This article explains the outcome of American labour’s formative stage in politics between 1860 and 1921 by modelling the decision-making process of labour elites under limited and full labour inclusion. Several countries featured limited inclusion through a neutral executive and democratic institutions, but full inclusion – the incorporation of labour into the party system through entrenched partisan elites – occurred only in the United States. An analytic narrative illustrates the conclusion from my decision analysis that the failure of social democracy and the embrace of moderate syndicalism in the United States occurred as the rational response of labour elites to this unique environment.