Figure 1.--The Civilian Construction Corps (CCC) was one of the most popular New Deal programs. I provided income for unemployed youths and their families, as well as goof food and medical care. |
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The New Deal critics commonly gloss over one very obsvious factor. There are periods in history that capitalism has to be saved from capitalists. There are a seies of bubbles in economic history that caused systemic damage. The story is, however, more complicated. Often down played, however, is the role of Government. Many economists believe that the Hoover Administration and the Congress (including Democrats) pursued policies that turned a serious economic down turn into the Great Depression. Despite the popular narative, the New Deal did not end the Depression. High levels of unemployment persisted in America throughout the 1930s until orders from Europe for military equipment and supplies began to flow into the United States as well as American rearmament.. Here there is considerable difference among historians and economists about New Deal policies, but the basic fact is that the New Deal despite massive spending did not end the Depression. We believe that are, however, important defenses of the New Deal. First. the actions taken in the First Hundred Days prevented the Depression from getting worse. These actions included: 1) ending the gold standard and 2) saving the banking system. Second, many of the New Deal agencies accomplished very important goals. Here authors vary. We believe some of the most important New Deal accomplishments were: the Civilian Conservation Corps (CCC), Rural Electrification Administration (REA), Security Exchange Commission (SEC), and Social Security. Some authors would add the Wagner Act which strengthen the bargaing power of labor unions. Third, President Roosevelt and the New Deal prevented the rise of more radical forces. There was in 1933 the very real possibility that economic depression would have resulted in if not revolution, far more profound changes than the New Deal. Men like Huey Long or Douglas MacArthur may have even fundamentally altered the democratic system. New Deal criticics may well dismiss this as unlikely, but America was in very deep trouble by 1933 and President Roosevelt's New Deal provided a level of hope and economic relief that ensured the survival of American democracy. The New Deal was a era of tremendous political change in America. The many New Deal programs certainly had economic costs, but also great achievements. They have to be considered individually. Some may not have been helpful. Others decidely were, both in economic and social terms. The Rural Electrification Administration (REA) had a massive possitive impact on the produtivity of the American farmer. The Civilian Conservation Corps (CCC) not only helped large numbers of unemployed youth, but provided wonderful facilities in national parks and forrests that succeeding generations of Americans have enjoyed. What the critics of the New Deal ignore is the root causes of the Depression. Here a major cause was the unfair distribution of wealth which left large numbers of Americans without purchasing power and the ability to support a growing economy. This was in large measure because there was not a ballance between labor and capital. Once labor could demand fair wages the result after the War was a tremendous expandion of the middle class in the 1940s and 50s. Much of the criticism of the New Deal is based on a modern assessment that the programs as a whole were not best suited to promote rapid economy growth. This is probably true. The New Dea did, however, preserve liberal democracy, set a more ballance relationship between labor and capital, prevent the growth of radical (Fascist and Communist) revolution, address wide-spread suffering, provide a pension system for elderly Americans, and begin a wide range of social reforms.
The New Deal critics commonly gloss over one very obsvious factor. There are periods in history that capitalism has to be saved from capitalists. There are a seies of bubbles in economic history that caused systemic damage. The story is, however, more complicated. Often down played is the role of Government in creating bubbles and other economic dislocations. Many economists believe that the Hoover Administration and the Congress (including Democrats) pursued policies that turned a serious economic down turn into the Great Depression.
Despite the popular narative, the New Deal did not end the Depression. High levels of unemployment persisted in America throughout the 1930s until orders from Europe for military equipment and supplies began to flow into the United States as well as American rearmament.. Here there is considerable difference among historians and economists about New Deal policies, but the basic fact is that the New Deal despite massive spending did not end the Depression.
We believe that are, however, important defenses of the New Deal. There were important achievemebts. Ending the Depression was not one of them, but there were ange of valuable contributions.
First. the actions taken in the First Hundred Days prevented the Depression from getting worse. These actions included: 1) ending gthe gold standard and 2) saving the banking system.
Second, many of the New Deal agencies accomplished very important goals. Here authors vary. We believe some of the most important New Deal accomplishments were: the Civilian Conservation Corps (CCC), Rural Electrification Administration (REA), Security Exchange Commission (SEC), and Social Security. Some authors would add the Wagner Act which strengthen the bargaing power of labor unions.
Third, President Roosevelt and the New Deal prevented the rise of more radical forces. There was in 1933 the very real possibility that economic depression would have resulted in if not revolution, far more profound changes than the New Deal. Men like Huey Long or Douglas MacArthur may have even fundamentally altered the democratic system. New Deal criticics may well dismiss this as unlikely, but America was in very deep trouble by 1933 and President Roosevelt's New Deal provided a level of hope and economic relief that ensured the survival of American democracy. And it was not just a domestic matter. Democracy ws imperiled around the worls. The Communists had seized control of Russia and Stalin was building a military collusus. Missolini and the Fascists had seized conttol of Italy. Hitler tgained control of Germany a month before President Roosevelt was inagurated. Japan had begun its aggressions by seizing Manchuraia (1931). The grand experiment of the New Deal ws a central test for democratic values. One uthor argues that democracy was rescued, albeit distorted by a coalition that included Southern Congressmaen intent on maintaining racial segregation. [Katznelson] The South was an important part of the Demnocraric coalition. Roosevelt could not have been elected without the South. And New Seal legislation could not have been passed without without the support of Southern Congressmn. And they were also stalwarts in his critical fight against the isolationists. They were also an important part of his effort to manage capitalism and to assert America's global power in the face of the American people's determination to stay out of another war.
The New Deal was an era of tremendous political change in America. The many New Deal programs certainly had economic costs, but also great achievements. They have to be considered individually. Some may not have been helpful. Others decidely were, both in economic and social terms. The Rural Electrification Administration (REA) had a massive possitive impact on the produtivity of the American farmer. The Civilian Conservation Corps (CCC) not only helped large numbers of unemployed youth, but provided wonderful facilities in national parks and forrests that succeeding generations of Americans have enjoyed. What the critics of the New Deal ignore is the root causes of the Depression. Here a major cause was the unfair distribution of wealth which left large numbers of Americans without purchasing power and the ability to support a growing economy. This was in large measure because there was not a ballance between labor and capital. Once labor could demand fair wages the result after the War was a tremendous expansion of the middle class in the 1940s and 50s.
Katznelson, Ira. Fear Itself: The New Dealand the Origins of Our Time
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