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A Prelude to the Welfare State: The Origins of Workers' Compensation (National Bureau of Economic Research Series on Long-Term Factors in Economic Dev)

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Excerpted from a book review by Robert Whaples in the Independent Review (Fall 2001)

Given the colossal size of the federal government in the United States and its pervasive influence on our economic lives, it is surprising that the growth of government isn't the subject of most history books written about the twentieth century. Unfortunately, the list of good books on the subject is surprisingly short. Fortunately, Price Fishback and Shawn Kantor have written a book that can be added to that short list. Indeed, their book, with its rigorous analysis of both markets and politics, is a model for others to follow.

Fishback and Kantor's exhaustive research provides new insights into why almost all states adopted workers' compensation laws between 1910 and 1921, even though related reform proposals were stillborn. [They] examine the timing of adoption across states and conclude that "progressive" politicians played only a marginal role. The strength of employer and worker interest groups was crucial. The occurrence of a crisis in the old liability system was also extremely important.

Probably the greatest shortcoming of this book is a failure to go back one more step to explain the origins of this crisis in greater detail. Whatever the reasons, the origin of the workers' compensation system, like the growth of government during much of the rest of the twentieth century, hinged crucially on a crisis.

Ultimately, the, Fishback and Kantor's painstaking analysis gives a clear picture of the operation of the American market and political system in an era when the logic of the welfare state was still generally rejected and when other programs that eventually became part of the welfare state (old-age pensions, unemployment insurance and subsidies, and sickness insurance) were not politically viable.