Historiography of the New Deal IB History of the Americans

Mr. Clarke

ESSENTIAL QUESTION: WHAT IMPACT DID THE NEW DEAL HAVE ON THE UNITED STATES? The Great Depression was both a great calamity and a great opportunity. How effectively Franklin D. Roosevelt responded to the calamity and what use he made of the opportunity are the two great questions that have animated historical debate about the New Deal. [M]ost of the first generation of historians who wrote about the New Deal (in the 1940s, 1950s, and early 1960s) agreed with Carl Degler’s judgment that the New Deal was “a revolutionary response to a revolutionary situation.” In this view, though Roosevelt never found a means short of war to bring about economic recovery, he shrewdly utilized the stubborn economic crisis as a means to enact sweeping reforms. Some leftist scholars writing in the 1960s, however,… charged that the New Deal did not reach far enough. This criticism echoed the socialist complaint in the 1930s that the depression represented the total collapse of American capitalism and that the New Deal had muffed the chance to truly remake American society. Roosevelt had the chance, these historians argued, to redistribute wealth, improve race relations, and bring the giant corporations to heel. Instead, said these critics, the New Deal simply represented a conservative holding action to shore up a sagging and corrupt capitalist order. Those charges against the New Deal stimulated another generation of scholars in the 1970s, 1980s, and 1990s to look closely at the concrete institutional, attitudinal, and economic circumstances in which the New Deal unfolded. Historians… sometimes referred to loosely as the “constraints school”- concluded that the New Deal offered just about as much reform as circumstances allowed and as the majority of Americans wanted. The findings of these historians are impressive: the system of checks and balances limited presidential power; the disproportionate influence of southern Democrats in Congress stalled attempts to move toward racial justice; the federal system, in fact, inhibited all efforts to initiate change from Washington. Most important, the majority of the American people at the time wanted to reform capitalism, not overthrow it. Perhaps William Leuchtenburg summed it up best when he described the New Deal as a “halfway revolution,” neither radical nor conservative, but accurately reflecting the American people’s needs and desires in the 1930s- and for a long time thereafter. The great “New Deal coalition” that dominated American politics for nearly four decades after Roosevelt’s election in 1932 represented a broad consensus in American society about the opportunities and legitimate limits of government efforts to shape the social and economic order. -David Kennedy & Elizabeth Cohen, “How Radical Was the New Deal?” The American Pageant (2010)

Document 1 [W]hile the New Deal had its roots in the earlier period, 1885-1929, it was not merely a synthesis of the New Nationalism and New Freedom programs of the Theodore Roosevelt-Woodrow Wilson era. Rather the FDR administration became a transition period in which the Depression crisis demonstrated that the traditional role of state intervention in the economy was inadequate to deal with the weaknesses of capitalism as it developed after World War I. Ultimately, however, it was the Second [World] War and the postwar era rather than the Depression that created the conditions for the recovery of the economy, enlargement and rationalization of the mechanics of the new form of state intervention, and the reorganization of government to facilitate implementation of its new role. That the New Deal or some other political movement did not find a solution to the causes and manifestations of the Depression was symptomatic of the fact that the 1930s were not as severe a social crisis as historians have characterized it. Essentially no major social group or class, neither the owners and managers of the corporate system, nor the workers, the farmers and middle classes felt themselves sufficiently threatened to commit themselves to more extreme forms of political and economic action. -Brad Wiley, “The Myth of New Deal Reform” (1970) Document 2 [M]uch of the historiography of the New Deal takes a “corporate liberal” approach to interwar reform. This approach stresses an intellectual and political continuity between the 1920s and the New Deal and sees the entire interwar era as evidence of the organizational triumph of capitalism. This said, there is sharp disagreement within the corporatist camp over the meaning of the New Deal. For liberal historians, it reflects the managerial imperatives of a society increasingly dominated by large corporations and large state institutions… For radical historians, the New Deal is less benign, reflecting both the intellectual poverty of American politics and a conspiratorial “campaign to save large corporate capitalism.” This view understates the range of business support for the New Deal, and as a consequence, confuses the contradictions of New Deal policy with some sort of eternal divide between “big business” and everyone else. […] [T]he New Deal was driven more by the competitive anxieties of a wide range of business interests than by the prescriptive vision of an ill defined corporate elite. -Colin Gordon, New Deals: Business, Labor, and Politics in America, 1920-1935 (1994) Document 3 [E]xactly, what did the New Deal do? It might be well to begin by recognizing what the New Deal did not do, in addition to its conspicuous failure to produce economic recovery. Much mythology and New Deal rhetoric notwithstanding, it did not substantially redistribute the national income. America’s income profile in 1940 closely resembled that of 1930, and for that matter 1920. […] [W]hat little income leveling there was resulted more from Depressiondiminished returns to investments, not to redistributive tax policies. Nor, with essentially minor exceptions like the TVA’s electric-power business, did the New Deal challenge the fundamental tenet of capitalism: private ownership of the means of production. In

