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The largest labor federation representing American workers, founded in 1886 and led for many years by Samuel Gompers, the American Federation of Labor (AFL) was a craft union championing the slogan, “a fair day's wage for a fair day's work.” With this slogan, the AFL differentiated its craft unionism from the more radical efforts first of the Knights of Labor and then, after 1905, of the Industrial Workers of the World. Unlike the Wobblies, the AFL sought to protect the privileges of a small segment of the industrial working class, skilled craft workers.

In the early 20th century, even the moderate craft unions affiliated with the AFL fought a difficult battle against capital. Nonetheless, the years between 1909 and 1919 represented an important period of union growth. As historian David Montgomery has argued, union strength waxed and waned with fluctuations in the economy. During boom years, when skilled workers were in high demand, unions gained membership, whereas recessions reduced workers' bargaining power, and union strength declined. But with the onset of World War I, in return for a “no-strike” pledge from the AFL leadership, the U.S. government began to actively support union efforts. Through this new capital/labor accord, union leaders found themselves, for the first time, in the corridors of Washington power. In 1913, President Wilson established the Labor Department and appointed former United Mine Workers leader, William Wilson, to a cabinet-level position overseeing its operations. Furthermore, to ensure steady wartime production and to quiet labor unrest, President Wilson put in place the National War Labor Board, with representatives from labor and management. This new board gave official sanction to the right of workers to organize and bargain collectively through their own chosen representatives. Between 1915 and 1920, union membership in the United States doubled. At the same time, the new capital/labor accord and the union movement's increasing reliance on governmental support reinforced the “business unionism” that already characterized much of the AFL's program. This situation led one contemporary observer, the radical political economist, Thorstein Veblen, to view the AFL as yet another vested interest. He wrote, in 1921, that its purpose and ordinary business is to gain a little something for its own members at a more-than-proportionate cost to the community.

Although Veblen's words rather accurately described the organizational attitudes of the AFL's leadership, craft workers were not all so parochial. In fact, within locals, craft unionists were often more radical than their moderate leadership. This radical craft unionism, with roots in the European syndicalist tradition, led to a series of wildcat “control strikes” that took place even while the AFL's official no-strike pledge remained in force. Radical craft workers were striking not for wages but for control over the means of production. This quest for industrial democracy only grew stronger with the war's end. After the armistice, organized labor expressed its new sense of confidence during the unprecedented Red Summer of 1919. Strikes, both sanctioned and unsanctioned, disrupted production on a national scale. Coming just 2 years after the Bolshevik Revolution in Russia, and led, at least in part, by radical syndicalists, this postwar strike wave inspired the fear and ire of America's ruling class. Rather than securing the labor movement's foothold in American political economy, the Red Summer resulted in a red scare, the Palmer raids, and new legal and extralegal forms of political repression. Labor's defeat in 1919 led to a 30% drop in union membership. The gains made during the early part of the century seemed to vanish into dust.

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