
saw in the strike the dangers of the national labor movement: "If the
American Federation of Labor succeeds in getting hold of the police in
Boston it will go all over the country, and we shall be in measurable
distance of Soviet government by labor unions." The Ohio State Journal
opposed any sympathetic treatment of the strikers: "When a policeman
strikes, he should be debarred not only from resuming his office, but
from citizenship as well. He has committed the unpardonable sin; he has
forfeited all his rights."
Samuel Gompers
of the AFL recognized that the strike was damaging labor in the public
mind and advised the strikers to return to work. The Police
Commissioner, however, remained adamant and refused to re-hire the
striking policemen. He was supported by Massachusetts Governor Calvin Coolidge,
whose rebuke of Gompers earned him a national reputation. Famous as a
man of few words, he put the anti-union position simply: "There is no
right to strike against the public safety, anywhere, anytime."
The strike proved another setback for labor and the AFL
immediately withdrew its recognition of police unions. Coolidge won the
Republican nomination for Vice-President in the 1920 presidential election in part due to his actions during the Boston Police Strike.
Williamsburg Rent Strike, Published September 14, 1919
Following a housing and coal shortage caused by the mobilization for
World War I, a wave of rent strikes occurred across all of New York City
and Jersey City from 1918 to 1920. While it is unclear exactly how many
tenants were involved, at least tens of thousands and likely hundreds
of thousands tenants struck.
In response to the strikes, which was marked heavily by the Red
Scare, rhetoric accusing tenant leaders of being Bolsheviks and comments
that claimed a fear that there would be a mass uprising were commonly
invoked by political officials at the time. Repression by the government
was also prevalent; two examples include the Palmer Raids and Lusk Committee raids. The period was also marked by anti-Semitic rhetoric.
By its end the wave of strikes had led to the passage of the
first rent laws in the country and fundamentally shifted tenant-landlord
relations. However, the more radical tenant groups largely were
destroyed by raids or slowly dwindled as a result of the new laws
addressing the crisis.
The owners quickly turned public opinion against the AFL. As the
strike began, they published information exposing AFL National Committee
co-chairman William Z. Foster's radical past as a Wobbly and syndicalist,
and claimed this was evidence that the steelworker strike was being
masterminded by radicals and revolutionaries. The steel companies played
on nativist fears by noting that a large number of steelworkers were
immigrants. Public opinion quickly turned against the striking workers.
State and local authorities backed the steel companies. They prohibited
mass meetings, had their police attack pickets and jailed thousands.
After strikebreakers and police clashed with unionists in Gary, Indiana, the U.S. Army took over the city on October 6, 1919, and martial law was declared. National Guardsmen, leaving Gary after federal troops had taken over, turned their anger on strikers in nearby Indiana Harbor, Indiana.
Steel companies also turned toward strikebreaking and
rumor-mongering to demoralize the picketers. They brought in between
30,000 and 40,000 African-American and Mexican-American
workers to work in the mills. Company spies also spread rumors that the
strike had collapsed elsewhere, and they pointed to the operating steel
mills as proof that the strike had been defeated.
Congress conducted its own investigation, focused on radical influence upon union activity. In that context, U.S. Senator Kenneth McKellar,
a member of the Senate committee investigating the strike, proposed
making one of the Philippine Islands a penal colony to which those
convicted of an attempt to overthrow the government could be deported.
The Chicago mills gave in at the end of October. By the end of
November, workers were back at their jobs in Gary, Johnstown,
Youngstown, and Wheeling. The strike collapsed on January 8, 1920,
though it dragged on in isolated areas like Pueblo and Lackawanna.
The United Mine Workers under John L. Lewis announced a strike for November 1, 1919.
They had agreed to a wage agreement to run until the end of World War I
and now sought to capture some of their industry's wartime gains.
Attorney General A. Mitchell Palmer invoked the Lever Act,
a wartime measure that made it a crime to interfere with the production
or transportation of necessities. The law, meant to punish hoarding and
profiteering, had never been used against a union. Certain of united
political backing and almost universal public support, Palmer obtained
an injunction on October 31 and 400,000 coal workers went on strike the next day.
He claimed the President authorized the action, following a meeting
with the severely ill President in the presence of his doctor.
Palmer also asserted that the entire Cabinet had backed his request for
an injunction. That infuriated Secretary of Labor Wilson who had
opposed Palmer's plan and supported Gompers' view of the President's
promises when the Act was under consideration. The rift between the
Attorney General and the Secretary of Labor was never healed, which had
consequences the next year when Palmer's attempts to deport radicals
were frustrated by the Department of Labor.