contrast with the pattern in virtually all of the industrial societies, whether Communist, socialist, or capitalist, no significant state-owned enterprises emerged in New Deal America. […] In the yeasty atmosphere of Roosevelt’s New Deal, scores of social experiments flourished. Not all of them were successful, not all of them destined to last, but all shared the common purpose of building a country from whose basic benefits and privileges no one was excluded. […] Above all, the New Deal gave countless Americans who had never had much of it, a sense of security, and with it a sense of having a stake in their country. And it did it all without shredding the American Constitution or sundering the American people. At a time when despair and alienation were prostrating other peoples under the heel of dictatorship, that was no small accomplishment. -David Kennedy, Freedom from Fear: The American People in Depression and War, 1929-1945 (1999) Document 4 Historians Jim Powell and Adam Cohen Debate the New Deal Did the New Deal help lift the country out of the Great Depression? Powell: It certainly did not. The New Deal prolonged the Great Depression not because of one mistake, but because of a combination of policies that make it more expensive to hire people. Some of the time during the 1930s, the economy expanded, but chronic high unemployment persisted throughout the period. It averaged 17 percent. The best the New Deal could do was 14 percent (double what we have now), and at times, New Deal unemployment was over 20 percent. The chronic high unemployment is what concerns everybody. FDR might have lifted people's spirits, but he never could figure out how to promote the recovery of private-sector employment. Cohen: Yes, and in two different ways. One, it had a definite impact on the U.S. economy. From 1933 on, you saw a steady increase in the GDP [gross national product], which showed that it was helping with economic activity. You also saw unemployment going down. It is true that the Great Depression didn't end until World War II, with the [fiscal] stimulation it provided. That really suggests we just needed more spending. The New Deal was working, but we needed more of the New Deal. We needed more New Deal spending. People who say the New Deal didn't help also ignore the fact that the New Deal put millions of people to work… People could see actual progress on the ground. They could see the economy getting better. If people believe things are getting better, they start spending. What was radical about the New Deal when it was introduced? Powell: It involved the biggest peacetime expansion of government power in American

history. So the New Deal was different, but I'm not sure one would call that radical. Was it radical to triple the tax burden, which is what FDR did between 1933 and 1940? Was it radical to destroy food and make three-quarters of the American population pay higher prices for food -- in the country's worst depression? That's what the New Deal did under the Agricultural Adjustment Act. Was it radical to make it more expensive for employers to hire people, triggering unemployment, as a number of New Deal policies did? Regardless of whether one would call such policies radical, I think it's fair to say that they harmed the people they were supposed to help. Cohen: When FDR took over, the federal government was limited in scope. It mainly defended the country from foreign enemies and delivered the mail. FDR reimagined what the federal government could be. It could be an employer of people. It could be a provider of relief payments. It could regulate the stock market. Those were things that no one thought the government should do, but terrible times allowed that. […] What the New Deal showed is that the [federal] government could make a difference. The government could improve people's lives during terrible times and it could make an enormous difference in people's lives. Jim Powell is the author of FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression (2003). Adam Cohen is the author of Nothing to Fear: FDR’s Inner Circle and the Hundred Days that Created Modern America (2009). Source: Blake, John. “New Deal or Raw Deal.” February 20, 2009. CNN.com. Document 4 The New Deal was a “laboratory for economic learning” in the 1930s. Given the state of government economic knowledge in the 1930s it is not surprising that government employees struggled to engineer recovery through micro-economic intervention. Economic historians and right-wing commentators blame the New Deal for prolonging the Depression by deterring private investment through excessive regulation and raising prices at the expense of jobs. While it is true that Roosevelt had not secured recovery by the time of the dramatic recession in 1937-38, it is also true that the spending afterwards did create new jobs. Government employment in the 1930s also compensated significantly for the failure to create new jobs in the private sector. Above all, it is difficult to see that a free market solution could have been imposed without massive social and anti-democratic unrest. For all the bitterness of opposition to Roosevelt and heightened class tensions in the US in the 1930s, the New Deal developed, especially through its welfare and jobs programs, enough social cohesion to allow its democratic institutions to survive a catastrophic economic downturn intact and to fight a world war successfully. -Anthony Badger, author of FDR: The First Hundred Days (2008)

Socratic Seminar Discussion Questions 1. How have historians of different political persuasions disagreed in their interpretations of the New Deal?

2. From which political persuasion (conservative, liberal, or radical) does each of the historians quoted above appear to speak?

3. On what aspects of the New Deal do historians agree?

4. How effective was FDR’s New Deal in accomplishing economic Relief, Recovery, and Reform.

5. How, if at all, did the New Deal alter the political landscape of the United States?

6. Why do you think the New Deal is of so much interest in modern-day political debates?