ECON 2200 Lecture Notes - Lecture 41: Calvin Coolidge, Clayton Antitrust Act, Human Capital
14 May 2018
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ECON 2200
Lecture 41
• High investment in technology/capital
o Electricity – about 1/3 of industrial power generated by electricity
1. more efficient power source
2. lower per-unit cost
o Older plants replaced/rebuilt
1. Increased labor productivity
Increase in capital typically increases productivity
• Supportive govt/legal environment – continued growth of ‘Big Business’
corporations and mergers
1. Little enforcement of antitrust
• 1923-1929: Calvin Coolidge is President
o Quote: “Chief Business of the American People is Business”
o Appointed very weak, inactive members to Federal Trade
Commission (formed by the Clayton Act) and discouraged
enforcement of Sherman and Clayton Acts.
1. Anti-union courts
For example:
• Courts allowed firms to obtain injunctions to stop strikes, pickets and
boycotts (was a legal court order and if you did not obey, you could be
thrown in jail or fined).
• Courts upheld firms’ use of “yellow-dog” contracts
o Asked employees to sign contract that, as a condition of
employment, they would not join a labor union.
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