“No man’s life, liberty or property is safe while the legislature is in session.” -- Mark Twain, 1866

To most of us, Labor Day is a three-day weekend, a barbecue and the end of summer, and few of us understand or appreciate the implications of the social and economic factors that led to its establishment.

Some controversy exists over whether it was Peter McGuire, member of the Knights of Labor (and, later, co-founder of the American Federation of Labor), or Matthew Maguire, secretary of New York’s Central Labor Union, who initially founded the holiday. What is known for sure is that the Central Labor Union organized and held the first Labor Day parade in New York City on Sept. 5, 1882.

The celebration spread to other industrial centers and, in 1884, was set as the first Monday in September. In 1894 President Grover Cleveland and Congress, in an attempt to appease the labor movement after Cleveland employed the U.S. military to squash the deadly Pullman Strike earlier that year, had Labor Day declared a national holiday.

An examination of the social and economic forces at work that led up to the Pullman Strike of 1894 is highly revealing — both of the results of government intervention into the economy, and of the nature and intent of America’s then-growing labor movement.

Government financing of railroads all throughout the mid-1800s, although amounting to only 10 percent of total financing, created disasters wherever it occurred. Through land grants, subsidies, state bonds and legislative law, a period of railroad overbuilding, scandals and arbitrary (i.e., government-granted) economic power of many of the railroads over their workers and customers, led to over-expansions and abuses that would never have occurred in an unhampered free market.

Both the over-expansions and the abuses had far-reaching ramifications. The phony bubble of railroad speculation finally popped and created the Panic of 1893, a serious depressive period initially started by the collapse of several of the banks involved in the shady financing, followed shortly thereafter by the collapse of the Northern Pacific, Union Pacific and Atchison, Topeka and Santa Fe railroads themselves. The callous disregard of many of the government-funded railroads (the Central Pacific and Union Pacific in particular) for the safety and pay for their workers, on the other hand, led directly to the formation of the country’s first major industrial labor union, the American Railroad Union, in Chicago in 1893.

When the sputtering fuse of the forces let loose by decades of government interference into the railroad industry finally sparked and blew the Pullman powder keg in 1894, the tactics employed by Eugene Debs and the ARU at that time laid the foundation for the way the majority of the trade unions were to operate for nearly three-quarters of a century to follow: combative, aggressive and highly inflammatory methods of recruitment and “negotiation” with business management. And — like the European medieval guilds of old, initially formed as a counterweight to the omnipotent powers of the kings and their barons — as government involvement in the economy grew ever wider and broader in scope and power throughout the 19th and 20th centuries, so grew the size, scope and power of the unions.

The true answer, the right answer, would have been for the trade unions to advocate the abolition of the arbitrary power that legislative bodies held over the workings of the economy — not to merely attempt to balance that political power with arbitrary power of their own. History would have supported that thesis; it was, after all, capitalism and the Industrial Revolution that shattered the caste and guild systems of the feudalistic Middle Ages to begin with. And the essence of capitalism is: private property, individual rights and free trade.

The great tragedy of the labor unions is that they’ve never fully grasped those facts to this day: lost instead in the myopia of “business vs. labor,” Labor union leaders do not see that the true interests of the American workers, as traders, lie in a radically different alignment -- business and labor, together, as freemen, by mutual consent to mutual advantage, vs. the state.

But then again, most of the rest of us do not realize it either. And that’s really too bad, because the attendant losses to our wealth, productivity and liberty have been so enormous that they simply cannot be calculated. Is this what we are celebrating?

Bradley Harrington is a former U.S. Marine and a free-lance writer who lives in Cheyenne, Wyo.

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