Scott Sumner answers Acemoglu and Johnson.

“During the late 1920s, the living standard of American blue-collar workers was far higher than 100 years earlier.  And yet almost none of the “progressive” ideas advocated by leftists had been put in place.  There was no minimum wage, no federal unemployment compensation, no OSHA, and labor unions were fairly weak.  In 1929, the federal government spent only a bit over 3% of GDP.”