Filene's Closing Ends Unusual Legacy

Century-Old Firm Was Founded by Reluctant Jewish Capitalist

Bargain Hunters: The closing of Filene’s Basement marks another milestone in the constantly shifting retail world. The store started as an experiment in a different kind of capitalism.
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Bargain Hunters: The closing of Filene’s Basement marks another milestone in the constantly shifting retail world. The store started as an experiment in a different kind of capitalism.

By Ari Paul

Published December 11, 2011, issue of December 16, 2011.
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This holiday season will be the last for two iconic discount clothing retailers with historic Jewish roots: Filene’s Basement and Syms, which acquired the former in 2009. Both recently declared bankruptcy and will cease operating in January.

While the commercial legacy of the Filene family may end soon, founder Edward Filene’s social legacy, as an exemplar of progressive management and labor rights, has suffered diminishing influence that long predates his store’s demise. Filene, in a sense, was emblematic of an urban, immigrant-centric political consensus between capital and labor that Americans have swept into the dustbin of history.

“The Jewish entrepreneurs — not to mention Jewish labor leaders — were important in the construction of an ideological political bloc that became the New Deal,” said Nelson Lichtenstein, a professor of history at the University of California at Santa Barbara.

In 1909, brothers Lincoln and Edward Filene — sons of a German-Jewish immigrant — embarked on a new venture: taking unsold items from their father’s department store and selling them at discount prices out of a low-cost basement location in Boston. Each week, unsold items would be marked down systematically. After a few weeks, if still unsold, the brothers would give them to charity. The business grew into a chain of retail stores in such cities as New York, Chicago and Washington, D.C.

Unlike the capitalists of the time who were battling militant unions, Edward Filene offered his employees an in-house mechanism — sometimes equated with a company union — to address their concerns about working conditions and raise their pay. It became a model for his core political beliefs.

Filene lobbied for workers compensation laws. His prominence later led to him to ally with President Franklin D. Roosevelt during the development of New Deal projects, including the use of public works projects to ease high unemployment. He was also a key supporter of the National Labor Relations Act, signed in 1935, on the grounds that codifying collective bargaining would alleviate disorder stemming from worker unrest at the time. The NLRA, he believed, was also essential for raising workers’ wages, which would increase consumer demand.

While his brother had taken over majority control of the company by the time Roosevelt came into office in 1933, Edward Filene’s prominence as a successful businessman made him the perfect endorser for Roosevelt’s capitalism with a Democratic face. But Filene wouldn’t live to see the post-war prosperity. He died in 1937.


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