Samuel Gompers, President of the American Federation of Labor,
protested that President Wilson and members of his Cabinet had provided
assurances when the Act was passed that it would not be used to prevent
strikes by labor unions. He provided detailed accounts of his
negotiations with representatives of the administration, especially
Secretary of Labor William B. Wilson.
He also argued that the end of hostilities, even in the absence of a
signed treaty, should have invalidated any attempts to enforce the Act's
provisions.
Nevertheless, he attempted to mediate between Palmer and Lewis, but
after several days called the injunction "so autocratic as to stagger
the human mind".
The coal operators smeared the strikers with charges that Lenin and
Trotsky had ordered the strike and were financing it, and some of the
press echoed that language. Others used words like "insurrection" and "Bolshevik revolution".
Eventually Lewis, facing criminal charges and sensitive to the
propaganda campaign, withdrew his strike call, though many strikers
ignored his action.
As the strike dragged on into its third week, coal supplies were
running low and public sentiment was calling for ever stronger
government action. Final agreement came on December 10.
Men arrested in raids awaiting deportation hearings on Ellis Island, January 13, 1920
Despite two attempts on his life in April and June 1919, Attorney General A. Mitchell Palmer
moved slowly to find a way to attack the source of the violence. An
initial raid in July 1919 against a small anarchist group in Buffalo
failed when a federal judge tossed out his case. In August, he organized the General Intelligence Division within the Department of Justice and recruited J. Edgar Hoover, a recent law school graduate, to head it.
Hoover pored over arrest records, subscription records of radical
newspapers, and party membership records to compile lists of resident
aliens for deportation proceedings. On October 17, 1919, just a year
after the Immigration Act of 1918
had expanded the definition of aliens that could be deported, the U.S.
Senate demanded Palmer explain his failure to move against radicals.
Palmer launched his campaign against radicalism with two sets of police actions known as the Palmer Raids
in November 1919 and January 1920. Federal agents supported by local
police rounded up large groups of suspected radicals, often based on
membership in a political group rather than any action taken. Undercover
informants and warrantless wiretaps (authorized under the Sedition Act) helped to identify several thousand suspected leftists and radicals to be arrested.
Only the dismissal of most of the cases by Acting United States Secretary of LaborLouis Freeland Post
limited the number of deportations to 556. Fearful of extremist
violence and revolution, the American public supported the raids. Civil
libertarians, the radical left, and legal scholars raised protests.
Officials at the Department of Labor, especially Post, asserted the rule
of law in opposition to Palmer's anti-radical campaign. Post faced a
Congressional threat to impeach or censure him. He successfully defended
his actions in two days of testimony before the House Rules Committee
in June 1919 and no action was ever taken against him. Palmer testified
before the same committee, also for two days, and stood by the raids,
arrests, and deportation program. Much of the press applauded Post's
work at Labor, while Palmer, rather than President Wilson, was largely
blamed for the negative aspects of the raids.
Deportations
Text of original caption: "THE SOVIET ARK, The United States army transport Buford, carrying 249 Russian 'Reds' as America's Christmas present to Lenine [sic] and Trotzky [sic]."
On December 21, 1919, the Buford,
a ship the press nicknamed the "Soviet Ark", left New York harbor with
249 deportees. Of those, 199 had been detained in the November Palmer Raids, with 184 of them deported because of their membership in the Union of Russian Workers, an anarchist group that was a primary target of the November raids. Others on board, including the well-known radical leaders Emma Goldman and Alexander Berkman,
had not been taken in the Palmer Raids. Goldman had been convicted in
1893 of "inciting to riot" and arrested on many other occasions. Berkman
had served 14 years in prison for the attempted murder of industrialist
Henry Clay Frick in 1892. Both were convicted in 1917 of interfering with military recruitment.
Some of the 249 were leftists or anarchists or at least fell within the
legal definition of anarchist because they "believed that no government
would be better for human society than any kind of government".
In beliefs they ranged from violent revolutionaries to pacifist
advocates of non-resistance. Others belonged to radical organizations
but disclaimed knowledge of the organization's political aims and had
joined to take advantage of educational programs and social
opportunities.
The U.S. War Department used the Buford as a transport ship in the Spanish–American War and in World War I and loaned it to the Department of Labor in 1919 for the deportation mission.
A "strong detachment of marines" numbering 58 enlisted men and four
officers made the journey and pistols were distributed to the crew.
Its final destination was unknown as it sailed under sealed orders.
Even the captain only learned his final destination while in Kiel harbor for repairs, since the State Department found it difficult to make arrangements to land in Latvia. Finland, though chosen, was not an obvious choice, since Finland and Russia were at war.
The notoriety of Goldman and Berkman as convicted anti-war
agitators allowed the press and public to imagine that all the deportees
had similar backgrounds. The New York Times called them all "Russian Reds". Most of the press approved enthusiastically. The Cleveland Plain Dealer
wrote: "It is hoped and expected that other vessels, larger, more
commodious, carrying similar cargoes, will follow in her wake." The New York Evening Mail
said: "Just as the sailing of the Ark that Noah built was a pledge for
the preservation of the human race, so the sailing of the Ark of the
Soviet is a pledge for the preservation of America." Goldman later wrote a book about her experiences after being deported to Russia, called My Disillusionment in Russia.
Concentration camps
As reported by The New York Times, some communists agreed to be deported while others were put into a concentration camp at Camp Upton in New York pending deportation hearings.
Expulsion of Socialists from the New York Assembly
The five Socialist assemblymen suspended by the New York State Legislature
On January 7, 1920, at the first session of the New York State Assembly, Assembly Speaker Thaddeus C. Sweet
attacked the Assembly's five Socialist members, declaring they had been
"elected on a platform that is absolutely inimical to the best
interests of the state of New York and the United States". The Socialist
Party, Sweet said, was "not truly a political party", but was rather "a
membership organization admitting within its ranks aliens, enemy
aliens, and minors". It had supported the revolutionaries in Germany, Austria, and Hungary, he continued, and consorted with international Socialist parties close to the Communist International.
The Assembly suspended the five by a vote of 140 to 6, with just one
Democrat supporting the Socialists. A trial in the Assembly, lasting
from January 20 to March 11, resulted in a recommendation that the five
be expelled and the Assembly voted overwhelmingly for expulsion on April 1, 1920.
Opposition to the Assembly's actions was widespread and crossed
party lines. From the start of the process, former Republican Governor,
Supreme Court Justice, and presidential candidate Charles Evans Hughes
defended the Socialist members: "Nothing ... is a more serious mistake
at this critical time than to deprive Socialists or radicals of their
opportunities for peaceful discussion and thus to convince them that the
Reds are right and that violence and revolution are the only available
means at their command." Democratic Governor Al Smith
denounced the expulsions: "To discard the method of representative
government leads to the misdeeds of the very extremists we denounce and
serves to increase the number of enemies of orderly free government."
Hughes also led a group of leading New York attorneys in a protest that
said: "We have passed beyond the stage in political development when
heresy-hunting is a permitted sport."
America's newspapers continually reinforced their readers'
pro-American views and presented a negative attitude toward the Soviet
Union and communism. They presented a threat of imminent conflict with
the Soviet Union that would be justified by the clash with American
ideals and goals.
In addition, when The New York Times reported positively
about the Soviet Union, it received less attention from the public than
when it reported antagonistically about it. This did not hold true when
Soviet interests agreed with American ones. As a result of this, the Times
had a tendency to use exaggerated headlines, weighted words, and
questionable sources in order to create a negative slant against the
Soviets and communism. The tendency was to be very pro-American and
theatrical in their coverage.
America's film industry reflected and exploited every aspect of the public's fascination with and fear of Bolshevism. The German Curse in Russia dramatized the German instigation of Russia's October Revolution. The Soviet nationalization of women was central to the plot of The New Moon, in which women between the ages of 23 and 32 are the property of the state and the heroine, Norma Talmadge, is a Russian princess posing as a peasant during the Russian Revolution. Similarly, in The World and Its Woman starring Geraldine Farrar,
the daughter of an American engineer working in Russia becomes an opera
star and has to fend off attempts to "nationalize" her.
Several films used labor troubles as their setting, with an
idealistic American hero and heroine struggling to outwit manipulative
left-wing agitators. Dangerous Hours tells the story of an attempted Russian infiltration of American industry.
College graduate John King is sympathetic to the left in a general way.
Then he is seduced, both romantically and politically, by Sophia
Guerni, a female agitator. Her superior is the Bolshevik Boris Blotchi,
who has a "wild dream of planting the scarlet seed of terrorism in
American soil".
Sofia and Boris turn their attention to the Weston shipyards that are
managed by John's childhood sweetheart, May. The workers have valid
grievances, but the Bolsheviks set out to manipulate the situation. They
are "the dangerous element following in the wake of labor as riffraff
and ghouls follow an army". When they threaten May, John has an epiphany and renounces revolutionary doctrine.
A reviewer in Picture Play protested the film's stew of
radical beliefs and strategies: "Please, oh please, look up the meaning
of the words 'bolshevik' and 'soviet'. Neither of them mean [sic] 'anarchist', 'scoundrel' or 'murderer' – really they don't!"
Some films just used Bolsheviks for comic relief, where they are easily seduced (The Perfect Woman) or easily inebriated (Help Yourself). In Bullin the Bullsehviks an American named Lotta Nerve outwits Trotsky. New York State Senator Clayton R. Lusk spoke at the film's New York premiere in October 1919. Other films used one feature or another of radical philosophy as the key plot point: anarchist violence (The Burning Question), assassination and devotion to the red flag (The Volcano), utopian vision (Bolshevism on Trial).
The advertising for Bolshevism on Trial called it "the
timeliest picture ever filmed" and reviews were good. "Powerful,
well-knit with indubitably true and biting satire", said Photoplay. As a promotion device, the April 15, 1919, issue of Moving Picture World
suggested staging a mock radical demonstration by hanging red flags
around town and then have actors in military uniforms storm in to tear
them down. The promoter was then to distribute handbills to the confused
and curious crowds to reassure them that Bolshevism on Trial takes a stand against Bolshevism and "you will not only clean up but will profit by future business". When this publicity technique came to the attention of U.S. Secretary of Labor William B. Wilson,
he expressed his dismay to the press: "This publication proposes by
deceptive methods of advertising to stir every community in the United
States into riotous demonstrations for the purpose of making profits for
the moving picture business". He hoped to ban movies treating
Bolshevism and Socialism.
Legislation
In
1919, Kansas enacted a law titled "An act relating to the flag,
standard or banner of Bolshevism, anarchy or radical socialism" in an
attempt to punish the display of the most common symbol of radicalism,
the red flag.
Only Massachusetts (1913) and Rhode Island (1914) passed such "red flag
laws" earlier. By 1920 they were joined by 24 more states.
Some banned certain colors (red or black), or certain expressions
("indicating disloyalty or belief in anarchy" or "antagonistic to the
existing government of the United States"), or certain contexts ("to
overthrow the government by general strike"), or insignia ("flag or
emblem or sign"). The Yale Law Journal
mocked the Connecticut law against symbols "calculated to ... incite
people to disorder", anticipating its enforcement at the next
Harvard-Yale football game. Ohio exempted college pennants and Wisconsin made an exception for historical museums. Minnesota allowed red flags for railroad and highway warnings.
Setting patriotic standards, red flag laws regulated the proper display
of the American flag: above all other flags, ahead of all other banners
in any parade, or flown only in association with state flags or the
flags of friendly nations. Punishment generally included fines from $1,000 to $5,000 and prison terms of 5 to 10 years, occasionally more.
At the federal level, the Espionage Act of 1917 and the amendments to it in the Sedition Act of 1918
prohibited interference with the war effort, including many expressions
of opinion. With that legislation rendered inoperative by the end of World War I, Attorney General A. Mitchell Palmer, supported by President Wilson, waged a public campaign in favor of a peacetime version of the Sedition Act without success.
He sent a circular outlining his rationale to newspaper editors in
January 1919, citing the dangerous foreign-language press and radical
attempts to create unrest in African American communities. At one point Congress had more than 70 versions of proposed language and amendments for such a bill, but it took no action on the controversial proposal during the campaign year of 1920.
Palmer called for every state to enact its own version of the Sedition Act.
Six states had laws of this sort before 1919 usually aimed at sabotage,
but another 20 added them in 1919 and 1920. Usually called
"anti-syndicalist laws", they varied in their language, but generally
made it a crime to "destroy organized government" by one method or
another, including "by the general cessation of industry", that is,
through a general strike. Many cities had their own versions of these laws, including 20 in the state of Washington alone.
Within Attorney General Palmer's Justice Department, the General Intelligence Division (GID) headed by J. Edgar Hoover
had become a storehouse of information about radicals in America. It
had infiltrated many organizations and, following the raids of November
1919 and January 1920, it had interrogated thousands of those arrested
and read through boxes of publications and records seized. Though agents
in the GID knew there was a gap between what the radicals promised in
their rhetoric and what they were capable of accomplishing, they
nevertheless told Palmer they had evidence of plans for an attempted
overthrow of the U.S. government on May Day 1920.
With Palmer's backing, Hoover warned the nation to expect the
worst: assassinations, bombings, and general strikes. Palmer issued his
own warning on April 29, 1920, claiming to have a "list of marked men"
and said domestic radicals were "in direct connection and unison" with
European counterparts with disruptions planned for the same day there.
Newspapers headlined his words: "Terror Reign by Radicals, says Palmer"
and "Nation-wide Uprising on Saturday". Localities prepared their police
forces and some states mobilized their militias. New York City's
11,000-man police force worked for 32 hours straight. Boston police
mounted machine guns on automobiles and positioned them around the city.
The date came and went without incident. Newspaper reaction was
almost uniform in its mockery of Palmer and his "hallucinations". Clarence Darrow called it the "May Day scare". The Rocky Mountain News
asked the Attorney General to cease his alerts: "We can never get to
work if we keep jumping sideways in fear of the bewiskered Bolshevik." The Boston American assessed the Attorney General on May 4:
Everybody is laughing at A.
Mitchell Palmer's May Day "revolution". The joke is certainly on A.
Mitchell Palmer, but the matter is not wholly a joke. The spectacle of a
Cabinet officer going around surrounded with armed guards because he is
afraid of his own hand-made bogey is a sorry one, even though it
appeals to the humor of Americans. Of course, the terrible "revolution"
did not come off. Nobody with a grain of sense supposed that it would.
Yet, in spite of universal laughter, the people are seriously disgusted
with these official Red scares. They cost the taxpayers thousands of
dollars spent in assembling soldiers and policemen and in paying wages
and expenses to Mr. Palmer's agents. They help to frighten capital and
demoralize business, and to make timid men and women jumpy and nervous.
Palmer's embarrassment buttressed Louis Freeland Post's position in
opposition to the Palmer raids when he testified before a Congressional
Committee on May 7–8.
Collapse
Once
Palmer's warnings of a May Day attempt to overthrow the government
proved false, the anti-Bolshevik hysteria wound down quickly.
In testimony before Congress on May 7–8, Louis Freeland Post defended
his release of hundreds seized in Palmer's raids so successfully that
attempts to impeach or censure him ended. Later in the month, a dozen prominent lawyers including Felix Frankfurter and Roscoe Pound
endorsed a report that condemned Palmer's Justice Department for the
"utterly illegal acts committed by those charged with the highest duty
of enforcing the laws" including entrapment, police brutality, prolonged
incommunicado detention, and violations of due process in court.
In June, Massachusetts Federal District Court Judge George W. Anderson ordered the discharge of twenty more arrested aliens and effectively ended the possibility of additional raids. The conservative Christian Science Monitor
found itself unable to support Palmer any longer, writing on June 25,
1920: "What appeared to be an excess of radicalism ... was certainly met
with ... an excess of suppression." Leaders of industry voiced similar sentiments, including Charles M. Schwab of Bethlehem Steel, who thought Palmer's activities created more radicals than they suppressed, and T. Coleman du Pont who called the Justice Department's work evidence of "sheer Red hysteria".
At the Democratic National Convention in July, Palmer never had a chance at winning the nomination.
Coolidge, famous for his opposition to the right of police to strike,
won a place on the Republican ticket, but the party's nominee, and the
eventual winner of the 1920 election, was the U.S. Senator from Ohio, Warren G. Harding.
He sounded a very different note in mid-August. An interviewer wrote
that "his jaws fairly snapped" when he said that "too much has been said
about Bolshevism in America. It is quite true that there are enemies of
Government within our borders. However, I believe their number has been
greatly magnified. The American workman is not a Bolshevik; neither is
the American employer an autocrat."
When another anarchist bomb exploded on Wall Street in September 1920, newspaper response was comparatively restrained. "More bombs may be exploded", wrote the New York Times,
"Other lives may be taken. But these are only hazards of a war which
... must be faced calmly." If anarchists sought to make people fearful,
"By keeping cool and firm we begin their defeat."
Nevertheless, the after-effects of the First Red Scare were a major factor in the passage of the Immigration Act of 1924.
![Scan of a newspaper front page. The word "Leger", part of the title, is visible at the top. The rest, so far as legible in this image, reads: RED "BIBLE" COUNSELS APPEAL TO VIOLENCE / "Right is Might" is Cardinal text of Doctrines Expounded in Guidebook of World Revolutionists / Bolshevist Propaganda Seized / [illegible byline] / Boston, Oct. 26—Pamphlets and other I.W.W. literature containing rules and instructions for burning buildings and shooting from concealed places have been seized by army intelligence officers here. The "Red" literature was discovered by military authorities. An organized campaign is being waged by the War Department against Bolshevist propagandists, anarchists and the I.W.W. / By Paul W. Ackermann / Public Ledger Correspondent](https://en.wikipedia.org/wiki/File:Red_Bible_-_Carl_W_Ackerman_-_October_27,_1919.jpg)
